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Rothwell v. Allstate Insurance Co.3/17/1999
APPEAL FROM: United States District Court for the District of Montana Great Falls Division The Honorable Richard W. Anderson, Judge presiding.
Certified: March 10, 1998
Submitted: November 17, 1998
. The United States District Court for the District of Montana, Great Falls Division, has certified to this Court the following question:
"Whether the provisions of § 39-2-701(1)(1995), MCA, that " n employer must indemnify his employee . . . for all that he necessarily expends or loses in direct consequence of the discharge of his duties as such or of his obedience to the directions of the employer," are validly subject to waiver by an employee by way of a provision in the employer's standard written contract of employment whereby the employee purports to agree to accept less than full indemnification for employment-related expenses."
. Pursuant to Rule 44, M.R.App.P, and by order dated March 10, 1998, we accepted the certified question. After briefing and oral argument by the parties and by the Montana Trial Lawyers Association (MTLA) as amicus curiae, we answer this question in the negative for the reasons set forth below.
Background
. On May 30, 1997, Reann Rothwell (Rothwell) filed an action in the United States District Court for the District of Montana against Allstate Insurance Company, Allstate Life Insurance Company, Allstate Indemnity Company, Novus Credit Service, Inc. f/k/a Allstate Enterprises, Inc. and its subsidiary companies, and Allstate Motor Club, Inc. (hereinafter collectively referred to as "Allstate"). Rothwell was an insurance agent for Allstate from 1989 until 1997. The complaint sought to require Allstate to indemnify and reimburse Rothwell for office and other employment-related expenses incurred in the course and scope of her employment with Allstate.
. On July 15, 1997, Allstate filed a motion to dismiss the complaint arguing that it failed to state a claim pursuant to Rule 12(b)(6), Fed.R.Civ.P., and that Rothwell had waived her statutory right to seek indemnification or reimbursement of these expenses by signing Allstate's standardized employment agreement. This agreement provides, in part:
II. Office Expense Allowance (OEA)
1. The Neighborhood Office Agent is responsible for his/her office expenses.
2. The Office Expense Allowance, the formula for which is described in the Neighborhood Office Agent Manual(s), is a Company authorized office expense reimbursement and is not a fund, compensation, or income. As such, amounts accrued in your OEA account belong to the Company and these amounts are used to reimburse you for Company authorized expenses.
3. Allstate reimburses actual expenses to the limit of the agent's OEA for specified office expenses as described in the Neighborhood Office Agent Manual(s). Any amount spent in excess of the OEA is the responsibility of the agent.
Allstate asserted that this agreement required Rothwell to assume responsibility for the expenses of operating an office for Allstate subject to partial reimbursement by Allstate pursuant to the contract language quoted above.
. Rothwell opposed Allstate's motion to dismiss arguing that the agreement is unenforceable and that the OEA reimbursement scheme is void as against public policy because it is inconsistent with § 39-2-701(1), MCA. The United States District Court certified the above question to this Court and stayed all proceedings pending this Court's answer.
Discussion
. Allstate argues that under § 39-2-701(1), MCA, while an employer is generally responsible for reimbursing an empl
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