NO. 91-472
IN THE SUPREME COURT OF THE STATE OF MONTANA
1992
MICHAEL R. BROW,
plaintiff and Appellant,
-vs-
WES EHLERT,
Defendant and Respondent.
APPEAL FROM: District Court of the Tenth Judicial District,
In and for the County of Fergus,
The Honorable Peter L. Rapkoch, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Torger S. Oaas, Attorney at Law, Lewistown, Montana
For Respondent:
Robert L. Johnson, Attorney at Law, Lewistown,
Montana
submitted on Briefs: February 6, 1992
Decided: November 12, 1992
Filed:
I
Clerk
Justice Karla M. Gray delivered the Opinion of the Court.
This is an appeal from an Order of the Tenth Judicial District
Court, Fergus County, granting respondent's motion for a newtrial.
We reverse.
The issue before us is whether the District Court abused its
discretion in granting a new trial. Resolution of the issue
necessitates a determination of whether workers' compensation
exclusivity and co-employee immunity are affirmative defenses or
matters of subject matter jurisdiction.
Appellant Michael Brown (Brown) brought a negligence claim
against respondent Wes Ehlert (Ehlert) seeking compensation for
personal injury and property damage sustained in a two car
automobile collision. The point of impact in the February 1989
accident was near the center of a narrow mountain road
approximately one mile from the Blue Range Mining Company mine
where both Brown and Ehlert were employed.
Brown filed a complaint against Ehlert seeking damages for
Ehlert's negligence. Ehlert generally denied the allegations of
negligence and raised the affirmative defense of comparative
negligence. He raised no other affirmative defenses either in his
pleadings, at the pretrial conference, or in the pretrial order; he
counterclaimed for property damage.
On June 18, 1991, following Brown's case-in-chief, Ehlert
moved to strike Brown's personal injury claim based on the
exclusivity of the Montana Workers' Compensation Act (the Act). He
asserted that Brown's own evidence established that both he and
Brown were within the course and scope of their employment at the
time of the collision, that the Act constituted the exclusive
remedy for Brown's personal injury claim and, consequently, that
the District Court was without subject matter jurisdiction over
that claim. He argued that it was Brown's obligation to state his
personal injury claim in such a manner as to bring it within one of
the exceptions to the exclusive provisions of the Act; according to
Ehlert, Brown's failure to do so excused any duty on his own part
to plead the Act as an affirmative defense. Brown responded that
applicability of the Act is an affirmative defense which is waived
if not raised timely. The court did not rule immediately, but
subsequently denied Ehlert's motion.
The jury returned a verdict in Brown's favor on June 19, 1991.
Ehlert moved for judgment notwithstanding the verdict, asserting a
variety of arguments relating to the exclusivity of the Act and
plaintiff's burden to plead himself into the court's jurisdiction
by alleging facts removing his personal injury claim from
application of the Act. Brown again respondedthat exclusivity and
co-employee immunity under the Act do not relate to subject matter
jurisdiction, but are affirmative defenses similar to other
avoidance defenses such as comparative negligence and statutes of
limitation which must be pleaded affirmatively. The District Court
denied Ehlert's motion and entered judgment for Brown.
Ehlert subsequently moved for a new trial on a number of
alternative bases, including the court's error of law in rejecting
his subject matter jurisdiction argument. On September 9, 1991,
the court granted Ehlerttsmotion for a new trial, citing Massey v.
Selensky (1984), 212 Mont. 68, 685 P.2d 938 (Massev I), and Massey
v. Selensky (1987), 225 Mont. 101, 731 P.2d 906 (Massev 11). This
appeal followed.
We will not reverse a district court's grant or denial of a
new trial absent a manifest abuse of discretion. Tappan v. Higgins
(1989), 240 Mont. 158, 783 P.2d 396. We note at the outset that
the court's order does not comply fully with Rule 59 (f), M.R.Civ.P.
We need not remand for entry of findings sufficient for our review
in this case, however, because it is apparent from the parties'
arguments to the District Court and from the court's citation to
the Massey cases that the order granting a new trial could have
been based only on the court's acceptance of Ehlertls subject
matter jurisdiction argument. Thus, we must determine whether
workerst compensation exclusivity and co-employee immunity under
the Act are matters which go to the district court's subject matter
jurisdiction or, alternatively, whether they are affirmative
defenses which are waived if not raised timely.
Given the District Court's reliance, a brief review of the
Massev cases is appropriate before we turn to the resolution of the
specific issue before us. We begin by noting that, while
applicability of the Act to a negligence claim against a co-worker
was involved in both Massev cases, neither case addressed the issue
presently before us.
The Massey cases arose from an accident in which plaintiff
Massey was injured after being struck by defendant Selensky's
unoccupied truck. Both parties were employees of the Anaconda
Company at the time and had ridden to work together in Selensky's
truck. The injury occurred after their arrival at Anaconda's
property but before their shift began. Massey filed for, and
received, workers' compensation benefits as a result of his
injuries. Massey then sued Selensky, alleging negligence. In
Massev I, Selensky moved for summary judgment after a period of
discovery, alleging that he was immune from suit because the injury
was compensable under the Workers' Compensation Act. Summary
judgment was entered in Selensky's favor on the grounds that
Selensky was within the course and scope of his employment at the
time of the injury.
On appeal, we noted that it is "well settled in Montana that
a co-employee is immune from liability for negligent acts resulting
in injuries which are compensable under the Workers' Compensation
Act." Massev I, 685 P.2d at 940. We went on, however, to state
specifically that "the simple fact that two persons have the same
employer would not necessarily cause this rule to apply." Id. In
reversing the summary judgment and remanding for further
proceedings, we set forth the proper test to be used by the
district courts in determining whether the co-worker was acting
within the course and scope of employment at the time the negligent
act occurred, noting that, if so, the co-worker is immune from
suit. Massev I did not address the issue of when and how co-
employee immunity must be raised.
Massev I1 was the appeal after remand of Massev I. On remand,
the district court entered partial summary judgment for plaintiff
Massey on the issue of co-employee immunity, applying the Itgoing
and comingI1 rule. On appeal, we noted that ll[c]o-employee immunity
is essential to the integrity of the Act," and again reversed,
determining that the premises rule, rather than the going and
coming rule, was appropriate to the facts of the case. Massev 11,
731 P.2d at 907. We found that Selensky was protected by co-
employee immunity from common law liability. Again, however, the
issue of when and how co-employee immunity under the Act must be
raised was not before us in Massev 11.
Ehlert is correct in asserting that if exclusivity and co-
employee immunity under the Act are questions of subject matter
jurisdiction, they can be raised at any time under Rule 12(h),
M.R.Civ.P. Ehlert asserts that 5 39-71-2905, MCA, grants exclusive
authority to make workerst compensation determinations to the
Workers1 Compensation Court and that 5 27-1-703, MCA, makes it
clear that a district court cannot consider negligence on the part
of an injured worker's co-employee to the extent the co-employee
has tort immunity under the Act. Ehlert argues that these correct
statements of law establish the District Courtts lack of subject
matter jurisdiction over Brown's personal injury claim. We
disagree.
Section 39-71-2905, MCA, is not applicable here. No dispute
under Chapter 71 of Title 39 is presented here and the District
Court has not been requested to make a workers1 compensation
determination. Further, 27-1-703, MCA, provides that to the
extent a co-employee has immunity from liability under the Act, a
trier of fact cannot consider or determine negligence by the co-
employee. The wording of the statute itself suggests that the
existence of such immunity must be determined by the District
Court. Indeed, we specifically stated in Massev I what the
legislature implied in f, 27-1-703(4), MCA:
[Tlhe trial court must expressly address the issue
of whether the fellow worker was a co-employee for
purposes of the immunity statute.
Massev I, 685 P.2d at 941. If the court finds that co-employee
immunity exists, the immunity is a bar to common law negligence
liability for personal injuries; if no immunity exists, the action
can proceed. Thus, while Massev I makes it clear that a district
court must make the immunity determination, it also assumes that
the issue has been raised timely as was the case therein. Subject
matter jurisdiction was not the issue.
Acceptance of Ehlertvssubject matter jurisdiction contention
would radically alter our modern rules of civil practice and
procedure. Plaintiffs bringing common law negligence actions could
no longer make "a short and plain statement of the claim showing
that the pleader is entitled to relief." Rule 8(a), M.R.Civ.P.
Instead, they would be required to allege that neither exclusivity
nor co-employee immunity under the Workersv Compensation Act was
applicable to their claim in order to plead their way into the
court's jurisdiction. Presumably, it also would be incumbent on
such plaintiffs to allege the inapplicability of all other
immunities and bars to their action. In the event of a general
denial by the defendant, one assumes the plaintiff would be put to
her or his proof on all such matters. Such a result is not only
contrary to our procedural rules, it is also contrary to our most
fundamental notions of the pleading and proof burdens of the
respective parties to a lawsuit. Nothing in the Act, the Montana
Rules of Civil Procedure or our cases supports such a result.
Ehlert relied at the District Court on Mitchell v. Banking
Corporation of Montana (1929), 83 Mont. 581, 273 P. 1055, as
support for his subject matter jurisdiction argument. In Mitchell,
the plaintiffs brought suit against the stockholders of a banking
corporation to enforce a specific statutory liability; the statute
created both the right and the remedy and contained a time limit
for bringing the action. This Court held that, under such
circumstances, w[a]llegations of fact showing that the action was
commenced within time are, therefore, a necessary part of the
complaint. ... Mitchell, 273 P. at 1057. Mitchell does not
mandate a conclusion here that Brown must allege inapplicability of
the Act.
The case before us is nearly the reverse of Mitchell. There,
the action was premised in its entirety on a statutory right and
remedy; our conclusion specifically was based on the fact that the
action did not exist at common law and that, therefore, the
plaintiffs had to meet each and every statutory requirement in
setting forth their claim. Here, Brown's action for personal
injuries & a common law negligence claim.
The jurisdiction of Montana's district courts over common law
personal injury claims cannot be disputed. See § 3-5-302, MCA. In
addition to alleging the facts of the claim, Brown further alleged
that the accident occurred in Fergus County, bringing the matter
under the jurisdiction of the Tenth Judicial District Court. Thus,
Brown met his pleading burden under Rule 8, M.R.Civ.P. No statute
or rule requires pleading the bapplicability of the Workers'
Compensation Act.
On the other hand, Rule 8(b), M.R.Civ.P., requires a party to
state her or his defenses to each claim asserted. In addition,
Rule 8(c) requires a party to set forth affirmatively all matters
constituting avoidance or affirmative defenses. The rationale for
requiring that these defenses be affirmatively pleaded is simple:
the same principles of fairness and notice which require a
plaintiff to set forth the basis of the claim require a defendant
to shoulder a corresponding duty to set out not merely general
denials as appropriate, but also those specific defenses not raised
by general denials by which a defendant seeks to avoid liability,
rather than merely to controvert plaintiff's factual allegations.
The essence of affirmative defenses is to concede that while
the plaintiff otherwise may have a good cause of action, the cause
of action no longer exists because some statute or rule permits
defendant to avoid liability for the acts alleged. Under these
principles, exclusivity and co-employee immunity under the Workers'
Compensation Act clearly constitute affirmative defenses. They do
not go to the merits of Brown's personal injury complaint; rather,
they assert that the Act protects Ehlert from liability for the
very acts alleged by Brown. As such, they are similar to
legislative immunity under 5 2-9-111, MCA, and to other affirmative
defenses such as statutes of limitations and the statute of frauds.
We conclude that Workers' Compensation exclusivity and co-employee
immunity are matters of avoidance which, pursuant to Rule 8(c),
M.R.Civ.P., must be pleaded affirmatively.
Furthermore, it is well settled in Montana that affirmative
defenses are waived if not raised timely. See Chandler v. Madsen
(1982), 197 Mont. 234, 642 P.2d 1028. Here, Ehlert did not raise
exclusivity or co-employee immunity under the Act in his initial
pleadings, after opportunity for discovery, or at the pretrial
conference. The matters were raised only after Brown's case-in-
chief. This is far too late to provide appropriate notice to Brown
and to apprise the District Court that the issues were before it
for consideration under the Massey I test or otherwise. We hold
that Ehlert waived the affirmative defenses of Workers'
Compensation Act exclusivity and co-employee immunity.
Our results here are consistent with those reached in other
jurisdictions. In Doney v. Tambouratgis (Cal. 1979), 587 P.2d
1160, the defendant attempted to raise the exclusivity defense in
a motion for nonsuit after the plaintiff's case-in-chief and again
in motions for judgment notwithstanding the verdict and for new
trial. The Supreme Court of California rejected a subject matter
jurisdiction argument, concludingthat the trial court's common law
jurisdiction continued unless and until coverage under the workers'
compensation statute was demonstrated; such coverage could be shown
by allegations of fact by plaintiff in the complaint or "by the
defendant through setting up the affirmative defense of coverage in
responsive pleadings and proceeding to prove the existence of the
requisite conditions." Doney, 587 P.2d at 1164. Similarly, in
Bendar v. Rosen (N.J.Super.A.D. 1991), 588 A.2d 1264, a co-worker
was sued for personal injuries caused by an automobile accident.
The defendant's attorney did not raise co-employee immunity until
after the jury was empaneled. The New Jersey court held that,
under the applicable procedural rules, co-employee immunity was
waived if not raised by motion before trial or as an affirmative
defense. Bendar, 588 A.2d at 1267. While we recognize that the
cited cases are distinguishable in part because the workers'
compensation acts in California and New Jersey are not identical to
Montana's Act, the driving force in those cases and in the case
before us relates to pleading rules and principles, rather than to
the specifics of each state's statutory workerss compensation acts.
In conclusion, the District Court based its grant of a new
trial on an erroneous interpretation of our Massey cases. Because
exclusivity and co-employee immunity under the Workers'
Compensation Act are affirmative defenses which are waived if not
raised timely, we hold that the District Court manifestly abused
its discretion in granting a new trial.
We note that Ehlert attempts to raise the issue of improper
injection of the fact of liability insurance as an alternative
basis on which this Court should uphold the District Court's grant
of a new trial. Following a mention of insurance by Brown's
counsel in closing argument, Ehlert moved for a mistrial; the
motion was denied. Ehlert also raised this issue as one of the
grounds for his motion for a new trial. The District Court did not
address the issue in its grant of a new trial. Ehlert did not
cross-appeal the District Court's denial of his motion for mistrial
or its failure to grant a new trial on this basis. Because this is
a matter separate and distinct from that for which Brown seeks our
review, and absent a cross-appeal, we are precluded from reviewing
this issue on appeal. Rouse v. Anaconda-Deer Lodge County (1991),
250 Mont. 1, 817 P.2d 690.
Reversed with instructions to reinstate the jury verdict and
enter judgment accordingly.
We concur: A
Ciiief Justice
November 12, 1992
CERTIFICATE OF SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the
following named:
Torger S. Oaas
Attorney at Law
P.O. Box 76
Lewistown, MT 59457
Robert L. Johnson
Attorney at Law
Ste. 507, Montana Bldg.
Lewistown, MT 59457
ED SMITH
CLERK OF THE SUPREME COURT
STATE OF MONTANA A .
BY: