No. 88-613
IN THE SUPREME COURT OF THE STATE OF MONTANA
1989
RONALD F. HILBIG,
Claimant and Appellant,
-vs-
CENTRAL GLASS COMPANY,
Employer,
and
STATE COMPENSATION INSURANCE FUND,
Defendant and Respondent.
APPEAL FROM: The Workers' Compensation Court, The Honorable
Timothy Reardon, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
R. V. Aottomly; Bottomly Law Offices, Great Falls,
Montana
For Respondent:
R. Scott Currey, Agency Legal Services, Helena,
Montana
Submitted on Briefs: June 30, 1 9 8 9
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Decided: August 11, 1989
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Filed: ::
Mr. Justice Fred J. Weber delivered the Opinion of the Court.
Ronald Hilbig appeals a decision of the Workers' Compen-
sation Court denying a lump sum conversion of his benefits
because the parties failed to enter into a binding agreement.
Mr. Hilbig also appeals the lower court's denial of his
petition for a larger award of domiciliary care. We affirm
and remand for further proceedings consistent with this
opinion.
The issues are:
1. Did the Workers1 Compensation Court err in conclud-
ing that the parties' oral negotiations did not establish a
binding contractual agreement?
2. Did the Workers' Compensation Court err in its award
of domiciliary care?
Ronald Hilbig had been employed as a glazier for 24
years when he fell from scaffolding approximately 12 to 15
feet to the ground while on the job on November 17, 1983. As
a result of this fall, Mr. Hilbig suffered a severe head
injury and was rendered permanently totally disabled, a fact
which the State Fund does not dispute.
On July 17, 1985, two meetings were held between claim-
ant's counsel, and State Fund representatives in an attempt
to negotiate a settlement agreement. The Workers' Compensa-
tion Court found that during these meetings, the parties
agreed that claimant was permanently totally disabled and
could receive a lump sum payment of $179,549.63 if claimant's
counsel could "put together" a justification for the lump sum
conversion. It is the parties' understanding of the phrase
"put together1' which is the subject of this appeal. The
Workers1 Compensation Court made the following findings in
this regard:
5. Mr. Bottomly [claimant's attorney] understood
the phrase "put together" to mean that he would
send Mr. Strizich [State Fund claims manaserl a
d-
petition and affidavit of justification, Mr.
Strizich would then concur by signing and then
submit it to the Insurance compliince -~ureaufor
approval.
6. Mr. Strizich understood the term "put together"
to mean that Mr. Bottomly would present documenta-
tion that would be acceptable to the State Fund and
the Insurance Compliance Bureau to justify a lump
sum conversion.
Following the initial meeting, claimant's counsel pre-
pared and submitted a written petition to the State Fund
proposing that $120,000 of claimant's benefits be placed in
an annuity to draw interest. This proposal was rejected by
the State Fund. Another meeting was held between Mr.
Bottomly; Mr. Currey, attorney for the State fund; and Mr.
Strizich, in an attempt to settle the dispute. At the meet-
ing, a social security offset was also discussed. The Work-
ers' Compensation Court found that the parties' testimony
conflicted as to what was resolved at that meeting, because
Mr. Bottomly testified that an agreement was made on the
social security issue at that time, Mr. Strizich denied the
making of any agreement, and Mr. Currey was not able to
recall. The second meeting resulted in a written lump sum
proposal dated January 21, 1987, in which, after a dispute
over the social security offset language, the State Fund
would not concur.
Claimant then filed a petition in the Workers' Compensa-
tion Court seeking to enforce the lump sum conversion which
he contended was agreed to by the parties. The Workers'
Compensation Court denied claimant's petition based on a
finding that there was no enforceable agreement reached by
the parties regarding a lump sum settlement. The lower court
did grant claimant's claim to payment for 24-hour domiciliary
care, however, the payments were limited to a four-month
period from December 1986 to April 1987. Claimant appeals
the limitation of this award along with the lower court's
denial of his petition.
I
Did the Workers' Compensation Court err in concluding
that the parties' oral negotiations did not establish a
binding contractual agreement?
Claimant argues that a valid and enforceable agreement
was created as a result of the parties' oral negotiations
during the two meetings. He bases this contention on the
fact that the intentions of the parties are discernable to a
reasonable degree and that the material elements of the
agreement were stated, citing Thrasher v. Schreiber (1926),
77 Mont. 221, 227, 250 P. 600, 602, and Somont Oil Co., Inc.
v. Nutter (Mont. 1987), 743 P.2d 1016, 1019, 44 St.Rep. 1685,
1689. The State Fund concedes that the parties did in fact
agree to claimant's disability status as permanently totally
disabled and that claimant could receive biweekly benefits in
the form of a lump sum payment. Despite these points of
agreement, the State Fund argues that the parties' under-
standing of how those terms were to be acted upon is at issue
and prevents the formation of a valid, enforceable agreement.
As pointed out by the hearing examiner, this issue hinged
upon the parties' understanding of what it meant to "put
together" a justification for a lump sum conversion. The
Workers' Compensation Court's findings reflect that claim-
ant's counsel assumed a lump sum payment would be forthcoming
upon submission of the written proposal, while the State Fund
representative understood that further approval would be
necessary. The record supports these findings and the par-
ties do not disagree as to the source of the
misunderstanding, but only as to its effect.
In order for a valid and enforceable contract to exist,
the following elements must be present:
(1) identifiable parties capable of contracting;
(2) their consent;
(3) a lawful object; and
(4) a sufficient cause or consideration.
Section 28-2-102, MCA.
The Workers' Compensation Court concluded that a lack of
consent precluded the formation of a binding contract requir-
ing the insurer to concur in the written petition later
submitted by the claimant. We agree. The facts here indi-
cate that there was no meeting of the minds on the basic
elements of an enforceable agreement. Claimant's counsel
assumed that mere preparation of the terms in written form
was sufficient. This assumption, however, is not consistent
with the statutory procedure for conversion of biweekly
benefits to a lump sum payment as set forth in $ 39-71-741,
MCA. That statute was amended retroactively in 1985. Howev-
er, this Court reinstated all pre-1985 injuries under the
language of the statute prior to the 1985 amendment in
Buckman v. Montana Deaconess Hospital (Mont. 1986), 730 P.2d
380, 43 St.Rep. 2216. The relevant statute, therefore, is §
39-71-741, MCA (1983), which reads:
Compromise settlement and lump-sum payments
--division approval required. The biweekly pay-
ments provided for in this chapter may be convert-
ed, in whole or in part, into a lump-sum payment.
Such conversion can only be made upon the written
application of the injured worker or the worker's
beneficiary, with the concurrence of the insurer,
and shall rest in the discretion of the division,
both as to the amount of such lump-sum payment and
the advisability of such conversion. The division
is hereby vested with full power, authority, and
jurisdiction to allow and approve all compromises
of claims under this chapter. All settlements and
compromises of compensation provided in this chap-
ter are void without the approval of the division.
Approval of the division must be in writing. . . .
The statute requires written application by the worker
(Mr. Hilbig) with the concurrence of the insurer (State
Fund). Claimant failed to prove the concurrence of the State
Fund to the satisfaction of the Workers' Compensation Court.
The record contains substantial evidence to support that
conclusion. We therefore affirm the Workers' Compensation
Court on this issue. As a result claimant is not entitled to
the claimed twenty percent penalty under § 39-71-2907, MCA.
I1
Did the Workers' Compensation Court err in its award of
domiciliary care?
On January 9, 1987, the parties agreed upon a pretrial
order which included the following issue:
Whether the State Fund has paid all medical expens-
es of which payment is required pursuant to section
39-71-704, MCA.
The trial took place on January 16, 1987. Prior to the entry
of judgment, the State Fund sent a letter to claimant's
counsel dated April 8, 1987, stating that:
The State Fund will authorize Mr. Hilbig to
obtain domiciliary care from the Northern Rocky
Mountain Easter Seals Society for a period of 6
months, 8 hours per day, at $7.50 per hour.
This offer was rejected by the claimant by letter dated April
20, 1987, which stated:
The offer of limited home care which you have
extended comes after this case, and that particular
issue, is before the Workers' Compensation Court,
and the issue has been submitted for the Court's
decision. The Workers1 Compensation Court now is
the exclusive forum to deal with the issue of the
need and extent of home care services.
Mrs. Hilbig has been supplying home care
services for 16 hours five days a week and 24 hours
two days a week, since November 17, 1983, and of
course, expects to be compensated for her services,
both in the past and in the future.
On April 14, 1987, prior to receipt of the above letter,
the State Fund filed a motion to clarify issues relating to
domiciliary care. The State Fund contended that due to its
offer of April 8, 1987, the issue of future benefits had been
resolved and was no longer an issue before the court. The
court determined that clarification of the issue was not
necessary because:
Both parties have agreed that the question of
domiciliary care to April 8, 1987, is an issue.
Whether or not future domiciliary care is necessary
depends upon the evidence presented and the court
will not create new issues at this late date.
Issues not decided at this hearing can return by
the petition of either party should disputes not be
resolved by the parties.
The court also noted that "[alt the end of the time period
(six months from the date payment began) consideration would
be given to future needs of the claimant."
The court's findings of fact, conclusions of law and
proposed judgment were entered on June 20, 1988. The court
determined that Mr. Hilbig was entitled to 24 hour-a-day home
health care, and awarded domiciliary care payable to claim-
ant's wife in the amount of $7.50 per hour for 24 hours a day
from December 18, 1986, to April 8, 1987. The date which
payment was ordered to begin was the date the lower court
found the employer first had knowledge of the need or demand
for domiciliary care, citing Carlson v. Cain (1985), 216
Mont. 129, 140, 700 P.2d 607, 614. Regarding the April 8,
1987 cutoff date, the court concluded that:
The defendant State Fund has acknowledged claim-
ant's entitlement of domiciliary benefits of $7.50
per hour for eight hours a day to claimant's wife
beginning April 8, 1987, but not before that date.
No other justification appears in the court's order why home
health care benefits were limited to a four-month period or
the need for future domiciliary care.
On June 20, 1988, claimant filed a petition with the
Workers' Compensation Court requesting that the court revise
its order of June 17, 1988, to provide for domiciliary care,
past and future, based on the court's finding that claimant
is entitled to 24 hours of domiciliary care. Claimant's
petition was denied by order dated July 12, 1988, which
stated:
The issues decided by the hearing examiner were
those presented by the parties and there is clearly
no basis for the claimant to now request additional
issues beyond those submitted to the Court. The
record amply supports the findings of the hearing
examiner and the Judgment of this Court.
Claimant now appeals both the above order and the judgment
rendered on the issue of domiciliary care. First he disputes
the court's finding that the employer did not have knowledge
of claimant's need for domiciliary care until December 18,
1986. He argues that the evidence clearly establishes con-
structive notice on the part of the employer from the date of
claimant's discharge from the hospital on December 6, 1983.
Claimant also disputes the court's limitation of home
health care benefits to April 8, 1987, arguing that such a
conclusion is inconsistent with the court's finding that
claimant requires 24 hours of care each day and that his
condition is "not improving and is likely to decline."
Claimant requests that this Court reverse the lower court's
imposition of a cutoff date and order that home health care
benefits be paid, at the rate of 24 hours per day, unless and
until the State Fund demonstrates that such care is no longer
needed. We will address these claims separately.
LIMITATION OF BENEFITS AS COMMENCING ON DECEMBER 18, 1986:
The employer ' s knowledge of the employee ' s need for
medical services at home resulting from the industrial injury
is one factor which must be met when considering eligibility
for domiciliary care. Larson v. Squire Shops, Inc. (Mont.
1987), 742 P.2d 1003, 1008, 44 St.Rep. 1612, 1619. The
Workers' Compensation Court determined that December 18,
1986, was the date the employer first knew of the need or
demand for domiciliary care. On that date, the Workers'
Compensation Court found that a pretrial conference was held
in which the claimant first requested domiciliary care. The
court further found that the medical reports prior to tha.t
date did not recommend home health care for the claimant.
Claimant argues that the employer had constructive
knowledge of his need for home health care based on medical
reports demonstrating the severity of head injury and the
effects upon claimant, such as a memory loss, headaches,
depression and anxiety. Claimant contends that this con-
structive knowledge dates back to December 6, 1983, when he
was released from the hospital, and that Mrs. Hilbig should
be reimbursed for 24 hour per day health care from that date.
The conclusion of the Workers' Compensation Court will
not be disturbed if there is substantial evidence in the
record to support its findings. Giacoletto v. Silver Bow
Pizza Parlor (Mont. 1988), 751 P.2d 1059, 1061-62, 45 St.Rep.
536, 537. We conclude that the record supports the lower
court's findings and conclusions that there was no knowledge
on the part of the employer until December 18, 1986, when
domiciliary care was first requested by the claimant. We
affirm the Workers' Compensation Court as to the commencement
date of domiciliary care.
LIMITATION OF BENEFITS TO APRIL 8, 1987:
It is not clear from the court's findings why it placed
this cutoff date on benefits payable to Mrs. Hilbig. In its
Order Denying Defendant's Motion to Clarify the Domiciliary
Care Issue, the court stated:
On April 8, 1984, [I9871 State Fund claims
examiner, Larry Thomas, informed the claimant's
counsel, R.V. Bottomly, that the State Fund is
authorizing domiciliary care for a period of six
months, at eight hours per day, at $7.50 per hour.
At the end of that time period, consideration would
be given to future needs of the claimant.
The record shows that the Workers' Compensation Court
limited domiciliary care to benefits due prior to April 14,
1987, the date of the State Fund offer of 8 hours per day of
such care at $7.50 per hour. The court assumed that benefits
after that date would be decided at some later date following
a six-month observation period during which claimant's needs
would be monitored and evaluated. We note that more than one
year had expired from the April 14, 1987 offer to the June
20, 1988 court order. The six-month period had long expired.
In addition, we note that the pretrial order of January 9,
1987 provided that the issue was whether the State Fund had
paid all medical expenses under 5 39-71-704, MCA, which
included the domiciliary care issue.
We affirm the Workers' Compensation Court award of
domiciliary care of $7.50 per hour, 24 hours a day, from
December 6, 1986, to April 8, 1987. We remand this cause to
the Workers' Compensation Court for such additional proceed-
ings as it shall determine to be necessary in order that the
court may determine the extent of the domiciliary care to
which claimant i.s entitled from and after April 8, 1987.
We Concur: A