Talbot v. WMK-Davis, LLC
380 P.3d 823
| Mont. | 2016Background
- In 2014 Jason Talbot, an Oklahoma resident employed by Cudd Pressure Control, was severely injured in Billings, Montana, while on company business; he filed a Oklahoma workers’ compensation claim and a Montana personal‑injury suit against the tortfeasor.
- Cudd (Talbot’s employer/insurer) paid roughly $600,000 in benefits and intervened in Talbot’s Montana tort suit to assert a workers’ compensation subrogation lien under Oklahoma statutory law.
- Oklahoma law authorizes a statutory subrogation lien (including a first lien on two‑thirds of net proceeds); Montana law (and Article II, §16 of the Montana Constitution) embodies a long‑standing “made whole” rule forbidding subrogation before the injured worker is fully compensated.
- The district court granted Talbot’s summary judgment, holding Montana law barred Cudd’s subrogation claim because Talbot had not been made whole; Cudd appealed.
- The Montana Supreme Court affirmed, holding Montana’s public policy (Article II, §16) is so strong that Montana courts will not apply §185 of the Restatement to allow foreign workers’ compensation subrogation prior to an injured party being made whole.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Montana courts must undertake a Restatement choice‑of‑law analysis (including §185) to determine validity of a workers’ compensation subrogation lien | Talbot: Montana’s Constitution and precedent forbid subrogation before being made whole; Montana public policy should control and bar the lien | Cudd: Courts should apply Restatement §§6 and 145/most‑significant‑relationship (or §185) and permit Oklahoma law to govern subrogation | Held: Montana will not apply §185; because of Montana’s exceptionally strong public policy (Art II, §16), courts will refuse to entertain subrogation claims pre‑made‑whole under §90 public‑policy exception to Restatement rules |
| Whether summary judgment for Talbot was proper | Talbot: If Montana law governs, Talbot is not made whole, so Cudd’s lien is invalid as a matter of law | Cudd: If Oklahoma law governs, its statutory lien is valid; dispute over governing law precludes summary judgment | Held: Affirmed summary judgment for Talbot — parties stipulated Talbot was not made whole under Montana law, and Montana law applies to bar the lien |
Key Cases Cited
- Oberson v. Federated Mut. Ins. Co., 330 Mont. 1 (2005) (Montana rejected adoption of Restatement §185 and held Montana public policy bars subrogation before the injured party is made whole)
- Phillips v. Gen. Motors Corp., 298 Mont. 438 (2000) (Montana adopts Restatement (Second) most‑significant‑relationship test for tort choice‑of‑law issues)
- Trankel v. Dept. of Military Affairs, 282 Mont. 348 (1997) (interpreting Article II, §16 and applying made‑whole principle)
- Francetich v. State Comp. Mut. Ins. Fund, 252 Mont. 215 (1992) (Article II, §16 is mandatory and prohibits depriving an employee of full legal redress)
- St. Paul Fire & Marine Ins. Co. v. Glassing, 269 Mont. 76 (1994) (subrogation rights are derivative; insurer stands in insured’s shoes)