No. 85-354
IN THE SUPREME COURT OF THE STATE OF MONTANA
1986
PAM DUNN,
Claimant and Respondent,
CHAMPION INTERNATIONAL CORP .
a self-insured employer under
Plan I,
Employer/Defendant and Appellant.
APPEAL FROM: The Workers' Compensation Court, The Honorable
Timothy Reardon, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Garlington, Lohn & Robinson; Bradley J. Luck argued,
Missoula, Montana
For Respondent :
Thomas C. Rulman argued, Missoula, Montana
Submitted: February 13, 1986
Decided: June 19, 1986
Filed: JUN 19 1986
Mr. Justice L. C. Gulbrandson delivered the Opinion of the
Court.
Champion International (Champion), the self-insured
employer, appeals a Workers' Compensation Court order which
awards to respondent Pam Dunn 2 0 0 weeks of permanent partial
disability benefits at $ 9 9 a week. The determinative issue
on appeal is whether there is substantial, credible evidence
to support the lower court's findings on respondent's lost
earning capacity. We hold that there is no such evidence
and, therefore, we reverse the lower court.
Since 1 9 7 4 respondent has worked for Champion at its
Bonner, Montana plant. Respondent injured her right knee at
work in May 1 9 8 0 and Champion, admitting liability for her
resulting condition, paid her temporary total disability
benefits. Dr. Westbrook performed knee surgery on respondent
in July 1 9 8 0 . R.espondent returned to work in September 1 9 8 0 .
She was found to have a 1 5 % impairment rating of her right
leg and Champion offered her 45 weeks of permanent partial
disability benefits. Champion paid two weeks of these
benefits to respondent at the maximum statutory rate of $ 9 9
per week.
In June 1 9 8 1 respondent injured her left knee while
working for Champion. Champion now accepts liability for the
left knee injury. Dr. Wooley performed surgery on the left
knee in October 1983. Respondent returned to work at
Champion after healing from this operation. In August 1 9 8 4
respondent filed a petition for a hearing before the Workers'
Compensation Court and a trial was held in November 1 9 8 4 .
Respondent elected to seek disability benefits under
§ 39-71-703, MCA, for her actual loss of earning capacity
resulting from her injuries.
The Five Valley Panel, a group of four doctors,
extensively examined respondent in October 1 9 8 4 and issued a
report on her condition. The Panel found that respondent
suffered a 15% permanent partial impairment of her right leg
(6% impairment of the whole woman) and no permanent partial
impairment of the left knee. The Panel's October 1984 report
states that her "condition is expected to stabilize and not
progress . . . Patient may continue to work as she is doing."
The report indicates the possibility of further deterioration
of respondent's knees.
Dr. Jacobson, a member of the Five Valley Panel,
testified by deposition and agreed with the Panel's
evaluation of respondent's knees. He stated that the Panel's
findings were unanimous; that no one could accurately
forecast respondent's future problems or condition with her
knees; that there was no reason for respondent to modify her
present employment if she could physically handle it; that
twisting and carrying heavy objects probably could aggravate
respondent's knees but that simply standing probably would
not affect them too much; that compared to the average person
with normal knees, respondent stands a greater chance of
future knee problems; and that he did not see any reason why
respondent should not try to continue her present employment
indefinitely if she could physically handle it and if she
stayed away from bending and twisting.
Dr. Wooley also treated respondent for the injuries to
her knees and he testified by deposition. Wooley agreed that
the Five Valley Panel's report was a "reasonably fair
assessment" of respondent's condition. He stated that
respondent, due to her injuries and surgery, was now
predisposed to arthritis of the knee; that "you would expect
[her knees] to develop pain, spurring, joint narrowing
. .. ;" that she would be prone to developing more symptoms
with degenerative change; and that her right knee will likely
be a problem in the future. He examined respondent in August
1984 and, as of that time, he said she did reasonably well at
work and was not having any significant problems, except with
one job requiring a lot of twisting and pivoting on her
knees. He stated that she - - - to handle - - -
was able all of the
other - -at work and that he believed she could probably
jobs -
still serve - very useful purpose - Champion.
a at Dr. Wooley
agreed that no one could accurately forecast what, when or if
specific problems will occur with respondent's knees.
Shortly before trial, respondent advanced at the mill
from a utility millworker to a panel patch operator. After
her injuries, respondent earned more money at the mill than
she had before the injury. As a utility millworker,
respondent was trained for, and filled in at, several other
mill job positions. She stated that her knees do not feel
normal and that, depending on what she does at work, she
suffers pain ranging from an ache to severe pain in her knees
after work. Respondent stated that her new job causes pain
ranging from an ache to severe pain from standing for eight
hours. She stated that she was able, after her injury, to
handle her present position at the mill and also her prior
position of utility millworker. As a result of on the job
training while she was a utility millworker, respondent
stated that after her injury she could handle other jobs at
the mill; specifically, the dryer feeder, veneer plugger,
individual defect router, off bearer and size line feeder.
She stated that she can sometimes handle the edge scraper
position. Respondent stated that, "I am versatile enough
that if they are short of people . . . they will send me
where they need me." She was earning $10.51 an hour at the
time of the hearing and had been earning $10.18 an hour in
her previous position. She stated that "they seem satisfied
with my work" and conceded that Dr. Westbrooke gave her an
unconditional work release in 1980 after the surgery on her
right (worst) knee.
Norm Johnson, a Job Service counselor with 12% years
experience with the Job Service, also testified by
deposition. He had interviewed respondent and he testified
mainly to establish the actual loss of earning capacity which
respondent had suffered. Johnson stated that employers tend
to hire people without prior injuries to cut down absenteeism
and to lower insurance costs. He felt that respondent's
injuries were going to cause her problems performing her
millworker job; i.e., being fast enough to perform her job
and doing her job in a satisfactory manner. Johnson stated
that he would not consider respondent for a millworker
position after 1977 because it would cause a steady
deterioration in her knees. He conceded that he knew nothing
of the physical requirements for some of the jobs at the
mill. He stated that if respondent had been required after
her injuries to seek employment in another vocational area,
she could have worked as a clerk (sales, payroll, production,
accountant clerk, receptionist), a salesperson, secretary and
a typist. He stated that in 1977, after her injuries,
respondent's probable earnings would have been $2.50-$3.00 an
hour (compared to her actual earnings of $6.31/hr.); in 1980,
$3.50-$4.00/hr. (actual $8.38); in 1981, $3.75-$4.25/hr.
(actual $9.13) ; in 1982, $4.00-$4.50/hr. (actual $9.83) ; in
1983, $4.25-$4.75/hr. (actual $9.83). The lower court
adopted these figures and found that, just after her injury,
respondent could earn $3.75/hr. (although she has earned at
least $8-9/hr. for the last four years since her injury).
On cross-examination Johnson conceded that his was not
an exhaustive list of all the jobs respondent could handle
during these periods. He conceded that there were other jobs
requiring some, but not extensive, training which respondent
could physically handle. He agreed that the pay differential
he testified to might be different if these other jobs were
included. Johnson admitted that he only considered the jobs
respondent held pre-1974 (before she started work for
Champion) and added one position, computer clerk, she had had
vocational training for. He based his wage differentials on
these jobs. Johnson stated that he did not include
millworking positions in the list of possible jobs for
respondent after her injuries because, "I believe that she
may have been able to obtain these types of work, but I
believe that she should not have considered those types of
work." Johnson agreed that there are a number of jobs at the
Champion Bonner facility that respondent is presently
qualified for and can handle physically on a full-time basis.
He thought she might not be able to handle them in the
future.
Paul Van Gordon, a labor relations manager for
Champion, also testified by deposition. He established that
he had extensive knowledge of the physical and other
requirements of the job positions at the Bonner plant. He
testified that respondent could fully perform her job
position at the Bonner mill, that she was an excellent
employee, that she had no attendance problem (four to five
absences a year), and that she had very high seniority in her
job. He stated that there were seven different job positions
which respondent can adequately handle and that there were
similar positions in other mills in the Missoula area. He
stated that within a 50 mile radius of Missoula there were
1,500 to 2,000 similar mill positions which respondent could
handle with her experience and physical condition. He deemed
respondent very employable.
The Workers' Compensation Court filed its decision in
June 1985. The court found that " [i]f claimant should be
required to seek work in another area secondary to a knee
deterioration and subsequent disability," she could work at
the clerical, secretarial and typing positions enumerated by
Norm Johnson of the Job Service. He found that - claimant
if
had been forced to quit working at Champion in 1980 because
of her knee disability, she could have earned $3.50-$4.00 an
hour. The court stated that it relied upon Johnson who "was
qualified to sta.te what the claimant's earning capacity would
be should she become unable to continue in her present
position secondary to a" knee deterioration. (Emphasis
added.) The court found that respondent had a diminution in
her hourly earning capacity of $4.63, based on her actual
earnings of $8.38/hr. (in May 1980 at the time of her injury)
minus $3.75/hr. (her wage capacity after the injury). After
the injury, respondent went back to her old job at $8-$9 an
hour. Based on the diminution computation, the court awarded
respondent 200 weeks of permanent partial disability benefits
at the statutory maximum of $99 a week. Champion appeals.
The only issue is whether there is substantial,
credible evidence to support the lower court's findings on
respondent's lost earning capacity. This Court will not
overturn a decision of the Workers' Compensation Court where
there is substantial evidence to support the findings of the
lower court. Keene v. Anaconda Co. (1982), 201 Mont. 102,
652 P.2d 216; Shupert v. Anaconda Aluminum Co. (Mont. 1985),
696 P.2d 436, 42 St.Rep. 277.
The only evidence which supports the disputed finding
(that respondent suffered a severe loss of earning capacity)
is the deposition testimony of Norm Johnson, the Job Service
counselor. As a result, this Court's function on review is
somewhat different from that in most cases. We have
repeatedly stated:
"Ordinarily, this Court will not substitute its
judgment for that of the Workers' Compensation
Court in determining the weight and credibility to
be given testimony. The reason for this is that
this Court defers to the lower court's assessment
of the demeanor and credibility of witnesses. Rule
52 (a), M.R.Civ.P. However, when the critical
evidence, particularly medical evidence, is entered
by deposition, we have held that 'this Court,
although sitting in review, is in as good a
position as the Workers' Compensation Court to
judge the weight to be given to such record
testimony, as distinguished from oral testimony,
where the trial court actually observes the
character and demeanor of the witness on the
stand. "
' (Citations omitted) .
Shupert, 696 P.2d at 439. This rule is applicable to
Johnson's testimony.
Montana law allows partially disabled workers to choose
between two types of permanent partial disability benefits.
Such a worker can elect benefits under 5 39-71-703, MCA, for
actual loss of earning capacity - indemnity benefits under
or
S 39-71-705, -708 for possible prospective loss in earning
capacity. McDanold v. B.N. Transport, Inc. (Mont. 1984), 679
P.2d 1188, 41 St.Rep. 472. In the case at bar, respondent
elected to seek benefits based upon her actual loss of
earning capacity. The test for loss of earning capacity
"is not whether there has been a loss of earnings
or income caused by the injury, but rather has
there been a loss of earning capacity -- a loss of
ability to earn in the open labor market."
Fermo v. Superline Products (1978), 175 Mont. 345, 348, 574
P. 2d 251, 253; Shaffer v. Midland Empire Packing Co. (1953),
127 Mont. 211, 213, 259 P.2d 340, 342.
As can be seen from the recent case of Hafer v.
Anaconda Aluminum Co. (Mont. 19841, 684 P.2d 1114, 41 St.Rep.
1403, it is possible under this test for a worker to earn
more after his injury and still collect disability benefits
for loss of earning capacity. In Hafer, the claimant earned
more after his injury than before and yet we found that he
had suffered a 40% loss of earning capacity.
In the instant case, the lower court found that
respondent had suffered a substantial loss of earning
capacity. The court found that respondent could earn only
$3.50-$4.00 per hour in 1980 after her injury. This finding
corresponds exactly to the wage testimony of Norm Johnson,
the Job Service counselor. In fact, Johnson's testimony is
the only evidence which supports the court's finding of lost
earning capacity. Johnson stated that if respondent had been
forced to seek employment after her injuries, she could only
work in clerical, sales and secretarial positions. He later
added that he considered a computer data entry position for
respondent when calculating her lost earning capacity.
Johnson refused to consider respondent for any post-injury
millworking positions in calculating her lost earning
capacity. He felt such positions might cause deterioration
of her knees and that she should not consider those
positions. Johnson's testimony provides some evidence to
support the court's finding of lost earning capacity. The
determinative question here is whether his testimony
constitutes the substantial, credible evidence required to
uphold the lower court's finding of a drastic loss of earning
capacity. We hold that it does not.
Initially, we note that respondent did testify that she
had pain in her knees after working. This testimony may
support a finding of some, slight loss of earning capacity.
However, in our view her pain does not support the finding of
a drastic loss of earning capacity, especially given her
admissions that she could handle a number of millworking
positions.
The court's finding of lost earning capacity is based
upon Johnson's list (hereinafter "post-injury job list") of
jobs respondent could work at after her injury. However,
Johnson admitted the list was not meant to be exhaustive. He
further admitted that he only listed those jobs respondent
worked at prior to working for Champion, plus one job
(computer data entry) she had training for. The test for
lost earning capacity, however, requires an analysis of
earning ability in the open labor market. Johnson, by so
limiting his post-injury job list, was not considering the
open labor market. In this vein, Johnson conceded that he
did not conduct any vocational testing of respondent.
Furthermore, Johnson's testimony is not credible
insofar as he excluded any millworking positions from the
post-injury job list. He admitted that he did not know the
specific physical requirements of many millworker positions
which respondent herself stated she could physically handle.
And yet Johnson refused to consider respondent for those
positions after her injuries. Johnson agreed that respondent
could physically handle many of the millworking positions.
He also agreed that there were a number of mill positions
requiring very little physical activity. He conceded that
there were several other Montana plywood plants with similar
positions requiring little physical activity. These facts
support a conclusion that the post-injury job list should
have included millworking positions.
Further, Johnson's refusal to consider mill positions
for the post-injury job list runs contra to - the other
all
evidence admitted. The other witnesses, specifically
respondent, Dr. Jacobson, Dr. Wooley and Paul Van Gordon,
were eminently more qualified to testify on respondent's
ability to handle mill positions after her injury.
Respondent stated that she could handle seven or eight
different kinds of jobs at the Champion mill after her injury
and up until the present time. In fact, she has been working
at the mill since her injuries and earns more than before her
accidents. Both doctors that testified agreed that
respondent could continue working at Champion if she could
handle the jobs. Dr. Wooley testified that she could handle
many of the jobs at the mill. Lastly, the Five Valley
Panel's medical report stated that respondent could continue
working.
Van Gordon's testimony bears on respondent's ability to
earn in an open labor market. He indicated that there are
many (1,500 - 2,000) mill jobs nea.r Missoula which
respondent, with her experience, could physically han.dle.
Both he and respondent agreed that Champion is satisfied with
her work. Since respondent's first knee injury in 1980, she
has continued to work at the Champion Bonner plant earning
from over $8.00 an hour in 1980 to over $10.00 an hour in
1984.
Based on the foregoing testimony of respondent, Dr.
Wooley, Dr. Jacobson, and Paul Van Gordon, we conclude that
in a post-injury, open labor market respondent would not be
limited to those low paying jobs detailed by Johnson. The
lower court should have included millworking positions in
those jobs used to compute respondent's earning capacity
after her injury.
Moreover, it appears that the lower court relied upon
the wrong grounds in awarding benefits to respondent.
Respondent elected to seek benefits for her actual loss of
earning capacity (under § 39-71-703, MCA). Nevertheless, the
court's language clearly indicates that it awarded benefits
for possible, future lost earning capacity. The court
enumerated possible jobs for respondent if she "should be
required to seek work in another area secondary to a knee
deterioration and subsequent disability ... " (Emphasis
added. ) The court found respondent could have earned
$3.50 - $4.00 an hour - she had been forced to quit working
if
at Champion due to her injury. Finally, the court relied on
Johnson's estimate of respondent's earning capacity
should she become unable to work at Champion secondary to a
knee deterioration. The court was clearly anticipating
respondent's possible, future, lost income despite her choice
of benefits for actual lost earning capacity.
We hold that substantial, credible evidence does not
support the findings on lost earning capacity. We reverse
the award of benefits and remand this case for a hearing on
respondent's lost earning
appropriate order.
We concur:
Justices
Mr. Justice Frank B. Morrison, Jr., Mr. Justice John C.
Sheehy, and Mr. Justice William E. Hunt, Sr., dissenting:
The majority has substituted its judgment for that of
the Workers' Compensation Court on a question of fact. We
feel that the judge who heard the testimony is in a far
better position than this Court to determine the weight to
be given evidence offered by the employment expert.