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Ramsbacher v. Trucking

Supreme Court of Montana

May 8, 2018

DAVID RAMSBACHER, Plaintiff and Appellant,
v.
JIM PALMER TRUCKING, Defendant and Appellee.

          Argued and Submitted: March 28, 2018

          District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DV 14-457 Honorable Karen S. Townsend, Presiding Judge

          For Appellant: Kurt M. Jackson (argued), Drew Blewett, Hoyt & Blewett, PLLC, Great Falls, Montana

          For Appellee: Marshal L. Mickelson (argued), Corette Black Carlson & Mickelson, Butte, Montana

          For Amici Curiae: Mark M. Kovacich (argued), Ross T. Johnson, Kovacich Snipes, P.C., Great Falls, Montana (for MTLA) Jill Gerdrum (argued), Axilon Law Group, PLLC, Missoula, Montana (for Avitus Group) T. Thomas Singer, Walter D. Clapp, Axilon Law Group, PLLC, Billings, Montana (for Avitus Group) Robert K. Baldwin, Goetz, Baldwin & Geddes, P.C., Bozeman, Montana (for NAPEO)

          INGRID GUSTAFSON JUSTICE.

         ¶1 David Ramsbacher (Ramsbacher) appeals from an order of the Fourth Judicial District Court, Missoula County, granting summary judgment in favor of Jim Palmer Trucking (JPT). We affirm.

         ¶2 We restate the issue on appeal as follows:

Does § 39-8-207(8)(b)(i), MCA, which extends the exclusive remedy of the Workers' Compensation Act from a Professional Employer Organization to its client, violate Article II, Section 16, of the Montana Constitution by depriving an injured worker of full legal redress?

         FACTUAL AND PROCEDURAL BACKGROUND

         ¶3 The controversy in this case arises from the interplay of Title 39, Ch. 8, MCA―known as the Montana Professional Employer Organizations and Groups Licensing Act (PEO Act)―and Article II, Section 16, of the Montana Constitution. Professional Employer Organizations (PEOs) hire employees and assign them to the PEO's client businesses on an ongoing basis. PEOs are statutorily required to assume responsibility for the payment of employee wages, workers' compensation premiums, payroll-related taxes, and employee benefits. Section 39-8-207(1)(b)(ii), MCA. However, Article II, Section 16, provides:

Courts of justice shall be open to every person, and speedy remedy afforded for every injury of person, property, or character. No person shall be deprived of this full legal redress for injury incurred in employment for which another person may be liable except as to fellow employees and his immediate employer who hired him if such immediate employer provides coverage under the Workmen's Compensation Laws of this state. Right and justice shall be administered without sale, denial, or delay.

         ¶4 Because Article II, Section 16, extends the exclusive remedy of the Workers' Compensation Act (WCA) only to the "immediate employer . . . if such immediate employer provides coverage, " the question arises here as to whether, when a business contracts with a PEO who pays the workers' compensation insurance premiums for certain employees, both the business and the PEO can be considered an "immediate employer" of those employees for the purpose of the exclusive remedy in accordance with § 39-8-207(8)(b)(i), MCA, or whether that provision conflicts with Article II, Section 16.

         ¶5 In August 2010, JPT entered into a contract with Payroll Plus Corporation (PPC), which is a licensed PEO. Pursuant to the requirements of the PEO Act, the parties' written contract governed the employment arrangement for certain job positions at JPT. Under the terms of the contract, JPT agreed not to hire employees directly. Instead, PPC hired the workers and "assigned" them to JPT. The contract designated PPC as the "administrative employer" of these employees. PPC agreed to assume responsibility for administrative duties, including payroll, payroll taxes, unemployment compensation, and workers' compensation.

         ¶6 The contract specified both PPC and JPT had some right of control over these employees. The contract stated, "PPC reserves a right of direction and control over Assigned Employees, as is necessary, to carry out its obligations as the administrative employer of such Assigned Employees, including the right to hire, terminate, ...


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