Libby’s CARD Clinic is facing a new federal lawsuit, this time from its insurance carrier.

General Star Indemnity Company, a subsidiary of Berkshire Hathaway, which also owns BNSF Railway, filed an amended suit Sept. 29 against the clinic and associated individuals, including Dr. Karen Lee Morrissette, Executive Director Tracy McNew, Physician Assistant Miles Miller, Michelle Boltz, R.N. and Board of Directors President Leroy Thom.

The suit alleges CARD officials misrepresented its application for a medical malpractice insurance policy that went into effect at the beginning of 2025.

General Star’s suit relates to the 2023 jury trial when a jury found the clinic had engaged in a fraudulent scheme to misdiagnose people with asbestos related disease. BNSF sued CARD in 2019, claiming more than 1,000 fraudulent diagnoses. Ultimately, the jury ruled that 337 cases were frauds.

Most of the claims at issue in the trial concerned the submission of EHH forms to Medicare, which certified that patients had been diagnosed with an asbestos-related disease and were eligible for coverage under an Affordable Care Act provision created to respond to Libby’s environmental health threat. 

According to CARD Executive Director Tracy McNew, prior to trial, Judge Dana Christensen made a legal ruling that any claim based only on an imaging read by an outside “B-reader” radiologist was invalid, making it likely that those certifications constituted a bulk of the 337 claims.

Two law firms are representing General Star, including Davis, Hatley, Haffeman and Tighe, PC, of Great Falls, Montana, and Walker, Wilcox, Matousek of Chicago.

Stephanie A. Hollar is lead counsel for the Great Falls firm while Christopher A. Wadley and Philip G. Brandt are handing the case for the Chicago outfit.

McNew, in an email to The Western News, said it’s her understanding that a court ruling would be required for GenStar to rescind the clinic’s coverage.

On whether the clinic can operate without medical malpractice insurance, McNew said, “I believe so. We will need to contract out the activities which constitute medical practice to a provider with their own malpractice insurance.”

General Star said CARD officials indicated on the application that they were not aware of any acts, errors, omissions, facts or circumstances that may result in a claim or suit.

The insurance company, with its main office in Stamford, Connecticut, alleges that CARD misrepresented its application when it failed to disclose that it had been liable for the fraudulent misdiagnosis of hundreds of patients. 

The company’s suit acknowledges that CARD did report two malpractice claims, filed by Thomas Steiger on behalf of his late father, Terry Steiger, and Thomas Matilas.

Their malpractice claims assert that alleged misdiagnoses caused hopelessness, untreated medical issues, opioid dependency and contributed to Terry Steiger’s death on Jan. 12, 2015, from heart disease.

General Star’s suit seeks to rescind the policy, or in the alternative, seeks a declaratory judgment that the policy doesn’t cover CARD or its employees (Morrissette, McNew, Miller, Boltz and Thom) in terms of underlying malpractice claims made by CARD patients, who allege they were misdiagnosed with ARD in connection to the clinic’s alleged fraudulent scheme.

“General Star in good faith would either not have issued the policy or would not have issued a policy in as large an amount or at the same premium or rate or would not have provided coverage with respect to the hazard resulting in the loss if the true facts had been made known to General Star as required by this application,’ Hollar wrote. 

The insurance company also wants to recover money that has been paid or may be paid on CARD’s or its employees’ behalf in connection with the underlying malpractice claims.

Those may include claims filed in Lincoln County District Court involving David Wickwire, Brenda M. Auge and several others.

Wickwire filed his complaint Aug. 6, 2025, against CARD. The remainder filed their respective suits Sept. 18, 2025, against the clinic and its representatives. They claim to be CARD patients or representatives of decedents who were patients at the clinic.

They include Auge, the estate of Clifford E. Auge, Ralph Fox, Gregory Laasch, the estates of Margaret Mack and Virnie C. Mack, Ladonna Mack, Timothy Moniz, Robert Orr, Shelly Orr, Milfred Siefke, Colleen Stewart, the estate of Charles L. Stewart, Mary Beth Stroklund, Tami Thill, Dave Torgerson, the estate of Marlene Torgerson, Walter Torgison, Cory Vinion, Eileen Vinion, the estate of Michael Vinion, and Steve Ward.

They are all represented by attorney Adam Duerk of Missoula firm McFarland Molloy Lacny and Duerk as well as Libby attorney Amy N. Guth. Duerk represented BNSF in its suit against CARD.

The defendants include CARD, Dr. Brad Black, Boltz, Miller, the Lincoln County City Health Board, Dr. Morrissette and Thom.

CARD opened in 2000 and the non-profit clinic has served thousands of area residents exposed to Libby amphibole asbestos. That year, CARD was established as a department of St. John’s Lutheran Hospital, now known as Cabinet Peaks Medical Center. In April 2003, CARD separated from St. John’s and became a non-profit. It moved to its current location in 2004.

Gold miners discovered vermiculite in Libby in 1881. In the 1920s, the Zonolite Company formed and began mining the vermiculite. In 1963, W.R. Grace bought the Zonolite mining operations. The mine closed in 1990. In 2002, the Environmental Protection Agency placed the site on the Superfund program’s National Priorities List and cleanup work continues to this day.

Fibers from the asbestos tied to vermiculite mining that began in the 1920s can embed in lung tissue and cause fatal lung disease. No one knows how many people in the region have died from the effects of asbestosis, mesothelioma or other cancers linked to exposure to asbestos-containing vermiculite mined, processed and shipped from Lincoln County and Libby.

BNSF’s involvement relates to asbestos-contaminated vermiculite in the rail yard that a 2024 federal jury said was a considerable factor in the negligent deaths of former Libby residents Thomas Wells and Joyce Walder. Both Wells and Walder lived near the railyard and were both diagnosed with mesothelioma and died in 2020.

The clinic is still operating, albeit at a different location, largely thanks to a grant from the Centers for Disease Control and Prevention. McNew announced the grant award last year and said it was effective from Sept. 1, 2024, through August 2029.

In September 2024, CARD lost an appeal to a jury’s $6 million judgment in June 2023. Federal jurors ruled that the clinic made or presented false claims 337 times, including 91 violations after November 2015.

CARD filed for Chapter 11 bankruptcy in August 2023, allowing it to continue operations. But the United States intervened in the bankruptcy proceeding and determined that the judgment should not be paid, so the bankruptcy was settled and dismissed in spring 2024.

The clinic was closed earlier this year, May 7, when the Lincoln County Sheriff's Office served a Writ of Execution on the Center for Asbestos Related Disease, Inc. to satisfy the judgment against the clinic.

Then clinic moved its operations to 118 West 3rd St. in Libby. They are open from 8 a.m. to 5 p.m. Monday through Wednesday.