Stewart v. Liberty Northwest Insurance
2013 MT 107
| Mont. | 2013Background
- Stewart injured knee at work in 2002; Liberty insured Gallatin Laundry and paid benefits with 18% WPI.
- Stewart’s treating doctors linked pain to knee injury and surgery; later physicians offered varying causation views.
- WCC denied increased impairment rating in 2007; Stewart did not appeal that decision.
- In 2008 Liberty stopped paying Lidoderm patches without notice; Stewart petitioned for benefits reinstatement.
- WCC proceedings culminated in 2012 Findings: pain meds causally related to injury; no attorneys’ fees or penalties awarded.
- Liberty’s defense relied on the 2007 WCC findings; Stewart cross-appealed on fees and penalties.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Collateral estoppel bars relitigation of causation? | Stewart; identical issue not litigated before | Liberty; issue identical to prior causation ruling | Collateral estoppel did not apply; no identical issue |
| Entitlement to reimbursement of attorneys’ fees? | Stewart; insurer acted unreasonably in stopping patches | Liberty; relied on prior WCC ruling as defense | WCC did not err in denying fees |
| Imposition of the 20% penalty under § 39-71-2907? | Stewart; failure to pay justified penalty due to unilateral cessation | Liberty; reliance on prior order reasonable | Penalty not imposed; actions deemed reasonable under prior order |
Key Cases Cited
- Baltrusch v. Baltrusch, 331 Mont. 281 (2006 MT) (collateral estoppel four-part test; identity of issues matters)
- Lund v. State Compensation Mut. Ins. Fund, 868 P.2d 611 (1994 MT) (different statutes; issues not identical; collateral estoppel inapt)
- Narum v. Liberty Northwest Ins. Corp., 206 P.3d 964 (2009 MT) (penalty affirmations where insurer acted unreasonably; distinguishable facts)
- Watkins Trust v. Lacosta, 92 P.3d 620 (2004 MT) (identification of issues for collateral estoppel)
- Marcott v. Louisiana Pacific Corp., 911 P.2d 1129 (1996 MT) (reasonableness standard for fee awards in workers’ comp)
- Paulson v. Bozeman Deaconess Foundation Hosp., 673 P.2d 1281 (1984 MT) (statutory penalty framework; reasonableness governs)