NO. 90-192
IN THE SUPREME COURT OF THE STATE OF MONTANA
1990
JOHN H. ALLEN,
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Claimant and Respondent,
TREASURE STATE PLUMBING,
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EMPLOYERS COMMERCIAL UNION,
Insurer-Defendant and Appellant,
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CHARTER OAK FIRE INSURANCE COMPANY,
Insurer-Defendant and Respondent.
APPEAL FROM: Workers' Compensation Court
The Honorable Timothy Reardon, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
C. J. Seifert; Gough, Shanahan, Johnson & Waterman;
Helena, Montana
For Respondent:
Donald D. Sommerfeld; Towe, Ball, Enright & Mackey;
Billings, Montana
Terry G. Spear; Matovich, Addy & Keller; Billings,
Montana
Submitted on Briefs: October 11, 1990
Decided: December 19, 1990
Filed: iY
Justice R. C. McDonough delivered the Opinion of the Court.
Employers1 Commercial Union appeals from the judgment of the
Workers' Compensation Court which held that Employers' Commercial
Union must pay permanent partial disability benefits and attorney's
fees to claimant, John Allen. We affirm.
The issues we find necessary for review are:
1 Whether the Workers' Compensation Court properly allocated
.
John Allen's benefit payments among insurers;
2. Whether the Workers' Compensation Court properly awarded
John Allen attorney's fees.
At time of trial, John Allen (Mr. Allen) was a 48 year old
married man who worked for his father as a laborer at Treasure
State Plumbing and Heating since the age of 14. Since that time,
Mr. Allen has worked as a plumber, laborer and as a backhoe
operator.
In July of 1973, he began to experience low back pain. In an
effort to alleviate the pain, Mr. Allen sought treatment from Dr.
Sterling R. Hayward, a Billings orthopedic surgeon. According to
Dr. Hayward, Mr. Allen's back condition had existed for at least
five years and was aggravated by his work as a backhoe operator.
As a result of this diagnosis, Dr. Hayward recommended that Mr.
Allen change jobs and discontinue his work as a backhoe operator.
Apparently, Mr. Allen did not heed this advice and on October
25, 1974 he suffered a second back injury while operating a
backhoe. Following this injury, he did not return to work until
March 12, 1976. Mr. Allen sought workers1 compensation benefits
2
and Employers Commercial Union accepted liability and paid medical
benefits as well as temporary total and partial disability
benefits.
Following this accident, Mr. Allen again sought treatment from
Dr. Hayward. Following several examinations, the doctor
determined that Mr. Allen's back condition may have been the
result of a herniated nucleus pulposus. This unconfirmed, yet
suspected diagnosis, matched his conclusions of a year earlier,
when Mr. Allen first sought treatment. Once again, Dr. Hayward
recommended that Mr. Allen seek different employment.
In May of 1976, the doctor again examined Mr. Allen and noted
that his back condition was I1staying about the same.'' Following
this examination, Dr. Hayward rendered his opinion that Mr. Allen
had reached a condition of maximum medical improvement.
After returning to work, Mr. Allen decreased his amount of
time operating the backhoe. In fact, the only time he did any
backhoe work was when there was no light work available. He
noticed that even a small amount of time on the backhoe aggravated
his back injury.
On September 12, 1977, Mr. Allen, while working for Treasure
State Plumbing, again injured his back. Apparently, this injury
occurred while he as helping a co-worker lift a ten inch clay sewer
pipe, which weighed approximately 230 pounds. The insurer at risk
at the time of this accident was Charter Oak Fire Insurance Company
(Charter Oak), however Mr. Allen did not pursue any claim against
it at this time.
Fearing that Dr. Hayward would recommend he undergo surgery,
Mr. Allen decided to seek chiropractic care. Therefore, instead
of returning to Dr. Hayward, he sought treatment from Dr. Cromwell,
a Billings chiropractor. While in Dr. Cromwelllscare, he returned
to work where he reinjured his back while lifting some bathtubs.
Once again, Mr. Allen did not report this accident, nor did he file
a claim.
Following these accidents, Mr. Allen discontinued working in
the field and began working in the office. Finally, in 1987, he
filed a petition before the Workers1 Compensation Court alleging
that he had suffered an injury on October 24, 1974 and further that
he was entitled to 500 weeks of permanent partial disability
payments, attorney's fees, costs and penalties. This petition was
filed against his employer, Treasure State Plumbing and Heating and
the appellant Employers Commercial Union Insurance Company (ECU).
Discovery conducted after this petition was filed, revealed
job related injuries occurring in 1977. It further revealed Dr.
Hayward1s opinion that Mr. Allen's back injury reached maximum
medical improvement in May of 1976. Based upon these facts ECU
determined that it was not the insurer on risk at the time of the
1977 injuries. It therefore entered into a partial settlement with
Mr. Allen and joined with him in an amended petition before the
Workers1 Compensation Court. In this amended petition, ECU sought
a judgment holding Charter Oaks liable for all permanent partial
disability payments occurring after September 12, 1977, the date
of Mr. Allen's subsequent injury. It based its arguments on the
fact that Charter Oaks was the insurer on risk at the time of this
injury and that Mr. Allen had reached maximum healing in 1976-
-before the 1977 accident.
Following trial, the Workers' Compensation Court held that
Charter Oaks was responsible for all compensation benefits
reasonable related to the temporary aggravation of Mr. Allen's back
condition resulting from his accident of 1977. However, it further
found that the 1974 injury was the cause of Mr. Allen's present
permanent partial disability and related diminution in earning
capacity. It therefore held that ECU was liable for the full
extent of Mr Allen's permanent partial disability payments. It
further held that ECU was liable for costs and attorney's fees.
ECU filed a notice of appeal and eventually, following an
order of this Court, Mr. Allen was dismissed as a party.
Therefore, the only issues submitted for our review concern the
disputed liability between ECU and Charter Oaks and the resultant
attorney's fees.
Initially, we note the standard of review applicable to
appeals from the Workers' Compensation Court. When reviewing
questions of fact, we limit our examination of the record to
determine if substantial credible evidence exists to support the
lower court s findings. 0'Brien v. Central Feeds (1990), 241 Mont .
267, 786 P.2d 1169. In reviewing questions of law, we merely
determine whether the lower court's interpretation of the law is
correct. Schaub v. Vita Rich Dairy (1989), 236 Mont. 389, 770 P.2d
522.
The lower court extensively reviewed all of the evidence
surrounding Mr. Allen's back injuries. It noted that he began
having problems with his back at least as early as 1972, when he
first sought medical treatment. At that time, the examining
physician advised him to discontinue backhoe work. Apparently,
this condition progressed and Mr. Allen suffered additional
compensable injuries in 1974 and 1977.
Following the 1974 injury, Dr. Hayward noted that Mr. Allen
had reached a condition of maximum medical improvement.
Particularly, in May of 1976 he noted that Mr. Allen's back
condition was "staying about the same."
In 1975, Dr. Hayward conducted a physical examination of Mr.
Allen. During this examination, Dr. Hayward made numerous findings
concerning Mr. Allens' flexibility, extension and sensations of
pain. The doctor did not, however, attempt to extrapolate any
impairment rating from these findings.
Approximately ten years later, at the request of Mr. Allen's
counsel, Dr. Hayward performed another physical examination. The
doctor was asked to determine an impairment rating. Consequently,
this examination was much more detailed than that given in 1976.
Following the examination, Dr. Hayward determined that Mr. Allen's
condition was probably worse in 1986 than in 1976. However, he in
no way attributed the worsening of Mr. Allen's condition to any
injury suffered in 1977. To the contrary, the doctor testified
that ongoing deterioration was natural for a person with Mr.
Allen's condition.
Finally, the Workers' Compensation Court heard testimony from
Mr. Allen, his father and employer, and Mr. Allen's co-workers,
that indicated that Mr. Allen's back condition significantly
worsened after the 1977 injury. According to this testimony, Mr.
Allen's ability to perform on the worksite was greatly impaired
following these accidents. However, the lower court also took into
consideration testimony which indicated that Mr. Allen had problems
doing heavy labor and running a backhoe prior to the 1977
incidents, as well as Dr. Hayward's testimony indicating that these
incidents did not cause further deterioration to his back. Based
upon this testimony, the court determined that although the
injuries may have temporarily aggravated Mr. Allen's pre-existing
condition, they did not cause his permanent partial disability.
The evidence, when viewed as a whole supports the Workers'
Compensation Court's conclusion that Mr. Allen' s 1974 injury was
the cause of his current disability. This Court will not reverse
the Workers' Compensation Court unless its findings of fact are
clearly erroneous. See Tenderhold v. Travel Lodge Itnl. (1985),
218 Mont. 523, 709 P.2d 1011.
Furthermore, we find no error of law warranting reversal.
ECU maintains that our decision in Belton v. Hartford Accident and
Indemnity Co. (1983), 202 Mont. 384, 658 P.2d 405, controls the
outcome of this case. In Belton, we held that once a claimant has
reached maximum healing or a medically stable condition, the
insurer at risk is no longer responsible for any subsequent
injuries or conditions. Using this rule of law, ECU argues that
because Mr. Allen had attained a condition of maximum healing in
1976, it should not be liable for the permanent partial benefits
claimed in 1987.
We disagree with ECU's application of Belton to the facts in
this case. In Belton, it was undisputed that an injury suffered
by the claimant in 1979 aggravated a prior injury sustained in
1977. Belton, 202 Mont. at 386. The 1979 injury rendered the
claimant permanently, totally disabled. In the case now before us,
however, Mr. Allen's doctor testified that his back condition was
not permanently aggravated by his second injury. Rather, as stated
by the Workers' Compensation Court, this second injury only
temporarily aggravated his pre-existing injury.
In harmony with Belton, the Workers' Compensation Court
required Charter Oak to pay temporary benefits for the temporary
aggravation to Mr. Allen' back caused by the 1977 injury. However,
because it found that his permanent partial disability was caused
by the 1974 injury, the court correctly held that ECU was
responsible for payment of those benefits. We hold this was a
correct interpretation and application of Belton and accordingly
the Workers' Compensation Court is affirmed on this issue.
Finally, ECU argues that the lower court erred in awarding Mr.
Allen attorney's fees. According to ECU, the statute in effect at
the time of the 1974 injury determines the manner and extent of Mr.
Allen's attorney's fees award. See Gullett v. Stanley Structures
(1986), 222 Mont. 365, 722 P.2d 619. The statute in effect at the
time of Mr. Allen's injury was 5 92-616 RCM, which states:
92-616. Costs and attorneys! fees payable on denial
of claim later found compensable. In the event the
insurer denies the claim for compensation or terminates
compensation benefits, and the claim is later adjudged
compensable, by the division or on appeal, the insurer
shall pay reasonable costs and attorneys1 fees as
established by the division. However, under rules
adopted by the division and in the discretion of the
division, an insurer may suspend compensation payments
for not more than thirty (30) days pending the receipt
of medical information.
ECU maintains that it did not deny "the claim for compensation
or terminate compensation benefits." Rather, it merely contested
the extent of its obligation to Mr. Allen. Therefore, it maintains
that 5 92-616 RCM, does not provide any authority to support the
lower court's award of attorney's fees and costs.
We disagree. ECU paid medical costs, and disability benefits
up until September 12, 1977, the date of Mr. Allen's second injury.
It refused, however, to pay any benefits due after that date. We
hold that this refusal was tantamount to a "termination of
compensation benefits." Therefore, the lower court's award of
attorney's fees and costs is clearly justified under 3 92-616 RCM.
Affirmed.
We Concur: F-
Justices