Nelson v. Cenex, Inc.

April 1 2008
05-701
IN THE SUPREME COURT OF THE STATE OF MONTANA
2008 MT 108GENE NELSON,
Plaintiff and Appellant,
v.
CENEX, INC.; FARMERS UNION CENTRAL
EXCHANGE, INC.; HARVEST STATES
COOPERATIVE, INC.; HAROLD WILLIAMS;
LOUIS DAY; and DOES A-Z, inclusive,
Defendants and Appellees.
APPEAL FROM: District Court of the First Judicial District,
In and For the County of Lewis And Clark, Cause No. BDV-2003-543
Honorable Jeffrey M. Sherlock, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
J. David Slovak, Mark M. Kovacich, Lewis, Slovak & Kovacich, P.C.,
Great Falls, Montana
For Appellees:
John G. Crist, Eric Edward Nord, Crist Law Firm, LLC, Billings, Montana
Submitted on Briefs: August 23, 2006
Decided: April 1, 2008
Filed:
__________________________________________
Clerk
Justice James C. Nelson delivered the Opinion of the Court.
¶1 Gene Nelson appeals an order of the District Court for the First Judicial District,
Lewis and Clark County, granting summary judgment in favor of Appellees and
dismissing Nelson’s cause of action stemming from his asbestos-related injury. We
reverse and remand for further proceedings consistent with this Opinion.
¶2 Nelson raises the following issues on appeal:
¶3 1. Did the District Court err when it declined to apply Gidley and the pre-1979
Montana Occupational Disease Act1 (the MODA) to afford Nelson a remedy in tort when
no remedy exists under the workers’ compensation system?
¶4 2. If the 1983 version of the MODA applies, did the District Court err when it
denied Nelson a tort remedy for his asbestos-related disease when no remedy exists under
the workers’ compensation system?
¶5 3. Did the District Court err when it dismissed Nelson’s tort claims founded on
the intentional and malicious acts exception to workers’ compensation exclusivity?
¶6 Because we find Issue 1 to be dispositive, we do not address Issues 2 and 3.
Factual and Procedural Background
¶7 CHS, Inc. (CHS) is the successor in interest to Cenex, Inc., Cenex Harvest States
Cooperative, Inc., and Farmers Union Central Exchange, Inc. Nelson worked full-time at
the CHS refinery in Laurel, Montana, from August 18, 1952, until February 1, 1967.
During the course and scope of this period of his employment with CHS, Nelson was
1
In 2005, the Montana Legislature merged the Occupational Disease Act into the
Workers’ Compensation Act.
2
required to work with and around asbestos and materials containing asbestos. At that
time, CHS did not provide its workers with any protection from asbestos exposure. As a
result, Nelson was exposed to, inhaled, and ingested asbestos fibers. Nelson left CHS in
1967 to pursue other employment opportunities.
¶8 On September 22, 1980, Nelson returned to CHS and worked sporadically on a
part-time basis during 1980, 1982, 1983, 1984 and 1985. Nelson did not work with or
around asbestos during this time.
¶9 In February 2002, Nelson was diagnosed with asbestos-related lung disease.
Because Nelson’s diagnosis occurred well past the deadline for filing a claim for
occupational disease benefits, Nelson filed suit against CHS on September 19, 2003, for
damages stemming from his asbestos-related disease. In his complaint, Nelson claimed
multiple theories of liability including negligence, strict liability for abnormally
dangerous activity, failure to provide a safe place to work, and negligent and/or
intentional infliction of emotional distress. Nelson’s complaint also included an
intentional acts claim based on the intentional and malicious acts exception to workers’
compensation exclusivity. In its answer to Nelson’s complaint, CHS raised a number of
affirmative defenses including immunity from suit premised on workers’ compensation
exclusivity.
¶10 Nelson filed a motion for partial summary judgment in July 2005 requesting that
the District Court strike CHS’s affirmative defense regarding exclusivity. At about the
same time, CHS filed its own motion for summary judgment seeking to dismiss Nelson’s
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tort claims on the basis of exclusivity and to dismiss Nelson’s intentional acts claim for
failure to provide proof to support the claim.
¶11 The District Court entered an Order granting CHS’s summary judgment motion
and dismissing Nelson’s claims on October 7, 2005. Two weeks later, the court issued a
memorandum outlining its rationale for granting summary judgment and dismissing the
complaint. In its memorandum, the court concluded that the 1983 version of the MODA
applied in this case and, as such, the MODA was the exclusive remedy for Nelson’s
claims. The court also rejected Nelson’s theory of liability predicated on the intentional
and malicious acts exception to workers’ compensation exclusivity.
¶12 Nelson appeals from the District Court’s order granting summary judgment in
favor of CHS and dismissing his complaint.
Standard of Review
¶13 We review an order granting summary judgment de novo using the same
M. R. Civ. P. 56 criteria applied by the district court. Lee v. USAA Cas. Ins. Co., 2001
MT 59, ¶ 24, 304 Mont. 356, ¶ 24, 22 P.3d 631, ¶ 24 (citing Spinler v. Allen, 1999 MT
160, ¶ 14, 295 Mont. 139, ¶ 14, 983 P.2d 348, ¶ 14). Summary judgment is proper only
when no genuine issues of material fact exist and the moving party is entitled to judgment
as a matter of law. Watkins Trust v. Lacosta, 2004 MT 144, ¶ 16, 321 Mont. 432, ¶ 16,
92 P.3d 620, ¶ 16 (citing M. R. Civ. P. 56(c)).
¶14 To determine the existence or nonexistence of a genuine issue of material fact, we
look to the pleadings, depositions, answers to interrogatories, admissions on file, and
affidavits. Lee, ¶ 24 (citing Erker v. Kester, 1999 MT 231, ¶ 17, 296 Mont. 123, ¶ 17,
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988 P.2d 1221, ¶ 17). In addition, all reasonable inferences that might be drawn from the
offered evidence will be drawn in favor of the party opposing the summary judgment
motion. Lee, ¶ 25.
¶15 The party seeking summary judgment has the burden of demonstrating a complete
absence of any genuine factual issues. Lee, ¶ 25. Where the moving party is able to
demonstrate that no genuine issue as to any material fact remains in dispute, the burden
then shifts to the party opposing the motion. Lee, ¶ 26. To raise a genuine issue of
material fact, the party opposing summary judgment must present material and
substantial evidence rather than merely conclusory or speculative statements. Lee, ¶ 26.
As this Court has previously observed, “proof is required to establish the absence of
genuine issues of material fact; a party may not rely on the arguments of counsel.”
Montana Metal Buildings, Inc. v. Shapiro, 283 Mont. 471, 476, 942 P.2d 694, 697 (1997)
(citing City of Bozeman v. AIU Ins. Co., 262 Mont. 370, 378, 865 P.2d 268, 273 (1993)).
¶16 In addition, we review a district court's conclusions of law to determine whether
they are correct. Montana Pet. Tank Comp. Bd. v. Crumleys, 2008 MT 2, ¶ 32, 341
Mont. 33, ¶ 32, 174 P.3d 948, ¶ 32 (citing State Farm Mut. Auto. Ins. Co. v. Gibson, 2007
MT 153, ¶ 9, 337 Mont. 509, ¶ 9, 163 P.3d 387, ¶ 9).
Discussion
¶17 Did the District Court err when it declined to apply Gidley and the pre-1979
MODA to afford Nelson a remedy in tort when no remedy exists under the
workers’ compensation system?
¶18 The District Court determined that the 1983 version of the MODA applied to
Nelson’s claims because his last day of employment with CHS was in 1985, and the
5
statute in effect on the last day of work controls. Consequently, the court determined that
Nelson’s tort claims were barred because the 1983 version of the MODA provides that
the MODA is Nelson’s exclusive remedy.
¶19 Nelson argues that the District Court erred in applying the 1983 version of the
MODA because the time period from 1980 to 1985 when he returned to work part-time
with CHS had no connection to his industrial disease. Nelson contends that the District
Court should have followed the “last injurious exposure doctrine” and applied the version
of the MODA in effect when he was actually exposed to the asbestos.
¶20 Section 39-72-305, MCA (1983), the statute the District Court determined applied
in this case, provides, in pertinent part:
Right to compensation exclusive remedy – uninsured employers.
(1) The right to recover compensation pursuant to the provisions of this
chapter for occupational diseases sustained by an employee and arising out
of and in the course of employment, whether resulting in death or not, is the
exclusive remedy therefor against an employer who is properly insured
under the Workers’ Compensation Act and the Occupational Disease Act of
Montana. [Emphasis added.]
However, the 1983 version of the MODA also contained the following statute of repose:
39-72-403. Time when claims must be presented. (1) When a
claimant seeks benefits under this chapter, his claims for benefits must be
presented in writing to the employer, the employer’s insurer, or the division
within 1 year from the date the claimant knew or should have known that
his total disability condition resulted from an occupational disease. When
a beneficiary seeks benefits under this chapter, his claims for death benefits
must be presented in writing to the employer, the employer’s insurer, or the
division within 1 year from the date the beneficiaries knew or should have
known that the decedent’s death was related to an occupational disease.
(2) The division may, upon a reasonable showing by the claimant or
a decedent’s beneficiaries that the claimant or the beneficiaries could not
have known that the claimant’s condition or the employee’s death was
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related to an occupational disease, waive the claim time requirement up to
an additional 2 years.
(3) Notwithstanding the provisions of subsections (1) and (2) of this
section, no claim to recover benefits under this chapter may be maintained
unless the claim is properly filed within 3 years after the last day upon
which the claimant or the deceased employee actually worked for the
employer against whom compensation is claimed. [Emphasis added.]
Consequently, under the 1983 version of the MODA, Nelson has no remedy at all for his
claims.
¶21 Nelson argues that pursuant to Gidley v. W.R. Grace & Co., 221 Mont. 36, 717
P.2d 21 (1986), the pre-1979 version of the MODA applies to his claims and, as such, his
common law right of action has been preserved.
¶22 In Gidley, we held that, upon expiration of the deadline for filing a claim under the
MODA, the injured employee could pursue a tort action against the employer under the
provisions of the MODA in effect prior to its amendment in 1979. Gidley, 221 Mont. at
39-40, 717 P.2d at 23-24. In that case, Louise Gidley (Louise) filed a wrongful death
action against W.R. Grace & Company (W.R. Grace) on behalf of the estate of her
deceased husband James, who died from asbestos-related cancer in May 1982. Louise
alleged that James had been exposed to asbestos while at his job with W.R. Grace.
Gidley, 221 Mont. at 37, 717 P.2d at 22.
¶23 W.R. Grace maintained workers’ compensation coverage for its employees.
However, to obtain workers’ compensation benefits, the applicable MODA provisions
required that a claim be filed within three years of the employee’s final day of work.
James’ last day of work was in July 1977. He was not diagnosed with work-related
asbestos disease until June 1981, eleven months after the expiration of the claim filing
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deadline. Consequently, James was not eligible for compensation under the MODA.
Gidley, 221 Mont. at 37, 717 P.2d at 22.
¶24 Louise filed an action against W.R. Grace in June 1984 alleging wrongful death
and misrepresentation. W.R. Grace asserted workers’ compensation exclusivity as a
defense to civil liability. The District Court dismissed the tort action on the grounds that
the MODA provided the exclusive remedy. Gidley, 221 Mont. at 37, 717 P.2d at 22.
¶25 The issue on appeal in that case was whether the MODA afforded the exclusive
remedy for Louise’s claims against W.R. Grace. However, before deciding that issue, the
Court had to determine which MODA statutes controlled the claim: those in effect on
James’ last actual day of work in July 1977; those in effect at the time he was diagnosed
in June 1981; or those in effect when Louise filed a claim for benefits under the MODA
in July 1982. Since this question was a novel one under the MODA, the Court in Gidley
looked to workers’ compensation cases for guidance as that question had been considered
a number of times in that context. The Court concluded that, under the WCA, the statute
in effect on the date of the accident or injury controls. The Court further concluded that
the same rationale should be applied in MODA claims, thus the Court determined that the
MODA statutes in effect on James’ last actual day of work in July 1977 were controlling.
Gidley, 221 Mont. at 37-38, 717 P.2d at 22.
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¶26 The MODA was originally enacted in 1959. The following sections of the MODA
governed an employee’s rights of suit at common law until 1979, when § 92-1308, RCM,
was amended and § 92-1331, RCM, was repealed:2
92-1308. Right to compensation exclusive remedy. The right to
recover compensation pursuant to the provisions of this act for occupational
diseases sustained by an employee and arising out of and in the course of
his employment, whether resulting in death, or not, shall be the exclusive
remedy therefor against the employer electing to be bound by and subject to
this act, except as to such employees as shall reject this act as provided
herein.
92-1331. Rights of suit at common law. There shall be no
common-law right of action for damage from occupational disease against
an employer who elects to come under the provisions of this act, excepting
for those employees not eligible for compensation under the terms of this
act, or who reject coverage of this act.
The Court concluded in Gidley, that these statutes were at least ambiguous, if not
contradictory, stating that “[o]ne statute makes MODA the exclusive remedy unless
affirmatively rejected. The other statute makes MODA the exclusive remedy unless
MODA is rejected or the employee is not eligible for compensation under the terms of
MODA.” Gidley, 221 Mont. at 38, 717 P.2d at 23-24. Hence, while § 92-1308, RCM,
purported to limit an employee’s remedy to the MODA, § 92-1331, RCM, allowed the
employee to pursue a common law right of action when the employee was not eligible for
compensation under the MODA.
¶27 Acknowledging the contradiction created by §§ 92-1308 and -1311, RCM, the
Court examined the legislative history of both statutes and applied the liberal rule of
2
In 1978, § 92-1308, RCM, was recodified as § 39-72-305, MCA, and § 92-1311, RCM,
was recodified as § 39-72-308, MCA.
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construction mandated by the MODA to hold that, under the pre-1979 provisions of the
MODA, upon expiration of the deadline for filing an occupational disease claim, an
injured employee may pursue a tort action against the employer. Gidley, 221 Mont. at
39-40, 717 P.2d at 23-24.
¶28 CHS argues on appeal that Gidley does not apply in this case, because this Court’s
decisions in Lockwood v. W.R. Grace & Co., 272 Mont. 202, 900 P.2d 314 (1995), Grenz
v. Fire and Cas. of Connecticut, 278 Mont. 268, 924 P.2d 264 (1996), and Hardgrove v.
Transportation Ins. Co., 2004 MT 340, 324 Mont. 238, 103 P.3d 999, specifically state
that the last day of work is controlling. However, CHS fails to recognize that the
holdings in all of these cases stem from our holding in Gidley. Furthermore, none of
these cases dealt with a scenario similar to the instant case where there were two separate
and distinct periods of employment with the same employer.
¶29 Nelson worked for CHS during two different periods of time separated by almost
thirteen years. It is undisputed that it was during Nelson’s first period of employment
with CHS (from 1952 to 1967) that he was exposed to asbestos. By his second period of
employment with CHS (from 1980 to 1985), he was not exposed to asbestos as CHS had
taken steps to remove the asbestos from the refinery. Thus, Nelson’s injury occurred
only during his first period of employment with CHS. This Court made it clear in Gidley
that we were applying to the MODA the same rationale used in the WCA—i.e., that the
date of accident or injury controls. However, because an occupational disease does not
occur on one single day or at one exact time, but rather, is ongoing, we used the
employee’s last day of work—the last day the employee could possibly have been
10
exposed to asbestos—as the point in time from which the occupational disease claim
would flow. Thus, we determined, in effect, that liability for and administration of a
claim should correspond with the period in which the injurious exposure occurred.
¶30 Nelson points out in his brief on appeal, that had he been employed by anyone
other than CHS from 1980 to 1985, the District Court would have had little trouble
applying the pre-1979 MODA to his claim as his subsequent employment would have
had no relevance to the causal exposure and resulting disease. Nelson maintains that the
result should not change simply because he returned to employment with CHS in an
unrelated capacity some thirteen years later. We agree that, as with the case of an
unrelated employer, Nelson’s subsequent employment with CHS bears no relevance to
the exposure and disease at issue.
¶31 Moreover, in support of this argument, Nelson relies on the “last injurious
exposure doctrine,” which, he asserts, places the focus of the inquiry on the injurious
mechanism. The “last injurious exposure doctrine,” as codified in Montana, provides in
pertinent part:
Where compensation is payable for an occupational disease, the only
employer liable is the employer in whose employment the employee was
last injuriously exposed to the hazard of the disease.
Section 39-72-303(1), MCA (2003) (repealed in 2005 and merged within the WCA at
§ 39-71-407, MCA).
¶32 CHS argues that this doctrine has nothing to do with which version of the MODA
applies to a worker’s claim. Instead, CHS maintains that the “last injurious exposure
doctrine” is applied to determine which employer or which insurance carrier is
11
responsible to pay benefits on a workers’ compensation claim. While CHS is correct that
this doctrine is applied to determine who is responsible to pay benefits, the statute is
illustrative of the rationale that existed under the MODA after Gidley that liability for and
administration of a claim should correspond with the period in which the injurious
exposure occurred.
¶33 Based on the foregoing, for purposes of determining which version of the MODA
applies to Nelson’s claims, we conclude that his employment with CHS from 1980 to
1985 bears no relevance to his injurious exposure to asbestos and the occupational
disease claim at issue here. Consequently, the correct version of the MODA to apply in
this case is the version of the MODA in effect in 1967, when the period of Nelson’s
employment that included his injurious exposure to asbestos, ended. As such and as
determined by this Court’s decision in Gidley, under the pre-1979 version of the MODA,
the MODA is not Nelson’s exclusive remedy.
¶34 Accordingly, we hold that the District Court erred in granting CHS’s motion for
summary judgment and in dismissing Nelson’s claims.
¶35 Reversed and remanded.
/S/ JAMES C. NELSON
We Concur:
/S/ PATRICIA COTTER
/S/ W. WILLIAM LEAPHART
/S/ JOHN WARNER
/S/ BRIAN MORRIS
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