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Selley v. Acuity Insurance Company

Court of Workers Compensation of Montana

February 27, 2018

SCOTT SELLEY Petitioner
v.
ACUITY INSURANCE COMPANY; VICTORY INSURANCE CO. INC.; and DOES 1-5, inclusive Respondents/Insurers.

          Submitted: February 1, 2018

          ORDER DECLINING TO CONSIDER PETITIONER'S MOTION FOR SUMMARY JUDGMENT

          DAVID M. SANDLER, JUDGE.

         Summary: Petitioner moves for partial summary judgment on his penalty claim against the second insurer, arguing that its refusal to authorize an MRI is unreasonable under the Belton rule, which provides that when two insurers deny liability for a claim, and assert that the other is liable, the second insurer has a duty to pay benefits under a reservation of rights until the claim is resolved. The parties have submitted nearly 300 pages of exhibits, the majority of which are medical records, in support of their positions.

         Held: Although insurers have a duty to investigate claims, which includes obtaining diagnostic tests, this Court declines to consider Petitioner's partial summary judgment motion under ARM 24.5.329(1)(b), because judicial economy will be not served by deciding the penalty claim against the second insurer before trial.

         ¶ 1 Petitioner Scott Selley has worked for a beer distributorship since 2008. It is heavy labor. Selley has three claims at issue in this case.

         ¶ 2 First, Selley has an injury claim from June 22, 2012, for injuries that occurred when he fell, and kegs fell on top of him. Selley underwent a total right hip replacement. He also suffered an injury to his lumbar spine, which caused pain into his right leg. Respondent Victory Insurance Co. Inc. (Victory) accepted liability for this claim. Selley reached maximum medical improvement (MMI) on April 22, 2014. His physician released him to return to work in his time-of-injury position.

         ¶ 3 Second, Selley has an injury claim from August 12, 2016, for a crush injury, which occurred when a keg fell on his right foot. He developed numbness and dysesthesia in his right foot. Respondent Acuity Insurance Company (Acuity) accepted liability for this claim.

         ¶ 4 Third, on June 7, 2017, Selley filed an occupational disease (OD) claim, based on conditions diagnosed via an EMG and a nerve conduction study, alleging that he has an OD of his lumbar spine, including peripheral motor neuropathy; intervertebral disk degeneration, lumbosacral region; and lumbar radiculopathy. Selley's podiatrist, Gina Painter, DPM, has opined that, absent any additional diagnostic testing, these conditions are "related to work injury." Dr. Painter has recommended an MRI of Selley's lumbar spine for diagnostic and treatment purposes.

         ¶ 5 Victory and Acuity denied liability for Selley's lumbar conditions. Victory denied liability under his 2012 injury claim on the grounds that Selley reached MMI for his 2012 injury and that his current condition is not a natural progression of that injury. Victory also asserted it is not liable under § 39-71-704(1)(f), MCA (2011), which states that medical benefits terminate 60 months from date of injury, subject to exceptions that are currently inapplicable. Victory further asserted that if Selley's lumbar conditions are ODs, it is not liable under § 39-71-407(14), MCA (2011 and 2015), because it was not the insurer at risk when Selley was first diagnosed, nor when he knew or should have known that these conditions were the result of an OD. Acuity denied liability for Selley's lumbar conditions under his 2016 injury claim on the grounds that his 2016 injury did not cause Selley's lumbar spine conditions and that they are a natural progression of his 2012 injury claim. Acuity also asserted that Selley does not have a compensable OD because of a lack of objective medical findings, and that if Selley has a compensable OD, Victory is liable because it was the insurer at risk when Selley's lumbar radiculopathy was first diagnosed. Based on their denials of liability, neither insurer will authorize the MRI.

         ¶ 6 In his Petition for Trial, Selley asserts that either Victory or Acuity is liable for his lumbar conditions, and seeks a penalty under § 39-71-2907, MCA. Selley has moved for partial summary judgment, arguing that Acuity has unreasonably refused to authorize his MRI under a reservation of rights pursuant to Belton v. Carlson Transport, in which the Montana Supreme Court held that when two insurers deny liability for a claim, and assert that the other is liable, the second insurer has a duty to pay benefits under a reservation of rights until the claim is resolved.[1]

         ¶ 7 Relying upon Ballard v. Stillwater Mining Co. - in which this Court ruled that the Belton rule does not apply when one or both insurers denies liability altogether[2] - Acuity argues that because it denied liability for Selley's alleged OD on the grounds that Selley does not have a compensable OD, it has no duty to authorize the MRI.

         ¶ 8 In his reply brief, Selley argues that Acuity did not have sufficient evidence at the time Dr. Painter requested the MRI to support its position that he does not have a compensable OD.

         ¶ 9 Victory agrees with Selley that Acuity has a duty to pay for the MRI but does not agree that ...


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