No. 8 7 - 1 5 7
IN THE SUPREME COURT OF THE STATE OF MONTANA
KENNETH REIL,
Claimant and Respondent,
-vs-
BILLINGS PROCESSORS, INC.,
Employer,
and
STATE COMPENSATION INSURANCE FUND,
Defendant and Appellant.
APPEAL FROM: The Workers' Compensation Court, The Honorable
Timothy Reardon, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
James M. Scheier, Agency Legal Services, Helena,
Montana
Nancy Butler, State Comp. Insurance, Helena, Montana
For Respondent:
Lloyd Hartford, Billings, Montana
Submitted on Briefs: Aug. 6, 1 9 8 7
Decided: December 3, 1987
Filed:
111"" - .
,v
*-
,
Clerk
Mr. Justice L. C. Gulbrandson delivered the Opinion of the
Court.
The State Compensation Insurance Fund appeals a
Workers1 Compensation Court judgment finding Kenneth Reil to
be entitled to temporary total disability benefits and
medical benefits. The Workers1 Compensation Court found that
Mr. Reil had suffered a cornpensable injury arising out of and
in the scope of his employment and that he had given his
employer sufficient notice of the injury pursuant to
S 39-71-603, MCA. We reverse the decision of the Workers'
Compensation Court on the notice issue and remand with
directions to dismiss the case.
Ken Reil suffers a congenital deformity in the
radioulnar joints of his arms. At age fourteen, Reil
underwent four surgeries in an attempt to correct these
deformities. The deformities cause Reil a considerable
amount of pain in his hands, wrists and elbows. The pain has
bothered Reil for years and his condition continues to worsen
over time.
Reil underwent two later surgeries in 1980 and 1981 for
an injury to his left wrist suffered in an industrial
accident while employed with a Billings meat packing plant.
Reil received a $25,000 settlement of his workers1
compensation benefits for the February 1980 injury.
Thereafter, Reil continued to experience pain both as a
result of the 1980 accident and his congenital deformities.
After the 1980 accident, Reil's doctor advised him to
avoid heavy work. Pursuant to the doctor's suggestions, Reil
enrolled in a computer program training course of instruction
at Eastern Montana College. Reil quit school after one
academic quarter to take a job as a computer operator with
Yellowstone Processors of Billings. At his initial job
interview, Reil informed Yellowstone Processors of his
congenital deformities and progressive pain. Yellowstone
Processors was the predecessor company of Billings
Processors.
Reil's initial position with Yellowstone Processors,
and later with Billings Processors, required that he load and
unload computer tape reels from a computer. Sometime in
1982, Yellowstone Processors transferred Reil to a data
storage position. Reil's responsibilities in data storage
were to pick-up and deliver client computer tapes, stack
boxes of computer tapes, catalogue tapes, and file tapes.
Reil worked with Yellowstone in data storage until the spring
of 1984 when he was laid-off. Reil experienced pain in his
arms throughout his tenure with Yellowstone Processors.
Reil next ran a high pressure power spray washer for a
company called High Plains Power Wash. Operating the high
pressure washer caused Reil pain in his elbows and wrists.
Reil returned to Billings to work for Carey Data as a
computer tape cataloger after one month with High Plains
Power Wash. Reil experienced pain in his elbows and wrists
while lifting twenty to thirty pound boxes of computer tapes
for Carey Data. In August of 1984, while with Carey Data,
Reil began a second job as a computer operator with Billings
Processors. With the exception of one person, the personnel
and management at Billings Processors were the same people
Reil had worked with at Yellowstone Processors. After a
month of holding down two jobs, Reil's position with Carey
Data was discontinued.
Reil loaded and unloaded one-pound computer tape reels,
lifted twenty to thirty pound boxes to waist level, and typed
for Billings Processors. Reil also performed light
janitorial work on his own initiative. All of these
activities caused Reil varying degrees of pain and
discomfort. During slower work periods, Reil was allowed to
watch a television he stored in a false ceiling above his
desk. In addition, Reil played basketball with his
supervisors and fellow employees on a weekly basis and went
hunting in the fall. Lifting the television, playing
basketball, and hunting also caused Reil pain in his arms as
did most activities utilizing his arms or hands.
Reil occasionally complained to his employers that his
arms and wrists hurt. However, Reil did not relate to his
employers that this pain was as a result of his work related
duties. Reil's employers assumed that his problems were
merely the consequences of the congenital deformities. Reil
did not ask to be reassigned to another position nor did he
request that his employers modify his duties to reduce the
necessity for use of his arms and hands.
Reil's congenital arm problems progressively worsened
from August to December of 1985. On January 7, 1986, Reil's
doctor advised him that he would have to undergo more
surgeries to his left and right wrists on January 20, and
March 24, 1986, respectively. These surgeries were to remove
prosthetic devices that had been previously implanted into
Reil's arms. At Reil's request, Billings Processors laid him
off the job so that he could undergo surgery and collect
unemployment compensation during convalescence. Reil's last
day on the job with Billings Processors was January 16, 1986.
Thereafter, Reil received six months of unemployment benefits
and did not return to work for Billings Processors.
On July 11, 1986, more than five months after leaving
Billings Processors, Reil filed a claim for compensation with
the Division of Workers' Compensation. The State Insurance
Fund denied compensation on the grounds that Reil failed to
give his employer sufficient notice pursuant to § 39-71-603,
MCA, and he had not suffered a compensable injury as defined
by $ 39-71-119 (I), MCA. The Workers' Compensation Court
heard the matter and found that Reil suffered a compensable
injury for which Billings Processors had sufficient actual
knowledge. The State Compensation Insurance Fund appeals and.
raises the following issues:
(1) Did the claimant fail to comply with the notice
requirement of S 39-71-603, MCA?
(2) Is there insufficient evidence to establish that
the claimant suffered a compensable in-jury under the Workers'
Compensation Act?
On cross-appeal, Reil asserts the following issues:
(1) Whether the Workers ' Compensation Court' s failure
to impose the 20% penalty against the insurer for its refusal
to pay compensation and medical benefits is justified where
substantial evidence of record fails to demonstrate the
existence of a bona fide controversy?
(2) Whether the Workers' Compensation Court erred when
it ordered the insurer and claimant to apply accrued
compensation benefits to repay the Unemployment insurance
Division the unemployment benefits claimant received during
the period in question where 5 39-71-743, MCA, prohibits said
funds being used to reduce such debts?
(3) Whether the appellant's appeal is frivolous and
therefore subject to the penalties set forth in Rule 32,
M.R.App.P.?
We find the State Insurance Fund's first issue to be
dispositive of this appeal. The Workers' Compensation Court
considered certain facts cumulatively and interpreted
S 39-71-603, MCA, to impute constructive knowledge of an
injury to the employer, Billings Processors. The appropriate
standard of review in this matter, therefore, is to determine
whether the lower court's interpretation of the law, as
applied to the particular facts of this case, is correct.
Wassberg v. Anaconda Copper Co. (Mont. 1985), 697 P.2d 909,
912, 42 St.Rep. 388, 391. Accordingly, we are free to
examine the lower court's legal analysis and draw our own
conclusions. Wassberg, supra.
This Court consistently stresses the importance of
employee compliance with the sixty day notice provision of
Montana's workers' compensation laws. Masters v. Davis
.
Logging (Mont 1987), P.2d , 44 St.Rep. 1664; Hunt
v. Sherwin Williams Co. (Mont. 19811, 624 P.2d 489, 38
St.Rep. 358. Under 5 39-71-603, MCA, notice of an industrial
accident is "mandatory and compliance with [the requirements
of the statute] are indispensable to [maintaining] a claim
for compensation ... " Dean v. Anaconda Co. (19591, 135
Mont. 13, 16, 335 P.2d 854, 856. Section 39-71-603, MCA,
provides the following:
No claim to recover benefits under the
Workers' Compensation Act, for injuries
not resulting in death, may be considered
compensable unless, within 60 days after
the occurrence of the accident which is
claimed to have caused the injury, notice
of time and place where the accident
occurred and the nature of the injury is
given to the employer or the employer's
insurer by the injured employee or
someone on the employee's behalf. Actual
knowledge of the accident and injury on
the part of the employer or the
employer's managing agent or
superintendent in charge of the work upon
which the injured employee was engaged at
the time of the injury is equivalent to
notice.
It is undisputed that Reil did not give his employer written
notice of a work related injury. The Workers' Compensation
Court found, however, that Billings Processors had sufficient
actual knowledge to satisfy the statute. We disagree with
the lower court ' s application of the facts to the law of this
case.
The Workers' Compensation Court made the following
findings of fact relevant to the issue of notice:
28. Claimant states that he notified his
employers that he was having pain in his
arms and he was going to see his doctor
on January 7, 1 9 8 6 .
29. After finding out he needed surgery,
claimant asked his employers if he could
be laid off so that he could draw
unemployment while he had his surgery.
30. Claimant's initial request to be
laid off was refused, but within a matter
of a few days (possibly the next day) the
decision was made to grant claimant his
request and he was laid off.
31. Claimant states that he asked his
employer if he would be able to return to
work after his surgery and that he was
told he could not come back until he was
able to handle all of the duties of his
job.
32. John Smatla, who was Vice-President
of Billings Processors at the time of
claimant's employment, testified that he
knew of claimant's congenital problems,
prior to claimant coming to work for
Billings Processors, but that claimant
never told him that the difficulties he
was having with his arms were a result of
his job duties. Mr. Smatla also
testified that claimant's termination was
voluntary, and that claimant wanted to
leave because he wasn't getting enough
hours, that he wanted to go to school and
that he wanted to look for a better job.
33. Richard DeLanty , who was
Vice-President of Operations at Billings
Processors during claimant's employment,
testified that he knew of claimant's
congenital difficulties prior to
claimant's employment with Billings
Processors. In January of 1986, claimant
told Mr. DeLanty that he was having
problems with his arms and constant pain
in one arm and that he needed to have
surgery done. Mr. DeLanty stated that
claimant never told him that claimant's
arm problems were related to his work,
but he did know claimant had problems.
34. Gale Behm was claimant's supervisor
during claimant's employment with
Billings Processors. Mr. Behm and
claimant are cousins and have known each
other since childhood. Mr. Behm stated
that the "sole reason" claimant wanted to
be laid off was to have surgery on his
arms. Mr. Behm knew of claimant's
congenital problem, knew claimant was
having constant pain and wanted to have
surgery, but denied any knowledge that
claimant's problems might be connected
with work.
35. Claimant's last day of work for
Billings Processors was January 16, 1986,
a Thursday. Claimant filed for
unemployment the next day and had surgery
performed on Monday, January 20, 1986.
Claimant received his full six months of
unemployment, the State finding that his
post-operative disability occurred after
his layoff. Claimant has not worked
since January 16, 1986. Claimant filed a
claim for compensation on July 11, 1986.
36. Claimant testified that he never
told his employers at Billings Processors
that he had suffered an on-the-job
injury, but that he did tell them that he
suffered pain from some of his duties.
The Workers' Compensation Court found that "[tlhe employer
knew of the preexisting condition, knew claimant was having
problems, knew claimant had to stop work to have surgery for
his problem, and knew claimant's work was aggravating
claimant's symptoms" and concluded that this was sufficient
actual knowledge of an injury under S 39-71-603, MCA. All
but the last finding are supported by the record of this
case.
When deposed and questioned by counsel for the State
Insurance Fund, Reil testified as follows regarding the issue
of notice:
Q: Now, did you ever tell either Dick
Delanty or John Smatla or Gale Behm that
you had a work related injury or series
of injuries?
A: No, I didn't.
When questioned about the information he provided on his
initial compensation claim form, Reil went on to testify as
follows:
Q: The second line up from the bottom
[in the block entitled Accident
Information] is: "Did you notify your
employer of the accident?'' It says,
"Yes." "Who did you notify?" It says,
"Dick Delanty. " "HOW?I
' "Told him of
problems caused by work. " Now is that
true?
A: Well, really just kind of in a sense.
I really never came right out and told
Dick that I was having problems due to
the job. I said, "But I'm having a lot
of problems with my arms lifting and
carrying things, and I don't know what's
causing it so that's why I went and saw
the doctor." As far as being specific
and notifying him of an accident, no, I
didn't.
Q: So correct me if I'm wrong, but Dick
knew that you had -- were suffering pain
and had some problems, but what you are
saying is he didn't have any way of
knowing if that was work related or you
didn't tell him if that was work related.
A: I didn't tell him it was work
related, no.
In addition, the transcript of the Workers' Compensation
hearing reveals the following exchange between Reil and his
attorney:
Q: Did you tell [your employer] that it
was the functions of your job, the
physical requirements of your job, that
caused this pan?
A: No, I didn't. I told them that I was
having a lot of problems with my arms and
that when I lifted or carried something
that they would bother me quite a bit and
I wanted to go to the doctor.
After a short recess, and when questioned by the State
Insurance Fund's attorney, Reil changed his testimony as
reflected by the following:
Q: Okay. Now you didn't ever tell any
of your supervisors at Billings
Processors that you had suffered an
on-the-job injury, did you?
A: No.
Q: Did you ever tell your supervisors at
Billings Processors that your job duties
were causing pain or discomfort in your
arms?
A: Yes, I did. I mentioned to them a
few times that when I lifted or carried
things that it would cause pain. It was
just kind of a -- it wasn't the topic of
conversation but I had mentioned it to
them quite a few times.
When confronted with his prior inconsistent statements, Reil
was asked whether he was now telling the court something
different, to which he answered:
A: No, it is not anything different. I
told Dick Delanty that I was having pain
because I was lifting and carrying things
and that's all I told him. I mean I
didn't come right out and say that my job
is causing these pains, or causing my
problems, but I am having a lot of pain
lifting and carrying things and I left it
at that.
Q: So you told him you were having a lot
of pain because of lifting and carrying
things. If you didn't specify that it
was because of the job duties, for all he
knew it could have been because of
something you were doing at home, is that
right?
A: Well, yes, but my job entailed
lifting and carrying things, so I guess I
more or less assumed that he knew that.
Q: But you never told him that the pain
was being caused by lifting and carrying
things at the job, is that what you are
saying now?
A: Yes, I guess in a sense. I told him
I was having pain due to lifting and
carrying things and I pretty much just
left it at that.
Reil's supervisors and fellow employees consistently
told the same story: Reil did not mention that his job
duties caused him pain. Reil's testimony on the subject is,
at best, inconsistent. The lower court recognized and
resolved these inconsistencies in Reil's favor by concluding
that they "were caused ... by the artful phrasing of
questions ... " Regardless of how the witnesses' answers
were solicited, the facts of this case do not support a
finding that Billings Processors had sufficient actual
knowledge of an injury pursuant to S 3 9 - 7 1 - 6 0 3 , MCA.
The lower court correctly recognized that " [a]ctual
knowledge of the accident or injury, while equivalent of
notice, must be more than simple knowledge that the claimant
is ill, or that claimant is injured." See Dean v. Anaconda
Co. (1959), 135 Mont. 13, 16, 335 P.2d 854, 856; State ex
rel. Magelo v. Industrial Accident Board (1936), 102 Mont.
455, 464, 59 P.2d 785, 789. The most that Billings
Processors can be said to have known in this case is that
Kenneth Reil had congenital problems and these problems often
caused him pain. Simple knowledge on the part of Billings
Processors that Reil was experiencing pain does not satisfy
the actual knowledge requirement of B 39-71-603, MCA.
"The purpose of the notice requirement or actual
knowledge in lieu thereof is to enable the employer to
protect himself by prompt investigation of the claimed
accident .. . I' Bender v. Roundup Mining Co. (1960), 138
Mont. 306, 313, 356 P.2d 469, 473. In the instant case, the
notice or actual knowledge requirement serves the additional
purpose of enabling the employer to reassign an employee with
a congenital defect to another position or modify his duties
to reduce the necessity for use of his arms and hands.
Reil's employers were aware that he suffered a
congenital defect. They were also aware that Reil lifted a
heavy television for his own entertainment while at work,
played basketball, and hunted. It was incumbent upon Reil,
therefore, to specifically advise Billings Processors that it
was his job-related duties that exacerbated these congenital
problems. As stated by Larson in his treatise on workers'
compensation law:
As a matter of common sense, the fact
that claimant is known to have a
preexisting occupational weakness
increases the burden - - claimant to
on the
show that the employer's knowledge - -
--- of the
articular manifestation of injury should
- taken as knowledge-that
Ee it was
- -
work-connected . .. [
---
I -
-
is not
reasonable to expect an employer t- o
launch an investiaation-everv time a
foreman hears someone complain - pain -
of or
sees someone get a bump, - - and such
knowledge - - tFerefore satisfy the
does not
obiectives of the notice statute.
3 Larson, Workmans' Compensation Law, S 78.31(a), p. 15-113
(1983). Reil off-handedly related to his employers that he
was experiencing problems. To hold that this is sufficient
actual knowledge of an injury would thwart the purposes of
the statute. There is no substantial evidence to support the
lower court's decision on the notice issue.
The Workers1 Compensation Court also erred in
considering the cumulative effect of the facts in this
particular case. "Actual knowledge of an accident and injury
... " or, as alleged in this case, actual knowledge of a
job-induced aggravation of a preexisting condition, "on the
part of ... the employer's managing agent or superintendent
... " can be imputed as notice to the employer. Section
39-71-603, MCA; Maki v. Anaconda Copper Co. (1930) 87 Mont.
314, 322, 287 P. 170, 173. The Workers' Compensation Court
imputed constructive knowledge of an injury to the employer,
Billings Processors, on the basis of facts "considered
cumulatively." However, in construing S 2933, R.C.M. (1947),
the predecessor statute to S 39-71-603, MCA, we recognized
that " [i]t is clear from these provisions that any kind of
knowledge, other than actual, or first-hand knowledge, would
be insufficient, for the statutory equivalent of information
required to be given in the notice is actual knowledge."
Maki, 87 Mont. at 323, 287 P. at 173 (citing smith v.
Industrial Acc. Com. (Cal. 1917), 162 P. 636, 637).
Accordingly, constructive knowledge imputed to the employer
on the basis of facts taken cumulatively is insufficient to
meet the requirements of S 39-71-603, MCA, under the
particular circumstances of this case.
Reil also argues that his injury is "latent" and the
sixty-day notice requirement should be tolled until such time
as he realized the alleged compensable nature of his pain.
To support this argument, Reil relies on our decision in
Bowerman v. Employment Security Commission (~ont.1983) , 673
P.2d 476, 40 St.Rep. 2062. In Bowerman we held that the
one-year notice of claim limitation of S 39-71-601, MCA,
"does not begin to run until the claimant, as a reasonable
man, should recognize the nature, seriousness and probable
compensable nature of his latent injury." Bowerman, 673 P.2d
at 479, 40 St-Rep. at 2065. The basis of our holding in
Bowerman was a 1973 legislative addition to S 39-71-601, MCA,
whereby " [tlhe division may, upon reasonable showing by the
claimant of lack of knowledge of disability, waive the time
requirement up to an additional 24 months." Section
39-71-601 ( 2 ) , MCA. Bowerman, however, does not apply to
§ 39-71-603, MCA, for the simple reason that the legislature
did not amend this statute to allow for waiver of the
sixty-day notice of injury requirement. Compare 55 39-71-601
and -603, MCA. We also note with approval that the lower
court found with regard to Reil's latent injury argument that
"simple ignorance of compensability, absent any evidence of
estoppel by the employer or medical disinformation [is
insufficient] to toll the notice requirement."
Constructive knowledge is not enough to satisfy the
requirements of S 39-71-603, MCA. An employer, or its
managing agent or supervisor, must have actual knowledge of
the accident and injury. The fact that Billings Processors
knew Reil was experiencing pain, either taken alone or
cumulatively with the other facts of this case, does not
constitute actual knowledge. Accordingly, the lower court
erred in finding that Billings Processors had actual
knowledge of Reil's alleged injury. We find that Billinss
Processors had no actual knowledge of either an injury or a
job-induced aggravation of a preexisting condition in this
case. Because of this finding we do not address the other
issues presented on this appeal. The decision of the
Workers' Compensation Court is reversed with directions to
dismiss the case.
Reversed.
We concur:
Mr. Justice John C. Sheehy, dissenting:
The statement of the majority that "Billing Processors
had no actual knowledge of either an injury or a job-induced
aggravation of a preexisting condition in this case," is not
founded on fact in the record, and is expressly adverse to
the findings of the Workers' Compensation Court.
The findings of the Workers ' Compensation judge include
the following:
Fourth, claimant testified that he told his
supervisors that his work was causing him problems.
Admittedly, there are some inconsistencies in
claimant's testimony. There are conflicts between
claimant's testimony and the testimony of the
employers' representatives. However, the
inconsistencies and conflicts are caused more by
the artful phrasing of questions rather than by
claimant's or his supervisors response. Claimant,
may, indeed, have never been so specific as to
say--"I have suffered an on-the-job industrial
injury--to this part of my right arm--on this
date--resulting in this condition."--but; claimant
did impart sufficient information to his employers
for them to have actual knowledge of injury . . ."
Based on conflicting evidence of the record, the court
resolved the matter of credibility and determined:
The employer knew of the preexisting condition,
knew claimant was having problems, knew claimant
had to stop work to have surgery for his problem,
and knew claimant's work was aggravating claimant's
symptoms. This actual knowledge is sufficient to
satisfy both the letter and the purpose of the
notice requirements of 5 39-71-603, MCA.
For more than 50 years, this Court has been saying that
the first duty of those who administer the Workers'
Compensation Act is to give the employee the greatest
possible protection consistent with its purposes. Miller v.
Aetna Life Insurance Company (1936), 101 Montana 212, 53 P.2d
704; in considering the Workers' Compensation Act, all of the
sections as originally enacted or amended, must be considered
together in such manner as to give effect to the Act as a
whole. State ex rel. Roundup Coal Mining Company v.
Industrial Accident Board (1933), 94 Mont. 386, 23 P.2d 253.
The majority have not followed the standard of review
applicable to workers' compensation cases. We have said that
the decisions of the Workers' Court will not be disturbed if
supported by substantial evidence. Skukrud v. Gallatin
Laundry Company, Inc. and Employees Commercial Union
Insurance Company (1976), 171 Mont. 217, 557 P.2d 278. Where
findings are based on conflicting evidence, the reviewing
court's function is confined to determining whether there is
substantial evidence supporting such findings. It is not the
court's function to determine whether there is sufficient
evidence to support contrary findings. Wilson v. Glacier
General Assurance Company (Mont. 19831, 670 P. 931, 40
St.Rep. 1509; Stamatis v. Bechtel Power Corporation (1979),
184 Mont. 64, 601 P.2d 403. We have always stated that we
will not substitute our judgment for that of the Workers'
Compensation Court as to the weight of evidence on questions
of fact. Robbins v. Anaconda Aluminum Company (19781, 175
Mont. 514, 575 P.2d 67; Brurud v. Judge Moving and Stora.ge
Company (1977), 172 Mont. 249, 516 P.2d 558.
In the light of the findings made by the Workers'
Compensation Court on disputed evidence, and the usual
standards of review applied to such findings, the duty of
this Court is to sustain the decision of the Workers'
Compensation Court, and not set it aside on the dubious
authority of a 1917 California case.
This Court has become the trier of both fact and law.
' i
(--)riLri Y ~ , L ~
Justice
Mr. Justice William E. Hunt, Sr., concurring:
I concur with the foregoing dissent.
/