No. 12805
I N THE SUPREME COURT OF THE STATE OF M N A A
OTN
1975
JOHN McMILLEN ,
Claimant and Respondent,
ARTHUR G. McKEE and COMPANY,
Defendant and A p p e l l a n t .
Appeal from: D i s t r i c t Court o f t h e Second J u d i c i a l D i s t r i c t ,
Honorable John B. McClernan, Judge p r e s i d i n g .
Counsel of Record:
For Appellant :
Poore, McKenzie, Roth and Robinson, B u t t e , Montana
James A. Robischon a r g u e d , and Donald C. Robinson
a r g u e d , B u t t e , Montana
F o r Respondent :
Hon. R o b e r t L. Woodahl, A t t o r n e y G e n e r a l , Helena,
Montana
Lon J. Maxwell, A s s i s t a n t A t t o r n e y G e n e r a l , a r g u e d ,
Helena, Montana
Norman H. G r o s f i e l d , S p e c i a l A s s i s t a n t A t t o r n e y G e n e r a l ,
a r g u e d , Helena, Montana
C o r e t t e , Smith and Dean, B u t t e , Montana
Kendrick Smith a r g u e d , B u t t e , Montana
Submitted: March 4, 1975
M. J u s t i c e Frank
r Haswell d e l i v e r e d t h e Opinion o f t h e Court .
Our o r i g i n a l opinion h e r e i n appearing i n 3 1 St.Rep. 1026, w a s
subsequently withdrawn. A r e h e a r i n g was g r a n t e d l i m i t e d t o t h i s
question:
"Does s e c t i o n 92-616, R.C.M. 1947, deny e q u a l p r o t e c t i o n ,
o f t h e laws t o t h e employer and defendant i n v i o l a t i o n
o f Sec. 1 of t h e 1 4 t h Amendment t o t h e United S t a t e s Con-
s t i t u t i o n o r Sec. 17 ( s i c ) , A r t i c l e I1 of t h e Montana
Constitution?"
T h i s c o n s t i t u t e s t h e complete opinion o f t h i s Court on a l l i s s u e s
of t h i s c a s e following r e h e a r i n g :
This i s a c o n s o l i d a t e d appeal by t h e employer and i t s i n s u r e r
from two judgments o f t h e d i s t r i c t c o u r t of S i l v e r Bow County,
awarding workmen's compensation b e n e f i t s t o two i n j u r e d employees
i n companion c a s e s .
Claimants a r e John and Robert McMillen, employees of Arthur
G. McKee & Company, a c o n t r a c t o r engaged on a job o f s m e l t e r i m -
provement i n Anaconda, Montana, under a w r i t t e n c o n t r a c t . Defendant
i s General Accident F i r e & L i f e Assurance Corporation, a p r i v a t e
i n s u r a n c e company, t h e Plan I1 i n s u r e r of t h e McKee Company under
t h e Montana workmen's Compensation Act.
The u l t i m a t e i s s u e f o r review i s whether t h e employees were
i n j u r e d i n t h e c o u r s e and scope of t h e i r employment s o a s t o
e n t i t l e them t o workmen's compensation b e n e f i t s under t h e Montana
Act. The Workmen's Compensation D i v i s i o n and t h e d i s t r i c t c o u r t
h e l d t h e y were. W affirm.
e
The two McMillen b r o t h e r s l i v e d i n B u t t e and t r a v e l e d each
workday t o and from t h e Anaconda job s i t e where t h e y had been em-
ployed f o r about two y e a r s . Each was p a i d $4 p e r day t r a v e l allow-
ance under t h e terms of a union c o n t r a c t providing i n m a t e r i a l p a r t :
"* ** T r a v e l pay o r s u b s i s t e n c e s h a l l be f o r days
worked. *** The mileage and amount of t r a v e l pay o r
s u b s i s t e n c e s h a l l be a s follows:
"zero t o 12-1/2 miles -----------------none
"Over 12-1/2 t o 25 m i l e s --------------$2.50
John McMillen purchased a used Dodge t r u c k t h r e e days b e f o r e
the accident i n question. It had some 71,000 m i l e s on i t a t t h e
time of purchase, b u t John t e s t i f i e d he c a r e f u l l y checked t h e c a r
b e f o r e purchase and found i t s a f e .
O Monday morning, J u l y 2 , 1973, t h e two McMillan b r o t h e r s
n
were s e r i o u s l y i n j u r e d i n a s i n g l e c a r a c c i d e n t w h i l e e n r o u t e
t o work. Due t o some mechanical f a i l u r e of t h e Dodge t r u c k , t h e
r e a r wheels locked, t h e t r u c k o v e r t u r n e d , and both McMillens were
injured. The a c c i d e n t occurred on t h e highway between B u t t e and
Anaconda b e f o r e t h e y reached t h e job s i t e . The cause of t h e
a c c i d e n t was something o v e r which n e i t h e r t h e employees n o r t h e
employer had any c o n t r o l .
P r i o r t o t h e day of t h e a c c i d e n t , b o t h employees had been
p a i d $4 p e r day f o r each day worked i n a d d i t i o n t o t h e i r wages.
The amount p a i d was c a l l e d "the mileage and amount of t r a v e l pay
o r subsistence". O t h e itemized breakdown a t t a c h e d t o t h e i r
n
checks, t h e r e i s a column headed " ~ u b s . ~ r a v e l i n which t h i s
"
payment was e n t e r e d . The employer d i d n o t deduct any t a x e s on
t h i s t r a v e l pay, b u t each employee p a i d income t a x e s on t h e t r a v e l
money.
N e i t h e r employee r e c e i v e d any t r a v e l pay on t h e day of t h e
accident.
The c l a i m s of each employee were heard by t h e Workmen's
Compensation Division. The D i v i s i o n e n t e r e d f i n d i n g s o f f a c t ,
c o n c l u s i o n s of law, and an o r d e r awarding compensation. The sub-
s t a n c e o f t h e D i v i s i o n holding was t h a t t h e t r a v e l allowance was
p a i d a s an i n c e n t i v e "to g e t t h e men t o come on t h e job" and a
b e n e f i t t o t h e employer; t h a t a c c o r d i n g l y each s u f f e r e d an a c c i -
d e n t a l i n j u r y a r i s i n g o u t o f and i n t h e c o u r s e of h i s employment;
and, t h a t each was e n t i t l e d t o b e n e f i t s under t h e Montana Act i n -
c l u d i n g compensation, medical expense and a t t o r n e y f e e s .
On a p p e a l t o t h e d i s t r i c t c o u r t , t h e c a s e s were heard on t h e
t h e r e c o r d b e f o r e t h e Workmen's Compensation Division w i t h o u t
a d d i t i o n a l evidence. The d i s t r i c t c o u r t adopted t h e f i n d i n g s o f
f a c t and c o n c l u s i o n s o f law o f t h e D i v i s i o n and e n t e r e d judgment
a f f i r m i n g t h e D i v i s i o n award of b e n e f i t s .
The employer and i n s u r e r now a p p e a l from t h e judgment o f
the d i s t r i c t court.
The i s s u e i s whether under t h e f a c t s and circumstances of
II
t h i s c a s e t h e two employees s u f f e r e d a c c i d e n t a l t n j u r i e s arising
o u t of and i n t h e c o u r s e o f " t h e i r employment w i t h i n t h e meaning
of ~ o n t a n a ' sWorkmen's Compensation Act. S e c t i o n 92-614, R.C.M.
A review of some p r i o r d e c i s i o n s of t h i s Court on compensation
II
coverage where an employee i s i n j u r e d going o r coming" t o and from
t h e job f u r n i s h e s t h e background f o r our d e t e r m i n a t i o n .
I n G r i f f i n v. I n d u s t r i a l Accident Fund, 1 1 Mont. 110, 106 P.
1
2d 346, compensation was denied a foreman i n j u r e d i n a f a l l on a
c i t y sidewalk when r e t u r n i n g home from work. The b a s i s of d e n i a l
was t h a t t h e sidewalk was n o t used by t h e employer i n c a r r y i n g on
h i s b u s i n e s s i n which t h e employee was employed and consequently
t h e employee was i n j u r e d o n l y by an o r d i n a r y s t r e e t hazard common t o
a l l pedestrians.
I n Morgan v. I n d u s t r i a l Accident Board, 133 Mont. 254, 260,
321 P.2d 232, c l a i m a n t , a union shop steward, was i n j u r e d i n an
automobile a c c i d e n t w h i l e t r a v e l i n g from Miles C i t y t o Forsyth.
I n denying compensation, t h i s Court pointed o u t t h a t a t t h e time
o f i n j u r y c l a i m a n t was on union b u s i n e s s and n o t w i t h i n t h e scope
of h i s employment. The Court l a i d down t h i s p r i n c i p l e :
"Under t h e p a r t i c u l a r circumstances, where t h e
a c c i d e n t occurred i s i r r e l e v a n t . I f claimant
was i n j u r e d w i t h i n t h e scope of h i s employment,
t h e f a c t t h a t he was i n j u r e d ' a f t e r h o u r s ' and
I
o f f r e m i s e s ' i s i n c i d e n t a l . Even i n ' s t r e e t
risks', t h e scope, n o t t h e p l a c e of employment
c o n t r o l s . I1
Guarascio v. I n d u s t r i a l Accident Board, 140 Mont. 497, 501,
374 P.2d 84, granted compensation where an i t i n e r a n t t e r r a z z o t i l e
worker r e s i d i n g i n S a l t Lake C i t y was k i l l e d i n an automobile
a c c i d e n t enroute from Utah t o Butte, Montana t o a i d i n c o n s t r u c t i o n
of a h o s p i t a l t h e r e . A t t h e time of t h e a c c i d e n t Guarascio was
being paid a , t r a v e l pay allowance based upon h i s hourly r a t e of pay
m u l t i p l i e d by t h e number o f hours necessary t o t r a v e l from S a l t
Lake C i t y t o B u t t e , p l u s an allowance f o r s u b s i s t e n c e and t r a n s -
portation costs.
I n Guarascio a f t e r f i n d i n g "an informal, o r a l type of employ-
ment", t h i s Court l a i d down t h e t e s t of compensability i n "going
and coming1 c a s e s i n terms of whether some reasonably immediate
s e r v i c e t o t h e employer was involved:
"1n t h e i n s t a n t c a s e , t h e decedent Guarascio
was c a r r y i n g on t h e b u s i n e s s of h i s employer
by t r a n s p o r t i n g himself t o B u t t e , Montana, s o
t h a t he could be on t h e job a s soon a s p o s s i b l e .
Furthermore, t h e employer recognized t h e b e n e f i t
t o i t by v i r t u e of t h e f a c t t h e decedent workman
was t o r e c e i v e monetary compensation f o r t h e time
spent t r a v e l i n g t o t h e job.
I n Morgan v. Ind. Acc.Bd., 133 Mont. 254, 321 P.2d
11
232, t h i s Court made t h e following observation:
11 IWhat i s t h e underlying p r i n c i p l e ? I n c a s e s where
some reasonably immediate s e r v i c e t o t h e employer
can be discerned t h e c l a i m has been s u s t a i n e d . Where
t h e r e has been no reasonably immediate s e r v i c e t h e
c l a i m has been denied. Such impresses u s a s a funda-
mental r u l e and guide f o r t h e l i b e r a l i t y t o which t h i s
Court i s n e c e s s a r i l y and properly committed and f o r
which c l a i m a n t ' s counsel s o e a r n e s t l y contend. [ C i t i n g
a u t h o r i t y ] . Beyond t h i s each d e c i s i o n must be con-
t r o l l e d by t h e p a r t i c u l a r f a c t s and circumstances of
t h e p a r t i c u l a r case. [ C i t i n ? a u t h o r i t y ] . Our opinion
proceeds upon t h a t premise.
h he r e c o r d h e r e s u b s t a n t i a t e s t h e f i n d i n g s of t h e
d i s t r i c t c o u r t , b u t we wish t o a a i n s t a t e , a s w e
F
d i d i n t h e Morgan c a s e , t h a t we do n o t i n t e n a t o
e s t a b l i s h any precedent * * *. Our d e c i s i o n i s l i m i t e d
t o t h e f a c t s i n t h e c a s e now b e f o r e us. 111
The employer and i n s u r e r contend t h a t Guarascio i s d i s -
t i n g u i s h a b l e on t h e b a s i s t h a t t h e r e t h e employee was paid h o u r l y
wages f o r h i s t r a v e l time i n a d d i t i o n t o s u b s i s t e n c e and t r a v e l
c o s t s i n d i c a t i n g t h a t t h e t r a v e l involved was f o r t h e b e n e f i t of
h i s employer. They contend t h a t t h e method of payment i s c r u c i a l
t o determination of b e n e f i t t o t h e employer, which c o n t r o l s com-
pensability.
W disagree.
e Although b e n e f i t t o t h e employer i s an important
f a c t o r i n determining compensability, t h e payment of hourly wages
f o r t r a v e l time i s n o t n e c e s s a r i l y a u n i v e r s a l condition precedent.
I n t h e i n s t a n t c a s e , t h e union c o n t r a c t s i n g l e d out f o r s p e c i a l
c o n s i d e r a t i o n a t r a v e l allowance and testimony a t t h e hearing i n d i -
c a t e d i t was paid a s an i n c e n t i v e t o g e t men out on t h e job. This
c o n t r a c t u a l f a c t supports t h e f i n d i n g of t h e Division and t h e d i s t r i c t
c o u r t t h a t t h e t r a v e l allowance was f o r t h e b e n e f i t of t h e employer
w i t h i n previous holdings of t h i s Court.
This i s c o n s i s t e n t with t h e majority r u l e i n t h e United S t a t e s
t h a t a workman i s u s u a l l y e n t i t l e d t o compensation when i n j u r e d
during t r a v e l t o o r from h i s employment where he r e c e i v e s a s p e c i f i c
allowance t o g e t t o and from h i s job. 1 Larsen, workmen's Compensa-
t i o n Law, 5 16.20 e t seq. 1 Larsen, workmen's Compensation Law,
5 16.30, p. 4-112, summarizes t h e p r i n c i p l e and i t s r a t i o n a l e :
11However, i n t h e majority of c a s e s involving a
d e l i b e r a t e and s u b s t a n t i a l payment f o r t h e ex-
pense of t r a v e l , o r t h e provision of an auto-
mobile under t h e employee's c o n t r o l , t h e journey
i s held t o be i n t h e course of employment. This
r e s u l t i s u s u a l l y c o r r e c t , because when t h e sub-
j e c t of t r a n s p o r t a t i o n i s s i n g l e d out f o r s p e c i a l
c o n s i d e r a t i o n i t i s normally because t h e t r a n s -
p o r t a t i o n involves a considerable d i s t a n c e and
t h e r e f o r e q u a l i f i e s under t h e r u l e h e r e i n suggested:
t h a t employment should be deemed t o include t r a v e l
when t h e t r a v e l i t s e l f i s a s u b s t a n t i a l p a r t of t h e
s e r v i c e performed. The sheer s i z e of t h e journey
i s f r e q u e n t l y t h e p r i n c i p a l f a c t supporting t h i s
conclusion, a s i n t h e s u c c e s s f u l c a s e s involving
t r i p s of e i g h t m i l e s , 20 miles, 22 miles, 30 miles,
50 miles, 54 miles, 60 miles, 120 m i l e s , and 130
miles. If
The employer and i n s u r e r a l s o argue t h a t t h e union c o n t r a c t
providing f o r a t r a v e l allowance i s i r r e l e v a n t t o compensability
because t h e meaning of t h e phrase " a r i s i n g o u t of and i n t h e
course of employment" must be determined by t h e r u l e s of s t a t u t o r y
construction. They f u r t h e r contend t h a t employers and employees
can n o t c o n t r a c t themselves i n and out of coverage under t h e
Workmen's Compensation Act by t h e terms of a union c o n t r a c t .
This contention i s specious, The s t a t u t o r y language can n o t
be i n t e r p r e t e d i n a vacuum. It must be i n t e r p r e t e d i n t h e context
of t h e f a c t s of t h e p a r t i c u l a r case before t h e c o u r t . The union
c o n t r a c t providing f o r t r a v e l allowance i s a f a c t . Payment of t h e
t r a v e l allowance i s another f a c t , The purpose of payment t o provide
an i n c e n t i v e t o g e t t h e employees on t h e job i s a t h i r d f a c t . The
b e n e f i t t o t h e employer i s a f i n a l f a c t . The s t a t u t o r y language i s
simply a p p l i e d t o t h e s e f a c t s and t h e meaning determined.
W have considered a l l t h e c a s e s , s t a t u t e s and a u t h o r i t i e s c i t e d
e
by counsel. W e hold t h a t t h e employees h e r e were i n j u r e d i n an
a c c i d e n t " a r i s i n g out of and i n t h e course of employment" and t h e i r
i n j u r i e s a r e t h e r e f o r e compensable. Our d e c i s i o n i s l i m i t e d t o t h e
f a c t s of t h e case b e f o r e us.
The employer and i n s u r e r a l s o r a i s e t h e i s s u e of t h e c o n s t i t u -
t i o n a l i t y of s e c t i o n 92-616, R.C.M. 1947, which provides, i n per-
tinent part:
"In t h e event t h e i n s u r e r denies t h e claim f o r
compensation o r terminates compensation b e n e f i t s ,
and t h e claim i s l a t e r adjudged compensable, by
t h e d i v i s i o n o r on appeal, t h e i n s u r e r s h a l l pay
reasonable c o s t s and a t t o r n e y s ' f e e s a s e s t a b l i s h e d
by t h e d i v i s i o n * * *."
The employer and i n s u r e r contend t h i s s t a t u t e denies equal
p r o t e c t i o n of t h e laws i n v i o l a t i o n of t h e United S t a t e s and Montana
constitutions. Two s p e c i f i c v i o l a t i o n s a r e a l l e g e d :
1 ) Allowing c o s t s and a t t o r n e y s ' f e e s t o s u c c e s s f u l claimants,
b u t not t o s u c c e s s f u l i n s u r e r s , . .
2) Requiring payment of c o s t s and a t t o r n e y s 1 f e e s i f t h e
s u c c e s s f u l claimant i s covered under Plans 2 o r 3 ( p r i v a t e insurance
company and t h e s t a t e fund), b u t n o t i f he i s covered under Plan 1
(self -insurers).
There i s ample a u t h o r i t y supporting t h e c o n s t i t u t i o n a l i t y of
Montana's Workmen's Compensation Act a s a v a l i d e x e r c i s e of t h e
state's police power. Cunningham v. Northwestern Improvement Co.,
44 Mont. 180, 119 P. 554. Here our concern is whether or not, in
exercising that police power, the legislature has violated constitu-
tional guarantees of equal protection of the laws.
The argument that insurers should be able to recover attorneys'
fees when they prevail, in order to satisfy equal protection provi-
sions, is not supported by any discoverable authority. To the con-
trary, the United States Supreme Court in Missouri, Kansas & Texas
Railway of Texas v. Cade, 233 U.S. 642, 34 S.Ct. 678, 58 L.Ed.
1135, 1138;1139, held:
I I If the classification is otherwise reasonable,
the mere fact that attorney's fees are allowed
to successful plaintiffs only, and not to successful
defendants, does not render the statute repugnant
to the 'equal protection' clause.* * *
'*
I * *The outlay for an attorney's fee is a necessary
consequence of the litigation, and since it must fall
upon one party or the other, it is reasonable to impose
it upon the party whose refusal to pay a just claim
renders the litigation necessary. 1 1
That holding has remained unchanged for over sixty years and
controls the federal constitutional question here. For the same
reasons, we hold that there is no violation of the equal protection
clause in Article 11, Section 4, Montana Constitution.
The second argument raised under federal and state equal
protection clauses arises from an improper construction of section
92-616, R.C.M. 1947. The employer and insurer argue that section
92-435, R.C.M. 1947, defining an "insurer", controls the applicability
of section 92-616. They argue that these sections, when read together,
unlawfully discriminate against Plan 2 and Plan 3 employers and
insurers by requiring them to pay costs and attorneys' fees while
exempting Plan 1 employers.
This argument ignores the provisions of section 92-401, R.C.M.
1947, which provide that statutory definitions will control unless
the context otherwise requires. The context here requires that
section 92-616 covers employers and insurers under all three plans.
This conclusion is compelled by a number of considerations.
First, if a statute is capable of two constructions, it is
the duty of this Court to give the statute that construction which
will make it constitutional. School District No. 12 v. Pondera
County, 89 Mont. 342, 297 P. 498; Parker v. County of Yellowstone,
140 Mont. 538, 374 P.2d 328.
Second, in the context of the legislative act (Ch. 477, Laws
of 19731, it is clear the legislature intended that the challenged
provisions apply to all three compensation plans. That legislative
enactment began with the words "Every insurer under any plan for
the payment of workmen's compensation benefits ** *.It (Emphasis
supplied). The use of the word "insurer" throughout the remainder
of the act (including what is codified as section 92-616) should be
construed as referring to insurers I Iunder any plan" --- Plans 1, 2
or 3, as the context does not otherwise require. Employers are
their own I1insurers" under Plan 1.
Finally, section 92-838, R.C.M. 1947, requires that the
provisions of the workmen ' Compensation Act be liberally construed.
s
The construction employed in this opinion is in accord with the
spirit of that Act, providing the employee with compensation undimin-
ished by the expenses of seeking legal remedies when he is wrongfully
denied compensation benefits.
The judgment of the district court is affirmed.
Justice
Mr. Justice Wesley Castles dissenting in part and concurring in part:
I dissent as to what the majority calls the ultimate issue.
The accident did not arise out of and in the course of employment.
Whether it be travel allowance or subsistence or any other negotiated
fringe benefit, does not make it in the course of employment as far
as industrial accidents are concerned.
I concur on the issue of constitutionality of section 92-616,
R.C.M. 1947.
---dr2-;----------,-----------
Justice.