Common Fund Litigation: Insurers

Schmill v. Liberty Northwest Ins. Corp. [12/22/09] 2009 MT 430 The Murer and Ruhd holdings confirm that claimants have a vested right to payment of past due benefits, regardless of which insurer is responsible for payment.  Due process is not violated when a court construes the meaning of a statute applicable to all workers’ compensation insurers bound by uniform laws.  Once potential beneficiaries are granted a vested right, a corresponding duty to pay arose as a matter of law.
Flynn & Miller v. Liberty Northwest Ins. Corp. [07/01/10] 2010 MTWCC 21 Under Schmill III, beneficiaries are not required to file a second claim once entitlement to a common fund is established.  Beneficiaries’ right to increased benefits arises automatically, as does the insurers’ responsibility to pay each beneficiary.  The insurers in Flynn bear the burden of identifying claimants whose right to increased benefits was established as a matter of law in Flynn I.
Stavenjord v. Montana State Fund [04/24/08] 2008 MTWCC 17 Where the Montana Supreme Court ruled that no common fund exists, this Court has no jurisdiction to order non-party insurers to comply with notification and identification procedures.

Stavenjord v. Montana State Fund [01/15/08] 2008 MTWCC 4 The Court found no rational basis for holding that one individual would be entitled to uncapped PPD benefits while another identically situated individual would not for the sole reason that his employer was insured by someone other than Respondent. While Respondent willingly submitted itself to the Court to oversee the identification and notification process, the Court has no jurisdiction over other insurers that are not a party to the action, and therefore, it is impossible for the Court to determine an appropriate procedure by which potential beneficiaries could be identified and notified of their interests related to increased Stavenjord-type benefits.

Reesor v. Montana State Fund [07/20/05] 2005 MTWCC 40 If the petitioner’s attorney is not entitled to common fund fees because no common fund exists or application of the common fund doctrine would be unconstitutional, the Court has no further jurisdiction to order payment of benefits to claimants not involved in the main litigation or to order payment of common fund attorney fees. Thus, all legal rulings regarding absolute defenses to a claim of a common fund must be applied to all insurers and self-insurers whether or not they raised the legal defenses which are successful.

Rausch v. Montana State Fund & Ruhd v. Liberty [02/22/05] 2005 MTWCC 9 Where a decision creates a common fund, insurers have a duty to identify and pay the benefitted claimants the benefits to which they are entitled.