No. 94-423
IN THE SUPREME COURT OF THE STATE OF MONTANA
APPEAL FROM: In the Workers' Compensation Court,
The Honorable Mike McCarter, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Ken H. Grenfell, Grenfell & Ogg,
Missoula, Montana
For Respondent:
Leo S. Ward, Browning, Kaleczc, Berry
& Haven, Helena, Montana
Submitted on Briefs: January 12, 1995
Decided: April 20, 1995
Filed:
Justice Terry N. Trieweiler delivered the opinion of the Court.
The appellant, Charles Rasmussen, filed a petition for
permanent total disability benefits in the Workers' Compensation
court, based on injuries he claimed were sustained during the
course of his employment with Heebs Food Center in Bozeman on
June 9, 1987. The respondent, State Compensation Mutual Insurance
Fund, which insured Heebs against compensation claims at that time,
denied that Rasmussen was totally disabled, and that his
disability, if any, was caused by a work-related accident. After
a two-day trial, the Workers' Compensation Court found that
Rasmussen was totally disabled from a work-related injury and
awarded benefits to him. The State Fund petitioned for a new
trial, and its petition was granted. Rasmussen appeals from the
Workers' Compensation Court's order granting the State Fund a new
trial. We reverse the Workers' Compensation Court and reinstate
its original judgment.
The following issue is dispositive on appeal:
Was it a manifest abuse of discretion for the Workers'
Compensation Court to grant the State Fund's petition for a new
trial?
FACTUAL BACKGROUND
Rasmussen filed a claim with the State Fund that he was
injured on June 9, 1987, when he fell while working for Heebs Food
Center in Bozeman. After investigating his claim, the State Fund
accepted liability for Rasmussen's injury and paid temporary total
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disability benefits until May 1993, when the benefits were
converted to permanent partial disability benefits.
On December 4, 1992, Rasmussen filed a petition for a hearing
before the Workers' Compensation Court in which he alleged that he
was permanently totally disabled from his job-related injury. On
December 28, 1992, the State Fund filed a response in which it set
forth three contentions: (1) that Rasmussen was not permanently
totally disabled; (2) that Rasmussen's disability, if any, was not
caused by a work-related injury; and (3) that Rasmussen was not
entitled to any relief or attorney fees.
Before trial on September 20, 1993, the parties filed a
pretrial order which was approved by the Workers' Compensation
Court. The pretrial order stipulated that the issues to be decided
were as follows: (1) whether Rasmussen is permanently totally
disabled; (2) whether Rasmussen is entitled, in the alternative, to
permanent partial disability benefits under § 39-71-703, MCA; and
(3) whether Rasmussen is entitled to attorney fees and costs. The
pretrial order specifically set forth the State Fund's contentions
as follows: (1) Rasmussen is not permanently totally disabled;
(2) Rasmussen's disability, if any, was not caused by an industrial
injury; (3) Rasmussen is not entitled to attorney fees and costs;
and (4) Rasmussen is not entitled to additional relief.
Trial commenced on September 20, 1993, in Missoula. During
its opening statement, the State Fund repeatedly referred to
Rasmussen's injury as an "alleged injury." Rasmussen objected and
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argued that the State Fund had accepted liability and that the
issue was to what extent Rasmussen's disability was related to the
injury. The court allowed the State Fund to continue, but later
engaged in the following colloquy with its counsel:
THE COURT: I'm trying to unravel that, if you are trying
to unaccept the claim in this proceeding.
MR. WARD: NO, this trial is about the credibility issue,
Your Honor. . . .
THE COURT: Okay. But is this proceeding, you're arguing
that the injury did not occur, or the accident did not
occur?
MR. WARD: We are arguing that evidence that the accident
did not occur which affects the credibility of this
Claimant, Your Honor, that's what we are arguing. We're
not arguing that we should be able to unravel and go
back. And you know, the claim, we paid the claim. We've
paid a bunch of the total disability benefits, a whole
bunch of medical benefits, and reflected by that stack of
records right there. We're not claiming that we're owed
that money.
1'm not sitting riqht now and savinq this is the
Donald Chatlin [sic] case and it's a fraud case at this
point. I am saying, though, most total disability cases
in my experience that go to court, that go to hearing,
are credibility cases, and that affects credibility.
(Emphasis added.)
Later in the trial, Rasmussen testified that he was injured
while working at Heebs on June 9, 1987. During cross-examination,
his counsel objected to questions that pertained to whether
Rasmussen was injured while working for Heebs on the basis that the
State Fund had accepted liability for the injury and that the State
Fund did not intend to pursue fraud. The State Fund again
responded that the questions were related to the issue of
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credibility. No mention was made of fraud; and the court clarified
that the State Fund was not attempting to rescind its original
acceptance of liability.
As part of its case, the State Fund called Cindy Kern,
Rasmussen's ex-wife, to testify that Rasmussen submitted a false
claim. Following her testimony, the court again expressed concern
about evidence of fraud which had not been previously alleged.
Again, the State Fund asserted that credibility was the issue.
On May 18, 1994, the Workers' Compensation Court entered its
findings of fact, conclusions of law, and judgment. The court held
that a fraud defense had not been properly raised, and found that
the accident occurred as alleged by Rasmussen. It also found that
he was permanently totally disabled from his job-related injury,
and awarded benefits accordingly.
On June 8, 1994, the State Fund petitioned for a new trial on
the basis that it had no notice that fraud needed to be
specifically pled and was surprised by that requirement. On
July 28, 1994, the Workers' Compensation Court granted the State
Fund's petition for a new trial. The court reasoned that because
its rules were unclear regarding the need to specially plead
affirmative defenses, such as fraud, the State Fund had not had
adequate notice of the need to amend its pretrial contentions and
that it should be given an opportunity to do so. It also held that
because it had not been pled as a defense, the court had not
adequately considered the State Fund's evidence of fraud.
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Therefore, the Workers' Compensation Court concluded that a new
trial was appropriate pursuant to 5 25-11-102, MCA. It also held
that it would consider evidence of fraud at the new trial.
DISCUSSION
Was it a manifest abuse of discretion for the Workers'
Compensation Court to grant the State Fund's petition for a new
trial?
We review a trial court's order granting a new trial for
manifest abuse of discretion. Jim’s Excavating Service v. HKM Assoc. ( I 9 9 4 ) ,
265 Mont. 494, 512, 878 P.2d 248, 259 (citing Nelson v. Flathead Valley
Tramif (1992), 251 Mont. 269, 274, 824 P.2d 263, 266.)
Rasmussen argues that the State Fund failed to allege fraud in
any of its pretrial claims, failed to ask that the pretrial order
be amended prior to the Workers' Compensation Court's judgment, and
indicated by its attorney's representations during trial that it
was not attempting to revoke its original acceptance of his claim.
He contends that the State Fund should not be allowed to amend its
pleadings after an entire trial and the court's unfavorable
decision. The State Fund responds that it was unfair to bind it to
requirements of the Rules of Civil Procedure which were not
applicable to the Workers' Compensation Court and were not
recognized by the Workers' Compensation Court until after the trial
in this case commenced.
Based on principles of estoppel and judicial admissions, we
conclude that the Workers' Compensation Court manifestly abused its
discretion when it granted the State Fund a new trial.
We have previously held that a party may not benefit from
asserting one position during pretrial discovery and later assert
a contrary position to the detriment of its opponent at trial or on
appeal. Plouflee, BurlingtonNorthern, Inc. (1986), 224 Mont. 467, 474, 730
P.2d 1148, 1153. In Plouffe, we relied on § 26-l-601, MCA, for the
following conclusive presumption:
[T]he truth of a declaration, act, or omission of a
party, as against that party in any litigation arising
out of such declaration, act, or omission, whenever he
has, by such declaration, act, or omission, intentionally
led another to believe a particular thing true and to act
upon such belief.
Section 26-l-601, MCA; Plouffe, 730 P.2d at 1153.
We have also previously held that a counsel's admissions in
court proceedings bind the client to those statements. Kohne v. Yost
(1991), 250 Mont. 109, 818 P.2d 360. In Kohne, defense counsel
admitted in closing argument that both parties in that case were
negligent. However, the jury found that neither the defendant nor
the plaintiff was negligent. The plaintiff moved for a judgment
notwithstanding the verdict, and for a new trial. The basis of the
motions was that the jury's decision was based on insufficient
evidence, in part, because defense counsel admitted in closing
argument that the defendant was negligent. Kohne, 818 P.2d at 361.
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Discussing defense counsel's statement, we recognized that a
counsel's admissions bind his or her client. Kohne, 818 P.2d at
361-62. A judicial admission is an express waiver made in court by
a party or his attorney conceding the truth of an alleged fact. It
has a conclusive effect upon the party who makes the admission and
no further evidence can be introduced to prove, disprove, or
contradict the admitted fact. Kohne, 818 P.2d at 362 (citing
9 Wigmore, Evidence, §§ 2588, 2590 (Chadbourn rev. 1981)). We also
held that such admissions may occur at any point during litigation.
Kohne . 818 P.2d at 362.
Based on principles of estoppel and judicial admissions, we
conclude that the State Fund is bound by its counsel's statements
during trial that it was not relying on the defense of fraud, and
that it cannot, after an adverse result, move for a new trial so
that it can allege the affirmative defense of fraud. The State
Fund led Rasmussen to believe that it was not asserting fraud as a
defense. It repeatedly skirted the court's questions on this issue
and, on at least one occasion, stated that it was not asserting
fraud. Therefore, counsel conceded for purposes of trial that
fraud was not an issue. Rasmussen should not have to spend the
time and assume the expense of trial on the assumption that the
State Fund's position is as represented by its attorney, only to
find out after the result that the whole proceeding must be
repeated based on a different theory.
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For these reasons, we hold that the Workers' Compensation
Court abused its discretion when it granted a new trial to consider
evidence of fraud. We reverse the Workers' Compensation Court's
order and reinstate the original judgment of the Workers'
Compensation Court.
Ju ice
We concur:
April 20, 1995
CERTIFICATE OF SERVICE
I hereby certify that the following certified order was sent by United States mall, prepaid, to the
following named:
Ken H. Grenfell
GRENFELL & OGG
412 West Alder
Missoula, MT 59802
Leo S. Ward
Browning, Kaleczc, Berry & Hoven, P.C.
P.O. Box 1697
Helena, MT 59624
ED SMITH
CLERK OF THE SUPREME COURT
STATE OF MONTANA