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IN THE WORKERS' COMPENSATION COURT OF THE STATE OF MONTANA
2003 MTWCC 23
d/b/a SEVEN BAR HEART & CATTLE COMPANY
ORDER DENYING MOTION FOR SUMMARY JUDGMENT
Summary: Respondents, an uninsured employer, moved for summary judgment on the Uninsured Employers' Fund's petition for reimbursement of benefits paid pursuant to section 39-71-504, MCA, arguing the UEF's petition is barred by the applicable statute of limitations since it was filed more than five years after the date of claimant's injury.
Held: Section 39-71-504, MCA (1995-2001), does not establish its own limitations period. Since the uninsured employer's obligation to reimburse the UEF is a liability created by statute, the applicable statute of limitations is the two-year statute contained in section 27-2-211(1)(c), MCA (1995-2001). Although the two-year statute applies, the claim is not time-barred. Where the action is to collect an amount equal to all benefits "paid or to be paid" by the UEF, the action did not accrue until claimant filed a claim for benefits with the UEF. Within two years of that date, the claims adjuster wrote to respondents demanding reimbursement for benefits paid. Under Intermountain Deaconess Home v. State of Montana, 191 Mont. 309, 623 P.2d 1384 (1981), the letter was an administrative demand tolling the statute of limitations.
¶1 Claimant, Allen E. Williams, was injured on March 22, 1997, in Cascade County, Montana. (UEF Petition; Respondent's Brief in Support of Motion For Summary Judgment ("Resp. Brief") at 1; Petitioner's Response to Respondent's Motion for Summary Judgment at 2.)
¶2 Claimant filed a claim with the UEF for workers' compensation benefits on July 23, 1997. (Id.)
¶3 On January 12, 1998, the UEF found claimant's claim compensable and began paying permanent partial disability benefits to claimant. (Id.)
¶4 On December 6, 2002, the UEF filed a petition with the Workers' Compensation Court seeking to recover the funds paid to claimant. (Resp. Brief at 2; Petitioner's Response to Respondent's Motion for Summary Judgment at 2.)
¶5 On April 8, 1999, Bernadette Rice, claims adjuster for the UEF, wrote to respondents as follows:
(Ex. B to Affidavit of Bernadette Rice.)
¶6 Between July 14, 1998 and September 12, 2002, the UEF sent at least eleven Claim Billing Notices to Greg Gould and Dr. Aimee Hachigian, indicating a current balance due the UEF based on claimant's claim. The notices contained the following language:
(Affidavit of Bernadette Rice at 2; Ex. B to affidavit.)
¶7 Respondent contends the UEF's petition is time-barred because it was filed more than five years after claimant's March 22, 1997 injury.
¶8 The present action is commenced pursuant to section 39-71-504, MCA (1995-2001), which provides for the UEF to seek reimbursement from an uninsured employer:
The section does not itself establish a limitations period.
¶9 Respondent argues the applicable statute of limitations is two years, citing section 27- 2-211(1), MCA (1995-2001), which provides:
Respondent relies upon subsection (1)(a), but that subsection is not applicable since the UEF's collection action is not for a "penalty or forfeiture," rather it is simply an action for indemnification. Moreover, section 39-71-504, MCA, gives no rights of enforcement to individuals. Subsection (1)(c), however, is applicable because section 39-71-504, MCA, establishes a statutory liability on the part of the uninsured employer to reimburse the UEF.
¶10 In order to determine when the two year limitations period began, the Court must first determine when the UEF's claim against the uninsured employer accrued. Because the UEF's action was to collect an amount equal to all benefits "paid or to be paid" to an injured employee, the action did not accrue until claimant requested benefits from the UEF. Before that point, there was nothing to indicate any benefits might even "be paid" by the UEF. According to the agreed facts, the claim for benefits was filed with the UEF on July 23, 1997, thus it is on that date that the two years began running.
¶11 Citing Intermountain Deaconess Home v. State of Montana, 191 Mont. 309, 623 P.2d 1384 (1981), the UEF argues the statute was tolled by Rice's April 8, 1999 letter. That letter, which was sent within the two-year period, demanded reimbursement from the employer. The letter was followed, between July 14, 1998 and September 12, 2002, with a series of claim billing notices informing respondents of the current balance owed.
¶12 I agree that Intermountain Deaconess applies and that the April 9, 1999 letter tolled the limitations period. In Employment Relations Division v. Total Mechanical Heating & Air Conditioning, et al., 2000 MTWCC 39, aff'd, 2002 MT 55, I summarized Intermountain Deaconess Home as follows:
¶13 Here, Rice's April 8, 1999 demand letter was the functional equivalent of the administrative letter in Intermountain Deaconess Home, and was sufficient to toll the statute of limitations. Having received Rice's letter and subsequent billing notices, respondents cannot legitimately claim any surprise or prejudice in the UEF's enforcement of the right of reimbursement set out in section 39-71-504, MCA.
¶14 The motion for summary judgment is denied.
Dated in Helena, Montana, this 21st day of March, 2003.
c: Ms. Brenda Wahler
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