No. 83-136
IN THE SUPREME COURT OF STATE OF MONTANA
1984
JERI T. PAULSON,
Claimant and Respondent,
-vs-
BOZEFIAN DEACONESS FOUNDATION I-IOSPITAL,
Defendant and Appellant.
APPEAL FROM: Workers' Compensation Court, The Honorable Timothy
Reardon, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Crowley, Haughey, Hanson, Toole & Dietrich; T. G.
Spear, Billings, Montana
For Respondent :
Halverson & Sheehy; William T. Kelly, Billings,
Montana
Submitted on Briefs: September 8, 1983
Decided: January 12, 1984
Filed: JAN 1 2 1984
Clerk
Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of
the Court.
Glacier General Assurance Company (Glacier) appealed the
Workers' Compensation Court's finding that Jeri Paulson
(claimant) was permanently totally disabled as a result of an
industrial accident. By motion of the appellant, that appeal
has been dismissed. Remaining for decision is claimant's
cross-appeal of the court's denial of the 20% penalty. We
remand for findings.
On October 8, 1979, claimant was injured when she fell
on a flight of stairs while working as a ward clerk at
Bazeman Deaconess Hospital. Claimant struck the tops of both
knees against a concrete step. Although claimant experienced
pain in her legs, she continued working. Claimant was
examined by a physician the same evening. She returned to
work the next day but still suffered some pain from the fall.
Sometime after the accident, claimant began experiencing
difficulty in remembering names and medications. In
addition, she experienced dizziness and difficulty in
maintaining balance. Claimant eventually quit her job as
ward clerk and assumed other duties in the hospital whereupon
she developed a limp in her left leg. In early December 1979
a Bozeman internist diagnosed her problem as a blocked artery
in the left leg. On the basis of that diagnosis, claimant
concluded nothing further could be done medically and that it
was a problem she would have to tolerate. She stopped
working at the hospital on August 7, 1981, because of
continued physical problems.
Prior to the accident, the claimant had no major medical
problems. In 1976, she did experience occasional right leg
and thigh pain for which she received medication and
underwent chiropractic treatment from 1976 to 1978.
After consulting with several doctors, claimant was
diagnosed as having spinal stenosis on July 21, 1981. She
was operated on for the condition on September 22, 1981 and
was hospitalized for one week. It was determined that the
spinal stenosis preexisted her industrial accident.
Nevertheless, the doctor who operated stated that the spinal
stenosis was aggravated by the accident. Several other
doctors are in agreement. It was also determined that the
claimant had multiple sclerosis prior to the accident. Upon
consideration of the medical evidence presented, the Workers'
Compensation Court eventually held that the pain and stress
that resulted from the aggravation of the spinal stenosis
possibly aggravated the multiple sclerosis. The Court
thereupon determined claimant to be entitled to an award
based upon total permanent disability. Glacier has withdrawn
its appeal of this judgment.
Prior to the trial court decision, claimant had
corresponded with Robert Stewart, a claims manager for
Missoula Service Company which handles claims for Glacier
General. In August, 1981, claimant wrote to Stewart, " [slo I
don't think of what (Workmen's Comp.) is doing for me as a
favor - more like a little bit of what I've got coming.
Thanks for your offer for an advancement - But I'll try to
hold things off 'ti1 then - though those two months are qonna
be rough. " In September, 1981, a total decompressive
laminectomy was performed on claimant and Stewart sent her a
check for $500.00. In Februarv, 1982, claimant was offered
$750 to settle and told she was actually owed nothing because
the claim for compensation was not made within one year, as
required by Section 39-71-601, MCA. As a result, claimant
signed a settlement petition and returned it to Stewart.
However, the Division of Workers' Compensation intervened and
refused to recommend approval of the petition because of the
medical evidence indicating aggravation of the underlying
condition.
Against this factual background, claimant sought an
award of the 20 percent penalty for unreasonable delay or
denial of claim under Section 39-71-2907, MCA. The trial
court denied this relief, and claimant cross-appeals that
decision.
The following issue is raised on appeal:
Did the trial court err in failing to award the 20
percent penalty under Section 39-71-2907, MCA sought by
claimant?
Section 39-71-2907, MCA provides:
"Increase in award for unreasonable delay or
refusal to pal7. When payment of compensation has
been unreasonably delayed or refused by an insurer,
either prior or subsequent to the issuance of an
order by the workers' compensation judge granting a
claimant compensation benefits, the full amount of
the compensation benefits due a claimant, between
the time compensation benefits were delayed or
refused and the date of the order granting a
claimant compensation benefits, may be increased by
the workers' compensation judge by 20%. The
question of unreasonable delay or refusal shall be
determined by the workers1 compensation judge, and
such a finding constitutes good cause to rescind,
alter, or amend any order, decision, or award
previously made in the cause for the purpose of
making the increase provided herein."
Claimant argues that Glacier dealt unreasonably with her
when it sought to settle the case on a disputed liability
basis for $750. Claimant points out that an aggravation of a
preexisting condition has always been compensable, and that
Glacier inaccurately and incompletely advised claimant of her
status under the law regarding the running of the statute of
limitations.
Section 39-71-2907, MCA was not intended to eliminate
the assertion of a legitimate defense by an insurer. Steffes
v. 93 Leasing Co., Inc. (1978), 177 Mont. 83, 580 P.2d 450.
To prevail under that section, a claimant must show that the
withholding or delay of payment was unreasonable. The
determination of what is unreasonable is a question of fact.
Smith v. Pierce Packing Co. (1978), 177 Mont. 267, 274, 581
P.2d 834, 838.
Although an aggravation of a preexisting condition is
well recognized as a compensable injury, the question of
whether there was an aggravation turns on the facts. With
regard to the aggravation of claimant's multiple sclerosis,
we uphold the trial court's determination that Glacier
reasonably withheld payment on the legitimate theory that
claimant's injuries were not compensable.
With regard to the aggravation of the spinal stenosis,
however, we are in disagreement with the Workers'
Compensation Court's findings and conclusions. Glacier was
in receipt of medical verification of a compensable injury on
July 28, 1981 when it received Dr. Wood's Division
Physician's First Report which stated the low back condition
"was definitely aggravated by that fall." Whether the
negotiations and offers which followed that date amount to
unreasonable delay or refusal is a question of fact which
must be reconsidered by the trial court. It is clear to this
Court, however, that claimant's letter in August, 1981
(Exhibit No. 23(a) at 24-25), does not amount to a decline of
an offer of disability benefits. The Workers' Compensation
Court's conclusion to that effect is clearly erroneous. The
trial court must consider whether Glacier's offers from July
28, 1981 through the date of trial were reasonable in light
of the medical verification they had received.
This cause is remanded to the Workers' Compensation
Court with directions to reconsider and issue findings
respecting application of the 20 percent penalty to denial of
the claim for aggravation of spinal stenosis. Originally
there was an issue in this appeal regarding whether
respondent should have been awarded benefits for multiple
sclerosis. The appeal of this issue was dismissed after
briefing. Claimant asks for costs and fees. We direct the
court to award reasonable costs and attorneys1 fees pursuant
to Section 3 9 - 7 1 - 6 1 1 , MCA as if claimant's benefits were
based on an Order of this Court.
We concur: v
Justice
/"