MT Supreme Court Finds Inadequate Payer Investigation and Tolls Statute for Denial While Incapacitated Worker is Without Guardian
june 11, 2023 – Michael Marsh
From Montana Law Week....WORK COMP: Statute properly tolled during time Claimant was without a guardian... substantial evidence supports finding that Claimant was working with argon when valve burst leading to incapacitating injuries from lack of oxygen... attorney fees and penalty properly imposed for inadequate investigation by adjuster... Sandler affirmed.
Accident Fund General Insurance hired out-of-state TPA Gallagher Basset to adjust the claim. Gallagher assigned the claim to out-of-state claims examiner Ashley Davis and a Montana claims examiner Nicole Palagi (level of experience and authority unknown), who hired nurse care manager Tanuya Helvik to assist with the claim.
The worker was severely injured when filling a bottle in the workplace. A valve burst striking the worker in the head. As of the case going to the Supreme Court, he had never regained consciousness.
Gallagher on behalf of Accident Fund General denied liability for the workers' compensation claim. One has to read the case to understand how absurd the TPA response to discovery was. Their automated system was unable to provide a verifiable copy of the denial letter sent originally on the claim Discovery seems to have led to three (3) different dates on the same letter.
The denial seems to have been based upon a position that the employer could not determine if there was a failure of equipment that led to the severe injury, or if there was a medical emergency sustained by the worker that led to the tank explosion. The court found that this was an inappropriate position to take.
Further, more than two (2) years had passed since the 'original' denial letter was sent to the worker's first guardian. AFG took the position that the two (2) year statute of limitation prohibited reopening or reconsideration of the claim when a new guardian was appointed for the worker. The court found that for an incapacitated person, the denial statute is tolled.
These claim decisions and actions pre-date passage of SB-165 (2023), likely a valid third party bad faith claim will follow.
Bryer as Guardian/Conservator for Sheldon v. Accident Fund General Ins., DA 22-590, 6/6/23
View full Supreme Court finding @ http://www.wcc.dli.mt.gov/sccases/Bryer_2023MT104.pdf
Takeaway: Consequences flow from claims decisions. Supervision of Montana claims by out-of-state persons is at best dangerous. Without the in-depth knowledge of the statutes and the litigation environment, some decisions which may appear to be in compliance with many state jurisdictions may lead to significantly expensive third-party bad faith litigation. Biased and 'incomplete' investigations in Montana will more often than not lead to adverse court decisions.
And really, applying a statute of limitations to an unrepresented worker in a coma?
Claims services purchasers need to use criteria other than the lowest per claim cost for making purchasing decisions. How many flat rate MO claims does it take to cover the $50,000 in avoidable litigation expense on ONE CLAIM?