January 3 2008
DA 07-0208
IN THE SUPREME COURT OF THE STATE OF MONTANA
2008 MT 3
CURTIS M. MICHALAK,
Petitioner and Appellee,
v.
LIBERTY NORTHWEST INSURANCE CORPORATION,
Respondent/Insurer and Appellant.
APPEAL FROM: The Workers’ Compensation Court,
Cause No. WCC 2006-1641,
Honorable James Jeremiah Shea, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Larry W. Jones, Law Offices of Larry W. Jones, Missoula, Montana
For Appellee:
Sydney E. McKenna and Justin Starin, Tornabene & McKenna, PLLC,
Missoula, Montana
Submitted on Briefs: November 28, 2007
Decided: January 3, 2008
Filed:
__________________________________________
Clerk
Justice W. William Leaphart delivered the Opinion of the Court.
¶1 Liberty Northwest Insurance Corporation (Liberty) appeals from the judgment of
the Workers’ Compensation Court (WCC). We affirm.
¶2 We restate the issues as follows:
¶3 Did the WCC err when it concluded that Michalak’s injury occurred during the
course and scope of his employment?
¶4 Did Michalak abandon his employment by participating in reckless behavior?
BACKGROUND
¶5 On July 23, 2005, Curtis M. Michalak (Michalak) suffered an injury while riding a
wave runner at his employer’s annual company picnic at Flathead Lake. At the time of
his injury, Michalak worked for Felco Industries, Ltd. (Felco) in Missoula, Montana, and
Liberty provided Felco’s workers’ compensation insurance.
¶6 Since approximately 1980, John Felton (Felton), Felco’s president and owner, has
hosted a company picnic at his lakeside home. Felco generally invites its employees and
their families, friends, and vendors to the company picnic. In 2005, Felco rented wave
runners for the annual picnic. While riding one of the wave runners, Michalak suffered
serious injuries, including several vertebrae fractures, and he was unable to return to his
employment with Felco.
¶7 Michalak filed a workers’ compensation claim for his injury. Liberty denied
Michalak’s claim on the basis that the injury did not occur within the course and scope of
his employment. Michalak then filed a claim with the WCC seeking compensation for
his injuries.
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¶8 The WCC issued findings of fact and conclusions of law after considering
Michalak’s trial testimony and the deposition testimony of Michalak, his co-workers, and
other witnesses. The WCC found that Felco notified its employees of the 2005 picnic by
placing a notice within the employees’ pay stubs and by displaying notices within the
plant. The WCC found that Felco paid for all the picnic supplies, including the wave
runner rentals. The WCC found that Michalak had the duty of overseeing the wave
runners during the picnic, and it found credible Michalak’s testimony that he bore
responsibility for supervising the wave runners’ operation, including providing riders
with safety instructions, monitoring the wave runners’ fuel and oil levels, instructing
others on how to ride the wave runners, and enforcing time limits on the wave runners’
use. The WCC further found that, “during the performance of his duties,” Michalak took
a ride on one of the wave runners and was injured.
¶9 The WCC next applied the four “course and scope” factors set forth in Courser v.
Darby School Dist. No. 1 and concluded that Michalak was within the course and scope
of his employment when he suffered his injury. 214 Mont. 13, 16-17, 692 P.2d 417, 419
(1984). Liberty appeals the WCC’s holding and challenges both the WCC’s findings of
fact and its conclusions of law.
STANDARD OF REVIEW
¶10 We review the WCC’s findings of fact to determine whether they are supported by
substantial credible evidence, and we review the WCC’s conclusions of law to determine
whether they are correct. Simms v. State Compensation Ins. Fund, 2005 MT 175, ¶ 11,
327 Mont. 511, ¶ 11, 116 P.3d 773, ¶ 11. Substantial credible evidence to support a
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finding of fact may be somewhat less than a preponderance of evidence but must be more
than a mere scintilla. Simms, ¶ 11. We apply the Workers’ Compensation Act (the Act)
effective at the time an employee suffers an injury. Wilson v. Liberty Mut. Fire Ins., 273
Mont. 313, 316, 903 P.2d 785, 787 (1995). The 2005 version of the Act governed when
Michalak was injured on July 23, 2005.
DISCUSSION
¶11 I Did the WCC err when it concluded that Michalak’s injury occurred
during the course and scope of his employment?
¶12 Employees who receive an injury “arising out of and in the course of
employment,” are entitled to workers’ compensation benefits. Section 39-71-407, MCA
(2005). Liberty argues that § 39-71-118(2)(a), MCA (2005), removes Michalak from the
definition of employee and therefore Michalak’s injury is not compensable.
¶13 Section 39-71-118(2)(a), MCA (2005), defines “employee” and “worker” to
exclude a person who is “participating in recreational activity and who at the time is
relieved of and is not performing prescribed duties . . . .” Thus, a person injured while
participating in recreational activities still qualifies as an “employee” and retains
workers’ compensation coverage if the person is injured while performing “prescribed
duties.” Section 39-71-118(2)(a), MCA (2005); Connery v. Liberty Northwest Ins. Corp.,
280 Mont. 115, 929 P.2d 222 (1996). Courser’s traditional four-factor “course and
scope” analysis determines whether a person is “performing prescribed duties.” Connery,
280 Mont. at 120, 929 P.2d at 225. The factors are: (1) whether the activity was
undertaken at the employer’s request; (2) whether the employer, directly or indirectly,
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compelled the employee’s attendance at the activity; (3) whether the employer controlled
or participated in the activity; and (4) whether the employer and the employee mutually
benefited from the activity. Connery, 280 Mont. at 121, 929 P.2d at 226. Each factor’s
presence or absence “may or may not be determinative,” and each factor’s significance
“must be considered in the totality of all attendant circumstances.” Connery, 280 Mont.
at 121, 929 P.2d at 226 (quoting Courser, 214 Mont. at 16-17, 692 P.2d at 419). After
evaluating these factors, the WCC concluded that Michalak’s injury was compensable
because he had not been relieved of his “prescribed duties” and thus was acting within
the course and scope of his employment. We review the WCC’s findings of fact to
determine whether they are supported by substantial credible evidence, and we review the
WCC’s conclusions of law to determine whether they are correct. Simms, ¶ 11.
¶14 Our review of the record supports the WCC’s finding, under the first Courser
factor, that the picnic was undertaken at Felco’s request. Felton testified that the Felco
company picnic had been an annual event since 1980. Felton testified that he selects the
particular date of the picnic and that he and Felco pay the picnic expenses. Felton
further testified that Felco provided paddle boats and wave runners because “it’s common
sense that people are going to more likely come if you have something like that . . . .”
Denise Sand, Felco’s secretary, testified that she notifies the employees about the picnic
through notices placed around the plant and in the employees’ paychecks. The notice
that Sand distributed in 2005 requested a head-count and indicated that friends, family,
and vendors were welcome at the Felco company picnic. Tim Yoder, a Felco supervisor
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in charge of Felco’s safety program, testified that he received a picnic invitation in his
paycheck. Michalak also testified that he received an invitation in his paycheck.
¶15 Regarding the second Courser factor, the WCC found that “at a minimum, Felco
indirectly compelled [Michalak’s] attendance at the picnic.” The WCC stated that
Michalak felt compelled to attend the picnic because his supervisor had asked him to
oversee the wave runners. Steve Talley, Michalak’s supervisor, testified that he felt
responsible for instructing the picnic attendees on safety procedures relating to the wave
runners. Talley testified that he asked Michalak to assist with and watch over the wave
runners because Talley knew that he would be unable to continuously supervise the wave
runners. Talley testified that Michalak agreed to provide assistance. Michalak testified
that Talley asked him to oversee the wave runners at the picnic. Michalak indicated that
he understood Talley’s request to be made in his capacity as Felco’s foreman, not as a
personal favor to Talley. Michalak testified that he went to the office of Fish, Wildlife,
and Parks and at some point obtained and reviewed a copy of the Montana boating
regulations. Michalak testified that one of his daughters felt ill on the morning of the
picnic, and he thought he would be unable to attend. Her condition soon improved,
however, and Michalak testified that he and his family went to the picnic so that he could
fulfill his obligation and respect his employer. We conclude that substantial credible
evidence supports the WCC’s finding that Felco compelled Michalak’s attendance at the
company picnic.
¶16 As to the third Courser factor, the WCC found that Felco controlled and
participated in the picnic activities. Felton testified that he selects the date of the picnic
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and that he and Felco pay for the picnic expenses, including food, beverages,
paddleboats, and wave runners. He further testified that Felco provides everything and
has a policy against employees bringing items to the picnic. Felton testified that he hosts
the company picnic at his home on Flathead Lake. Felton further testified that he
believed Felco took a tax deduction for the picnic expenses. Shawn Skinner, Felco’s
general manager, testified that he had duties and responsibilities related to organizing the
picnic, but primarily delegated the tasks associated with organizing the picnic to Ken
Lockwood, an independent contractor, and Denise Sand. Sand testified that she used a
Felco company credit card to purchase the picnic supplies, including the wave runner
rentals. Sand further testified that Felco claimed the picnic expenses as a tax deduction.
Several witnesses also testified that the annual company picnic features a horseshoe
tournament, with the winner earning a spot on a plaque displayed at Felco. We conclude
that substantial credible evidence supports the WCC’s finding that Felco controlled or
participated in the picnic.
¶17 Finally, the WCC found that Felco and its employees mutually benefited from
the picnic. Felton testified that the company picnics were good for the company and that
the picnic promoted good relations. Tim Yoder testified that the picnic was good for the
company and good for morale. Skinner testified that the company picnic benefited Felco
and Felco’s employees. Sand testified that the picnic was good for the company because
the picnic provides an opportunity for the employees to congregate with their spouses and
extended family. We conclude that substantial credible evidence supports the WCC’s
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finding, under the fourth Courser factor, that the Felco company picnic provided mutual
benefit to Felco and its employees.
¶18 Liberty’s argument that Michalak failed to satisfy the Courser factors rests on the
misconception that the “activity” in the Courser analysis should be Michalak’s wave
runner ride, rather than the Felco company picnic. However, Liberty’s narrow focus on
Michalak’s wave runner ride is inconsistent with Courser itself. In Courser, we
determined that Courser was within the course and scope of his employment when he was
injured in a motorcycle accident while commuting from graduate school to his home in
Dillon, Montana. We applied the four-factor “course and scope” analysis and focused on
the activity of attending graduate school, not the motorcycle ride. 214 Mont. at 16-17,
692 P.2d at 419. The WCC properly focused its Courser analysis on the Felco company
picnic as the “activity,” rather than Michalak’s ride on the wave runner, to determine
whether Michalak’s injury occurred within the course and scope of his employment.
¶19 We conclude that substantial credible evidence supports the WCC’s findings under
the Courser factors. Based on its Courser analysis, the WCC determined that, though
Michalak was injured while participating in a recreational activity, he nonetheless was
within the course and scope of his employment when he was injured and that his injury
was compensable. We conclude that the WCC’s findings support its conclusion of law
that Michalak was injured within the course and scope of his employment.
¶20 Liberty argues that the above four-factor analysis has no place in Montana’s
jurisprudence and advocates that we overrule Courser. According to Liberty, the
Courser factors trace their ancestry to the “liberal construction” statute, § 39-71-104,
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MCA (1985), and, because the Legislature has repealed that statute, the factors should be
excised from our jurisprudence. Additionally, Liberty describes this Court’s Connery
decision, in which we concluded that the “prescribed duties” of § 39-71-118(2)(a), MCA,
are determined by applying the Courser factors, as “simply a judicial abracadabra.” We
disagree with Liberty on both counts. First, the Courser factors set forth what a court
should analyze to determine whether a person’s injury falls within the course and scope
of employment; the Legislature’s directive that the Act be construed according to its
terms and not liberally in favor of any party instructs a court how to interpret the Act.
Section 39-71-105, MCA (2005). The Courser factors and the Legislature’s directive are
not mutually exclusive and we decline Liberty’s plea to overrule Courser and its
successive body of case law. Second, as to the “judicial abracadabra” charge, we
explained in Connery that the Legislature left the term “prescribed duties” undefined and
we noted that defining prescribed duties is fact-intensive and varies depending on the
particular case. Thus, we concluded that “the application of a traditional course and
scope of employment analysis is, and will be, necessary to determine exactly what an
employee’s ‘prescribed duties’ are in a particular case.” 280 Mont. at 120, 929 P.2d at
225. In the eleven years since Connery, the Legislature has declined to modify or further
define the term “prescribed duties.” Absent further legislative direction, we reject
Liberty’s plea to overrule Courser, Connery, and the ensuing cases applying the “course
and scope” factors. We conclude that the WCC applied the correct analysis to determine
whether Michalak’s injuries were compensable.
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¶21 II Did Michalak abandon his employment by participating in reckless
behavior?
¶22 Liberty argues that Michalak abandoned his employment by operating the wave
runner in a reckless manner. According to Liberty, the only way Michalak could have
sustained his severe injuries is by operating the wave runner at a high rate of speed and in
a dangerous manner. In support of its argument, Liberty cites to Hicks v. Glacier Park,
Inc., 236 Mont. 113, 768 P.2d 346 (1989).
¶23 In Hicks, a Glacier National Park bellhop, who fancied himself an auto-mechanic,
attempted to assist a guest with a weak car battery. The bellhop first push-started the car,
then accelerated to a high rate of speed, failed to stop at a stop sign, and eluded a
pursuing park ranger by putting “the pedal to the metal.” The bellhop eventually lost
control of the vehicle and crashed into a tree approximately two-and-a-half miles from
the hotel. 236 Mont. at 114, 768 P.2d at 347. The WCC found that even if the bellhop
was initially within the course and scope of his employment, he deviated from the scope
of his employment when he evaded the law enforcement officer. We affirmed the
WCC’s judgment denying compensation to the bellhop. Hicks, 236 Mont. at 117, 768
P.2d at 348.
¶24 Liberty argues that, like the bellhop in Hicks, Michalak abandoned the course and
scope of his employment when he operated the wave runner recklessly and at high speed
and thus “pursue[d] an objective in nowise essential to or incidental to any service he is
paid to perform . . . .” Hicks, 236 Mont. at 115, 768 P.2d at 347 (emphasis omitted).
Hicks is inapplicable to this case. Unlike Hicks, the WCC in this case made no findings
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that Michalak acted recklessly or negligently. In fact, the WCC made no findings
regarding the manner in which Michalak operated the wave runner other than finding that
he was injured during the performance of his duties:
[Michalak] testified that he was instructed to help pick up the wave runners,
supervise, give safety instructions, monitor the fuel and oil levels, provide
instructions on how to ride them, and enforce time limits on their operation.
At one point, during the performance of his duties, [Michalak] elected to
take a turn on one of the wave runners himself because one was available.
While riding one of the wave runners, [Michalak] sustained the
injuries that are the subject of this action. [Michalak’s] recollection as to
the specifics of how he was injured is vague because of his injuries.
¶25 Though Liberty acknowledges that Michalak provided some assistance before
taking a ride on the wave runner, Liberty claims that testimony from Michalak and Talley
supports finding both that Michalak was operating the wave runner in a reckless manner
and that he was untrustworthy as a witness. Michalak testified that as he executed a
subtle left-hand turn, he saw “something very weird in the water, and that is the last thing
I remember.” Michalak testified that he regained consciousness underwater and that he
had to blow bubbles to determine the direction of the surface. He stated that when he
gained the surface of the lake, the wave runner was “quite a distance” from him. Talley
testified that Michalak told him that “he was out there flipping the Wave Runner around”
when he was injured. Based on this testimony, Liberty urges that the only possible
explanation for Michalak’s injury is that “he was traveling at a very high rate of speed
when he lost control of the wave runner and was plunged deep into Flathead Lake.”
¶26 In essence, Liberty calls on this Court to make additional findings of fact
regarding Michalak’s injury. Liberty states that “it is conclusively established by the [un-
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contradicted] testimony of Talley that [Michalak] injured himself while whipping the
wave runner around at a high speed.” However, Talley’s testimony is contradicted:
Michalak testified that he was not “wave-jumping” when he was injured, but that he was
making a subtle left-hand turn and saw a discoloration in the water. Other witnesses
testified that they saw logs floating in the lake in 2005. Further, the WCC determined
that Michalak was a credible witness. The WCC also found that Michalak was injured
during the performance of his duties; we concluded under Issue I that substantial credible
evidence supported the WCC’s Courser analysis and that the WCC correctly concluded
that Michalak’s injury occurred during the course and scope of his employment. Our
standard is whether substantial credible evidence supports the WCC’s findings, not
whether evidence supports findings different from those made by the WCC. Taylor v.
State Compensation Ins. Fund, 275 Mont. 432, 440, 913 P.2d 1242, 1246 (1996). In this
case, the WCC’s findings are supported by substantial credible evidence; moreover, we
refuse to substitute our judgment for that of the WCC’s when the issue “relates to the
weight given to certain evidence or the credibility of the witnesses.” Taylor, 275 Mont.
at 437, 913 P.2d at 1245.
CONCLUSION
¶27 We conclude that the WCC properly applied the four factors from Courser v.
Darby School Dist. No. 1, 214 Mont. 13, 692 P.2d 417 (1984), to determine whether
Michalak’s injury while riding a wave runner at the Felco company picnic occurred
during the course and scope of his employment. We conclude that substantial credible
evidence exists to support the WCC’s findings under the Courser factors and that the
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WCC correctly concluded that Michalak was injured during the course and scope of his
employment. We affirm.
/S/ W. WILLIAM LEAPHART
We concur:
/S/ JOHN WARNER
/S/ JAMES C. NELSON
/S/ PATRICIA COTTER
/S/ BRIAN MORRIS
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