39-71-2914, MCA

[1991] S.L.H. v. State Fund [12/28/00] 2000 MT 362 An insurer's claim for subrogation not supported in fact or law warrants imposition of sanctions under section 39-71-2914, MCA (1991) against the represented party, the attorney, or both. Although the statute permits the judge discretion to choose appropriate sanctions, the imposition of sanctions is not discretionary where the judge finds that section 39-71-2914, MCA (1991) has been violated.

Where counsel for an insurer admits the insurer had no legal authority or factual theory to support its claim for subrogation, and that it had completed no investigation whatsoever to support its subrogation claim, the workers' compensation court, upon its own initiative, should impose sanctions for violation of section 39-71-2914, MCA (1991).


Chippewa v. Uninsured Employers' Fund [11/05/12] 2012 MTWCC 39 Although the Court did not find the third-party respondent’s counter-claims and request for indemnity well-founded, it did not believe they were filed for the purpose of causing unnecessary delay or needless increase in the cost of litigation.  While his counsel could have better researched the bounds of the Court’s jurisdiction, counsel did not lack diligence to the extent that sanctions would be warranted.

Briese v. Ace American Ins. Co. [02/20/09] 2009 MTWCC 5 While the Court was not persuaded by Petitioner’s arguments with respect to the wage calculation issue, the arguments advanced by Petitioner were plausible and were not interposed for any improper purpose. Therefore, Petitioner and his attorney did not act in such a way as to warrant sanctions.
Montana State Fund v. Simms [08/04/08] 2008 MTWCC 39 Respondent’s attorney violated § 39-71-2914, MCA, when he pursued the case, demanded the Court’s time, and required parties to submit to depositions and produce discovery when he knew that he had a conflict of interest and would be forced to withdraw as counsel. Counsel further misrepresented his reasons for withdrawing his representation when he pled that it was based on “newly discovered evidence” when he later admitted that he knew of the potential conflict of interest at the outset of the case and chose to remain counsel because he thought he could get the matter dismissed. While I agree withdrawing his representation based on the potential conflict was a judgment call, counsel continued to pursue the case for several weeks after I denied the motion to dismiss, causing Petitioner, Petitioner’s counsel and this Court to expend time and resources needlessly.

[1993] Beaulieu v. Human Dynamics Corp. [9/22/04] 2004 MTWCC 65 Where a party takes a position that absolutely contradicts the position it took in two prior actions, and there is no factual or legal basis for its changing its position, sanctions are appropriate and are imposed. 39-71-2914, MCA (1987-2003).

[1991] O'Brien v. State Fund [2/10/98] 1998 MTWCC 7 Claimant demanded sanctions under section 39-71-2914, MCA (1991), against the attorney filing a response on behalf of State Fund which asserted the insurer's claim for "equittable subrogation" in claimant's third-party recovery in a malpractice case. Claimant noticed the deposition of Carl Swanson, President of State Compensation Insurance Fund. Protective order granted prohibiting deposition. Sanctions under section 39-71-2914, MCA (1991) are available against an attorney signing a pleadings which is not "warranted by existing law or a good faith argument for extension, modification or reversal of existing law." The issue raised is whether State Fund's position, put forth by its counsel, was beyond the pale of legitimate advocacy. Mr. Swanson is not, to the Court's knowledge, an attorney, certainly did not sign the pleading in question, and is beyond the ambit of sanctions.
[1991] O'Brien v. State Fund [2/10/98] 1998 MTWCC 6 Where section 39-71-2907, MCA, refers to unreasonable delay in payment of "benefits," insurer's conduct in causing delay in release of third-party settlement proceeds does not give rise to a statutory penalty. However, sanctions under section 39-71-2914, MCA (1991), a statutory version of Rule 11, are available in workers' compensation proceedings. Claimant may be entitled to sanctions where State Fund's assertion of "equittable subrogation" in claimant's recovery in a third-party malpractice case, maintained in its response to petition, but abruptly dropped prior to trial, raises a prima facie issue as to whether the assertion was well founded and in good faith. Because the facts on that issue are insufficiently developed, a briefing schedule and hearing on sanctions was set.