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Ebi/orion Group v. State Comp. Ins. Fund11/29/1989
Submitted on Briefs August 10, 1989
We reverse the summary judgment granted by the Workers' Compensation Court holding in effect that no genuine issue of material fact was presented as to the right of EBI-Orion Group for indemnification from the State Compensation Insurance Fund We determine that there are substantial issues of material fact which must be decided by the Workers' Compensation Court, and so remand the cause for further proceedings in accordance with this opinion
The issue in this case is whether EBI-Orion (EBI) may be entitled to indemnification from the State Compensation Insurance Fund relating to a compromise settlement between EBI and an injured employee, which compromise was approved by the Division of Workers' Compensation
Claude Athey was an employee of Harp Line Construction in Kalispell, Montana. On September 19, 1985, when EBI was the Workers' Compensation carrier for Harp, Claude Athey slipped and fell while carrying nuts and bolts and sustained a back injury in the course of his employment. However Athey did not file a claim for benefits relating to this date until the State Fund received such a claim from Athey on September 16, 1986. On receipt of the claim, the State Fund began payment of temporary total benefits to Athey
In the course of investigation, the State Fund made a determination that Athey's accident had actually occurred on September 19, 1985. The State Fund therefore terminated payments because the State Fund coverage of Harp Line Construction did not commence until October 1, 1985. The date determined by the State Fund as the date of the accident preceded the coverage date for State Fund
EBI, as the carrier whose coverage was in effect on September 19, 1985, first denied liability for late notice to the employer, but later accepted liability and began making benefit payments to Athey
In the period following September 19, 1985, Athey had continued his employment with Harp Line Construction. The winter months were slow and he was called only occasionally to work. He returned to steady employment in May of 1986 for Harp Line Construction
In the course of the summer of 1986, Athey's employment duties included lifting of heavy objects. On August or September of 1986, while State Fund was the compensation carrier for Harp, he was engaged in stacking iron or heavy tires when the condition of his back increased to the point where he could no longer work. He informed his employer, and from the record here, Athey has not worked since
During the period that the State Fund was making payment of benefits to Athey, one of its field investigators filed a report respecting Athey's case with the following language in his report:
"It should be noted however that just prior to his leaving on September 8, 1986, the claimant however was involved in fairly strenuous activity in stacking these tires and apparently this is also when he started to complain more about his condition and told Mr. Harp that he could not continue."
It was after Athey's back reached the condition that he could no longer work that he filed his first claim for benefits with the State Compensation Insurance Fund
On April 2, 1987, when EBI accepted liability for the September 19, 1985 claim, it did so by letter, including a reservation of rights to recover any amount paid in the event that further investigation revealed that a second injury occurred while the State Fund was on the risk
On May 16, 1988, counsel for EBI wrote to the State Fund that EBI had agreed to a compromise settlement of Athey's claim for Workers' Compensat
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