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Royal Insurance Company v. Roadarmel3/17/1999
ORDER GRANTING SUMMARY JUDGMENT
The present action is brought by Royal Insurance Company (Royal) to recover $63,864.79 in payment of its subrogation interest in a $300,000.00 third-party judgment recovered by respondent Earl Roadarmel (Earl). Earl's attorney, Mr. Donald E. White (White), is named as a co-respondent to the claim.
Both Royal and the respondents have moved for summary judgment. The motions have been fully briefed and none of the parties has asked for oral argument. The cross- motions are therefore deemed submitted for decision.
Facts
The facts are not in dispute. They are set out in the briefs and in the attachments
to the parties' briefs.
The salient facts are as follows:
1. Earl suffered an industrial injury as a result of a work-related exposure to the chemical toluene. The exposure occurred between September 18, 1986 and December 1987. Roadarmel v. Acme Concrete Co., 237 Mont. 163, 772 P.2d 1259 (1989).
2. Earl filed a claim for compensation. The claim was denied. He then petitioned the Workers' Compensation Court (WCC), which held that he had in fact suffered an industrial injury. On April 25, 1989, the Supreme Court affirmed that determination. Id.
3. In June 1989 the parties entered into a full and final compromise settlement. (Exs. C and H to petitioner's motion.) The settlement was approved by the Department of Labor and Industry on July 24, 1989. (Ex. J to petitioner's motion; Ex. 2 to respondent's motion.) It provided that Royal pay claimant $74,750, but "fully reserved" Royal's subrogation interest in any third-party claim. (Id., Ex. C to petitioner's motion.)
4. In conjunction with the negotiation of the full and final compromise settlement, the parties also reached an agreement concerning Royal's participation in a third-party action against the manufacturer and distributor of the toluene. Through written correspondence of their attorneys, they confirmed their agreement.
5. On June 2, 1989, Mr. White wrote to Royal's attorney, Mr. James G. Edmiston
(Edmiston), to confirm the terms of the full and final compromise settlement. In his letter, White also addressed subrogation, writing:
We would also agree to your client, Royal Insurance Company's participation in the action against Exxon and Great Western Chemical with the $5,000 cost advancement.
(Ex. E to Petitioner's Motion.)
6. On June 6, 1989, Edmiston replied, writing in relevant part:
The insurer accepts your offer to fully participate in the third party action against Exxon and Great Western Chemical by paying a $5,000.00 cost advancement. No other cost advancements will be required of Royal Insurance in order to fully participate. Royal's subrogation interest will then be calculated pursuant to the formula set forth by the Montana Supreme Court in Tuttle v. Argonaut Ins. Co., 580 P.2d 1379 (Mont. 1978). I have enclosed a copy of this excerpted from Norm Grosfield's "Red Book" on Montana Workers' Compensation law.
Royal Insurance is sending me a check for $5,000.00 payable to Earl Roadarmel and yourself, which I will forward onto you when I receive it.
(Ex. F to Petitioner's Motion.)
7. Thereafter, Edmiston forwarded Royal's check for $5,000 to White. On July 6, 1989, White wrote to Edmiston to acknowledge receipt of the check and confirm the subrogation agreement. (Ex. M to Petitioner's Motion.) The check was cashed.
8. The third-party action against Exxon was settled for $7,500. (Petitioner's Motion at 2).
9. The third-party
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