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Moreau v. Transportation Insurance Co.

Court of Workers Compensation of Montana

May 30, 2017

CRISTITA MOREAU, Individually and as Personal Representative of the Estate of Edwin Moreau Petitioner

          Submitted: November 17, 2015




         Summary: Respondent accepted liability for the decedent's occupational disease, and paid certain medical benefits. However, another entity had already paid some of the medical bills for which Respondent would have been liable under § 39-71-704, MCA. Petitioner contends that since that entity does not want to be reimbursed, Respondent should pay the amount of those medical bills to Petitioner. Respondent moved for summary judgment, contending that it is not liable to Petitioner since the decedent received the medical services to which he was entitled. Petitioner cross-moved for summary judgment.

         Held: Under controlling case law, Respondent is entitled to summary judgment. It is not liable to pay Petitioner the value of the decedent's medical bills which were paid by an entity that is not seeking reimbursement from Petitioner. Furthermore, this Court does not have jurisdiction to decide whether Respondent must reimburse another entity that is not a party to this case for paying the decedent's medical bills.

         ¶ 1 In Moreau v. Transportation Ins. Co., [1] the Montana Supreme Court held that Petitioner Christita Moreau, Individually and as Personal Representative of the Estate of Edwin Moreau (Moreau), had standing and that this Court had jurisdiction to decide this case on its merits. After remand, Respondent Transportation Insurance Co. (Transportation) moved for summary judgment, arguing that it is not liable for the compensation Moreau seeks. Moreau objects to Transportation's motion and has cross-moved for summary judgment.


         ¶ 2 The following issues are before this Court:

Issue One: Is Transportation liable to Moreau for $95, 846, which Transportation would have owed for certain medical bills had another entity not paid them?
Issue Two: Is Transportation liable for Moreau's costs and attorney fees, plus a 20% penalty?

         ¶ 3 Since Moreau is not the prevailing party, Transportation is not liable for her costs, attorney fees, or a penalty, and Issue Two is therefore resolved.[2]


         ¶ 4 Edwin Moreau (Edwin) contracted an asbestos-related occupational disease which arose out of his employment with W.R. Grace and ultimately caused his death.

         ¶ 5 In 2001, W.R. Grace created and funded the Libby Medical Plan (LMP) to assist Libby residents in paying for medical costs resulting from asbestos exposure from vermiculite mining in Lincoln County.

         ¶ 6 During Edwin's illness, the LMP paid $95, 846 of his medical bills.

         ¶ 7 As part of the resolution of W.R. Grace's bankruptcy case, on September 21, 2012, certain rights and duties of the LMP were transferred into the Libby Medical Plan Trust (Libby Trust), with W.R. Grace remaining responsible for the LMP's ongoing payment obligations incurred prior to that date. The LMP ceased to offer benefits on that date, but medical providers had until September 21, 2014, to submit claims for services already rendered to the LMP for reimbursement.

         ¶ 8 Transportation initially denied liability for Edwin's occupational disease. During subsequent litigation, it accepted liability for Edwin's occupational disease, and the parties stipulated to a satisfaction of judgment.[3] Thereafter, Transportation reimbursed Moreau for out-of-pocket medical expenses and paid medical bills which had been paid by other insurers and Medicaid.

         ¶ 9 Jay Flynn, MD, medical director of the LMP, agreed in his deposition that the bills the LMP paid on Edwin's behalf were for reasonable and necessary medical care related to Edwin's occupational disease. He testified that the LMP paid these bills with no strings attached and that the LMP never made any demand for reimbursement nor did it expect reimbursement.

         ¶ 10 William M. Corcoran, an executive from W.R. Grace, also testified in his deposition that W.R. Grace is not making any claim for reimbursement of Edwin's medical bills paid by the LMP. Corcoran stated that the amounts W.R. Grace deposited into the LMP were voluntary with no conditions. Corcoran further testified that, regardless of the source of the funds, W.R. Grace would not accept reimbursement for bills paid by the LMP. Likewise, Adam Paul, an attorney who represented W.R. Grace in connection with its bankruptcy, informed the parties that W.R. Grace would not seek reimbursement.

         ¶ 11 Moreau's attorneys advised Transportation's counsel that if W.R. Grace did not want to be reimbursed for the funds the LMP paid for Edwin's treatment, "then the amount should be paid to [Moreau]." Because neither the LMP nor W.R. Grace sought reimbursement from Transportation or Moreau for the medical bills the LMP paid, Transportation refused to pay the $95, 846 to Moreau.

         ¶ 12 Moreau subsequently brought this case, contending that Transportation must pay the $95, 846 to her because it is a primary payor with an absolute duty to pay benefits.

         ¶ 13 In addition to representing Moreau, her attorneys also represent the Libby Trust for purposes of recovering the disputed $95, 846. The Libby Trust is not a party to this case. The attorneys informed this Court, via affidavit, that they "have been authorized by Francis McGovern, Trustee of the Libby Trust, to recover, on behalf of the Trust, the medical payments made by the Libby Medical Plan to treat Edwin Moreau's occupational disease."[4]

         ¶ 14 On October 23, 2014, Moreau's and the Libby Trust's attorneys sent a letter to Transportation demanding that Transportation reimburse the Libby Trust. The letter states, in relevant part:

Demand is hereby made for immediate repayment to the Trust of the $95, 846 in medical benefits paid by the Libby Medical Plan on behalf of Edwin Moreau. . . . If the funds are not reimbursed, we will initiate a proceeding in the Workers' Compensation Court to enforce the Trust's rights to reimbursement and for a penalty for the denial of benefits and misrepresentation to the WCC. We will then seek a remand of the Moreau case on the grounds that the basis for Transportation's argument has been rendered moot.

         ¶ 15 Transportation did not reimburse the Libby Trust and it asserts it does not have a legal duty or obligation to do so. Transportation also argues that the Libby Trust's right of reimbursement, if any, is irrelevant to the present matter since the Libby Trust is not a party to this case. As of the date of this Order, the Libby Trust has not brought a claim in this Court against Transportation for reimbursement.


         ¶ 16 This case is governed by the 1991 version of the Montana Workers' Compensation Act (WCA) since that was the law in effect on Edwin's last day of work for his time-of-injury employer.[5]

         ¶ 17 For the Court to grant summary judgment, the moving party must establish that no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law.[6] The material facts necessary for disposition of this case are undisputed. Accordingly, this case is appropriate for summary disposition.

         ¶ 18 Transportation argues that under § 39-71-704, MCA, and Shepard v. Midland Foods, Inc., [7] it is not liable to Moreau for the amount she now seeks since the LMP paid Edwin's medical bills and neither the LMP, the Libby Trust, nor W.R. Grace has asked Moreau for reimbursement.

         ¶ 19 Moreau contends that since Transportation did not reimburse the $95, 846 in medical bills paid by the LMP, it owes $95, 846 worth of medical benefits and that she is legally entitled to these funds.

         ¶ 20 Section 39-71-704, MCA, states, in relevant part:

Payment of medical, hospital, and related services - fee schedules and hospital rates - fee limitation. (1) In addition to the compensation provided under this chapter and as an additional benefit separate and apart from compensation benefits actually provided, the following must be furnished:
(a) After the happening of the injury and subject to the provisions of subsection (1)(d), the insurer shall furnish, without limitation as to length of time or dollar amount, reasonable services by a physician or surgeon, reasonable hospital services and medicines when needed, and such other treatment as my be approved by the department for the injuries sustained, subject to the requirements of 39-71-727.

         ¶ 21 The Montana Supreme Court interpreted this statute in Shepard, a case with facts similar to the case at bar.[8] Shepard injured his knee in an industrial accident and incurred medical bills.[9] Because the insurer initially denied liability for the claim, Medicare and private health insurance paid some of Shepard's bills.[10] This Court ruled that the workers' compensation insurer was not required to pay the value of these medical bills to Shepard, explaining: "If, at a future date, claimant is sued for medical costs which should have been paid by defendant, claimant may file a Petition asking for a ruling on the matter … If the claimant is held responsible, it is clearly the insurer's obligation to pay medical benefits; thus, litigation of that issue seems unlikely."[11]

         ¶ 22 On appeal, Shepard argued that the workers' compensation insurer was liable either to reimburse Medicare and his private health insurer for the amounts each had paid, or to pay those amounts to him.[12] The Supreme Court rejected both arguments.[13] First, the court held that since neither Medicare nor the health insurer was a party to the case, this Court did not have jurisdiction to "adjudicate any right to reimbursement which those entities had."[14] Second, the court rejected Shepard's argument that the workers' compensation insurer was liable to pay him the medical benefits under § 39-71-704, MCA.[15] The court explained:

Contrary to appellant's assertion, this statute is not authority for ordering respondent to pay appellant for medical expenses already paid by other health care providers. The statute requires the insurer to furnish reasonable services, medicine and treatment. To order the insurer to pay appellant for medical expenses already paid is not furnishing services nor is it reasonable. . . .
Appellant Shepard is here asking for a windfall. The lower court ruled that if Shepard were sued for medical expenses, he could petition the Workers' Compensation Court for relief. That ruling is logical, equitable and can provide Shepard with prompt relief. We hold ...

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