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LIBERTY MUTUAL FIRE INSURANCE COMPANY
CUT BANK IGA STORE
Summary: Petitioner asked the WCC to find that she was an employee of a grocery store when she was injured while demonstrating food products to store customers. The workers' compensation insurer moved to dismiss, arguing, among other things, that claimant had sued the store for negligence, successfully resisted a motion for summary judgment by stating under oath that she was an independent contractor, not an employee, and recovered $60,000 in settlement of her tort claim.
Held: The doctrine of judicial estoppel precludes petitioner from taking a position in this proceeding contrary to the position taken in the tort case. Motion to dismiss with prejudice granted.
¶1 Petitioner, Barbara Birch (Birch), seeks judgment determining that she was an employee of Cut Bank IGA Store (IGA)(1) when she was injured on April 28, 1994. At the time of the injury, she was demonstrating food products to store customers.
¶2 Following her injury, Birch sued IGA for negligence. IGA responded that she was its employee and that her claim was therefore barred under the exclusive remedy doctrine of the Workers' Compensation Act, section 39-71-411, MCA. Birch insisted she was an independent contractor, successfully opposing IGA's motion for summary judgment based on the employment issue, and then persuaded IGA to pay $60,000 to settle her tort claim. She then filed the present petition to collect workers' compensation benefits.
¶3 Birch and IGA have submitted this case for decision based on an Agreed Statement of Facts and an agreed set of exhibits. The exhibits consist of copies of various pleadings, motions, and other documents, including a deposition of Birch, from the district court litigation.
¶4 Based on the agreed facts and exhibits, Birch and IGA submit the following issues for the Court's determination:
(Stipulation to Issues.)
¶5 The Court finds the judicial estoppel argument to be dispositive. The doctrine precludes a party from taking a position or asserting a fact in one judicial proceeding and thereafter taking an inconsistent position in a subsequent proceeding. Fiedler v. Fiedler, 266 Mont. 133, 139, 879 P.2d 675, 679 (1994). The nature of the doctrine was set out in Rowland v. Klies, 223 Mont. 360, 368, 626 P.2d 310, 316 (1986), and was repeated in Brown v. Small, 251 Mont. 414, 418, 825 P.2d 1209, 1212 (1992), as follows:
¶6 Judicial estoppel applies not just to facts a party presents under oath, but also to positions taken. "Judicial estoppel is equally applicable to a party like Brown who seeks to take a position contrary to his pleadings in an earlier judicial proceeding." Brown, 251 Mont. at 418, 825 P.2d at 1212. In Fiedler the Supreme Court elaborated that a party cannot take the opposing viewpoint when he has induced another to stipulate to his position and drop his arguments for that opposing position.
¶7 Four elements must be shown. Those elements are:
Fiedler, 266 Mont. at 140, 879 P.2d at 679-680. All elements are met in the present case.
¶8 Birch's tort action against IGA was predicated on her being found to be an independent contractor. If she were found to be an employee, then the exclusive remedy provision set forth in section 39-71-411, MCA, barred her action and precluded her recovery of damages.
¶9 Birch was well aware of the exclusive remedy provision. IGA raised it initially in a motion to dismiss (Ex. 3B) and then renewed it in a motion for summary judgment (Ex. 3J) which was supported by an affidavit setting forth facts consistent with an employment relationship between IGA and Birch. (Ex. 3E.) Birch vigorously resisted IGA's motion and countered it with her own affidavit which, on its face, was clearly calculated to show that she was an independent contractor, not an employee.(2) (Ex. 3F.)
¶10 In her brief opposing summary judgment, Birch expressly denied that she was IGA's employee. There was no equivocation in the statement:
(Ex. 3K at 1-2.) Birch proceeded to support her contention with sworn statements she made in her affidavit, her deposition and answers to interrogatories. She characterized her sworn statements as proving that she "was at no time an employee of the Cut Bank IGA food store" (Id. at 7, underlining in original) and even went on to argue that the IGA was estopped from contending that she was an employee.
¶11 She was successful in defeating IGA's motion for summary judgment. The district judge denied the motion, holding:
(Ex. 3N at 2.)
¶12 Birch's statements under oath, and her assertions concerning the legal effect of those statements, are sufficient to satisfy the first estoppel element. While estoppel does not apply when facts are uncertain or undetermined, Rowland, 223 Mont. at 368, 726 P.2d at 316, there was no uncertainty as to the facts underlying the employment dispute. This case is distinguishable from Caekaert, a case in which the claimant testified that he had been forced to quit working on account of back pain. In Caekaert the Supreme Court found that claimant's testimony was not inconsistent with a subsequent claim for temporary total disability benefits based on carpal tunnel syndrome. There was no inconsistency because at the time claimant testified concerning his back he was describing his condition as it existed at that time and the condition was not necessarily permanent. The Supreme Court wrote:
Caekaert, 268 Mont. at 116, 885 P.2d at 502 (emphasis added.) This case is different. The facts were frozen as of the time of injury.
¶13 The second element is satisfied. It was unnecessary that Birch obtain a judgment against IGA. Traders State Bank of Poplar v. Mann, 258 Mont. 226, 243, 852 P.2d 604, 615 (1993). It was sufficient that she was "at least successful in arguing . . . [her] original position against the party asserting the estoppel." Id. Birch's statements prevented IGA from obtaining summary judgment. She thereby induced IGA to drop its arguments and settle the case in the amount of $60,000, a substantial sum which contradicts any characterization of the settlement as for "nuisance value."
¶14 The third element is satisfied. Birch's present claim that she was an IGA employee is absolutely contrary to her position in district court that she was not an employee. Her argument that she was uncertain of her status is disingenuous. She vigorously resisted all attempts to characterize her as an employee.
¶15 Finally, the fourth element is satisfied. In the face of Birch's assertion of independent contractor status, and its loss of the motion for summary judgment, IGA paid a substantial settlement and dropped its pursuit of the exclusive remedy defense.
¶16 The fact that IGA, rather than its workers' compensation insurer, was the defendant in the district court action does not preclude application of the estoppel. The situation here is no different than in Brown. In that case, the plaintiff's attorneys commenced an action against plaintiff's insurer following fire damage to plaintiff's property. They settled the case. Subsequently, they discovered that there was an additional endorsement providing additional coverage of which they were unaware at the time of settlement. They brought a second action on behalf of plaintiff, alleging that the insurer violated its duty to its insured by failing to disclose the additional coverage. Based on the allegations, they procured an additional $75,000 settlement for plaintiff, who displayed his gratefulness by suing the attorneys for malpractice and alleging that they were negligent in failing to discover the additional coverage in the first place. Even though the allegations in the second action were directed at a third party, i.e., the insurer, the Supreme Court held that plaintiff was judicially estopped from pursing a legal malpractice action:
251 Mont. at 418-19, 825 P.2d at 1212.
¶17 Having found that Birch is judicially estopped from seeking workers' compensation benefits, it is unnecessary to consider the other issues raised by the parties.
¶18 1. The petition is dismissed with prejudice.
¶19 2. This JUDGMENT is certified as final for purposes of appeal pursuant to ARM 24.5.348.
¶20 3. Any party to this dispute may have 20 days in which to request a rehearing from this Order Dismissing with Prejudice.
DATED in Helena, Montana, this 3rd day of March, 1998.
c: Mr. Cameron Ferguson
BARBARA BIRCH being first duly sworn deposes and says,
/s/ Barbara Birch
1. The store is legally known as Supervalue, Inc., but will be referred to hereinafter as "IGA".
2. The text of the affidavit is set forth in an addendum to this decision.
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