Contracts: Generally

MONTANA SUPREME COURT DECISIONS

Newlon v. Teck American, Inc. [11/10/15] 2015 MT 317, 381 Mont. 378, 360 P.3d 1134 Where a claimant agreed to settle his claim in exchange for a one-time payment and medical benefits “for life,” the court found the four elements necessary to form a valid contract were met.  Both parties agreed to the provisions of the settlement agreement memorialized with the Department; settlement was a lawful objective; settlement agreements of workers’ compensation claims are enforceable contracts; and both parties provided proper consideration as part of their agreements.
Wiard v. Liberty Northwest Ins. Corp., 2003 MT 295 Contract principle of covenant of good faith and fair dealing did not require insurer to inform claimant of 60-month rule contained in section 39-71-704(1)(d), MCA (1991), regarding using or losing medical benefits.
 
MONTANA WORKERS' COMPENSATION COURT DECISIONS

Hartung v. Montana State Fund [03/15/16] 2016 MTWCC 3 Mental weakness which falls short of the claimant being incapable of understanding the force and effect of an agreement is insufficient to invalidate a contract.  Capacity to contract deals with the ability to understand the terms of the document, not a person’s actual understanding.

Baker v. Fireman's Fund Ins. Co. [03/22/12] 2012 MTWCC 9 Petitioner gave his attorney authority to negotiate and finalize a settlement agreement.  The contract became binding when the parties mutually agreed to its material terms, notwithstanding the absence of Department of Labor and Industry approval.  Petitioner never expressed or conditioned his acceptance upon his review and approval of a written agreement.  Petitioner later tried to repudiate the agreement based upon an unarticulated condition, but his latent intent not to be bound did not prevent the formation of a valid contract and Petitioner is bound by it. 

Pearson v. MIGA [01/09/12] 2012 MTWCC 1 Since Petitioner signed the settlement agreement on his own behalf and was found by the Court to be incompetent at the time of the agreement, the agreement is subject to rescission pursuant to § 28-2-203, MCA, because Petitioner was of “unsound mind.”  Pursuant to § 27-2-202, MCA, an action founded on a written contract must be commenced within eight years, and since Petitioner filed his Petition for Trial a little over three years after the statute of limitations ran, the Petition would have been time-barred but for the five-year extension of the statute of limitations provided for in § 27-2-401(1), MCA, when an individual suffers from serious mental illness.
Drury v. Int'l Paper Co. and O'Brien v. Int'l Paper Co. [12/08/10] 2010 MTWCC 32 Where the parties agreed to settle a claim, but when drafting the settlement agreement disagreed as to whether the settlement of the right to pursue a death benefits claim was included in the agreement, the Court concluded that the settlement could not be enforced as an essential term of the settlement agreement was never reached by the parties.
Narum v. Liberty Northwest Ins. Corp. [06/04/08] 2008 MTWCC 30 The full and final settlement entered into by the parties is a contract and governed by contract law. Where the settlement agreement provides for medical benefits to be left open and acknowledges the parties’ awareness that a hip replacement may become necessary, Respondent is liable for further medical benefits related to Petitioner’s left hip.
Jones v. Albertsons [06/22/07] 2007 MTWCC 26 Parties may not enter into a legally invalid contract, and this Court will not approve a proposed stipulated settlement and enter judgment to that effect.
Pinnow v. MSF [02/24/06] 2006 MTWCC 9 Where Petitioner attempted to repudiate a stipulation for settlement on the grounds that she believed she was settling only one of two claims, when the language of the settlement clearly delineated that she was settling both claims, the Court agreed with Montana State Fund that the Stipulation for Settlement is a valid contract and must be enforced. Since there was an unconditional offer and an unconditional acceptance, the $125,000 settlement is valid and enforceable. Lockhead v. Weinstein, 2003 MT 360, ¶ 9, 319 Mont. 62, 81 P.3d 1284.
Kruzich v. Old Republic Ins. Co. [06/01/06] 2006 MTWCC 23 The full and final settlement entered into by the parties is a contract, thus contract law governs the agreement. Morrissette v. Zurich American Ins. Co., 2000 MTWCC 2, ¶ 61, citing Kienas v. Peterson, 191 Mont. 325, 329, 624 P.2d 1, 3 (1980). A contract may be rescinded when the parties were laboring under a mutual mistake regarding a material fact when the contract was made. Morissette, ¶ 61, citing South v. Transportation Ins. Co., 275 Mont. 397, 401, 913 P.2d 233, 235 (1996). The contract may be rescinded only where “the parties share a common misconception about a vital fact upon which they based their bargain.” Morrissette, ¶ 61, quoting Mitchell v. Boyer, 237 Mont. 434, 437, 774 P.2d 384, 386 (1989) (citations and emphasis omitted).
Gamble v. Sears [01/30/06] 2006 MTWCC 5 The full and final settlement entered into by the parties is a contract. Therefore, contract law governs the agreement. Morrissette v. Zurich American Ins. Co., 2000 MTWCC 2, ¶ 61 (citing Kienas v. Peterson, 191 Mont. 325, 329, 624 P.2d 1, 3 (1980)). Appealed to Supreme Court 02/23/06
Applegate v. Liberty Northwest Ins. [10/9/02] 2002 MTWCC 45 A rehabilitation plan executed by the claimant and an insurer does not bar a claim for auxiliary benefits where it does not expressly do so and where the plan is adopted pursuant to section 39-71-1006, MCA (1999). Auxiliary benefits are expressly a separate and distinct benefit from rehabilitation benefits. § 39-71-1025, MCA (1999).