No. 87-366
IN THE SUPREME COURT OF THE STATE OF MONTANA
1989
WILLIAM F. SHARKEY,
Claimant and Appellant,
-vs-
ATLANTIC RICHFIELD COMPANY,
operating as ANACONDA MINERALS
COMPANY, a/k/a, THE ANACONDA
COMPANY,
Defendant and Respondent.
APPEAL FROM: The Workers' Compensation Court,
In and for the Area of Helena, MT,
The Honorable Timothy W. Reardon, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Gene B. Daly, Helena, Montana
For Respondent:
Andrew J. Utick, Helena, Montana
Submitted on Briefs: May 4, 1989
c .-z Decided: July 13, 1989
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Mr. Justice Fred J. Weber delivered the Opinion of the Court.
This appeal arises from an order by the Workers' Compen-
sation Court, concluding that the claimant did not incur a
new industrial injury in 1981 and that claimant is properly
receiving permanent partial benefits according to rates
applicable to a 1978 injury. From this order, the claimant
appeals. We affirm.
The issues are:
1. Did the Workers' Compensation Court err in conclud-
ing that the claimant did not sustain an industrial injury in
1981?
2. Did the Workers' Compensation Court err in conclud-
ing that the statute of limitations was not tolled on the
basis of equitable estoppel?
3. Did the Workers' Compensation Court err in conclud-
ing that the statute of limitations was not tolled because
the employer made payments in lieu of compensation?
4. Did the Workers' Compensation Court err in conclud-
ing that the reduction in benefits was not unreasonable?
5. Did the District Court err in awarding attorney fees
and costs pursuant to S 39-71-612, MCA (1978)?
Mr. William Sharkey suffered an industrial accident on
September 10, 1978, while employed by the Atlantic Richfield
Company (ARCO), when he fell from a ladder approximately
twelve feet to the ground. His left arm hooked into the
ladder as he fell, and he sustained injuries to his left
shoulder. Mr. Sharkey was treated by Dr. Losee for this
injury. This treatment included surgery on the shoulder in
December of 1978. Mr. Sharkey returned to work for ARCO in
May of 1979 with no physical restrictions.
ARC@ accepted liability for this injury and paid tempo-
rary total disability benefits while Mr. Sharkey was unable
to work. ARC0 also paid medical expenses. In December of
1979 the parties negotiated a final settlement for this
injury for the sum of $3,948.00, which represented 42 weeks
of permanent partial disability benefits at the rate of
$94.00 per week.
In late 1981, Mr. Sharkey began experiencing problems
with his left shoulder again. He contends that these prob-
lems stemmed from a new work-related injury which occurred on
December 16, 1981. Mr. Sharkey claims that on that date he
was lifting the hood on a fuel truck when his left shoulder
"gave out," causing the hood to fall on him. He claims that
his left shoulder was re-injured in this accident.
Mr. Sharkey testified that he reported the accident to
his supervisor, Mr. Johnson, who made out a written report in
Mr. Sharkey's presence. Mr. Sharkey also testified that he
told Mr. Bugni, ARCO's Workers' Compensation Coordinator,
that he hurt his shoulder.
Also, in December of 1981, Mr. Sharkey obtained author-
ization to see Dr. Losee for his shoulder problem. This
authorization was obtained from Ms. Nelson, a claims adjuster
for the insurer, E.S.I.S., Inc. Dr. Losee referred Mr.
Sharkey to Dr. Matsen at the University Hospital in Seattle,
Washington, who performed surgery on Mr. Sharkey ' s shoulder
in March of 1982.
Ms. Nelson reopened Mr. Sharkey's 1978 injury claim
following the January 1982 examination by Dr. Losee. Begin-
ning in February 1982 Mr. Sharkey began receiving Workers'
Compensation temporary total benefits at the same rate he had
received for his 1978 injury. These benefits amounted to
$188 per week and continued until they were reduced to per-
manent partial benefits of $94 per week, in February 1983.
I
Did the Workers' Compensation Court err in concluding
that claimant did not sustain an industrial injury in Decem-
ber of 1981?
In reviewing a decision of the Workers' Compensation
Court, the standard of review is whether substantial credible
evidence exists to support the findings and conclusions of
the Workers' Compensation Court. Stangler v. Anderson Meyers
Drilling Co. (Mont. 1987), 746 P.2d 99, 101, 44 St.Rep. 1944,
1947. Findings of fact are not clearly erroneous if they are
supported by substantial credible evidence. Tenderholt v.
Travel Lodge Intern. (Mont. 1985), 709 P.2d 1011, 1013, 42
St.Rep. 1792, 1794.
Additionally, in Wight v. Hughes Livestock Co., Inc.
(1981), 634 P . 2 d 1189, 1191, 38 St.Rep. 1632, 1635, rev'd on
other grounds, 204 Mont. 98, 664 P . 2 d 303 (19831, this Court
stated:
"If the Workers' Compensation Court's findings are
based on conflicting evidence . . . this Court's
function on review is confined to determining
whether there is substantial evidence on the whole
record supporting such findings." Harmon v.
Deaconess Hospital (1981), Mont., 623 P.2d 1372,
1374, 38 St.Rep. 65, 67-68, and cases cited
therein.
The Workers' Compensation Court found that Mr. Sharkey
did not sustain a new industrial injury on December 16, 1981.
Although Mr. Sharkey claims that he injured his left shoulder
when the hood fell on him in December of 1981, there is no
evidence in the record from either written documents or oral
testimony, to corroborate Mr. Sharkey's assertion. At trial,
aside from Mr. Sharkey's assertion, the evidence indicated
that the 1981 shoulder problem stemmed from the 1978 injury.
While M r . Sharkey t e s t i f i e d t h a t he r e p o r t e d t h i s i n j u r y
to his supervisor, Mr. Johnson, who f i l l e d out a written
report, Mr. J o h n s o n d i d n o t t e s t i f y a t t r i a l and no a c c i d e n t
r e p o r t was e v e r f i l e d . Mr. Sharkey c l a i m s t h a t he r e p o r t e d
h i s shoulder injury t o M r . Bugni i n p e r s o n on t h e d a y o f t h e
accident. However, M r . S h a r k e y c o u l d n o t remember i f h e t o l d
Mr. Bugni how h e h u r t h i s s h o u l d e r .
In testifying a t t r i a l , Mr. Bugni r e f e r r e d t o n o t e s h e
had t a k e n d u r i n g h i s c o n v e r s a t i o n w i t h M r . Sharkey. Accord-
ing t o those notes, t h e conversation occurred t h e day a f t e r
the accident, and was o v e r t h e t e l e p h o n e . Mr. Bugni t e s t i -
fied that Mr. Sharkey did not mention a new accident or
injury; rather, Mr. Sharkey told him he was having more
problems with his shoulder from h i s previous 1978 i n j u r y .
There i s no e v i d e n c e indicating that Mr. Sharkey i n -
formed either Dr. Losee or Ms. Nelson of a new accident;
instead, t h e evidence indicated t h a t both D r . Losee and M s .
Nelson u n d e r s t o o d t h a t h i s 1981 s h o u l d e r problems had d e v e l -
oped o v e r a p e r i o d o f months. Dr. Losee, i n h i s letter t o
Dr. Matsen, i n d i c a t e d t h a t t h e s h o u l d e r p r o b l e m s had d e v e l -
oped o v e r a p e r i o d o f s e v e r a l months. He t e s t i f i e d t h a t h e
had no r e c o r d o r r e c o l l e c t i o n t h a t M r . S h a r k e y i n f o r m e d him
o f a new i n j u r y t o h i s s h o u l d e r . Ms. Nelson s t a t e d t h a t s h e
had no knowledge t h a t M r . S h a r k e y was c l a i m i n g a new i n j u r y
u n t i l 1985. Both M r . Bugni and M s . Nelson t e s t i f i e d r e g a r d -
i n g t h e r e c o r d s which would have been made, had M r . Sharkey
reported a new and separate injury in 1981. Their f i l e s ,
however, c o n t a i n e d no r e c o r d s t o corroborate M r . Sharkey's
claim.
Mr. Sharkey contends that ARCO has made a judicial
admission in this case, admitting that Mr. Sharkey indeed
s u s t a i n e d a new i n j u r y i n 1981. It is true that a t trial,
ARCO also argued for a determination that Mr. S h a r k e y had
sustained a work-related injury in 1981. Such a finding,
combined with a determination that no notice was given of the
injury, would have meant the statute of limitations had run
for this claim, thereby preventing a recovery. In fact, the
Workers1 Compensation Division might have been entitled to a
reimbursement from Mr. Sharkey for benefits already paid.
The Workers' Compensation Court properly considered the
actual facts which were presented at trial through witnesses
and exhibits. What ARC0 may have contended is irrelevant to
the factual determination made by the court. When the testi-
mony is conflicting, it is the trial court which judges the
credibility of the witnesses and this Court defers to that
assessment. "Ordinarily, this Court will not substitute its
judgment for that of the Workers1 Compensation Court in
determining the weight and credibility to be given testimo-
ny " Rule 52(a), M.R.Civ.P.; Jones v. St. Regis Paper Co.
(1981), 196 Mont. 138, 146, 639 P.2d 1140, 1144. The court
found the facts to compel a conclusion that Mr. Sharkey did
not sustain a new injury in 1981.
Our review of the record demonstrates that there is
substantial credible evidence to support the findings of the
Workers1 Compensation Court. We conclude that the court was
correct in determining that no new injury occurred in 1981.
We affirm the holding of the Workers' Compensation Court.
11
Did the Workers1 Compensation Court err in concluding
that the statute of limitations was not tolled on the basis
of equitable estoppel?
The elements of equitable estoppel were enunciated in
1,indblom v. Employers Liability Assur. Corp. , (1930), 88
Mont. 488, 494, 295 P. 1007, 1009 as follows:
Generally speaking, the following are the
essential elements which must enter into and form a
part of an equitable estoppel in all of its appli-
cations: "1. There must be conduct--acts, lan-
guage, or silence--amounting to a representation or
a concealment of material facts. 2. These facts
must be known to the party estopped at the time of
his said conduct, or at least the circumstances
must be such that knowledge of them is necessarily
imputed to him. 3. The truth concerning these
facts must be unknown to the other party claiming
the benefit of the estoppel, at the time when it
was acted upon by him. 4. The conduct must be
done with the intention, or a least with the expec-
tation, that it will be acted upon by the other
party, or under such circumstances that it is both
natural and probable that it will be so acted upon.
* * * 5 . The conduct must be relied upon by the
other party, and, thus relying, he must be led to
act upon it. 6. He must in fact act upon it in
such a manner as to change his position for the
worse; in other words, he must so act that he would
suffer a loss if he were compelled to surrender or
forego or alter what he has done by reason of the
first party being permitted to repudiate his con-
duct and to assert rights inconsistent with it.
Mr. Sharkey contends that ARCO is equitably estopped
from asserting the statute of limitations defense. He con-
tends that the employer's silence in not notifying Mr.
Sharkey that he was being paid according to 1978 rates meets
the first element of equitable estoppel. Our holding in the
first issue, however, resolves this dispute. To constitute
an estoppel, it would be necessary for ARCO to have knowledge
or imputed knowledge of material facts entitling Mr. Sharkey
to 1981 benefits. ARCO would then have to conceal these
facts. As in Devlin v. Galusha, Higgins and Galusha (1982),
202 Mont. 134, 138-39, 6 5 5 P.2d 979, 981, neither the employ-
er in the present case nor the insurer engaged in any conduct
which would amount to a representation or concealment of a
material fact. It was the claimant's omission which brought
about a failure to file a claim. This court has previously
held that estoppel does not apply where the omissions of the
party claiming estoppel caused the problem.
Additionally, the third element of estoppel, that the
claimant was unaware of the truth, is questionable. Mr.
Sharkey had previously been paid benefits based on his 1978
wages. These benefits were reinstated and were still based
on the 1978 rates. Mr. Sharkey must be imputed with knowl-
edge that his benefits should reflect the alleged 1981 date
of injury. However, he accepted benefits based on the 1978
rates. Thus equitable estoppel is inapplicable because the
first three elements are not met. We affirm the holding of
the Workers' Compensation Court in concluding that equitable
estoppel does not apply.
Mr. Sharkey also contends that ARC0 violated S
39-71-204, MCA (1978), by reinstating Mr. Sharkey's 1978
benefits after a final settlement without obtaining a written
order from the Workers' Compensation Division, and without
notifying the claimant in writing. This contention fails
because S 39-71-204, MCA (1978), does not require that the
Division approve in writing of the reopening of a claim, or
that it notify the claimant in writing.
Did the Workers' Compensation Court err in concluding
that the statute of limitations should not be tolled because
the employer made payments in lieu of compensation?
Mr. Sharkey contends that the payments he received
through the reinstatement of 1978 benefits tolled the statute
of limitations on filing a workers ' compensation claim.
According to this theory, the statute may be tolled where an
employer makes voluntary payments which are substantially
comparable to or greater than benefits available through
workers' compensation. See generally 3 A. Larson, The Law of
Workers' Compensation § 78.43 (1987). The concern is that an
employer may lull the claimant into a "false sense of securi-
ty by apparently acknowledging the validity of his claim,
paying remuneration in lieu of compensation, and then invok-
ing the statute after the lapse of one year." Frost v.
Anaconda Co. (1982), 198 Mont. 216, 221, 645 P.2d 419, 422,
citing Cupit v. Dancu Chemical Co. (Okla. 1957), 316 P.2d 593
at 595. In Frost we also stated that to toll the statute
under this theory, the employer should have some knowledge of
the effect of what he is doing. Frost, 645 P.2d at 423,
quoting Buxbaum v. Cumberland Provision Co. (1961), 14 A.D.2d
425, 221 N.Y.S.2d 339, at page 342.
Claimant relies on Frost to support his contention but
the cases are not comparable. In Frost, the employer paid
compensation from an employee benefit plan, which was totally
separate from workers' compensation benefits. The payments
were comparable to or greater than workers' compensation
benefits. This created a false sense of security in the
employee, leading him to believe it was unnecessary to file a
workers' compensation claim.
Tn the present case the payments were clearly workers'
compensation disability benefits, and the amounts were based
on 1978 rates. Neither the payments nor the conduct of the
employer would mislead Mr. Sharkey into believing he did not
need to file a claim for the alleged new injury. We conclude
that the payments made to Mr. Sharkey did not toll the stat-
ute of limitations. We affirm the ruling of the Workers'
Compensation Court on this issue.
IV
Did the Workers' Compensation Court err in concluding
that a reduction in benefiks to the claimant was not
unreasonable?
In 1983, Ms. Nelson reduced Mr. Sharkey's benefits from
temporary total benefits of $188 per week to permanent par-
tial benefits of $94 per week. Mr. Sharkey contends that
this reduction was "unreasonable." He further contends that
if the reduction was unreasonable, he is entitled to an
increased award pursuant to 5 39-71-2907, MCA (1978), which
provides for a 108 penalty when benefits are unreasonably
refused or delayed.
Mr. Sharkey contends that the reduction was unreason-
able, apparently because he was enrolled in a rehabilitation
program through Social Rehabilitation Services with a goal of
obtaining certification as a vo-tech teacher. Mr. Sharkey's
contention may be attributable to the fact that $
39-71-116 (19), MCA, the statute defining temporary total
benefits, was amended in 1985 to state that temporary total
benefits were appropriate during a period of retraining.
However, this amendment was not in effect when Mr. Sharkey
was injured, and we have previously stated that the statute
in effect on the date of injury controls. Homme v.
Rauenhorst (Mont. 1987), 740 P.2d 1110, 1113, 44 St.Rep.
1261, 1265. We also point out that this amendment has subse-
quently been deleted. Thus, the Workers' Compensation Court
is not obligated to reach a finding of total disability
simply because the claimant is in a retraining program.
Homrne, 740 P.2d at 1113; Phillips v. Spectrum ~nterprises
(Mont. 1986), 730 P.2d 1131, 1135, 43 St.Rep. 2288, 2292.
Temporary total disability is defined in §
39-71-116 (19), MCA (1978), as follows:
"Temporary total disability" means a condition
resulting from an injury as defined in this chapter
that results in total loss of wages and exists
until the injured worker is as far restored as the
permanent character of the injuries will permit.
Permanent partial disability is defined in
5 39-71-116(12) , MCA (19781, as follows:
"permanent partial disability" means a condition
resulting from injury as defined in this chapter
that results in the actual loss of earnings or
earning capability less than total that exists
after the injured workman is as far restored as the
permanent character of the injuries will permit.
Additionally, in Anderson v. Carlsons Transport (1978),
178 Mont. 290, 294, 583 P.2d 440, 442, we stated:
"'[Tlemporary total disability ceases when the
workman's physical condition is as far restored as
the permanent character of the injuries will per-
mit. When the claimant has reached this stage in
his healing process temporary total disability
ceases, and partial disability begins if there is
permanent partial impairment.'" (Quoting McAlear
v. McKee (1976), Mont., 558 P.2d 1134, 1137, 33
St.Rep. 1337, 1340.)
At trial, Ms. Nelson testified that she made the deci-
sion to reduce Mr. Sharkey's benefits to permanent partial
based on a medical report and a Work Capacity form from Dr.
Losee, a medical report from Dr. Baggenstos, and rehabilita-
tion reports. These reports indicated that Mr. Sharkey was
medically stable and that there was work available for him.
A review of the record demonstrates that claimant was as far
restored as the permanent character of his injuries would
permit. The record also demonstrates that work was available
which Mr. Sharkey could perform. This evidence fulfills the
definitional requirements of permanent partial disability and
indicates that the change was properly made. See, McDanold
v. B.N. Transport, Inc. (1984), 208 Mont. 470, 475, 679 P.2d
1188, 1191. Mr. Sharkey cannot properly contend that perma-
nent partial benefits are not appropriate merely because he
was involved in a rehabilitation program.
To prevail under § 39-71-2907, MCA (1981), the claimant
must show unreasonableness. Paulson v. Bozeman Deaconess
Foundation Hosp. (1984), 207 Mont. 440, 444, 673 P.2d 1281,
1283. Additionally, whether the insurer's conduct was unrea-
sonable is a factual question and this ruling by the Workers'
Compensation Court will not be overturned if supported by
substantial credible evidence. Coles v. Seven Eleven Stores
(1985), 704 P.2d 1048, 1052, 42 St.Rep. 1238, 1242. The
Workers' Compensation Court determined that the reduction was
not unreasonable and we conclude that there is substantial
credible evidence to support that determination. We there-
fore affirm this ruling.
v
Did the District Court err in awarding attorney fees and
costs pursuant to § 39-71-612, MCA (1978)?
The Workers' Compensation Court allowed attorney fees
and costs pursuant to § 39-71-612, MCA (1978), which allows
fees when the amount of benefits is in controversy. Mr.
Sharkey contends that attorney fees and costs should have
been allowed pursuant to 39-71-611, MCA (1978), which
allows fees when benefits are denied or terminated.
The record demonstrates that the Workers' Compensation
Fund paid temporary total benefits of $188 per week until
February of 1983, at which time the award was reduced to
permanent partial benefits of $94 per week. As a result, it
is clear that attorney fees cannot be awarded under §
39-71-611, MCA (1978), which applies only where benefits are
denied or terminated. Mr. Sharkey was awarded 500 weeks of
permanent partial benefits by the Workers' Compensation
Court. The Division had argued for an award of only 280
weeks of permanent partial, or in the alternative, for no
benefits based on a statute of limitations defense. Clearly
t h e amount o f b e n e f i t s was i n c o n t r o v e r s y , and M r . Sharkey
r e c e i v e d a n award i n e x c e s s o f what t h e D i v i s i o n o f f e r e d . We
t h e r e f o r e c o n c l u d e t h a t a t t o r n e y f e e s and c o s t s were p r o p e r l y
awarded p u r s u a n t t o 5 39-71-612, MCA ( 1 9 7 8 ) .
Affirmed.
W e Concur:
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C h i e f Jug