Supco: Injured Worker Can’t Sue Company for Turning Him In

The Montana Supreme Court rebuffed an attempt by man who received a nearly $2 million workers compensation claim to sue his former employer, who he believed turned him in for fraud in a related case.

The Conoco refinery in Billings, Mont., paid Peter Sherner $1.9 million judgment in 2001, six years after Sherner was permanently injured by exposure to hydrogen sulfide gas.

A dispute over Sherner’s claim for in-home care through Conoco’s insurance company ended with felony charges against Sherner and his neighbor.

Sherner then filed a lawsuit against Conoco, its insurer and claims adjuster, saying they “acted with malice” in encouraging state authorities to investigate him.

A district judge threw the case out for a lack of evidence and ordered Sherner to pay $15,000 in legal fees.

The Supreme Court agreed with the lower court’s decision to dismiss the case, saying Sherner did not provide enough evidence to prove the companies acted maliciously.

But justices disagreed with the order for Sherner to pay legal fees. Chief Justice Karla Gray, writing for the majority, said the lower court will have to reconsider the amount.

Sherner, who has trouble walking and talking since being hit with a blast of the gas from a leaking pipe that caused permanent neurological damage, had hired his neighbor to provide in-home care that his doctor ordered. Workers’ compensation insurance, through Conoco’s self-funded plan, was picking up the tab.

An anonymous call tipped off state authorities that neighbor Bernice Corcoran was not working all the hours she claimed with the insurance company. Conoco’s insurance adjuster, Crawford & Co., hired a private investigator to look into the matter.

Corcoran later pleaded guilty to felony theft, while charges against Sherner were dismissed.

The court didn’t agree that the companies were maliciously targeting Sherner.

“On the contrary, the facts clearly indicate Crawford and National (Loss Control Services Corp.) were simply doing their jobs when they investigated (Sherner’s) claim,” Gray wrote.

Justice Patricia Cotter dissented, saying the court ignored critical facts, such as the insurance company’s surveillance simply on the belief he was doing something illegal.