Past workers comp lapse lands Montana dealer in blizzard of litigation

Publish Date: 
Jan 4, 2013

HELENA, Mont. - A former snowmobile and ATV dealer has won a legal battle against the state, but the war has been costly and doesn’t appear to be over.

The Montana Supreme Court found for Elk Mountain Motorsports in a case against the state in November, but the state has since sued the dealership and could end up with the funds the dealer was awarded.

The unanimous five-judge panel on Nov. 20 upheld an award of $198,749 to Elk Mountain for damages the dealership suffered from a breach of contract by the state Uninsured Employers’ Fund, administered by the Montana Department of Labor and Industry.

The dealership reportedly let its workers’ compensation insurance lapse in 2004 when an employee was injured. The employee filed a claim with the Uninsured Employers’ Fund, which has been paying his medical bills and lost wages ever since. The fund worked out a deal for Elk Mountain to repay those costs over time, but sought to impose a new deal in May 2010, according to the background of the case described in the high court opinion and cited in the Billings Gazette. The dealer rejected the new agreement, and the fund sent it to collections.

The process allegedly strained the dealer’s relationship with Arctic Cat, which eventually pulled its franchise. The dealer sued the fund for breach of contract in 2010, and on Dec. 12 filed a case against Arctic Cat Sales, claiming the OEM made the franchise relationship intolerable and caused financial losses.

Dealer principal Bob McWilliams secured his Arctic Cat franchise in 2002. When the Uninsured Employers' Fund sent its claim to collections, it allegedly caused problems with the OEM, and two finance companies sued the dealership. One arranged a long-term repayment plan; the other case is still pending in court.

Today the dealership sells mostly cars, trucks and boats, but is still licensed to sell used ATVs and snowmobiles. McWilliams, once a professional fisherman, has used the vacated floorspace to start selling fishing gear. 

Posted by Holly Wagner