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Asurion Services, LLC v. Montana Insurance Guaranty Association

Supreme Court of Montana

June 13, 2017

ASURION SERVICES, LLC, Plaintiff and Appellee,
v.
MONTANA INSURANCE GUARANTY ASSOCIATION, Defendant and Appellant.

          Submitted on Briefs: March 22, 2017

         APPEAL FROM District Court of the First Judicial District, In and For the County of Lewis And Clark, Cause No. CDV-2015-104 Honorable Kathy Seeley, Presiding Judge

          For Appellant: Geoffrey R. Keller, Adrianna Potts, Matovich, Keller & Murphy, P.C., Billings, Montana

          For Appellee: William O. Bronson, William O. Bronson, PLLC, Great Falls, Montana

          For Amicus Curiae: Mark Cadwallader, Special Assistant Attorney General, Montana Department of Labor and Industry, Helena, Montana

          OPINION

          James Jeremiah Shea Justice.

         ¶1 Defendant Montana Insurance Guaranty Association (MIGA) appeals the August 29, 2016 order denying its motion for summary judgment by the First Judicial District Court, Lewis and Clark County. We address the following issue:

Whether the District Court erred by granting summary judgment to Asurion and denying summary judgment to MIGA based on the exclusivity provision of the Montana Workers' Compensation Act.

         PROCEDURAL AND FACTUAL BACKGROUND

         ¶2 Christy Harris is a former employee of National Electronics Warranty, LLC-now known as Asurion Services, LLC (Asurion)[1]-at its customer service facility in Great Falls. While employed by Asurion, Harris filed industrial injury claims for two different incidents, occurring on May 5, 2002, and September 4, 2002. Asurion was insured by Lumbermens Mutual Casualty Company (Lumbermens) as a Plan 2 employer under Montana's Workers' Compensation Act (WCA), § 39-71-101 et seq., MCA. Lumbermens accepted and adjusted Harris's workers' compensation claims until it was declared insolvent in May 2013. When Lumbermens went into liquidation, the MIGA assumed handling of Harris's claims pursuant to the Montana Insurance Guaranty Association Act (Guaranty Act), § 33-10-101, et seq., MCA. MIGA retained Western Guaranty Fund Services to adjust Harris's claims, which it continued to do through February 2015. In February 2015, MIGA notified Asurion that it was seeking recovery of benefits paid on Harris's claims pursuant to § 33-10-114(2), MCA, which provides, in pertinent part:

(2) The association has the right to recover from the following persons the amount of any "covered claim" paid on behalf of the person pursuant to this part:
(a) any insured whose net worth, on December 31 of the year preceding the date the insurer becomes an insolvent insurer, exceeds $50 million and whose liability obligations to other persons are satisfied in whole or in part by payments made under this part[.]

         ¶3 Asurion filed a declaratory judgment action, naming MIGA, Harris, and the Montana Department of Labor and Industry (DLI) as defendants. Harris and DLI were dismissed as parties, although DLI remained involved as amicus curiae. MIGA answered and filed a counterclaim, also seeking declaratory relief. Asurion and MIGA filed cross-motions for summary judgment.

         ¶4 The District Court granted Asurion's motion for summary judgment and denied MIGA's motion. The District Court concluded that § 33-10-114(2), MCA, did not afford MIGA relief because the WCA protects the employer by providing an exclusive remedy that frees the employer from potential liability claims by an employee. See § 39-71-411, MCA. The District Court held that because Asurion met its obligation to obtain workers' compensation insurance, it has no payment obligations to Harris; therefore, MIGA cannot base a claim for recovery on § 33-10-114(2), MCA. The District Court concluded: "[I]t would be illogical to conclude that an employer, protected from liability and removed from the benefits distribution process by law, is suddenly liable for all the payments made by MIGA because the insurer became insolvent."

         STANDARDS OF REVIEW

         ¶5 We review de novo a district court's grant or denial of summary judgment, applying the same criteria of M. R. Civ. P. 56, as a district court. Pilgeram v. GreenPoint Mortg. Funding, Inc., 2013 MT 354, ¶ 9, 373 Mont. 1, 313 P.3d 839 (citation omitted). Summary judgment is appropriate when the moving party demonstrates both the absence of any genuine issues of material fact and entitlement to judgment as a matter of law. M. R. Civ. P. 56(c)(3); Bird v. Cascade Cnty., 2016 MT 345, ¶ 9, 386 Mont. 69, 386 P.3d 602. When there are cross-motions for summary judgment, a district court must evaluate each party's motion on its own merits. Halenga v. Schwein, 2007 MT 80, ¶ 18, 336 Mont. 507, 155 P.3d 1242. On cross-motions for summary judgment, where the district court is not called to resolve factual disputes and only draw conclusions of law, we review the district court's conclusions of law to determine whether they are correct. Bud-Kal v. City of Kalispell, 2009 MT 93, ¶ 15, 350 Mont. 25, 204 P.3d 738 (citation omitted).

         DISCUSSION

         ¶6 Whether the District Court erred by granting summary judgment to Asurion and denying summary judgment to MIGA based on the exclusivity provision of the Montana Workers' Compensation Act.

         ¶7 With limited exceptions not applicable to this case, the WCA applies to all employers and employees. "An employer who has any employee in service under any appointment or contract of hire, expressed or implied, oral or written, shall elect to be bound by the provisions of compensation plan No. 1, 2, or 3." Section 39-71-401(1), MCA. Asurion elected to be bound by ...


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