No. 03-678
IN THE SUPREME COURT OF THE STATE OF MONTANA
2004 MT 340
WILLIAM HARDGROVE,
Petitioner and Appellant,
v.
TRANSPORTATION INSURANCE COMPANY,
Insurer of W. R. GRACE & COMPANY,
Respondent and Respondent.
APPEAL FROM: The Workers’ Compensation Court, Cause No. WCC 2002-0666,
Honorable Mike McCarter, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Tom Lewis and Keith Marr (argued), Lewis, Slovak & Kovacich, P.C.,
Great Falls, Montana
Thomas A. Baiz, Jr., Attorney at Law, Great Falls, Montana
For Respondent:
Todd A. Hammer and David Sandler (argued), Hammer, Hewitt
and Sandler, Kalispell, Montana
For Amicus Curiae:
Jon L. Heberling, McGarvey, Heberling, Sullivan & McGarvey,
Kalispell, Montana (Ex-Mine Workers)
Heard and Submitted: June 23, 2004
Decided: December 1, 2004
Filed:
__________________________________________
Clerk
Justice W. William Leaphart delivered the Opinion of the Court.
¶1 William Hardgrove appeals from the Workers’ Compensation Court’s determination
that § 39-72-403(3), MCA (1983) (repealed 1985), bars his claim for Occupational Disease
Act (ODA) benefits, and that that statute violates neither the Equal Protection Clauses of the
Montana and United States Constitutions nor the Full Legal Redress Clause of the Montana
Constitution. We affirm the Workers’ Compensation Court.
BACKGROUND
¶2 The parties stipulated the facts in this case. W.R. Grace employed Hardgrove at its
Libby, Montana, mine from 1967 until April 2, 1984. Transportation Insurance Company
(Transportation) was insuring W.R. Grace during Hardgrove’s employment. Over fourteen
years after he stopped working for W.R. Grace, Hardgrove discovered he had asbestosis as
a result of his employment. He filed his occupational disease claim one month and one day
after this discovery. The law in effect on an employee’s last day of work governs the
resolution of an ODA claim, so the laws in effect in 1984 apply. Grenz v. Fire & Cas.
(1996), 278 Mont. 268, 272, 924 P.2d 264, 267. Transportation denied his claim asserting
that the three-year time period during which he could file his claim had elapsed under § 39-
72-403(3), MCA (1983) (repealed 1985).
¶3 Hardgrove raises three issues on appeal:
¶4 1. Whether § 39-72-403(3), MCA (1983) (repealed 1985), is a statute of repose that
is not subject to equitable tolling under Bowerman v. Employment Sec. Comm’n (1983), 207
Mont. 314, 673 P.2d 476.
2
¶5 2. Whether, assuming it is a statute of repose, § 39-72-403(3), MCA (1983) (repealed
1985), violates the equal protection clauses of the Montana and United States Constitutions.
¶6 3. Whether, assuming it is a statute of repose, § 39-72-403(3), MCA (1983) (repealed
1985), violates the Full Legal Redress Clause of Montana Constitution Article II, Section 16.
STANDARD OF REVIEW
¶7 We review the Workers’ Compensation Court’s findings of fact to determine whether
substantial, credible evidence supports them, and we review its conclusions of law to
determine whether they are correct. Hiett v. Missoula County Pub. Schs., 2003 MT 213,
¶ 15, 317 Mont. 95, ¶ 15, 75 P.3d 341, ¶ 15.
DISCUSSION
I
¶8 This controversy focuses on the characterization of § 39-72-403(3), MCA (1983)
(repealed 1985), as either a statute of limitations or a statute of repose. A legislature can
make clear it intends a statute to be a statute of repose if the statutory period for bringing the
claim can lapse before the cause of action accrues. P. Stolz Family P’ship L.P. v. Daum (2nd
Cir. 2004), 355 F.3d 92, 103.
¶9 Section 39-72-403, MCA (1983) (§ 39-72-403(3), MCA (1983), repealed 1985),
provides as follows:
Time when claims must be presented. (1) When a claimant seeks
benefits under this chapter, his claims for benefits must be presented in writing
to the employer, the employer’s insurer, or the division within 1 year from the
date the claimant knew or should have known that his total disability condition
resulted from an occupational disease. When a beneficiary seeks benefits
3
under this chapter, his claims for death benefits must be presented in writing
to the employer, the employer’s insurer, or the division within 1 year from the
date the beneficiaries knew or should have known that the decedent’s death
was related to an occupational disease.
(2) The division may, upon a reasonable showing by the claimant or
a decedent’s beneficiaries that the claimant or the beneficiaries could not have
known that the claimant’s condition or the employee’s death was related to an
occupational disease, waive the claim time requirement up to an additional 2
years.
(3) Notwithstanding the provisions of subsections (1) and (2) of this
section, no claim to recover benefits under this chapter may be maintained
unless the claim is properly filed within 3 years after the last day upon which
the claimant or the deceased employee actually worked for the employer
against whom compensation is claimed.
Under the statute of limitations and extension outlined in subsections (1) and (2), a claimant
or his beneficiary must file a claim within three years from the date the claimant or his
beneficiary knew or should have known that the claimant’s condition or death resulted from
an occupational disease. Section 39-72-403, MCA (1983) (§ 39-72-403(3), MCA (1983),
repealed 1985). Nevertheless, the legislature added subsection (3) that ends the cause of
action on a date certain and independent of the accrual of the cause of action. Thus, § 39-72-
403(3), MCA (1983) (repealed 1985), is a statute of repose.
¶10 Substantively, statutes of limitations limit the time during which a claimant may
pursue his right, but statutes of repose extinguish the existence of the underlying right itself.
P. Stolz Family P’ship L.P., 355 F.3d at 102 (“Unlike a statute of limitations, a statute of
repose is not a limitation of a plaintiff’s remedy, but rather defines the right involved in terms
of the time allowed to bring suit.”). Statutes of repose establish the absolute time beyond
which no party is liable. Joyce v. Garnaas, 1999 MT 170, ¶ 14, 295 Mont 198, ¶ 14, 983
P.2d 369, ¶ 14. Courts may equitably toll statutes of limitations for latent injuries, but no
event short of a legislative mandate can toll statutes of repose. Bowerman; Joyce, ¶ 13.
4
¶11 Statutes of repose cannot be tolled. Joyce, ¶ 14. As a court, we cannot extend to
statutes of repose the latent injury exception that Bowerman extended to statutes of
limitations. That is the domain of the legislature. Joyce, ¶ 14. We hold that the statute of
repose barred Hardgrove’s claim as of April 3, 1987–three years after his last day working
for W.R. Grace.
II
¶12 Hardgrove next argues that, if § 39-72-403(3), MCA (1983) (repealed 1985), is a
statute of repose, it violates the Equal Protection Clauses of the Montana and United States
Constitutions. We review equal protection challenges under one of the three recognized tiers
of scrutiny. State v. Price, 2002 MT 229, ¶ 33, 311 Mont. 439, ¶ 33, 57 P.3d 42, ¶ 33. The
rational basis test applies to equal protection claims brought by an injured or diseased
worker. Schmill v. Liberty Northwest Ins. Corp., 2003 MT 80, ¶ 12, 315 Mont. 51, ¶ 12, 67
P.3d 290, ¶ 12. Further, “[t]he question of constitutionality is not whether it is possible to
condemn, but whether it is possible to uphold the legislative action.” Powell v. State
Compensation Ins. Fund, 2000 MT 321, ¶ 13, 302 Mont. 518, ¶ 13, 15 P.3d 877, ¶ 13.
¶13 In applying the rational basis test, this Court must determine whether a legitimate
legislative objective for the statute exists and whether the legislature’s classification
rationally relates to that objective. Henry v. State Compensation Fund, 1999 MT 126, ¶ 33,
294 Mont. 449, ¶ 33, 982 P.2d 456, ¶ 33; Gryczan v. State (1997), 283 Mont. 433, 457, 942
P.2d 112, 126. Hardgrove identifies two classifications that he believes do not rationally
relate to legitimate legislative objectives.
5
¶14 First, he claims that the legislature created two classes by repealing § 39-72-403(3),
MCA (1983). In a 1985 amendment to the ODA, the legislature repealed § 39-72-403(3),
MCA (1983), but specifically applied that amendment only to people injured on or after the
effective date. Act of March 19, 1985, ch. 112, § 6, 1985 Mont. Laws 211 (“Section 6.
Applicability. This act applies to claims arising from exposures occurring on or after the
effective date of this act.”). Members of the first class include those who stopped working
before the amendment’s effective date. They are subject to the statute of repose and had to
have brought their claims within three years of stopping work. Members of the second class
include those who stopped working on or after the amendment’s effective date. They are
not subject to the statute of repose, but can bring their claim any time it accrues in the future.
¶15 Prior to the amendment, the legislature had provided a balance of rights and
responsibilities among the workers, employees, and employers. In establishing an effective
date, the legislature may have sought to protect those who relied upon the rights and
responsibilities established prior to the amendment. See Penrod v. Hoskinson (1976), 170
Mont. 277, 552 P.2d 325. It may have wanted to avoid disturbing past transactions, to avoid
extinguishing expectations, and to minimize the inconvenience associated with the changes.
See Penrod. For those reasons, it may have expanded the ODA rights prospectively only.
We conclude that that legitimate legislative objective rationally relates to this classification.
¶16 Second, Hardgrove claims that the legislature created a classification that violates
equal protection by instituting occupational disease and workers’ compensation systems with
6
different time limitations. The ODA contained a statute of repose, but the parallel statute in
the Workers’ Compensation Act (WCA) contained no such provision. Compare § 39-72-
403, MCA (1983) (§ 39-72-403(3), MCA (1983), repealed 1985), with § 39-71-601, MCA
(1983) (“Statute of limitation on presentment of claim–waiver” with respect to the WCA,
amended (1989). The WCA merely limited claims through a statute of limitations. Section
39-71-601, MCA (1983) (amended 1989). That unequal treatment, Hardgrove argues,
violates the Equal Protection Clauses of the Montana and United States Constitutions.
¶17 The Montana Legislature overhauled the WCA and ODA in 1987, so the only
distinction remaining between an industrial “injury” under the WCA and an “occupational
disease” under the ODA became the “number of work shifts over which a worker incurred
an affliction.” Henry, ¶¶ 18, 21, 43, 44 (recognizing that a herniated disc contracted over
one shift was an “injury” under the WCA, but a herniated disc contracted over two shifts was
an “occupational disease” under the ODA; and concluding that “[s]imply put, a herniated
disc is a herniated disc.”); Schmill, ¶¶ 17, 18; Stavenjord v. Montana State Fund, 2003 MT
67, ¶¶ 41-47, 58, 314 Mont. 466, ¶¶ 41-47, 58, 67 P.3d 229, ¶¶ 41-47, 58.
¶18 Given that slight distinction in the 1987 law, we applied the rational basis test and
found the differences in benefits under the WCA and ODA were not rationally related to the
number of shifts over which the worker contracted the injury. Schmill, ¶ 23; Stavenjord,
¶ 48; Henry, ¶ 45. Regardless of those decisions, some or all of the differences between the
ODA and WCA before the 1987 overhaul may pass the rational basis test.
7
¶19 Transportation argues that Eastman v. Atlantic Richfield Co. (1989), 237 Mont. 332,
777 P.2d 862, controls the equal protection violation in this case. In Eastman, we applied
the rational basis test to determine whether the disparities of compensation between the
WCA and ODA violate equal protection. In recent cases, we have criticized Eastman
because of the circumstances surrounding it, and suggested that, if the same pro se litigant
had brought the constitutional question today, we would likely have designated the opinion
noncitable. Schmill, ¶¶ 13, 15-16; Stavenjord, ¶¶ 32-42, 48 (discussing the procedural
circumstances surrounding the Eastman case and explaining the reasons Henry distinguished
it); Henry, ¶¶ 41-43.
¶20 In any event, Eastman is inapplicable to the statute under consideration. That case
held that the disparity of compensation between an ODA claimant and a WCA claimant was
rationally related to a legitimate government purpose; in this case, however, we must
determine whether the disparity of times during which the right to compensation exists
rationally relates to a legitimate governmental objective. A decision on the former has no
relevance to a decision on the latter, so Eastman has no bearing on this case.
¶21 In creating differences between the ODA and the WCA concerning the lengths of time
during which the right to compensation exists, the legislature may have been trying to ensure
that the occupational disease system paid only for those diseases contracted on the job. The
legislature may have thought workers could contract occupational diseases outside of work,
and it did not want to require the employer to pay under such circumstances. See Stavenjord,
¶ 58 (Rice, J., dissenting). For example, an employee could come into contact with asbestos
8
outside the workplace if he crawled around asbestos-contaminated attics in his spare time.
To prevent these injustices, the legislature may have instituted a statute of repose to
extinguish the right to compensation three years after working for an employer. See § 39-72-
403(3), MCA (1983) (repealed 1985).
¶22 The legislature may have believed that determining the cause of occupational diseases
is exceedingly difficult after three years, while one can more easily determine the effects of
an industrial accident even many years later. This pre-1987 classification between ODA and
WCA time periods rationally relates to these legitimate government purposes.
III
¶23 Hardgrove argues that the statute of repose in § 39-72-403(3), MCA (1983) (repealed
1985), violates his right to full legal redress included in Montana Constitution Article II,
Section 16:
Section 16. The administration of justice. Courts of justice shall be
open to every person, and speedy remedy afforded for every injury of person,
property, or character. No person shall be deprived of this full legal redress
for injury incurred in employment for which another person may be liable
except as to fellow employees and his immediate employer who hired him if
such immediate employer provides coverage under the Workmen’s Compensa-
tion Laws of this state. Right and justice shall be administered without sale,
denial, or delay.
Hardgrove admits that, under Meech v. Hillhaven West, Inc. (1989), 238 Mont. 21, 26-44,
776 P.2d 488, 491-501, he has no fundamental right to full legal redress, but he argues,
nevertheless, that he is entitled to full legal redress.
¶24 Indeed, “[t]here must be the basis or underpinning of a cause of action and remedy
as defined by the lawmakers before one arrives at the point of redress.” Meech, 238 Mont.
9
at 38, 776 P.2d at 498. Statutes of repose extinguish the underlying right after the statutorily-
defined period of time lapses. P. Stolz Family P’ship L.P., 355 F.3d at 102. In the case sub
judice, the statute of repose extinguished the right to the cause of action three years after
Hardgrove stopped working for W.R. Grace, so, as of that point in time, Hardgrove has had
no right to redress under the ODA. Reeves v. Ille Elec. Co. (1976), 170 Mont. 104, 110-111,
551 P.2d 647, 651.
¶25 Hardgrove further argues that Lockwood v. W.R. Grace & Co. (1995), 272 Mont. 202,
900 P.2d 314, removes his tort remedy, so his only chance of receiving full legal redress is
through the ODA. In Lockwood, we distinguished an earlier opinion, Gidley v. W.R. Grace
& Co. (1986), 221 Mont. 36, 717 P.2d 21, because the statutory scheme upon which we
based Gidley had changed. Under the earlier statutory scheme, a statutory contradiction and
ambiguity allowed Gidley to bring a tort claim after the statute of repose, § 39-72-403(3),
MCA (1983) (repealed 1985), had precluded his ODA claim. Lockwood’s ODA claim
accrued years later, but under the same statute. Between the accruals of the Gidley and
Lockwood situations, the legislature eliminated one of the conflicting statutes that had
allowed Gidley to pursue a remedy outside the ODA. Without that ambiguity, the ODA was
Lockwood’s only remedy. We denied his tort claim. Lockwood, 272 Mont. at 206, 900 P.2d
at 316.
¶26 Citing Stratemeyer v. Lincoln County (1996), 276 Mont. 67, 915 P.2d 175,
Transportation argues that, if there is no ODA coverage for a latent injury, Hardgrove still
has another chance to obtain full legal redress in the tort system. To maintain the quid pro
10
quo compromise inherent in the WCA, Stratemeyer gave employees access to the tort system
when the WCA failed to cover particular injuries. 276 Mont. at 79, 915 P.2d at 182. Thus,
Transportation argues, Hardgrove does not need full legal redress from the ODA because he
can obtain redress elsewhere.
¶27 Since this appeal comes from the Workers’ Compensation Court, the question whether
Hardgrove has a tort remedy is not properly before us so we cannot decide the Stratemeyer
or Lockwood issues. Lockwood, 272 Mont. at 206, 900 P.2d at 316.
¶28 We affirm the judgment of the Workers’ Compensation Court that § 39-72-403(3),
MCA (1983) (repealed 1985), is a statute of repose that violates neither the right to equal
protection nor full legal redress.
/S/ W. WILLIAM LEAPHART
We concur:
/S/ KARLA M. GRAY
11
/S/ JIM RICE
/S/ JOHN WARNER
/S/ MARC G. BUYSKE
Honorable Marc G. Buyske, District
Judge, sitting in place of Justice Regnier
12
Justice Patricia O. Cotter dissents.
¶29 I dissent.
¶30 In reaching its decision, the Court fails to note that prior to the overhaul of the
workers’ compensation statutes in 1986, rules of liberal construction guided the courts in
interpreting Workers’ Compensation Act. Specifically, under both § 39-71-104, MCA
(1983) (the WCA) and § 39-72-104, MCA (1983) (the ODA), the courts were directed to
liberally construe any parts or sections of the Acts when interpreting them. In Yurkovich v.
Industrial Accident Board (1957), 132 Mont. 77, 83, 314 P.2d 866, 870, this Court
recognized that the Workers’ Compensation Act must be construed so as to give the
employee “the greatest possible protection within the purposes of the act.” The Legislature
eliminated this rule of liberal construction when it revised the Workers’ Compensation Act.
However, the statute in effect on Hardgrove’s final day of work governs the resolution of his
occupational disease claim. Grenz v. Fire and Cas. of Connecticut (1996), 278 Mont. 268,
271, 924 P.2d 264, 266. Thus, the 1983 version of the ODA--together with the statutory rule
of liberal construction--governs this case.
¶31 The Court concludes here that § 39-72-403(3), MCA (1983), is a statute of repose
because it contains an absolute time beyond which no recovery could be had by Hardgrove.
In so doing, the Court rejects the holding of Bowerman v. Employment Sec. Com’n. In
Bowerman, which was decided under the law in effect in 1981--prior to the overhaul of the
WCA/ODA system--this Court was asked to decide whether the statute of limitations for
instituting Bowerman’s workers’ compensation claim had been tolled. Bowerman suffered
13
an injury in 1976, but did not recognize the existence of his injury until four years later,
when he submitted a claim for workers’ compensation coverage. The statute of limitations
in effect at the time of Bowerman’s termination was § 39-71-601, MCA (1981). It provided
in pertinent part:
(1) In case of personal injury or death, all claims shall be forever barred
unless presented in writing to the employer, the insurer, or the division, as the
case may be, within 12 months from the date of the happening of the accident
. . . .”
(2) The division may, upon a reasonable showing by the claimant of lack of
knowledge of disability, waive the time requirement up to an additional 24
months.
(Emphasis added.)
¶32 The Workers’ Compensation Court concluded that since Bowerman had filed his
claim more than three years after the accident, it was “forever barred.” On appeal, this
Court disagreed, concluding that § 39-71-601, MCA (1981), “should be interpreted, in cases
of latent injury, so that the time period for notice of claim does not begin to run until the
claimant, as a reasonable man, should recognize the nature, seriousness, and probable
compensable character of his latent injury.” Bowerman, 207 Mont. at 319, 673 P.2d at 479.
¶33 Both the timing and conclusion of Bowerman are significant. The statute in question
in Bowerman stated unequivocally that, unless a claim is filed within three years of the date
of injury, such claim “shall be forever barred . . . .” Section 39-71-601(1), MCA (1981).
Compare this language to the operative statutory language at issue here--“no claim to recover
benefits under this chapter may be maintained unless the claim is properly filed within three
14
years . . . .” Section 39-72-403(3), MCA (1983). If anything, the language in the Bowerman
statute is more absolute in its terms than the language of the statute with which we are faced
in Hardgrove’s case. Nonetheless, noting that the Court’s duty is to interpret liberally the
provisions of the Workers’ Compensation Act, the Court in Bowerman interpreted the statute
as one of limitations subject to equitable tolling, thus allowing Bowerman his day in court.
¶34 In Gidley v. W.R. Grace & Co. (1986), 221 Mont. 36, 39-40, 717 P.2d 21, 23, we
were asked to decide whether the ODA was Gidley’s exclusive remedy against Grace. This
Court, noting its obligation to liberally construe the ODA in favor of the claimant, stated:
We also conclude that [the Montana Occupational Disease Act] is to be
administered so as to give the employee the greatest possible protection within
the purposes of the Act (citing Yurkovich). We further conclude that when
MODA statutes are open to more than one interpretation, one of which is
favorable to the employee and another against him, the court may properly
construe the statutes in a manner most favorable to the employee.
(Citation omitted.) (Emphasis added.) The Bowerman Court construed the statute before
it in a manner most favorable to the employee; this Court construes the statute against him.
I submit that, under Bowerman, the statute before us should have been construed as a statute
of limitations and not a statute of repose. Such a conclusion is compelled on the basis of the
public policy considerations and principles of liberal construction of the day. Hardgrove is
entitled to the same consideration that Bowerman received. I dissent from our refusal to
extend it.
/S/ PATRICIA O. COTTER
15
Justice James C. Nelson joins in the dissent of Justice Patricia O. Cotter.
/S/ JAMES C. NELSON
16