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Schmill v. Liberty Northwest Insurance Corp.6/4/2004
DECISION AND JUDGMENT REGARDING COMMON FUND ISSUES
On June 22, 2001, this Court held that section 39-72-706, MCA (1989-1999), which provides for a reduction in indemnity benefits in proportion to non-occupational factors violated the equal protection clauses of the United States and Montana Constitutions. On April 10, 2003, the Montana Supreme Court affirmed that decision. Schmill v. Liberty Northwest Ins. Corp., 2003 MT 80, 315 Mont. 51, 67 P.3d 290.
Following the decision of the Montana Supreme Court, the petitioner's attorney filed a notice of her intent to claim a twenty-five percent common fund attorney fee on all benefits due claimants as a result of the holding in Schmill. The claimed lien extends to all claimants irrespective of the insurer, a lien which I have previously characterized as a "global lien."
After several conferences with the Court, it was agreed that the parties and the Intervenor, Montana State Fund (State Fund), would prepare stipulated facts which would allow the briefing of the defenses raised by respondent to the claimed lien. The parties have filed their stipulated facts and present the following issues to the Court for resolution at this time:
a Does the failure to request common fund fees or class certification in the pre-remand proceedings in Schmill bar the Petitioner from now requesting common fund fees or class certification?
b Does the appellate decision in Schmill, 2003 MT 80, apply retroactively?
c Does the appellate decision in Schmill, 2003 MT 80, create a common fund? If so, as a general matter, what claimants are encompassed by the common funds?
d If a common fund is created as a result of the appellate decision in Schmill, 2003 MT 80, is the common fund limited solely to claimants insured by the named respondent, or does the fund encompass all claimants irrespective of their insurers?
(See Minute Entry No. 3426 and Judge McCarter's Memo of February 24, 2004.)
Stipulated Facts Regarding Liberty
For the limited purposes of resolving the issues presented above, the parties have stipulated to the following facts:
a Liberty NW ("LNW"), wrote its first Montana workers' compensation policy in July of 1988.
b As of August 25, 2003, LNW had a total of 31,794 claims in Montana.
c As of October 16, 2003, LNW identified 909 occupational disease claims from the 31,794 total claims filed in Montana.
d LNW's computer system is not able to identify whether apportionment was taken in any of the 909 occupational disease claims.
(Joint Statement Of Stipulated Facts, filed February 25, 2004 at 2.)
Stipulated Facts Regarding Montana State Fund
The State Fund and the petitioner in Stavenjord v. State Compensation Insurance Fund, WCC No. 2000-0207, have similarly entered into a Joint Statement of Stipulation of Facts, albeit with respect to common fund and retroactivity issues arising in that case. The facts, however, provide some insight into the identification of the State Fund claimants who may be entitled to Schmill benefits. I summarize the salient facts from that stipulation as follows:
a Between July 1, 1987 and June 22, 2001, the State Fund utilized two different computer database systems to record basic claim information. It utilized the DB02, mainframe system until February 1997. Since February of 1997 it has used the CMS system.
b Montana State Fund has run queries on both systems and identified 2,939 claims coded as occupational diseases arising on or after July 1987. It has also identified eight
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