No. 88-106
IN THE SUPREME COURT OF THE STATE OF MONTANA
1988
JAMES HURLEY, JR.,
Claimant and Respondent,
-vs-
OLIVER DUPUIS, 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:
Browning, Kaleczyc, Berry & Hoven; Oliver H. Goe,
Helena, Montana
For Respondent :
Michael C. Prezeau, Whitefish, Montana
Submitted on Briefs: July 8, 1 9 8 8
Decided: August 11, 1988
Filed:
Clerk
Mr. Justice L. C. Gulbrandson delivered the Opinion of the
Court.
The State Compensation Insurance Fund (State) appeals
from a judgment of the Workers' Compensation Court. The
Workers' Compensation Court held that the claimant, James
Hurley, Jr. (Hurley) is entitled to benefits under
5 39-71-703, MCA, based on Hurley's testimony that he was
once employed at the rate of $12.44 an hour on a part-time
basis and that this amount established his pre-injury earning
capacity. We reverse.
The State presents the following issue for our
consideration:
Did the Workers' Compensation Court err in calculating
Hurley's entitlement to wage loss benefits pursuant to
5 39-71-703, MCA, based on his testimony he once earned
$12.44 an hour?
On or about August 3, 1985, Hurley suffered a back
injury while he was working in a cherry grove for Oliver
Dupuis (Dupuis) in Polson, Montana. It is undisputed that
Hurley's injury arose out of and in the course of his
employment. Dupuis, as Hurley's employer, was enrolled in
Plan I11 of the Workers' Compensation Act and his insurer was
the State Compensation Insurance Fund.
The State paid disability benefits to Hurley from
August 4, 1985 to the present and Hurley received two advance
payments on his permanent partial disability benefits in the
amount of $12,000.
On December 12, 1986, Hurley filed a petition for
hearing before the Workers' Compensation Court. The petition
originally requested permanent total disability benefits, or
permanent partial disability benefits, a lump sum advance,
attorney's fees and a penalty. The Workers' Compensation
Court was presented with the deposition testimony of Hurley,
his wife Shadia, vocational rehabilitation specialists Scott
McIntosh and Deborah Swigert, Dr. James Urban, Dr. John
Stephens and Dr. David Jacobson. The Workers' Compensation
Court deemed the case submitted on August 21, 1987 and issued
Findings of Fact, Conclusions of Law and Judgment on January
6, 1988.
Hurley was awarded $146.50 per week for 500 weeks for
permanent partial disability pursuant to $ 39-71-703, MCA.
This gave Hurley a total benefit of $73,250. The Workers'
Compensation Court also determined that Hurley was entitled
to a lump sum, in part, to buy transportation and to
extinguish some debt obligations. The § 39-71-703, MCA
benefits were calculated on the basis of Hurley's pre-injury
earning capacity being $12.44 an hour, which was an amount he
earned for one or two weeks working on a part-time basis for
an employer, whom Hurley could not name, in Wells, Nevada.
It is from this method of calculating Hurley's 5 39-71-703,
MCA, benefits that the State appeals.
Previous to his employment in Polson, Hurley had a
well-traveled job history. In answers to interrogatories and
in an exhibit attached to his deposition, Hurley lists
fifteen different jobs over a period of ten years. His
longest length of employment at any location was from the
fall of 1982 to the spring of 1984 at a ranch in Refugio,
Texas. Other than his alleged job in Wells, Nevada, Hurley's
highest paying job was for $7.00 an hour as a laborer for a
construction company in Salt Lake City, Utah. In the
majority of his employment, Hurley was paid between $4.00 and
$5.00 per hour and remained employed for only a few months.
The State claims on this appeal that the pre-injury
earning capacity determined by the Workers' Compensation
Court was erroneous and therefore Hurley should not be
entitled to $146.50 per week. We agree.
This case was determined by the Workers' Compensation
Court after it reviewed the deposition testimony of the
claimant, his wife, his treating physicians and other
physicians who treated his injury, and rehabilitative
experts. The State argues that this Court is in as good a
position to review the deposition testimony as the Workers'
Compensation Court and we agree.
[Wlhen the critical 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 record testimony."
Snyder v. San Francisco Feed & Grain (Mont. 1987), 748 P.2d
924, 929, 44 St.Rep. 2216, 2224; citing Jones v. St. egis
Paper Co. (1982), 196 Mont. 138, 146, 639 P.2d 1140, 1144.
See also, Shupert v. Anaconda Aluminum Co. (Mont. 19851, 696
P.2d 436, 439, 42 St.Rep. 277, 281-282; Lamb v. Missoula
Imports, Inc. (Mont. 1984), 684 P.2d 498, 41 St.Rep. 1414.
The medical testimony showed a diagnosis of
spondylolysis and spondylolisthesis at L-5 and S-1. Hurley
was forced to undergo surgery. The testimony showed that
upon reaching maximum medical stability, Hurley could no
longer perform any work which required heavy labor. Dr.
Jacobson testified that Hurley would not be able to lift more
than 25-30 pounds on a regular basis or more than 50-100
pounds on an occasional basis. Dr. Stephens' evaluation was
similar to Dr. Jacobson. Dr. Stephens expressed concern
about further injury if Hurley did not comply with limited
physical exertion. Dr. Urban, who treated Hurley from May
29, 1986 testified that Hurley was restricted from lifting
more than 60 pounds.
This testimony clearly shows that Hurley suffered a
loss of earning capacity that caused "a loss of ability to
earn on the open labor market." Beck v. Flathead County
(Mont. 1988), 749 P.2d 527, 529, 45 St.Rep. 215, 217.
However, the issue of this case is the proper determination
of just how Hurley's proper loss should be calculated.
Hurley withdrew his claims for permanent total
disability pursuant to 5 39-71-116(13), MCA, and his claim
for a penalty. Therefore, we are only concerned here with
his entitlement under permanent partial disability. We have
said that a partially disabled worker may choose two types of
permanent partial benefits under Montana law. Dunn v.
Champion International Corp. (Mont. 1986), 720 P.2d 1186,
1189, 43 St.Rep. 1124, 1128. "Such a worker can elect
benefits under 5 39-71-703, MCA, for actual loss of earning
capacity - indemnity benefits under 5 39-71-705, -708 for
or
possible prospective loss in earning capacity." Dunn, 720
P.2d at 1189.
In this case, 5 39-71-703(1), MCA, as it read prior to
its amendment in 1987, controls since Hurley's injury
occurred in 1985. See, Buckman v. Montana Deaconess Hospital
(Mont. 1986), 730 P.2d 380, 382, 43 St.Rep. 2216, 2218. The
Workers' Compensation Court appropriately stated that
§ 39-71-703, MCA benefits were calculated to determine
"actual lost earning capacity."
However, in determining this actual lost earning
capacity, the Workers' Compensation Court adopted Hurley's
theory that it should be based on a pre-injury earning
capacity of $12.44 per hour. The Workers' Compensation Court
applied this pre-injury maximum to his post-injury earning
capacity. Both parties, through their rehabilitation experts
(McIntosh for Hurley and Swigert for the State), were fairly
close in the estimated post-injury earning potential.
McIntosh asserted a $4.50 per hour post-injury earning
potential while Swigert estimated Hurley's post-injury
earning potential at $5.00 to $6.00 per hour. The court's
determination was as follows:
It is with the post-injury earning
potential that the pre-injury capacity
becomes important. For example, we will
set out by calculation how the various
figures being considered can affect the
claimant's weekly partial disability
rate.
Maximum Rate $146.50 no partial $13.32
Thus, using the 500 weeks of benefit
potential (whole man injury) claimant
concludes the partial disability
entitlement at $71,250.00 and defendant
finds none, beyond this impairment award.
Thus, to identify the precise issue more
directly, we can ask the question of
whether or not in a 703 analysis, a
claimant's highest pre-injury earnings,
regardless of how long he held the job,
must be considered. While defendant
admits that claimant might have earned as
much as $12.44 per hour, given his
sporadic work history, his nomadic
lifestyle and the fact that there is no
evidence that claimant was actually an
acceptable worker at that rate requires
the Court to discount the figure
substantially. While we would agree that
if claimant was fired from the $12.44 per
hour job because he couldn't do it, there
would be a substantial question as to
utilizing that figure for an earnings
example, but such is not the case here.
The record discloses only that the
claimant did a job that paid that much,
even if only for a short time. We also
see some relevance to defendant's
argument that two or three weeks'
earnings over an individual's eight-year
work life is not a true measure of his
actual earning capacity. But we are
reluctant to set a standard or policy
whereby no consideration is to be given
to such earning. Otherwise, a claimant
who is injured on the first day of a new
job paying $15.00 per hour with a
previous earning maximum of $5.00 per
hour would be seriously prejudiced in
establishing a future loss of earning
capacity. Also, difficult economic times
which have forced skilled tradesmen laid
off from their usual $12.00 per hour
machinist job and permanently injured
working part-time at a fast food place
for $3.65 per hour would be punished
unfairly.
We recognize and appreciate the Workers' Compensation
Court's concern as outlined. Generally, the Workers'
Compensation Court will be upheld upon a finding of
substantial credible evidence. Snyder, 748 P.2d at 929.
However, under the facts of this case, substantial credible
evidence has not been produced to show that Hurley had a
pre-injury earning potential of $12.44 per hour.
Impairment of earning capacity has been defined as "the
permanent diminution of the ability to earn money in the
future. " Sedlack v. Bigfork Convalescent Center (Mont.
1988), 749 P.2d 1085, 1087, 45 St.Rep. 199, 202; Thomas v.
Whiteside (1966), 148 Mont. 394, 397, 421 ~ . 2 d449, 451.
Additionally, we have stated that earning capacity is not
only determined by a comparison of pre-injury and post-injury
wages but also by age, occupational skills, education,
previous health, remaining number of productive years and
degree of physical or mental impairment. Beck, 749 P.2d at
529; Thomas, 421 P.2d at 451.
Here, although Hurley was thirty years old at the time
of filing this claim, he has no real occupational skills; he
dropped out of school in the tenth grade and obtained a
G.E.D. Due to his back injury he is basically removed from
any manual labor employment. The most important fact is that
he never maintained a job for an extended period of time so
that he could establish higher earnings.
Granted, McIntosh testified that in the Denver area,
current labor market earnings for concrete workers ranged up
to $517.20 per week which translates to approximately $13.00
per hour in a 40-hour work week. However, due to Hurley's
previous work history it is extremely unlikely that he would
be able to obtain one of these jobs or remain employed.
Further, in analyzing Hurley's testimony, his claim of
a $12.44 per hour wage is suspect. Hurley originally
answered interrogatories and stated that he worked at this
rate the "winter, 1981." Upon being deposed, it was
ascertained that Hurley merely worked for this wage, and at
another job for this same unknown employer where he was paid
$6.00 an hour, for a total of three to four weeks. He
further admitted that he worked at the $6.00 an hour job for
two or three of the three or four weeks worked. Hurley had
no W-2 forms from this employment and he paid no taxes on the
income.
Further discrepencies are present. Hurley answered
interrogatories that he worked as a laborer for a
construction company in Salt Lake City, Utah from February to
November of 1976 and then with a concrete construction
company from December, 1976 to April, 1977. Hurley admitted
that in reality there had been at least an eight-month gap
between these employments.
We realize that the Workers' Compensation Act, at the
time of the injury involved in this case, was to be
"liberally construed." Section 39-71-104, MCA (1985);
Shupert, 696 P.2d at 441. However, the Legislature could not
have meant that this liberal construction did not require
substantial credible evidence to support a claim. Here, in
light of our review of the depositions; our analysis of
Hurley's previous work history, his age, education, remaining
working years, and extent of his injury; and, in conjunction
with the law as it existed in regard to this case, we
determine that the Workers' Compensation Court erred in its
determination that Hurley's pre-injury earning capacity was
$12.44 per hour.
We reverse.
I
Justice;'
We concur: l"