Document XOkBOLj2eprMZEwaYDpEa73dx

February 28, 1968 `laryland Aaerioan Qeneral Group 1415 Faat Aukay Streat Portland, Oregon ATTENTION t John Uopklna Rot Your Claim Not 750 C 890 Insurant V. R, Oraoa * Co. Zonollta Division Claimanti LILAS D. WELCH Polloyt R 0O1J98 Dear Mr. Uopklnat l'hla Latter will eerwe to oonfira our several uoat reoant * telephone conversations oonoarnlng thla partloular natter,4 and to provide you with a general eimnary of events leading up to final aettleaent. Aa you are of oourae aware, trial of the leeuee Involved waa conducted before the Chairman of the laduetrlal Aooldent Qoard In Kallapell, on Noveaber 29, 1967. We had diaouaaed the aatter abortly before the Hearing, and I had lafornad you of the devalopaenta that had ooourred and Information whloh had boooaa available a few daya prior to the date aet for trial, whloh lnforaatlon waa confirmed in our letter of Noveaber 25 1967. lnforaatlon then available bad led ae to believe that we might well wlah to attaapt to dlapoae of the oaae by way of aettleaent, rather than proceeding on through trial and faolng the poaalblllty of the adialcolon of a groat deal of very damaging-evldenoe whloh might have a grave effeot on any future;oJLalaa of thio nature ariolng through employment by the company la Libby. Settlement of oourae could not be effeoted at that late late, and consequently the aatter waa hoard at the tlae aet. The eaployer ltaelf waa of oourae quite oonoerned with the general altuation, aa well aa with the partloular oaae with whloh we are oonoerned, and the general oounael of the dlvialon oonduoting the Zonollte operationa, Mr. Charlea Dugan, traveled from Cambridge, Maaaaohuaette to Kallapell in order to attend trial. PLAINTIFFS r -2 Count*L representing olaluat had subpoenaed several fellow employ***, as well as Mr. Kujava, Safety Engineer for the company, and of oouree the looal Zonollt* management vas present. In addition, the oama had apparently aroused considerable interest, and there were several spectators, including oounsel representing still another olainant whose physical difficulties arose prior to the time ooverag* vas provided by Maryland Casualty Company. In general, the testimony of the fellow workers indiosted that they euoountered a dust problem at many points through^ out the /.onolite plant facilities, and a great deal of testimony was introduced with respeot to dust conditions ex istent in the yard area Itself. It is of aourae at this point that the warehouse, where oialaant was employed for many years prior to his retirement, is loeated. It waa further developed that the main exhaust system of the mill had been eo oonstruoted as to allow the Intense Bill dust to pervade the yard area. It waa further developed that oialaant was required to sweep the warehouse as well as travel froa point to point throughout the yard area la performing his general duties. Another party who had been employed in the warehouse testified to the extreme dust conditions vtileh arose while sweeping, and employees working in a machine shed some distance froa the mill testified that the condition at that point at times beaame extremely sever* It waa also developed that oomplaints had been registered by union representatives in a nesting with the Zonollt* manager some months prior to oialaant*s retirement, and it was alleged that certain oonoess&oas or admissions had been made by the nanagement at that tlas. It waa however established that neither the management nor the employees or onion representatives were aotually aware of the aeflrt.*ity of the oonsldione, or of the degree of exposursijBaf.harmful subs tone e until very reoently, and of course tgtd*Information ia pretty well documented in our own fllejtr * The hazard ws faced particularly at the tiae did of course involve the numerous written reports submitted by the State Hoard of Health whioh through the years Indicate that the State Board had beeome more and mors concerned with the problem of asbestosle. Mills no state Board representative had been subpoenaed or was present at the Hearing, counsel attempted to bring in Jnfornaiiou contained within such reports through the testimony of the employer's Safety Engineer and manager. l' registered an objection on several grounds* Including a claim that all suoh information was Included under a statute relating to the privileged nature of information developed by the State hoard of Health, a rather heated Argument arose at that time* with the Chairman of the Uoard at first indicating that he was net aware of any suoh statutory privilege* and indicating that bs intended to allow in evidence all suoh information whloh might bo relevant to the issues* a noon recess was callsd at this time* ed we were able to convince the Chairman that suoh privilege did exist* further pointing out that the best evldenoe of oonrse would be the reports themselves or the aotual findings of the State hoard representative admitted through bio own testi mony. The Chairman finally sustained our objeotlon, and I believe * the entire matter was conduoted in a manner whloh made it evident that while we were not attempting to stl;fle or exclude relevant testimony* we sinply had no intention of allowing hearsay evldenoe in the record* The Hearing consumed the entire day* and I actually believe the record would indicate little aotual evldenoe establishing claimant's condition to have been proxlmately connected with his employment in the warehouse was presented. The general ploture however would of oouree neoessarily reflect the dust conditions existent at the plant* and further the existence of ssboetoe fibor in the nill dust .-ould not be denied. The Hearing was condlnasd st ths oonoluslon of tho tostlnony* and arrangsnsnts woro mads to obtain tho deposition of Dr. Harry Power, of Groat Palls, Montana. In addition of eourse, counsel..indicated his intsntlon of oontinuing with an attenpt to obtagtt the State Board of ITealth records and place then in evidence* and dlsaussion was had relative to obtaining such testimony at a Hearing to he conducted In Helena* Montana, the State Capitol. \ rurtfter problem presented to us* as you and I have dis cussed by telephone* was the possibility that the Industrial Accident Hoard might in faot find the olain to bo entirely uncompeusAble* as not within Tho Ocoupatlonal Disease Aot as such, which la turn opened up tho possibility of /.onollte being faced with n civil suit for damages in an employer's liability situation. This particular situation has in fact arisen in Montana in tbs past in a case involving inhalation of oenent dust, and in that oase, the employee obtained a mdgaent in excess of $50,000.00 lu a suit oondueted in the Montana Federal District Court. Vbile this particular faoet of the oase might not be considered to be aotually an element lu the oooupational dleeaae Bearing, still the exposure that might be enoountered by the employer under suoh circumstances could not be ignored. After considering tue situation as it stood at the olose of the Hearing, Mr. Dugan, oounsel for Zonollte, indicated that he felt settlement attempt was definitely indicated, and he did in turn assure those oonoerued that he intended to present all of the problens existent at the Libby plant to the Division management as soon as he returned. A few days after the Hearing, we had a dlaouasion with the Chairman of the Industrial Aooldent Board in an atteapt to ascertain his view of the proceedings up to that tine. He; indicated that he felt that while the reoord before, him could not be said to establish with certainty that claimant had been injuriously exposed to asbestos fibers during his employment at the warehouse, which of oourse had continued for many years prior to his final disability, he did feel that there could bo no question but that Mr. Velch had oontraoted the disease while la the employment of the Zonollte company, and that he felt under suoh oirouastanoes he should extend the benefit of any doubt to the employee and allow us to oontest suoh deoleion through the Courts if we felt neoessary. This information of oourse merely confirmed the opinion we all held at that time, to the effect that some compromise settlement should be entered into without delay. As you jjftil recall-, you and Z dleouseed the situation and deoidedffjr.open negotiations with an offer in on area under $5*0OO^nrtirith-'the indication that we felt under any olroumst&aoes,' the extent of liability was statutorily limited to that amount. X might say in this particular respect, that the Chairman of the Board had agreed that our views might be oorreot in this regard, but had further indicated that if he ruled the matter to be oompensable, he intended to allow the olaia in its entirety which of course presented us with total exposure of around 919,000.00. At any rata, we did ooaaenee negotiations, and after several dlsouselone, were presented with what we were inforaed to be the final Minima figure of 812,000.00. I riieoueeed the natter with yon again at that tine, and authority In that anonnt was extended. we then oonduoted farther negotiations, and In addition called upon the Chalraan of the Board to exert whatever pressure be oould toward aettleaent at a figure of 810,000.00, and after a good deal of dlsousslon, agreeaent was finally reaohed at this figure. As Z have inforwed you. The Occupational Dlseaae Aot of Montana elaply aakea no provision for a ooaproalse luap sun aettleaent such as Is included within the Vorkaen'e Compensation Aot. Our own situation is of oourse unique In this Jurisdiction,! and we really have little preoedent to follow lh oonoluding-* the natter in the wanner In which we did. It appears that the only aethod of disposing of suoh a olala aooeptable to ths Industrial Aooldent Board Involves the withdrawal of the olala presented by the Injured enployee, coupled with a full and final release, and we have so prooeeded. Withdrawal of Clala, properly subscribed by Mr. veleh has been forwarded along to the Industrial Aooldent Board, and in addition we drafted a Release whioh we feel will adequately proteot the eaployer and insurer's position, whioh has been subsorlbed by Lilas D. Welch and Christine veleh, his wife, and we are at this tine forwarding copies of Withdrawal of Clala, together with original and oopy of Release. You will; note that the Release does oontaln a hold haralsss and indmjtlfleation provision, and as la the instant oase there jdBttRulnor benefloiarles, it would appear that no furthm^Emlon need be taken, however in the event a oase of thiWtype is disposed of in a siailar aanner In the future, wid alnor benefioiaries are involved, further thought aost oertainly should be given to ths proper aethod of disposing of any possible olaias of suoh ainors. Draft earlier forwarded along has been delivered, and as all phases of this aatter are now disposed of, we are at this tins closing our file and subaitting statenant for servloee, together with itenisation of tine and expense incurred. -6- r;idu#trlal Accident Doard Order acknowledging Withdrawal of Claia will bo Issued In duo course, and we will forward it along to you at that tlae. i`e are certainly pleased to hare had the opportunity to be of service to you In the defense of this extreaely interesting case, and are happy the natter could be dieposed of on an equitable basis. Sincerely, SYL/nk Enclosures S. Y. Larrlck Statement for Services, with Itealsatlon of Tlae and Expense Copies, Withdrawal of Claia original and oopy, Release cm Mr. Robert Conley Your Pilot 1 C 34-016160 Enolosurest Copy, Withdrawal of Claia Release 4 I-