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Sikkema v. Liberty Northwest Insurance Co.

Court of Workers Compensation of Montana

September 26, 2017

DIANE SIKKEMA Petitioner
v.
LIBERTY NORTHWEST INSURANCE CO. Respondent/Insurer.

          Submitted: September 8, 2017

         Summary: Petitioner seeks a 20% increase in the amount of benefits under § 39-71-2907, MCA, and her attorney fees under §§ 39-71-611 and -612, MCA, for Respondent's alleged unreasonable delay in authorizing a surgery. Respondent moves for partial summary judgment. It argues that Petitioner cannot recover her attorney fees on her medical benefits under §§ 39-71-611 or -612, MCA - which generally provide that this Court can award attorney fees if it adjudicates a dispute over compensation and the insurer's denial or delay was unreasonable - because it authorized the surgery prior to adjudication, and further argues that this Court cannot award attorney fees on the 20% increase because this increase is a "penalty" and not "compensation." Petitioner objects to the summary judgment motion, arguing that the statutes do not preclude her from recovering attorney fees on her claim for a 20% increase in the full amount of benefits due under § 39-71-2907, MCA - which Petitioner argues is not a penalty, but rather additional compensation.

         Held: Respondent is entitled to summary judgment on Petitioner's claim for attorney fees. This Court cannot award attorney fees on Petitioner's medical benefits because Respondent authorized the surgery before this Court adjudicated the dispute. Nor can this Court award attorney fees if Petitioner obtains a 20% increase in her benefits because case law from the Montana Supreme Court and this Court establishes that the 20% increase under § 39-71-2907, MCA, is a penalty, not compensation.

          ORDER GRANTING RESPONDENT'S MOTION FOR PARTIAL SUMMARY JUDGMENT

          DAVID M. SANDLER, JUDGE

         ¶ 1 Respondent Liberty Northwest Insurance Co. (Liberty) moves for summary judgment on the issue of whether Petitioner Diane Sikkema can recover attorney fees under §§ 39-71-611 or -612, MCA, which generally provide that this Court can award attorney fees if it adjudicates a dispute over compensation and the insurer's denial or delay was unreasonable. Liberty argues that Sikkema cannot recover her attorney fees on her medical benefits because it authorized her surgery without an adjudication from this Court. Liberty also argues Sikkema cannot recover her attorney fees if she proves that Liberty unreasonably delayed authorizing her surgery which therefore entitles her to a 20% increase in her medical benefits under § 39-71-2907, MCA - the only other issue left in this case - because the 20% increase is a "penalty" and not "compensation." Sikkema opposes Liberty's motion.

         UNDISPUTED FACTS

         ¶ 2 On February 25, 2008, Sikkema filed a claim for compensation after suffering an injury to her left knee and foot.

         ¶ 3 Liberty accepted liability for the claim and paid benefits.

         ¶ 4 In 2014, Sikkema and Liberty settled the indemnity portion of her claim, but left medical benefits open.

         ¶ 5 On March 3, 2017, Martin Gelbke, MD, recommended that Sikkema undergo total left-knee arthroplasty. Dr. Gelbke declined to offer a causation opinion, and Liberty denied authorization for the recommended treatment.

         ¶ 6 On May 25, 2017, Sikkema obtained a causation opinion from Alexander LeGrand, MD, who had previously treated Sikkema. He opined that her need for total left-knee arthroplasty was related to her industrial injury.

         ¶ 7 On June 2, 2017, Sikkema filed a Petition for Hearing, asking this Court to find Liberty liable for the total left-knee arthroplasty. Sikkema also alleged that Liberty's denial of liability for her arthroplasty was unreasonable and prayed for her costs and attorney fees under §§ 39-71-611 and -612, MCA, and a 20% increase in benefits under § 39-71-2907, MCA.

         ¶ 8 On June 19, 2017, prior to any ruling from this Court, Liberty authorized Sikkema's total left-knee arthroplasty.

         LAW AND ANALYSIS

         ¶ 9 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.[1] The material facts necessary for disposition of this case are undisputed. Accordingly, this case is appropriate for summary disposition.

         ¶ 10 This case is governed by the 2007 version of the Montana Workers' Compensation Act (WCA) since that was the law in effect on the date of Sikkema's industrial accident.[2]

         ¶ 11 Sikkema asserts that Liberty's delay in authorizing her total left-knee arthroplasty was unreasonable. Thus, she asserts that she is entitled to a 20% increase in her medical benefits under § 39-71-2907, MCA, which provides, in relevant part:

(1) The workers' compensation judge may increase by 20% the full amount of benefits due a claimant during the period of delay or refusal to pay, when:
(a) the insurer agrees to pay benefits but unreasonably delays or refuses to make the agreed-upon payments ...

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