No. 85-124
IN THE SUPREME COURT OF THE STATE OF MONTANA
19e5
DEE SHEPARD,
Claimant and Appellant,
-vs-
MIDLAND FOODS, INC., Employer,
and
GLACIER GENERAL ASSURANCE COMPANY,
Defendant and Respondent.
APPEAL FROM: The Workers' Compensation Court, The Honorable
Timothy Reardon, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Kelly & Halverson, P.C.; Sheehy, Prindle & Finn;
Patrick L. Prindle, Billings, Montana
For Respondent:
Crowley Law Firm; L. Randall Bishop, Billings,
t'lontana
Submitted on Briefs: Aug. 22, 1985
Decided: December 18, 1985
Filed: DEC181985
Clerk
Mr. Justice L. C. Gulbrandson delivered the Opinion of the
Court.
Dee Shepard appeals a Workers' Compensation Court order
awarding him disability benefits. The issues on appeal are
whether the lower court erred by (1) refusing to increase
Shepard's award under S 39-71-2907, MCA, for unreasonable
delay or refusa.l to pay; (2) holding defendant insurer not
liable for medical expenses paid by other health care
providers who have not sought reimbursement from Shepard. We
af firm.
The parties have been before this Court in a related
proceeding; Shepard v. Midland Foods, Inc. (Mont. 1983), 666
P.2d 758, 40 St.Rep. 1177. We set out the case history in
some detail in the first Sheward case. The resolution of the
instant case requires on.ly a perfunctory outline of the
facts.
In 1972, a doctor diagnosed Shepard as suffering from
degenerative arthritis and chondrocalcinosis in his knees.
In February 1980, Shepard injured his knee while working at
his job for Midland Foods, Inc. He received temporary total
disability payments for ten days after the injury. Shepard
returned. to his job in February 1980 but retired in April of
that year due to knee difficulties and on the advice of his
doctor. He sought permanent total disability benefits after
his retirement and was denied the same. Shepard petitioned
the Workers' Compensation Court for a hearing on his right to
disability benefits. In September 1982, the Workers'
Compensation Court denied permanent total disability benefits
to Sheparc7,.
The court concluded that Shepard had retired because of
his knees, which had deteriorated for other than work related
reasons. The court ruled that Shepard's injury at work was
not the cause of his disability.
Shepard appealed that decision and in July 1983, this
Court reversed the Workers' Compensation Court, holding that
there was not substantial evidence that Shepard's knees had
deteriorated for other than work related reasons. This Court
remanded the case for a determination of the compensation,
costs, fees and penalties, if any, to which Shepard was
entitled.
In October 1983, the Workers' Compensation Court again
held a hearing on Shepard's claim for disability benefits.
At that hearing, Shepard's counsel stated that Shepard's
total medical expenses to that time amounted to $23,160.42.
Counsel stated that, of that amount, Medicare had paid
$19,273.85, Banker's Mutual, Shepard's insurance carrier, had
paid $1,156.96, and Shepard ha.d paid $407.60.
During the course of the proceedings, counsel for the
insurer delivered a check for $11-,870.60 to Shepard's
counsel. The insurer's counsel stated in court that
Shepard's cashing of that check was not meant to be a release
or compromise of any of Shepard's claims or rights. On
October 11, 1983, insurer's counsel filed an affidavit with
the Workers' Compensation Court. The affidavit stated, (1)
that the check delivered to Shepard's counsel stated on the
back that the endorsement of the check would be a release and
receipt in full payment; (2) that the affiant did not know
this language was on the check at the time the check was
offered; (3) that the affiant only learned of this language
after the October 6, 1983 hearing; (4) that the affiant then
delivered another check to Shepard, which check had the
endorsement and release language crossed out and initialed;
and (5) that it was not the intent of the insurer's counsel
that the cashing of the check would be a release of Shepard's
claims. The record also contains a letter from insurer's
counsel to Shepard's counsel which supports the veracity of
the affidavit.
At the October 6, 1.983 hearing, the Workersr
Compensation Court granted counsel approximately sixty days
(until November 30, 1983) to complete the two anticipated
depositions for the case. The depositions were to be
submitted as part of the record upon which the Workersf
Compensation Court would make its decision. Counsel for both
parties requested and received an extension for the filing of
depositions until January 30, 1984.
The insurer completed its deposition by that deadline.
Shepard requested and received - further extensions for the
two
completion of depositions. Shepard finally filed his
completed deposition with the lower court on April 30, 1984.
Thereafter, counsel for both parties submitted proposed
findings of fact and conclusions of law in August 1984.
On December 24, 1984, the Workers' Compensation Court
issued its decision. The court awarded to Shepard total
disability benefits from February 1980, medical benefits for
treatment and surgery on his knees, and reasonable costs and
attorney's fees. The court held that Shepard was not
entitled to be paid for benefits paid by other health care
insurers. The court refused to impose a twenty percent
penalty on the insurer under 5 39-71-2907, MCA.
In January 1985, Shepard's counsel filed a petition for
rehearing and request for order nunc pro tunc. The petition
again requested the lower court to impose a twenty percent
penalty on the insurer. The petition also requested the
lower court to order the defendant insurer to reimburse
Medicare and Shepard's health care insurer for the amounts
they had paid for Shepard's medical expenses. The petition
states:
. .. Claimant is primarily liable to
Medicare and his health insurance company
for benefits paid through those policies
which are the Workers' Compensation
insurer's responsibility. Upon discovery
of nonreimbursement, Medicare and the
health insurance provider will sue the
Claimant, not the insurer.
The lower court issued an order refusing Shepard's
requests and stating:
If, at a future date, claimant is sued
for medical costs which should have been
paid by defendant, claimant may file a
Petition asking for a ruling on the
matter. .. If the claimant is held
responsible, it is clearly the insurer's
obligation to pay medical benefits; thus,
litigation of that issue seems unlikely.
Shepard appeals the rulings of the District Court.
The first issue is whether the lower court erred in
refusing to increase the award to Shepard under S 39-71-2907,
MCA . That section allows a court to increase the
compensation benefits due a claimant by twenty percent where
the insurer has unreasonably delayed or refused. payment of
compensation. A decision to increase the award under this
section is within the discretionary power of the Workers'
Compensation Court. Putnam v. Castle Mountain Corp. (Mont.
1985), 702 P . 2 d 333, 42 St.Rep. 833. This Court will not
overturn a decision of the Workers' Compensation Court where
there is substantial evidence to support the findings and
conclusions of the lower court. Nielsen v. Beaver Pond, Inc.
(Mont. 1983), 661 P.2d 47, 40 St.Rep. 489.
The first issue arises from appellant's contention that
the lower court erred in refusing to impose a twenty percent
penalty upon the insurer for unreasonable delay or refusal to
Pay Appellant argues that until Janua.ry 1985, the
respondent insurance company refused payment of benefits.
Appellant later concedes that respondent offered a check for
$11,870.60 on October 6, 1983 but contends that cashing the
check would have prejudiced his rights. He ignores the
record and the affidavit of respondent's counsel which show
that the check was not offered as a final settlement of the
claim and that respondent did not intend the cashing of the
check to be a release of appellant's claims or rights.
The record also shows that much of the delay in this
case was due to appellant's repeated requests for extensions
of time in which to complete depositions. The record further
shows that, generally, respondent was reasonable in the
negotiations and conduct of the case. Respondent did
initially deny its liability to Shepard for permanent total
disability benefits but this action was not in itself
unreasonable. In fact, the lower court at first agreed that
respondent was not liable for permanent total disability
benefits. We uphold the lower court's decision to not impose
a twenty percent penalty upon respondent.
The second issue is whether the lower court erred in
holding respondent not liable for medical expenses paid for
by other health care providers who have not sought
reimbursement from appellant.
Appellant's argument on this issue is somewhat
confusing. Appellant appears to argue at one point that
respondent is liable to appellant for medical expenses paid
by other health care providers. Before the lower court,
however, appellant requested that respondent be required to
reimburse the health care providers. Appellant cites no case
law for either proposition.
Neither Medicare nor Ranker's Mutual, Shepard's
insurance carrier, was a party to this action. The lower
court had no jurisdiction to adjudicate any right to
reimbursement which those entities had. See Spiker v. John
Day Co. (Neb. 1978), 270 N.W.2d 300.
Section 39-71-704, MCA, entitled Payment of medical,
hospital, and. related services, states that,
. . . the . . . insurer shall furnish,
without limitation. . . reasonable
services by a physician or surgeon,
reasonable hospital services and
medicines when needed, and such other
treatment as may be approved. ..
Contrary to appellant's assertion, this statute is not
authority for ordering respondent to pay appellant for
medical expenses already paid by other health care providers.
The statute requires the insurer to furnish reasonable
services, medicine and treatment. To order the insurer to
pay appellant for medical expenses already paid is not
furnishing services nor is it reasonable. In Spiker, the
Nebraska Supreme Court held that the pla.intiff had no valid
claim for reimbursement for services furnished by the
Veterans Administration and Medicare. The Nebraska statute
controlling in Spiker is similar to § 39-71-704, MCA.
Appellant Shepard is here asking for a windfall. The
lower court ruled that if Shepard were sued for medical
expenses, he could petition the Workers' Compensation Court
for relief. That ruling is logical, equitable and can
provide Shepard with prompt relief. We hold that the lower
court did not err in its ruling on this issue.
7
Affirmed. ,/?
,
We concur- -- /
flA <
' ,
/
r
ief Justice
Mr. Justice John C. Sheehy did not participate.