Tuttle v. Morrison-Knudsen Co., Inc.

Montana Supreme Court

Tuttle v. Morrison-Knudsen Co., Inc.

580 P.2d 1379, 177 Mont. 166, 1978 Mont. LEXIS 833

CourtMontana Supreme Court

DecidedJune 19, 1978

Docket14123

StatusPublished

Cited by18 cases

This text of 580 P.2d 1379 (Tuttle v. Morrison-Knudsen Co., Inc.) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Tuttle v. Morrison-Knudsen Co., Inc., 580 P.2d 1379, 177 Mont. 166, 1978 Mont. LEXIS 833 (Mo. 1978).

Pincite

Opinion

MR. CHIEF JUSTICE HASWELL

delivered the opinion of the Court.

Insurer, Argonaut Insurance Co., and claimant’s employer Morrison-Knudsen Co., Inc. appeal from the judgment of the Workers’ Compensation Court, on November 18, 1977, which affirmed the Division of Workers’ Compensation order that determined appellants’ interest in claimant’s third party recovery. Following the denial of appellant’s petition for rehearing, this appeal ensued.

On appeal, the parties have stipulated to an agreed statement of facts, which is:

On January 18, 1974, Irvin B. Tuttle, while commuting to work at the Sarpy Creek Mine, near Hardin, Montana, where he worked for the Morrison-Knudsen Company, from his home in Billings, Montana, was involved in an automobile accident. Tuttle was not driving. He was injured and claimed workers’ compensation *168 benefits based on the fact that he was receiving travel pay and was in the course of his employment.

Argonaut Insurance Company, the insurer for Morrison-Knudsen, an employer enrolled under Plan No. 2 of the Workers’ Compensation Act, denied coverage.

Tuttle petitioned the Division for a determination of disability and an order awarding compensation was issued June 19, 1975.

Argonaut has paid compensation from January 18, 1974 to May, 1977 pursuant to the June 19, 1975 order.

Tuttle instituted a third-party action against the driver of the vehicle he was riding in when the accident, which caused his injury, occurred. Argonaut was not advised of the filing of this law suit. On May 4, 1977 Argonaut was advised of an offer of settlement in the amount of $147,500 in this law suit. On May 5, 1977 Tuttle accepted the offer of settlement.

Argonaut was advised of the acceptance of this offer on May 11-, 1977.

From the $147,500 received in settlement of the third-party action, the entire attorney fees in the amount of $47,500 and the entire costs in the amount of $2,427 were paid, $18,045.52 was retained in trust, and the balance of $79,527.48 was distributed to the claimant or for his benefit. No request was made upon Argonaut Insurance Company to contirbute to the attorney fees or costs in advance of the consummation of the settlement.

Argonaut and Morrison-Knudsen Company, Inc., petitioned the Division for an- order determining their subrogation interest in the May 4, 1977 award. The division issued an order determining subrogation interest on May 19, 1977.

Argonaut petitioned for reconsideration of the May 19, 1977 order. This petition was denied by the Division’s order denying insurer’s petition for reconsideration of order determining subrogation interest of June 1, 1977.

The insurer, Argonaut Insurance Company, and employer, Morrison-Knudsen Company, Inc. petitioned for appeal of the division’s order determining subrogation interest of May 19, 1977, and *169 order denying insurer’s petition for reconsideration of order determining subrogation issued June 1, 1977, and from the whole thereof.

The Workers; Compensation Court held a hearing on the insurer’s appeal. On November 18, 1977, that court affirmed the division’s order. Insurer appeals from that judgment.

The sole issue before this Court is whether the Worker’s Compensation Division order that determined the insurer’s subrogation interest in claimant’s third party recovery, and which was affirmed by the Worker’s Compensation Court, is correct in light of the provisions of section 92-204.1, R.C.M.1947.

Section 92-204.1 establishes the insurer’s right to subrogation in third party recovery right to subrogation in third party recoveries by injured workmen. The statute under consideration was amended in 1977. The amendments simply cleaned up the language in the statute and divided it into two sections. They did not make any substantive change in the statute. In this case, we are concerned with the statute as it existed prior to the 1977 amendments.

This is a case of first impressions in Montana.

We have held that the Workers’ Compensation Act must be liberally construed in favor of claimant. Murphy v. Anaconda Co., (1958), 133 Mont. 198, 321 P.2d 1094; Marker v. Zeiler, (1961), 140 Mont. 44, 367 P.2d 311. Applying that standard of liberal construction to this statute, we believe that the order of the Worker’s Compensation Division must be affirmed.

In its order of May 1977, the Workers’ Compensation Division determined the insurer’s statutory subrogation interest pursuant to section 92-204.1 That section provides that the insurer is entitled to full subrogation for all compensation and benefits paid or to be paid. The insurer’s right of subrogation is a first lien on the third party recovery. However, the employees is guaranteed at least one-third of the recovery and the insurer is required to pay his proportionate share of the costs and attorney fees of the third party action. The section further provides that when the third party action is settled and the amount of benefits and compensation has not been ful *170 ly determined, the Division of Worker’s Compensation shall determine what proportion of such settlement shall be allocated under subrogation.

In this case, claimant settled his third party action for $ 147,500. The action was settled prior to a full determination of his workmen’s compensation benefits. Due to that fact, the Division of Worker’s Compensation was requested to determine how much of the third party settlement should be allocated under subrogation. Their determination was as follows:

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