h o 87-11
'.
IN THE SUPREME COURT OF THE STATE OF MONTANA
1987
ROBIN A. SPADARO,
Plaintiff and Appellant,
-vs-
MIDLAND CLAIMS SERVICE, INC.;
NORTH STAR CASUALTY SERVICE, INC.;
FIRST HORIZON INSURANCE COMPANY,
Defendants and Respondents.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
The Honorable William Speare, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Lewis E. Brueggemann, Billings, Montana
For Respondent:
Crowley, Haughey, Hanson, Toole & Dietrich; Jack
Ramirez, Billings, Montana
Keefer, Roybal, Hanson, Stacey & Jarussi; Earl J.
Hanson, Billings, Montana
Submitted on Briefs: April 17, 1987
Decided: July 21, 1987
Filed:
Mr. Chief Justice J.A. Turnage delivered the Opinion of the
Court.
Plaintiff Robin Spadaro appeals an order entered by the
Thirteenth Judicial District Court, Yellowstone County,
granting summary judgment to defendants. We affirm.
One issue is presented for our review:
Did the District Court err when it granted summary
judgment in favor of defendants?
In August 1983, Robin Spadaro was an employee at the
Carbon County Health Care Center in Red Lodge, Montana. The
Carbon County Health Care Center is managed by Kare-More,
.
Inc (Kare-More) . On June 15, 1983, Spadaro became employed
on a part-time basis in the Health Care Center's laundry
department. On August 1, 1983, appellant injured her lower
back while lifting a basket of wet laundry.
Spadaro reported her injury in a timely manner. She
completed a claim for workers' compensation and was treated
by a physician. She was advised by her doctor, Robert Kerr,
to take a week off work for bed rest. However, on August 9,
1983, T. K. Strong, also a Kare-More employee, submitted a
written report that she had witnessed Spadaro dancing while
at a local bar on August 8, 1983. In spite of Strong's
report, Spadaro complained of continuing back pain. She was
subsequently examined on August 19, 1983, by another
physician, Dr. R.ichard Lewallen, and hospitalized in
Billings.
At the time of Spadaro's injury, Kare-More was insured
by First Horizon Insurance Company under Workers' Compensa-
tion Plan #2. North Star Casualty Service, Inc., was First
Horizon's insurance adjuster. First Horizon and North Star
are located in Minneapolis, Minnesota. Consequently, Midland
Claims Service, Inc., located in Billings, was contacted by
North Star to investigate Spadaro's workers' compensation
claim.
North Star, on August 22, 1983, accepted Spadaro's
claim and mailed payment of $234.33 (Check # I ) . At approxi-
mately the same time, First Horizon ordered an investigation
of Spadaro's claim. On September 2, 1983, payment of $156.22
was issued to Spadaro (Check #2). Both checks were sent to
Spadaro's post office box in Red Lodge.
Check # 1 arrived in Red Lodge while Spadaro was hospi-
talized in Billings. Spadaro's brother, Tim Flammini, took
possession of the check. Flamrnini forged Spadarols signature
and with her consent cashed Check #l. The record reveals
that Spadaro owed Flammini for babysitting and consented to
Flamminils request to retain the proceeds of Check #l.
Spadaro then contacted an attorney, Robert Skaggs, and
told Skaggs she was not receiving her workers' compensation
benefits. Skaggs, relying on Spadaro's false statements,
requested North Star to stop payment on all checks issued to
Spadaro. Skaggs also requested North Star to reissue a
single check for the full amount of benefits owed.
When North Star stopped payment on Checks #1 and #2,
North Star learned that Check # 1 had been cashed. North Star
suspended payment of benefits to Spadaro pending an
investigation.
Spadaro was aware that North Star, in accord with her
attorney's request, had stopped payment of both checks.
However, Spadaro cashed Check #2 and used it for a rental
deposit. Spadaro then sought the advice of a second attor-
ney, Lewis Brueggemann. On September 20, 1983, Robert Skaggs
withdrew as Spadaro's attorney.
On October 4, 1983, Brueggemann submitted an incorrect
notice of attorney form to the Workers' Compensation
Division. As a result, the Division refused to recognize
Brueggemann as a counsel of record. Brueggemann subsequently
completed the proper attorney authorization form and was
recognized as counsel of record on October 12, 1983.
In early September 1983, Tom Mrachek, Midland's
adjuster, began his investigation of Spadaro's claim.
Mrachek found Spadaro had been treated at the Red Lodge
clinic and released for work by Dr. Robert Kerr. Mrachek
also found that Spadaro, apparently without a referral, had
seen another physician. Spadaro's second physician, Dr.
Lewallen hospitalized Spadaro and placed her in traction.
On September 8, 1983, Midland requested additional
medical information from Spadaro's attorney, Skaggs. Howev-
er, when Skaggs withdrew as Spadaro's attorney, Midland's
request was not honored. On September 16, 1983, Midland was
notified by Darlene Monroe, claims adjuster for North Star,
that Robin Spadaro had left Montana for Colorado. Midland
then waited until October 4, 1983, for Spadaro to contact its
office.
Midland again, on October 14, 1983, requested Spadaro's
medical records from Spadaro's new attorney, Lewis
Brueggmann. Midland's adjuster, Tom Mrachek, explained to
Brueggemann in that "none of those medical reports indicate
the current problem is directly associated with [Spadaro'sl
industrial accident of 8/1/83." On October 28, 1983, Midland
received a letter from Dr. Lewallen which stated that 'I. . .
Spadaro twisted her back while working at the Health Care
Center." Upon receipt of the letter, Midland immediately
advised North Star to accept Spadaro's claim and pay all
temporary total disability benefits. North Star did not
immediately accept Midland's advice. North Star continued
its investigation based on additional information in Dr.
Lewallen's report that Spadaro may have injured her back some
eight months earlier in a domestic disturbance involving her
ex-husband.
On November 7, 1983, Spadaro filed her claim for breach
of the implied duty of good faith and fair dealing. On
November 30, 1983, North Star issued payments of $1,900.80 to
Spadaro for all temporary total disability benefits dating
back to August 1, 1983. North Star's payment included
$234.33 previously paid to Spadaro. First Horizon and North
Star have continued to pay Spadaro full benefits to date.
Based upon the foregoing facts as shown through undis-
puted deposition testimony, the District Court, on December
17, 1985, granted respondent's motion for summary judgment.
Issue
The sole issue presented for our review is whether the
District Court erred when it granted summary judgment in
favor of respondents?
The standard by which this Court reviews an appeal from
a motion granting summary judgment is whether the record,
when taken as a whole, shows no genuine issue of material
fact. Kronen v. Richter (Mont. 1984), 683 P.2d 1315, 1317,
41 St.Rep. 1312. Where critical testimony is taken by
deposition, this Court will closely examine the District
Court's findings. When reviewing deposition testimony the
reviewing court is in a like position to the District Court
and is freely able to review such evidence. Kaiser v. Town
of Whitehall (Mont. 1986), 718 P.2d 1341, 1342, 43 St.Rep.
176.
A party opposing a motion for summary judgment may not
rest upon the allegations or denials of his pleadings. The
party's response must set forth specific facts showing there
is a genuine issue for trial. Nationa.1 Gypsum Co. v. Johnson
(1979), 182 Mont. 209, 595 P.2d 1188, 1189. Conclusory or
speculative statements are insufficient to raise a genuine
issue of material fact. Kronen, 683 P.2d at 1318.
In Vigue v. Evans Products (1980), 1.87 Mont. 1, 608
P.2d 488, 491, we held that an injured employee could bring a
claim against a Plan I (self) insurer for commission of
intentional torts or bad faith in the processing and han-
dling of a workers' compensation claim. We held in Hayes v.
Aetna Fire Underwriters (1980), 187 Mont. 148, 609 P.2d 257,
262, that an injured employee could bring a separate claim
against a Plan I1 insurer (private insurance carrier) for
intentional torts and bad faith in adjusting and processing a
workers' compensation claim.
No one should be allowed intentionally
and tortiously to cut off a claimant
unilaterally for whatever purpose they
choose and then hide behind workers'
compensation exclusivity in assurance
that the only retribution will come in
the favor of a compensation penalty paid
for by society.
Hayes, 609 P.2d at 262.
In Birkenbuel v. Mont. State Compensation Ins. Fund
(Mont. 1984), 687 P.2d 700, 704, 41 St.Rep. 1647, we held
that an injured employee seeking punitive damages for inten-
tional torts or bad faith against a Plan I11 insurer (the
State Fund) was barred by public policy. In Birkenbuel, we
recognized punitive damages are designed to punish an inten-
tional tortfeasor. However, we held it would be improper to
allow "punishment" of the State Fund, since innocent Montana
taxpayers would be forced to reimburse the State Fund.
Rirkenbuel, 687 P.2d at 704.
In Carlson v. Anaconda Company (19741, 165 Mont. 413,
529 P.2d 356, we held an injured employee was limited in a
negligence claim against his employer to remedies with the
Workers' Compensation Division. However, Carlson, 165 Mont.
at 417, 529 P.2d at 358, citing Reed v. Hartford Acc. &
Indemnity Co. (D. Pa. 1973), 367 F.Supp. 134, 135, permits an
injured employee's claim for bad faith, where an insurer acts
intentionally wit.h malice when settling a workers1 compensa-
tion claim.
Unfair Claims Settlement Practices
Plaintiff and appellant Spadaro alleges that respon-
dents acted in bad faith when they suspended or denied
Spadaro's workers' compensation benefits. Spadaro claims
respondents violated § 33-18-201, MCA, which prohibits unfair
claim settlement practices by an insurer. Appellant cites no
facts to support her allegation that $ 33-18-201, MCA, was
violated.
The moving party has the initial burden of establishing
the absence of any genuine issue of material fact. Mustang
Beverage Company, Inc. v. Jos. Schlitz Brewing Company
(1973), 162 Mont. 243, 246, 511 P.2d 1, 3. However, once
the moving parties' burden has been met, as found by the
District Court, the burden of establishing a genuine issue of
material fact shifts to appellant Spadaro. In order to
prevent summary judgement, Spadaro must produce evidence
sufficient to raise a genuine issue of fact. Kaiser v. Town
of Whitehall (Mont. 1986), 718 P.2d 1341, 1342, 43 St.Rep.
176.
On appeal, Spadaro has failed to cite any disputed
facts. Instead, Spadaro has relied on general allegations of
disputed facts. A party opposing summary judgment 'l [m]ust
set forth specific facts showing that there is a genuine
issue for trial." Rule 56(e), M.R.Civ.P.. National Gypsum
v. Johnson, (1979), 182 Mont. 209, 212, 595 P.2d 1188, 1189
Additionally, Spadarols allegations that various
sections of 33-18-201, MCA, were violated by respondents is
not supported by the record. Respondents began paying
benefits to Spadaro when they issued Check #1 on August 22,
1983. Respondents accepted Spadaro's claim even though they
had evidence that her claim might not be genuine. On
September 2, 1983, respondents issued Check #2. After
receiving the checks, Spadaro fraudulently told her first
attorney, Robert Skaggs, that she had not received the
checks. North Star, following Skaggs's request, stopped
payment on the checks. North Star became suspicious upon
learning that the checks had already been cashed. In
response to the confusing situation created by Spadaro, North
Star began its investigation.
Respondents were aware that Spadaro was initially
advised by Dr. Robert Kerr on August 2, 1983, to take a week
off for bed rest. Respondents were also aware that Kerr then
advised her to return to work. However, Spadaro was examined
by Dr. Lewallen apparently without a referral from Dr. Kerr.
On August 19, 1983, Dr. Lewallen placed Spadaro in traction
in a Billings hospital. Given this information, respondents
sought Spadaro's complete medical records.
On September 8, 1983, respondents requested Robert
Skaggs, Spadaro's first attorney, to forward appellant's
medical records. Respondent's request was not honored fol-
lowing Skaggs' withdrawal on September 20, 1983. Subsequent
to Skaggs's withdrawal, Spadaro did not contact respondents
until October 4, 1983. Her new attorney, Lewis Brueggemann,
failed to complete a client authorization until October 11,
1983. On October 14, 1983, respondents requested Brueggemann
to provide them with Spadaro's medical records. On October
28, 1983, Brueggemann sent Dr. Richard Lewallen's report,
which specifically stated that claimant Spadaro had injured
her back in a work-related accident on August 1, 1983.
The record reveals that Spadaro was the primary cause
for the d.elay in receiving her compensation benefits.
Spadaro's (1) fraudulent conduct, (2) change of attorneys and
(3) failure to provide respondents with her medical records
delayed receipt of her benefits until October 28, 1983.
Spadaro complains that she did not receive benefits for four
months. However, the record clearly reveals that she is
responsible for a delay of approximately three months.
The record also reveals that Spadaro and her new attor-
ney Lewis Brueggemann were aware that S 39-71-610, MCA,
enabled Spadaro by petitioning the division, to receive
benefits for forty-nine days pending a hearing on the matter.
Brueggemann and Spadaro elected not to utilize 5 39-71-610,
MCA. Spadaro is not required to utilize the benefits of this
section. However, her failure to do so is a proper
consideration.
Violations of §§ 39-71-606 through -609, MCA
Appellant Spadaro contends respondents violated
S 39-71-606, MCA, which requires an insurer to accept or deny
a claim within thirty days. On August 22, 1983, respondents
accepted liability within thirty days of appellant's claim
for benefits. The record reflects respondents accepted
liability within thirty days of Spadaro ' s submission of a
claim for compensation benefits. Therefore, we need not
address this issue.
Spadaro next contends S 39-71-607, MCA, requiring an
insurer to suspend payments pending receipt of medical
records for no more than thirty days was also violated.
Appellant Spadaro has completely failed to produce evidence
that respondents suspended payment for more than thirty days.
Therefore, we will not review this issue.
Spadaro also contends 5 39-71-608, MCA, which allows an
insurer to make compensation payments without accepting
liability, was violated. Spadaro claims in a general manner,
that respondents violated this statute by failing to provide
her with compensation advice forms until July 30, 1984.
However, Spadaro has failed to show any intentional
misconduct or any resulting prejudice. Further, respondents
on September 8, 1983, provided Spadaro with a letter, similar
to a compensation advice form. Respondents' failure to
adhere to S 39-71-608, MCA, was technical in nature and not
made in bad faith. Respondents' violation of S 39-71-608,
MCA, under these facts, does not constitute bad faith.
Finally, Spadaro claims respondents violated
5 39-71-609, MCA, which requires an insurer to provide a
claimant with written notice, fourteen days before
termination of compensation benefits. In the case at hand,
respondents suspended Spadaro's benefits after Spadaro
fraudulently claimed that she had not received Checks 1 or 2.
Respondents then investigated Spadaro's alleged injury and
subsequent fraudulent conduct. The record reveals that
respondents failed to provide Spadaro with written notice
that her compensation benefits were being suspended. In
doing so, respondents violated 5 39-71-609, MCA.
In Catteyson v. Great Falls Mobile Home Center (19791,
183 Mont. 284, 286, 599 P.2d 341, 343, we held when an
insurer violates 5 39-71-609, MCA, the insurer remains liable
for compensation benefits until proper notice is served.
Claimant Spadaro has received all compensation benefits
previously owed by respondent. Further, Spadaro has
continued to receive benefits to date. Spadaro has provided
no evidence indicating respondents acted intentionally or
with malice when they suspended benefits. Hayes v. Aetna
Fire Underwriters (1980), 187 Mont. 148, 153, 609 P.2d 257,
260. A technical violation of 5 39-71-609, MCA, was
committed by respondents. However, respondents' conduct does
not rise to the level of bad faith.
Appellant Spadaro contends "[o]bviously, the record is
replete with genuine issues of material fact. " However,
appellant failed to cite a single disputed material fact.
After reviewing the trial court's examination of the record,
we hold that the trial court properly found that appellant
Spadaro failed to show any disputed material fact. Summary
judgment is proper when the record shows no genuine issue of
material fact. Kronen v. Richter (Mont. 1984), 683 P.2d
1315, 1317, 41 St.Rep. 1312.
The record also supports the trial court's finding that
much of the complained of delay was the result of Spadaro's
own calculated and fraudulent conduct. We have long held one
cannot take advantage of his own wrong. Section 1-3-208,
MCA .
We hold the District Court did not err in granting
summary judgement.
Accordingly, the District Court is affirmed.
We concur: