Marcott v. Louisiana Pacific Corp.

NO. 95-015
IN THE SUPREMECOURT OF THE STATE OF MONTANA
1996

BRUCE MARCOTT,
Petitioner and Appellant,
v

APPEAL FROM: Workers' Compensation Court, State of Montana,
The Honorable Mike McCarter, Judge presiding.

COUNSEL OF RECORD:
For Appellant:
Chris J. Ragar; Ragar Law Office, Bozeman, Montana
For Respondent:
Kelly M. Wills; Garlington, Lohn & Robinson,
Missoula, Montana

Submitted on Briefs: August 24, 1995
Decided: February 14, 1996
Filed:
Justice Karla M. Gray delivered the Opinion of the Court.

Bruce Marcott appeals from the portion of the judgment entered
by the Workers' Compensation Court which denied his request for the
statutory penalty and attorney fees. We affirm.
We address the following issues on appeal:
1. Does substantial evidence support the Workers'
Compensation Court's finding that Louisiana Pacific Corporation's
denial of Marcott's claim was reasonable?
2. Did the Workers' Compensation Court err as a matter of law
in refusing to apply "the Holton rule"?
FACTUAL AND PROCEDURAL
BACKGROUND
Bruce Marcott worked for Louisiana Pacific Corporation (LP) as
head mechanic at its Belgrade, Montana, plant. LP is self-insured
under Plan No. 1 of the Montana Workers' Compensation Act (the
Act).
On February 17, 1994, Marcott and another mechanic, Gene
Quillen, were performing repairs on a disabled LP forklift. The
job required them to use a second forklift to lift the cab off of
the disabled one. Using the operative forklift, Marcott lifted the
cab, then dismounted. After dismounting, Marcott was walking
behind the forklift when he heard a loud snap and felt pain in his
left calf.
Quillen transported Marcott to the LP plant office. When
Quillen asked what had happened, Marcott responded that his leg had
"gone out." Matt Harris, Marcott's supervisor, asked what had
happened and whether Marcott had tripped, slipped, or been running.
Marcott answered that he was "coming around the back [of the
forklift] when it went out on me." In responding to questions by
other supervisory personnel and Dr. Robert Jackson, the attending
physician at the Gallatin Valley Family Clinic, Marcott indicated
that he was just walking at the time of the injury. During his
transport to the clinic and his subsequent examination by nine
different doctors, Marcott did not inform anyone that he was doing
anything other than walking. At the clinic, Dr. Jackson diagnosed
Marcott's injury as a torn muscle in his left calf.
LP personnel and safety director John Mikkelson, whose duties
include advising LP whether workers' compensation claims are
compensable, examinedinformationprovidedby supervisory personnel
and medical records provided by Marcott's physicians. Mikkelson
also obtained legal advice regarding the compensability of an
injury sustained while walking at work. After evaluating the
information, Mikkelson notified Marcott by letter dated March 21,
1994, that LP was denying his claim. The letter also informed
Marcott that LP would reevaluate his claim if he provided any
additional information.
LP first learned of Marcott's assertion that he was walking
briskly and turning sharply at the time of his injury in a letter
from Marcott's counsel dated April 29, 1994. In light of this
information, LP personnel reviewed Marcott's medical records,
including information provided by another physician, Dr. David
King. Dr. King indicated that Marcott's injury was not caused by
any unusual demands placed on Marcott by his employment. Mikkelson

3
considered Dr. King's information to be consistent with his legal
understanding that the injury was not compensable. LP continued to
deny liability for Marcott's claim.
Marcott petitioned the Workers' Compensation Court for a
determination that his injury was compensable under the Act and
that he was entitled to temporary total disability benefits. He
also contended that LP was unreasonable in refusing to accept
liability for his injury and sought the statutory penalty and
attorney fees. LP responded, contending that factual and legal
disputes regarding the compensability of Marcott's injury required
resolution by the court and that it had not unreasonably denied
Marcott's claim.
At trial, Marcott testified that his injury occurred while he
was walking "pretty fast," turning on his left leg and just coming
down on his right foot. He admitted that he told his supervisors
and attending physicians only that he was walking, but attributed
the lack of further detail to the significant pain he was
experiencing and the absence of follow-up questions by both LP and
the physicians. Marcott also provided substantial medical evidence
in support of his testimony regarding how the injury occurred. Dr.
John Campbell, Marcott's orthopedic surgeon, opined that it was
more probable than not that an unusual strain caused Marcott's
injury. Dr. King, a family practitioner, testified that merely
walking across a floor would not provide an adequate explanation
for Marcott's injury.
LP relied on Marcott’s original statements to LP personnel and

4
his physicians regarding how the injury occurred and on June 1994,
correspondence fromDr. King describing walking briskly and turning
sharply as relatively benign activities. Dr. King also opined in
the letter that, while Marcott's injury occurred at work, it was
"not specifically caused by any unusual demands placed on him by
his employment."
LP also relied on the testimony of Dr. Donald Harrell, an
orthopedic surgeon it retained after denying Marcott's claim and
receiving Marcott's "walking briskly and turning sharply"
information. Dr. Harrell opined on direct examination that walking
briskly while turning sharply places no unusual increase in stress
on the calf structure. In Dr. Harrell's view, the fact that the
injury occurred at work was coincidental, because Marcott's work
activities placed him at no greater risk of injury than that faced
by any individual of his age in normal daily life. On cross-
examination, however, Dr. Harrell agreed that some unusual force
generally is required to cause a muscular rupture and, therefore,
that Marcott's injury was an unusual result given his activity at
the time of the injury.
The Workers' Compensation Court concluded that Marcott's
injury was compensable. It also concluded, however, that Marcott
was not entitled to the statutory penalty or attorney fees.
Marcott appeals.
DISCUSSION
In addition to substantive workers' compensation benefits, the
Act authorizes a 20% increase in the full amount of benefits, and

5
an award of attorney fees, when an insurer denies liability for a
claim later adjudged compensable and the Workers' Compensation
Court determines that the insurer's denial was unreasonable.
Sections 39-71-2907 and 39-71-611, MCA. The penalty set forth in
5 39-71-2907, MCA, was not intended to eliminate an insurer's
assertion of a legitimate defense to liability. Paulson v. Bozeman
Deaconess Foundation Hosp. (1984), 207 Mont. 440, 444, 673 P.2d
1281, 1283 (citation omitted).
In this case, the Workers' Compensation Court concluded that
Marcott's injury was compensable based on its determination that
Marcott was walking rapidly and turning sharply when the injury
occurred; thus, according to the court, the injury was caused by an
unusual strain under § 39-71-119(2) (a), MCA. This conclusion
satisfies the threshold factor for an award of both the penalty and
attorney fees against LP--denial of liability for a claim later
adjudged compensable. The court found, however, that LP's denial
of Marcott's claim was reasonable and, on that basis, declined to
award Marcott the statutory penalty or attorney fees.
Marcott challenges the court's "reasonableness" finding and
each of the several bases on which the court relied for its
finding. Reasonableness is a question of fact. Stordalen v.
Ricci's Food Farm (1993), 261 Mont. 256, 258, 862 P.2d 393, 394.
We review the Workers' Compensation Court's findings of fact to
determine whether they are supported by substantial evidence.
Stordalen, 862 P.2d at 394.
It is important to note at the outset that neither the

6
compensability of Marcott's claim nor the correctness, as a matter

of law, of LP's legal interpretation regarding compensability is at
issue here. The Workers' Compensation Court found Marcott to be a
credible witness and resolved a factual dispute over whether the
injury occurred while he was merely walking or walking briskly and
turning sharply in his favor. On that basis, the court determined
that Marcott's injury was caused by an unusual strain as
contemplated by § 39-71-119(2), MCA, and, therefore, that the
injury was compensable.
Only the Workers' Compensation Court's finding that LP's
denial of Marcott's claim was reasonable is before us on appeal.
We will address in turn each reason the court articulated for its
reasonableness finding. Before doing so, however, we summarize
LP's overall position because of its importance in understanding
our analysis of whether substantial evidence supports the Workers'
Compensation Court's "reasonableness" finding.
Briefly stated, LP asserted that a factual dispute existed
over whether Marcott was merely walking or walking quickly and
turning sharply at the time of the injury and that the factual
dispute, which arose more than two months after the injury,
involved Marcott's credibility. LP also contended that, if Marcott
were merely walking at the time, his injury was not compensable
because it did not arise out of Marcott's employment as required by
§ 39-71-407, MCA.

1. Does substantial evidence support the Workers'
Compensation Court's finding that LP'S denial of
7
 Marcott's claim was reasonable?
a. Factual dispute
The Workers' Compensation Court determined that LP reasonably
relied on the information in its possession when it initially
denied Marcott's claim, and that LP's continued denial was
reasonable because, by that time, a “legitimate factual dispute
existed as to whether claimant was simply walking or walking
rapidly and turning sharply to his left." The factual dispute
related to Marcott's credibility.
The record establishes that, following Marcott's injury, the
only information in LP's possession which related to the
circumstances surrounding the injury was that Marcott was just
walking when his calf muscle ruptured. Several supervisory
personnel interviewed Marcott and Quillen at different times
regarding the incident and the reported facts remained unchanged;
LP also obtained Marcott's medical records, which reinforced those
facts. LP relied on this information in its initial denial of
Marcott's claim. Thus, we conclude that substantial credible
evidence supports the Workers' Compensation Court's finding that
LP's reliance on this information at the time of the initial denial
was reasonable.
The record also reflects that, more than one month after LP's
denial of the claim, LP received a letter from Marcott's counsel.
This letter asserted that Marcott was walking rapidly and turning
sharply at the time of his injury; the letter was the first notice
LP received that Marcott alleged anything other than that he was

8
simply walking at the time of the injury. AS noted above, LP's
legal interpretation hinged in large part on LP's original
understanding of the facts surrounding the injury; namely, that
Marcott was merely walking. According to the record, LP's receipt
of the letter from Marcott's counsel containing a different version
of the facts regarding the injury resulted in LP's continued denial
of Marcott's claim on two bases: that a factual dispute regarding
the circumstances surrounding the injury existed which required
resolution by the Workers' Compensation Court; and that the factual
dispute involved Marcott's credibility, a related issue requiring
resolution by the court.
Based on this record, we conclude that substantial evidence
supports the Workers' Compensation Court's finding that LP's denial
of the claim based on the existence of a legitimate factual dispute
was reasonable.
b. Legal interpretation
LP's position was that a muscle rupture which occurred while
a worker was merely walking at work did not arise out of his
employment under 5 39-71-407, MCA. The Workers' Compensation Court
determined that LP's reliance on heart attack and other cases to
defend against the compensability of a condition which arises
spontaneously as a result of an ordinary activity people do on a
daily basis irrespective of work raised a colorable issue within
the bounds of legitimate legal advocacy. In essence, this
determination constituted a finding by the court that LP's legal
interpretation, based on the facts as originally reported, was not

9
unreasonable.
In Hunter v. Gibson Products of Billings (1986), 224 Mont.
481, 485, 730 P.2d 1139, 1142, we clarified that, with regard to an
insurer's decision to contest compensability based on its
interpretation of case law, the Workers' Compensation Court's
reasonableness finding remains a question of fact subject to the
substantial evidence standard of review. This clarification was
consistent with our 1984 holding in Paulson that the statutory
penalty contained in § 39-71-2907, MCA, was never intended to
eliminate the assertion of a legitimate defense to liability.
Paulson, 673 P.2d at 1283. It also was consistent with our
conclusion in Holton v. F.H. Stoltze Land & Lumber Co. (1981), 195
Mont. 263, 269, 637 P.2d 10, 14, that the existence of a genuine
doubt, from a legal standpoint, that any liability exists
constitutes a legitimate excuse for denial of a claim or delay in
making payments.
Thus, as a general rule, where a court of competent
jurisdiction has clearly decided an issue regarding compensability
in advance of an insurer's decision to contest compensability, the
clear applicability of the earlier decision constitutes substantial
evidence supporting a finding by the Workers' Compensation Court
that the contest over compensability is unreasonable. & Hunter,
730 P.2d at 1142. Conversely, where the issue upon which an
insurer bases its legal interpretation has not been clearly
decided, the lack of clear decision may constitute substantial
evidence supporting a finding by the Workers' Compensation Court

10
that the insurer's legal interpretation is not unreasonable.
Therefore, we determine here only whether the compensability of an
injury sustained while a claimant is merely walking at work has
been clearly decided.
Among this Court's cases upon which LP relied in contesting
liability and compensability were Ness v. Diamond Asphalt Co., Inc.

(1964), 143 Mont. 560, 393 P.2d 43; Dumont v. Wickens Pros.
Construction Co. (1979), 183 Mont. 190, 598 P.2d 1099; and Wise v.
Perkins (1983), 202 Mont. 157, 656 P.2d 816. We address each case
in turn.
In Ness
-I the decedent worked as a general maintenance man and
laborer and died as the result of a myocardial infarction which
occurred at his workplace. Ness
-, 393 P.2d at 44. The issue before
us was whether the evidence supported the district court's finding
that the decedent's myocardial infarction was not in any way caused
or influenced by the demands of his employment. The record
established that the decedent had no history of heart disease and
that he had not visibly exerted himself during the course of his
employment on the day he died. Ness
-, 393 P.2d at 44. The record
also contained a physician's opinion that there was no relationship
between the decedent's employment and the cause of his death, as
well as the statement that the episode "occurred while at work,
rather than as a result of work." Ness
-I 393 P.2d at 45. We
determined that the record supported the court's finding and
affirmed the judgment of the court and the Industrial Accident
Board that the decedent's widow was not entitled to workers'

11
compensation death benefits. Ness, 393 P.2d at 45.
In Dumont, we addressed the 1967 amendment to the statutory
definition of injury--which required that the injury be a tangible
happening of a traumatic nature "from an unexpected cause, or
unusual strain"--and applied it to a case involving an employee who
died as the result of a heart attack occurring at his job site.
Dumont, 598 P.2d at 1106-09. The decedent had a history of
arteriosclerosis, but his widow attempted to demonstrate that the
death was compensable because the decedent was subjected to unusual
strain by his employment. Dumont, 598 P.2d at 1101. The widow's
medical witness ruled out any possible causal connection between
the death and work-related events on or preceding the date of
decedent's death. Dumont, 598 P.2d at 1108. We determined that
the record failed "to disclose anything unusual that occurred to
the deceased" in relation to his work. Dumont, 598 P.2d at 1108.
Based on the absence of any work-related unusual strain or
unexpected cause resulting in the decedent's heart attack, we
affirmed the Workers' Compensation Court's judgment denying
workers' compensation death benefits. Dumont, 598 P.2d at 1109.
LP analogizes NeSS and Dumont to the present case by pointing
out that here, as in those cases, the episode occurred at work but,
at least according to the facts Marcott first reported, was not
caused by and did not result from the work. It observes that, in
those cases, we required that the "unexpected cause/unusual strain"
element be met and, in addition, that we implicitly recognized the
validity of its argument that the injury must be work-related; that

12
is, that the injury must "arise out of" the work. In this regard,
LP also observes that it was entitled to rely on Dr. Harrell's
pretrial and direct examination medical opinions that Marcott's
work activities at the time of the injury did not increase his risk
of injury and that walking briskly while turning sharply did not
place an unusual increase in stress on the calf structure.
In deciding to contest liability in this case based on its
interpretation that Marcott's injury was not compensable, LP also
relied on the inapplicability of our decision in Wise. In Wise
-I
the claimant usually worked as a custodian and bartender, putting
in work days of around eight to twelve and one-half hours each.
Over the period of a week during which all responsibility for
operation of the bar unexpectedly fell on her, she worked
approximately fourteen to eighteen hours per day, standing most of
the time. On one or more occasions, the claimant was unable to sit
at all during such a day and, indeed, she seldom had the
opportunity to be off her feet at all during the week. Wise
-I 656
P.2d at 817. By the end of the week, she was experiencing swelling
and pain in her legs and feet; her condition ultimately was
diagnosed as thrombophlebitis of both legs and she sought workers'
compensation benefits. -,
Wise 656 P.2d at 817.
The employer in Wise argued, among other things, that the
claimant's phlebitis was not an injury under § 39-71-119(l), MCA,
which, at that time, defined injury as a "tangible happening of a
traumatic nature from an unexpected cause or unusual strain" which
results in physical harm. -,
Wise 656 P.2d at 819-20. The Workers'

13
Compensation Court determined that the work week at issue
constituted a tangible happening of a traumatic nature from an
unusual strain. Based on the evidence establishing the claimant's
excessive work schedule during that time, we agreed and affirmed
the court's award of compensation benefits. Wise
-I 656 P.2d at 820.
LP points out that the compensability determination in Wise
was premised on evidence of the claimant's excessive work hours on
her feet and was not based on a determination that merely walking
or standing at work was sufficient to constitute a work-related
tangible happening from an unusual strain. Thus, according to LP,
the issue of whether an injury sustained while merely walking at
work is compensable has not been decided by this Court and, at
least by implication from Wise, arguably could be decided in its
favor.
Read as a whole and on a stand-alone basis, these cases appear
to constitute sufficient evidence to support the Workers'
Compensation Court's finding that LP's legal interpretation was not
unreasonable in light of the facts as originally reported. Marcott
addresses the cases on which LP relies only briefly, and this
summary approach is not altogether inappropriate. As discussed
above, the issue before us is not whether those cases compel a
legal conclusion that Marcott's injury is not compensable. The
issue is whether those cases provided LP with a reasonable basis
upon which to contest liability; stated differently, the issue is
whether LP's liability for an injury sustained while an employee
was walking at work has been so clearly decided as to negate any

14
genuine doubt from a legal standpoint and render unreasonable the
defense LP asserted to liability. See Hunter, 730 P.2d at 1142;
Paulson, 673 P.2d at 1283; Holton, 637 P.2d at 14.
In this regard, Marcott primarily relies on Robins v. Ogle
(1971), 157 Mont. 328, 485 P.2d 692, and Shepard v. Midland Foods,
Inc. (1983), 205 Mont. 146, 666 P.2d 758, under which he claims his
ruptured calf muscle is absolutely compensable as an unexpected
effect meeting the "unusual strain" requirement of § 39-71-
119(2) (a), MCA. On this basis, he contends that the Workers'
Compensation Court's finding that LP's legal interpretation was
reasonable is not supported by substantial evidence.
In Robins, we addressed whether a herniated disc sustained by
the claimant when lifting a pail of water at work met the 1967
definition of injury under the Act; more precisely, the issue was
whether the claimant's condition occurred as the result of an
"unusual strain" pursuant to § 92-418, R.C.M. (1947). "Injury" was
defined at that time as a tangible happening of a traumatic nature
from an unexpected cause, or unusual strain. Robins, 485 P.2d at
693.
The claimant in Robins had been mopping the floor at the time

her disc herniated, and we observed that the strain she suffered
was not unusual from the perspective of the manner in which the
mopping was being done. Robins, 485 P.2d at 694. The record
reflected, however, that she had "picked [the bucket] up wrong" and
"twisted [her] back" while moving the bucket and removing the mop.
Robins, 485 P.2d at 694. Noting that a herniated disc resulting

15
from picking up a bucket in the wrong manner and turning to pick up
the mop constituted a strain which was unusual from the standpoint
of effect, we stated that "[aln unusual result from a work-related
strain qualifies as 'an unusual strain' under section 92-418,
R.C.M. 1947." Robins, 485 P.2d at 695.
In Sheuard, we addressed whether an aggravation of a pre-
existing condition resulting primarily from a claimant's routine
heavy work could result in a compensable injury under the same
statutory definition interpreted in Robins. The claimant had
performed extremely heavy work for his employer over a period of
many years; he slipped and fell in 1980, twisting his left knee and
striking it sharply on the edge of a step, and subsequently favored
his right knee in order to take the pressure off his injured left
knee. Sheoard, 666 P.2d at 760. According to the medical
evidence, the claimant's routine heavy work aggravated his
underlying degenerative knee condition, even absent the 1980 fall
and its aftermath. Sheoard, 666 P.2d at 760.
We noted that a series of minor work-related traumas which
sufficiently aggravate a pre-existing condition to result in
disability could lead to an injury compensable under the Act, and
reiterated our conclusion from earlier cases that "unusual strain"
can apply to an unexpected resulting injury even though the effort
involved was not unusual for the particular job. Sheuard, 666 P.2d
at 761 (citations omitted). On the basis of undisputed and
substantial evidence of work-related injury aggravating a pre-
existing condition, and the absence of any evidence that the

16
claimant did heavy work outside of his employment, we concluded
that the Workers' Compensation Court's determination that the
claimant's knees had deteriorated for other than work-related
reasons was not supported by substantial evidence. Sheoard, 666
P.2d at 762-63.
We observe that Robins and Sheuard were decided in 1971 and
1983, respectively. Dumont and Wise
.------I upon which LP relied for its
legal interpretation, were decided in 1979 and 1983, respectively.
None of the cases discusses, much less distinguishes or overrules,
any of the others.
We agree with Marcott that Robins clearly states the law
regarding l'unusual strain" as that term is used in the Act. Robins
did not, however, address a specific question regarding the work-
related nature of the activity at issue or, as raised in this case,
whether the injury "arose out of" Marcott's employment under § 39-
71-407, MCA.
In the heart attack cases relied on by LP, on the other hand,
we concluded that the conditions underlying the workers'
compensation claims were not caused by work-related activity and
were not compensable. Thus, those cases are distinguishable from
Robins with regard to the specific legal interpretation and issue
advanced here by LP.
On that basis, we conclude that the compensability of
Marcott's injury had not been so clearly decided as to negate any
genuine doubt from a legal standpoint. We hold that substantial
evidence supports the Workers' Compensation Court's finding that

17
LP's legal interpretation regarding the compensability of Marcottrs
injury was not unreasonable.
C. Investigation
Marcott's final assertion of error with regard to the Workers'
Compensation Court's reasonableness finding relates to LP'S
investigation of Marcott's claim. In its oral decision at the end
of the hearing, the court rejected Marcott's contentions that LP'S

investigation was so inadequate as to be unreasonable. The court
found that LP reasonably relied on the information it received both
from Marcott and from his medical records in deciding to deny
Marcott's claim.
It is undisputed that insurers have an affirmative duty to
investigate workers' compensation claims.
[Aln insurer has a duty to make at least a minimal
investigation of a claim's validity in light of the
relevant statutes. Absent such [an1 investigation,
denial of a claim for benefits is unreasonable.
Stevens v. State Comp. Mut. Ins. Fund (19941, 268 Mont. 460, 467,
886 P.2d 962, 966, overruled on other srounds bv Kloepfer v.
Lumbermens Mut. Cas. Co. (Mont. 1995), 899 P.2d 1081, 52 St.Rep.
663 (quoting Love11 v. State Comp. Mut. Ins. Fund (1993), 260 Mont.
279, 288, 860 P.2d 95, 101).
Here, the record reflects that LP interviewed Marcott and
Quillen, the only witness to the incident; both stated that Marcott
was just walking when the injury occurred. LP also obtained
Marcott's medical reports, which contained Marcott's statements to
his doctors to the same effect. These reports included, for
example, Dr. Jackson's statement that "[platient was walking across
18
a level floor and felt an immediate sharp pain he was not
aware of striking any objects or any mishaps." Similarly, Dr.
Campbell reported that Marcott was a 'I. . . male . while at
work, taking a step and feeling something pop in the back of his
left calf . . .'I Finally, LP sought legal advice on the
compensability and liability issues vis-a-vis these reported facts.
Based on this evidence and evaluation of the claim, LP denied
liability.
Marcott argues that LP's investigation was inadequate. He
contends, among other things, that LP could not reasonably rely on
Marcott's initial statements because Marcott was in agonizing pain
at the time they were made; that LP was required to ask Marcott and
Quillen whether Marcott was walking rapidly or turning to his left
when his calf muscle ruptured; and that, faced with a purported
inconsistency in Dr. Jackson's report between Marcott's related
history regarding the injury and the doctor's affirmative response
to a question on the form report inquiring whether the patient's
condition is "due to a work-related accident," LP had an obligation
to contact Dr. Jackson to ascertain whether any additional or
different history had been received from Marcott and why the form
report indicated that the condition was due to a work-related
accident. Marcott relies on Stevens in support of his argument
that LP's investigation was inadequate and unreasonable.
In Stevens, the State Fund accepted liability for the
claimant's accident and began paying benefits. Thereafter, it
received an anonymous tip that the claimant was working; the tip

19
and subsequent statements regarding the invalidity of the workers'
compensation claim originated with the claimant’s former spouse.
Stevens, 886 P.Zd at 963-64. The State Fund arranged for two
separate investigations and received reports from both
investigators. Thereafter, the State Fund terminated the
claimant's benefits based solely on its knowledge that a witness
was available to testify against the claimant's version of the
injury. It did not read the investigative reports it had
commissioned, evaluate the "accuser's" statements, even though she
was known to be the claimant's former spouse, or attempt to
validate the accusations through interviews with either the
claimant or other witnesses; nor did the State Fund opt to petition
the Workers' Compensation Court to terminate benefits. Stevens,
886 P.2d at 966-67.
Under these circumstances, we concluded that the State Fund
had failed to make "a reasoned review of all available evidence in
the case . . . followed by an impartial evaluation of the evidence
reviewed." Stevens, 886 P.2d at 968. We also concluded that this
failure to make even a minimal review and evaluation after the
investigations were completed--and prior to terminating benefits--
rose to the level of unreasonable conduct; thus, we held that
substantial evidence did not support the Workers' Compensation
Court's determination that the State Fund's termination of benefits
was reasonable. Stevens, 886 P.2d at 968.
Stevens has no application here. That case involved an

insurer's duty in investigating and evaluating information upon

20
which it ultimately terminated benefits already being paid, and its
failure to even review investigative materials it had commissioned.
Stevens does not support Marcott's contention that, in evaluating
liability and compensability issues, an insurer can rely on neither
the claimant's own statements regarding the circumstances
surrounding his injury nor reports from his doctors containing the
same description of how the injury occurred. It also does not
support the theory that an insurer has an affirmative duty to ask
the claimant specific follow-up questions to uncover facts
additional to, or different from, those provided by the claimant in
an effort to establish facts upon which the compensability of the
injury might be more clear.
In the final analysis, it remains the claimant's burden to
prove the compensability of his injury by a preponderance of the
evidence. See Walker v. United Parcel Service (1993), 262 Mont.
450, 454, 865 P.2d 1113, 1116. While we reaffirm our cases
imposing an affirmative duty on insurers to reasonably investigate
and evaluate a claim, we decline to expand that duty by imposing a
requirement that an insurer must attempt to build a case for the
claimant by discounting the claimant's own statements to the
employer and to his doctors.
We conclude that the record contains substantial evidence to
support the Workers' Compensation Court's finding that LP
reasonably relied on the information provided by Marcott. We
further conclude that the Workers' Compensation Court's implicit
finding that LP's investigation was not unreasonable pursuant to

21
Stevens is supported by substantial evidence

2. Did the Workers' Compensation Court err as a matter
of law in refusing to apply "the Holton rule"?
The Workers' Compensation Court concluded that, even though
several of Marcott's physicians noted in their reports that his
injury was work-related, these opinions were not conclusive
regarding the compensability of the injury. Marcott contends that
the court's legal interpretation was incorrect because he is
entitled to the statutory penalty pursuant to our decision in
Holton as a matter of law. We review the Workers' Compensation
Court's conclusions of law to determine whether they are correct.
Stordalen, 862 P.2d at 394.
Marcott relies on the following language from Holton:
The triggering event for the purpose of awarding
penalties for unreasonable delay or refusal to pay
compensation is the insurer's receipt of medical
verification of a compensable injury. Unless such
verification contradicts other evidence sufficient to
make the verification inherently incredible, the
insurer's duty to pay commences and failure to pay (or
deny a claim) will expose the carrier to the possibility
of penalties after thirty days.
Holton, 637 P.2d at 13 (citations omitted). Marcott argues that,
pursuant to this language, LP's legal duty to pay him workers'
compensation benefits began as soon as it received an indication
from one of his doctors that his injury was work-related. His
position, however, does not take into account either the facts upon
which Holton was decided or the totality of our decision in that
case.
In Holton, the claimant was injured at work in late 1972,
22
required--and recuperated from--surgery, and returned to work. He
left Stoltze's employ for less strenuous work at better pay, but
was laid off soon thereafter. He ranched for a time, following
which he managed a bar. He continued to experience pain and
stiffness resulting from the work-related injury. Holton, 637 P.2d
at 11.
The insurer was notified in early 1974 that the claimant's
physician gave him a 5% total body impairment rating. Thereafter,
the insurer's physician rendered a 10% impairment rating and the
insurer offered to settle on the basis of that rating. The
claimant made a counteroffer and heard nothing more from the
insurer for more than four years; no benefits were paid during that
time. Other issues aside, the Workers' Compensation Court
ultimately determined that the claimant suffered a 40% disability,
but denied imposition of the statutory penalty. Holton, 637 P.2d
at 11-13.
The claimant argued on appeal that, under the facts of his
case, he was entitled to the 5 39-71-2907, MCA, penalty. We
discussed both the statute and case law in stating that "the
triggering event" for imposition of the penalty for unreasonable
delay or refusal to pay "is the insurer's receipt of medical
verification of a compensable injury." Holton, 637 P.2d at 13. On
receipt of such medical verification and absent other evidence
rending the verification inherently incredible, the insurer's duty
to pay begins and failure to pay exposes the insurer to the
"possibility of penalties." Holton, 637 P.2d at 13 (citations

23
omitted). Contrary to Marcott's arguments here, these statements
did not resolve the penalty issue in Holton; nor did they become a
controlling rule of law that receipt of medical verification of a
compensable injury, followed by nonpayment of benefits,
automatically results in the imposition of the penalty as a matter
of law. They merely set the stage for our resolution of the case.
The facts on which our decision in Holton was based were that
both the claimant's physician and the insurer's physician had
rendered impairment ratings and, after an initial settlement offer
was made and rejected, the insurer took no action whatsoever for
more than four years. Holton, 637 P.2d at 13. We observed that §
39-71-2907, MCA, does not provide the insurer the right to delay
the payment of any compensation until a formal hearing; indeed, the
converse is true: the insurer has a duty to promptly pay any
undisputed compensation. Holton, 637 P.2d at 13. 'I [Tlhe only
legitimate excuse for delay of compensation is the existence of
genuine doubt, from a medical or legal standpoint, that anv
liability exists." Holton, 637 P.2d at 14 (citations omitted).
Notwithstanding the dispute as to the total compensation due, both
parties in Holton agreed as of March 31, 1975, that at least a 10%
disability claim should be paid; the insurer made no payments of
benefits. On the basis of those undisputed facts, we determined
that the insurer had "no legitimate excuse for delay in paying the
10% disability claim prior to the hearing. The penalty for
unreasonable delay, as provided by section 39-71-2907, MCA, is
justified." Holton, 637 P.2d at 14.

24
 It is clear that the facts of Marcott's case are not analogous
to those in Holton. Here, a factual dispute existed concerning the
events surrounding the injury and, on the basis of the facts as
Marcott originally reported them, LP relied on a legal
interpretation under which Marcott's claim was not compensable; the
Workers' Compensation Court determined that the legal
interpretation was not unreasonable. We stated in Holton that the
existence of genuine doubt over liability--from either a medical or
a legal standpoint--constitutes a legitimate reason to delay or
refuse payment of workers' compensation benefits. Holton, 637 P.2d
at 14. Indeed, as set forth above, Holton is only one case in a
line of cases clarifying that the statutory penalty in § 39-71-
2907, MCA, was never intended to preclude an insurer's assertion of
a legitimate defense to liability. See, e.s., Hunter, 730 P.2d at
1142; Paulson, 673 P.2d at 1283.
Nothing in Holton requires immediate payment of benefits where
disputed legitimate factual or legal issues relating to
compensability and liability exist. We hold, therefore, that the
Workers' Compensation Court did not err as a matter law in refusing
to apply Holton.
Affirmed.

25
sitting for Retired Justice
Fred J. Weber

26
Justice Terry Ii. Trieweiler dissenting.

I dissent from the majority opinion. The employer's conduct

in this case was not only unreasonable, it was arrogant and

oppressive. Further review of the facts is necessary in order to

fully appreciate what little basis LP had for its denial of

Marcott's claim.

Bruce Marcott was injured during the course of his employment

on February 17, 1994, while working to repair a forklift with Gene

Quillen. His injury occurred after he jumped down from the

forklift, took two or three brisk steps to the rear of the

forklift, and turned sharply to his left to walk around behind the

forklift. At the point where he began his turn, he placed his

weight on his left foot, and as he pushed off he heard a loud pop

that sounded like a gun going off, experienced an extreme pain in

his left calf, and nearly fell to the floor. He was able to catch

himself, struggled over to another part of the room, and sat down

on a chair. In this condition, when questioned by his employer's

personnel, he explained that he was walking, felt a pop in his leg,

and his leg went out.

Following his injury, Marcott was taken to a Belgrade clinic

where he was examined by Dr. Robert Jackson. Dr. Jackson diagnosed

an injury to a calf muscle, treated him conservatively, gave him

crutches, and told him to return if his condition did not improve.

Following that treatment, Dr. Jackson completed an Attending

Physician's First Report and Initial Treatment Bill, which was

received by the insurer on February 23. On that form, he was asked

27
whether the condition for which he treated Marcott was due to a
work-related accident. He answered "yes."
When Marcott's condition did not improve, but instead worsened
considerably, he was seen on February 21 by Dr. John Campbell, an
orthopedic surgeon. Dr. Campbell admitted him to the hospital the
same day, where he treated him surgically for a ruptured
gastrocnemius muscle. On February 25, 1994, Dr. Campbell also
completed an Attending Physician's First Report and Initial
Treatment Bill. In response to the same question regarding the
cause of Marcott's injury, he also answered that it was caused by
a work-related accident.
Subsequent to Marcott's release from the hospital following
Dr. Campbell's surgery, he developed blood clots in his leg and
lungs for which he was readmitted to the hospital for further
treatment. During that hospitalization, he was treated by Dr.
David B. King, a family physician. During the course of that
treatment, Dr. King specifically questioned Marcott about the
activity he was engaged in at the time of his injury, and received
a more specific description of that activity than had been given in
response to more general questions which had been asked previously.
In a later report regarding that conversation, he related the
history given by Marcott, and his conclusions based on that
history, as follows:
Mr. Marcott has indeed given me the history of the event
occurring while making a sharp turn at a brisk walking
pace. . . . [I]t was during the hospitalization and in
the context of reviewing the events of his original
injury with an eye towards trying to better understand

28
 the sequence of events which followed. I consider it to
have been spontaneous, uncoached, and valid testimony.
.

To summarize, Bruce suffered what in my experience
is a most unusual injury from a relatively benign
activity which has led through a series of complications
leaving him with the long term problem which I have just
described. There is no reason to suspect that there is
anything other than a cause and effect sequence at work,
initiated by the brisk walking with a sharp turn to the
left causing a minor muscle injury which unfortunately
led to the compartment syndrome and swelling ultimately
leading to the surgery and finally to the blood clot.
There is likewise no reason to doubt that this happened
at the time and place Bruce suggests. It occurred at
work. While it is not specifically caused by any unusual
demands placed on him by his employment (we all walk
briskly and turn suddenly) it in fact happened at work
and led to the above complications as described.
During the course of prolonged treatment for various
complications from his original injury, Marcott was seen by five
other physicians. All of these physicians submitted bills to the
insurer which indicated that Marcott's injury was work related.
Altogether, eight physicians examined Marcott and billed the
insurer for their services. Not one of them ever suggested that
his injury was anything but work related.
In spite of all of this information, at no time from the date
of Marcott's injury until the date of trial did either Bill Fleming
or John Mikkelson, the defendant's employees who were responsible
for denying Marcott's claim, ever contact one of Marcott's

physicians to determine why, in their opinion, his injury was work
related, or what specific description of activity they were relying
on, or whether the doctors had information about his activity other
than the general information gathered by witnesses at the scene of

29
the accident when Marcott was more concerned about getting to the
hospital than engaging in semantic distinctions about the specific
type of activity he was engaged in when he was injured. Never did
Fleming or Mikkelson question any doctor who had actually seen or
treated Marcott about how this injury could have occurred while
walking, or whether something other than normal activity would have
been required to cause such an injury.
Instead, on March 21, 1994, Mikkelson simply wrote to Marcott
and told him that his injury was not related to employment
activities. Subsequent to that date, Dr. Campbell made the
following entry in his office notes:
I think all these problems are related to his initial
qastrocnemius rupture which I documented at surgery which
happened at work. I feel this is a work related injury,
and all these complications are secondary to this work
related injury.
That office note was received by Marcott's employer on approxi-
mately April 7, 1994.
On April 29, 1994, counsel for Marcott sent a letter to the
employer which explained the nature of activity in which Marcott
had been engaged at the time of his injury. Along with the letter
he sent a notarized statement from the only person working with
Marcott who confirmed that Marcott had been walking rapidly and
turning sharply. In spite of all of the undisputed medical records

and this additional documentation, LP continued to deny Marcott's
claim.
Instead of paying one cent to Marcott with which he could pay
for his groceries, make his house and car payments, pay his medical

30
bills, and support his family, LP waited until it concluded that it
would have to defend against a petition in the Workers'
Compensation Court and spent its money hiring an expert consultant
to review Marcott's records. Even then it did not bother asking
the expert consultant to personally examine Marcott or take a
history from him. It did, however, pay that consultant $725 to
review the records and issue a report, and another $2500 to appear
briefly and testify at the time of Marcott's trial.
In Stevensv.
State CompensationMutual Insurance
Fund (1994) , 268 Mont. 460,

886 P.2d 962, we cited authority for the following obligation on
the part of any insurer or employer:
Our case law provides that "an insurer has a duty to make
at least a minimal investigation of a claim's validity in
light of the relevant statutes. Absent such investiga-
tion, denial of a claim for benefits is unreasonable."
Love11[v. State Camp. MA. Ins. Fund (1993) , 260 Mont. 279, 2881 ,
860 P.2d [951 at 101. See also; Gamer v. Montana Dept. of
Highways (1990), 243 Mont. 414, 421, 795 P.2d 77, 81.

Stevens, 268 Mont. at 466-67, 886 P.2d at 966.

In this case, if the employer was not going to simply grant
Marcott's claim for workers' compensation benefits based on the

uncontroverted medical documentation that had been provided, then
it had a clear obligation to further investigate by questioning at
least one of his health care providers before denying the claim.
Although the conclusion is so obvious it should not require
authority, we have clearly so held in the past. In Holton v. F.H. Stoke

LandandLumberCo. (1981), 195 Mont. 263, 637 P.2d 10, we made the

following statement about the triggering event for a finding that
an insurer has acted unreasonably:

31
 The triggering event for the purpose of awarding
penalties for unreasonable delay or refusal to pay
compensation is the insurer's receipt of medical
verification of a compensable injury. Unless such
verification contradicts other evidence sufficient to
make the verification inherently incredible, the
insurer's duty to pay commences and failure to pay (or
deny a claim) will expose the carrier to the possibility
of penalties after thirty days.
Halton, 195 Mont. at 268, 637 P.2d at 13.

In spite of the obvious obligation to investigate, and LP's
obvious failure to do so in any meaningful way, LP was allowed to
justify its conduct based on its adjuster's opinion that some
doctors believe any accident occurring at work is automatically
work related. Although there was no foundation for such testimony,
even if it had been true it would have been totally irrelevant to
this case since not one doctor who had seen the claimant and
expressed the opinion that his injury was work related was asked by
that same adjuster what the basis for his or her opinion was. If
that testimony was not irrelevant enough, the Workers' Compensation
Judge made a total farce of matters by going on to conclude that
"[bIased on its own review of many, many medical depositions, the
Court can validate the adjuster's observation." The trial judge's
finding gives new and dangerous meaning to the notion of "judicial
notice."
In summary, based on all of the evidence in this case, LP's
conduct was unreasonable for two reasons. First, if the real issue

was whether Marcott was simply walking or was walking briskly and
turning sharply at the time of his injury, then the employer
conducted absolutely no investigation from which it could make that

32
determination. It simply took great satisfaction in and then
relied on an inadequate description of events based on an
inadequate interrogation of the claimant at the scene of the
accident while he was experiencing excruciating pain and concerned

about nothing other than getting to the hospital or to a doctor.

Second, whether claimant was merely walking or was walking

briskly and turning sharply makes absolutely no difference to the

question of whether his injury was caused by a work-related
accident. Section 39-71-119(2), MCA, defines an accident as an

"unusual strain." We have repeatedly held that when used in the
Workers' Compensation Act, "unusual strain" refers to either cause
or effect. Even assuming that LP's arbitrary and unqualified

medical opinions, which they arrived at without the benefit of
medical consultation, were correct, Marcott's ruptured
gastrocnemius muscle would have been an unusual result from

walking, whether the walking was normal or brisk.

The cases relied upon by LP to justify its denial of Marcott's

claim are simply not on point. In neither Nessv. DiamondAsphalt Co.

(1964), 143 Mont. 560, 393 P.2d 43, nor Dumont v. WickensBrothers

ConstructionCo. (1979), 183 Mont. 190, 598 P.2d 1099, was there any

evidence that the employees' heart attacks were caused by

work-related activity. In this case, there was no question about

the fact that Marcott's injury was caused by a work-related

activity (walking) Marcott was attempting to fix his employer's

forklift. In an effort to do that, he hopped off the forklift,

walked to the back of the forklift, and was attempting to go behind

33
it. The only reason for this activity was to serve his employer.
Therefore, his activity was clearly "work related." The only
dispute was whether at the time of his injury he was walking

normally or briskly. However, as pointed out by the majority,

pursuant to our decision in Robins v. Ogle (1971), 157 Mont. 328, 485

P.2d 692, that distinction is irrelevant.

Ness was decided before the language "unusual strain" was even

included in the definition of injury or accident. In Dumont, the

employee died in bed and the only contention by his survivor was

that the activity which caused his death constituted an "unusual

strain." There was simply no contention that the effect of his

activity was an "unusual strain." Dumont , 183 Mont. at 192, 598

P.2d at 1101. Furthermore, there was no witness to testify that he

even complained of an unusual problem in reaction to the activities

he had engaged in. Finally, in Wisev. Perkins (1983), 202 Mont. 157,

656 P.2d 816, the issue again was concerned with whether the cause

of that claimant's injury was an "unusual strain," not whether she

could receive compensation had the effect of her activity been an

unusual strain.

In Robins, we held that an unusual result from normal activity

qualifies as an "unusual strain. I’ Robins, 157 Mont. at 333, 485 P.2d

at 695. In Holton, we held that when an insurer or employer denies

or unreasonably delays payment of benefits which are justified by

uncontroverted medical documentation, it has acted unreasonably.

Ho/ton, 195 Mont. at 268, 637 P.2d at 13. In Stevens, we held that,

34
absent a reasonable investigation, denial of a claim for benefits
is unreasonable. Stevens, 268 Mont. at 467, 886 P.2d at 966. 1n

this case, LP ignored all three cases and avoided any consequence.

The entire burden of its unreasonable conduct must now be born by

the unemployed claimant.

The majority's disregard for the evidence in this case causes

an extreme injustice and hardship for Marcott. He has not only
lost a $40,000 per year job due to a work-related injury with no

prospects for reemployment in the near future and been forced to
live on and provide for his family with disability benefits that

represent a fraction of his former income, he is somehow supposed

to figure out how to pay thousands of dollars for attorney fees for

services that never should have been required to recover disability

benefits to which he was so clearly entitled. The reluctance of

the Workers' Compensation Court and this Court to pass the cost of

unnecessary litigation to the responsible insurer is especially

disturbing because it comes at a time when the laws have been

changed to prevent injured workers from hiring the attorneys who

have, in the past, been essential to the enforcement of their

rights. See §§ 39-71-611 and -612, MCA (1987).

For these reasons I dissent from the majority opinion.

Justice William E. Hunt, Sr., j oins in the foregoing dissenting
opinion.

35
Justice W. William Leaphart, dissenting

I dissent from the majority opinion. LP failed to make the
"minimal investigation of a claim's validity" as required by our
holding in Love11 v. State Compensation Mutual Ins. Fund (1993),
260 Mont. 2.79, 288, 860 P.2d 95, 101. Under Lovell, denial of
Marcott's claim without making such a minimal investigation was
unreasonable.

36