No. 81-389
IN THE SUPREME COURT OF THE STATE OF MONTANA
1982
ODEAN L. FROST,
Claimant and Respondent,
vs.
ANACONDA COMPANY,
Employer,
and
THE ANACONDA COMPANY,
Defendant and Appellant.
Appeal from: Workers' Compensation Court
Honorable William Hunt, Judge presiding.
Counsel of Record:
For Appellant:
Utick and Grosfield, Helena, Montana
Andrew Utick argued, Helena, Montana
For Respondent:
Neil J. Lynch argued, Butte, Montana
Submitted: April 1, 1982
Decided: May 13, 1982
Mr. Justice Frank B. Morrison, Jr., delivered the Opinion of
the Court.
The Workers' Compensation Judge, William E. Hunt,
issued an order on July 31, 1981, granting benefits to
claimant, Odean Frost, despite a four and one-half year gap
between claimant's injury and the filing of his claim for
benefits. Section 39-71-601, MCA, establishes a one year
statute of limitations for filing such claims. Frost's
employer, The Anaconda Company, appeals from that order.
We affirm.
On October 21, 1974, claimant slipped and fell off an
ore shovel at the Berkely Pit. Frost landed on his lower
back, stood up without assistance and worked the remaining
six hours of his shift. At the request of the Pit supervisor,
Bud Brisban, Frost filed an accident report that night. An
entry was made in the Pit's ledger indicating that the
accident had occurred. However, no report of the accident
reached the Claims Office as no immediate medical attention
was required. It was the policy of the Pit at that time to
report to the Claims Office only accidents which resulted in
immediate medical attention.
Although Frost's back did not significantly bother him
subsequent to the accident, he began to progressively lose
control over one of his legs. In August 1975, Frost went to
a doctor who determined that the leg difficulties were due
to a disc problem caused by the accident at the Pit. Surgery
was performed; however, Frost's leg still continues to cause
him great discomfort. He has been unable to work since
1975.
Following surgery, Frost notified The Anaconda Company's
Claims Office that he would not be returning to work.
Although the accident was recorded in the Pit ledger the
night it occurred, there is no evidence indicating that the
Company was told in 1975 by Frost that his inability to
return to work was due to a work-related injury. Therefore,
after having Frost complete some forms, office worker Ed
Nimi set Frost up in the Company's "METRO" program.
he METRO program is offered by The Anaconda Company to
its salaried employees unable to work due to any disability,
whether or not work related. The program is designed so
that both workers' compensation and social security benefits
are offset against the METRO payments. Under the METRO
program, Frost received 100% of his salary for the first six
months he missed work, long-term disability benefits in the
amount of 70% of his salary for each month missed thereafter,
100% of his hospital expenses and 80% of his doctor and
pharmacy expenses. Had Frost received workers' compensation
benefits, he would have been eligible for 66 2/3% of his
salary for each week he was unable to work, as well as
medical and hospital expenses pursuant to section 39-71-704,
MCA. Therefore, the METRO benefits were substantially
comparable to, if not greater than, the workers' compensation
benefits available to Frost.
On December 23, 1978, Frost received notice that the
Metropolitan Life Insurance Company was terminating his
METRO benefits while they redetermined his eligibility. He
was reinstated six months later, with full reimbursement of
the previous six months' payments. However, in order to
avoid future terminations of benefits, Frost filed for
workers' compensation. Those benefits have statutory protections
against arbitrary termination. See Title 39, Chapter 71,
Part 6, Montana Code Annotated.
The Company's claims' officer, Mr. Bugni, determined
that no claim for workers' compensation had ever been completed
by Frost. Bugni sent a claim form to Frost, who completed
it and returned it to Bugni in late April 1979, four and
one-half years after his accident. Section 39-71-601, MCA,
establishes a one year statute of limitations for filing
such claims. Mr. Frost's claim was therefore three and one-
half years late. On that basis, The Anaconda Company subsequently
denied any liability to Frost.
Claimant then filed a petition in the Workers' Compensa-
tion Court requesting that he be awarded benefits. A hearing
was held January 16, 1980, before Roger Tippy, a Workers'
Compensation Court-appointed hearings examiner. Mr. Tippy
issued findings of fact and conclusions of law on June 13,
1980, denying workers' compensation benefits to the claimant
"on the grounds that he did not file a claim for compensation
within twelve months of the occurrence of his accident as
required under [section] 39-71-601, MCA." The Workers'
Compensation Judge adopted those findings of fact and conclusions
of law and issued a judgment and order dated June 24, 1980,
dismissing claimant's petition for benefits.
A rehearing was requested and held before Judge Hunt on
July 21, 1981. On July 31, 1981, Judge Hunt issued an
amended judgment and order containing the following findings
of fact: (1) the Company enrolled the claimant in the METRO
program but failed to file a claim for workers' compensation
benefits or inform Frost of his right to do so; (2) the
claimant did not realize the METRO benefits lacked the
statutory protections given workers' compensation; and (3)
the claimant did not know he had waived protection under the
Workers' Compensation Act until he applied for benefits in
1979.
Judge Hunt applied the above findings to part of the
test for equitable estoppel found in Lindblom v. Employers'
Etc. Assur. Corp. (1930), 88 Mont. 488, 494, 295 P. 1007,
1009:
(1) There must be conduct -- acts, language, or silence --
amounting to a representation or a concealment of material
facts.
(2) These facts must be known to the party estopped at
the time of his said conduct, or at least the circumstances
must be such that knowledge of them is necessarily imputed
to him.
Judge Hunt then found that the Company should have
known claimant was eligible for workers' compensation and
that its silence regarding the above facts amounted to
concealment of material facts. He therefore held that the
Company was estopped from asserting the statute of limitations
as a defense to Frost's claim and that Frost was eligible to
receive workers' compensation benefits.
The sole issue before this Court is whether the Workers'
Compensation Judge correctly forbade The Anaconda Company
from asserting the one year statute of limitations found in
section 39-71-601, MCA, as a bar to claimant's recovery of
workers' compensation benefits. We affirm the Workers'
Compensation Judge's decision, although for reasons different
than those relied on by that Judge.
Judge Hunt relied upon the doctrine of equitable estoppel
in determining that the statute of limitations defense was
not available to The Anaconda Company. In so doing, he
cited only two of the six essential elements of estoppel
discussed in Lindblom v. Employers' Etc. Assur. Corp.,
supra. Judge Hunt found that material facts known to the
Company were kept concealed from the claimant. However, he
failed to find that the claimant's reliance on the Company's
silence was to his detriment, another essential element of
estoppel. See also Ricks v. Teslow Consolidated (1973), 162
Mont. 469, 512 P.2d 1304.
We find that claimant suffered no detriment. He received
METRO benefits which were substantially comparable to benefits
he would have received under the Workers' Compensation Act.
In fact, for the first six months he was unable to work, he
received 33 1/3% more benefits than he would have under the
Act. In addition, although claimant's benefits under the
METRO program were terminated for six months, he recovered
the full unpaid amount when he was reinstated in the program.
Claimant Frost was inconvenienced, but did not suffer any
detriment.
We choose instead to affirm the lower court's decision
on the basis that "compensation" paid by the Company to Mr.
Frost tolled the statute of limitations for filing his claim.
"Compensation," in order to toll the statute of limitations,
must consist of benefits substantially comparable to or
greater than the benefits available to the same employee
under the Workers' Compensation Act.
In Ricks v. Teslow Consolidated, supra, this Court held
that medical payments would not toll the statute of limitations
for filing a workers' compensation claim. This decision
does not affect Ricks in any way. We do not believe medical
payments to be sufficient compensation to warrant tolling
the statute of limitations for the recipient.
Compensation, to toll the statute, must be sufficient
to convince the recipient that he is receiving such a large
percentage of workers' compensation benefits available to
him that to seek further benefits would be a wasted effort.
"The purpose of the tolling provision is to prevent an
employer from lulling a claimant into a false sense of
security by apparently acknowledging the validity of his
claim, paying remuneration in lieu of compensation, and
then invoking the statute after the lapse of one year."
Cupit v. Dancu Chemical Co. (Okla. 1957), 316 P.2d 593 at
595. This rationale is also discussed in Riccioni v. American
Cyanamid Co. (1953), 26 N.J. Super. 1, 96 A.2d 765; Silva
v. Sandia Corporation (10th Cir. 1957), 246 F.2d 758; Reed
v. Fishing Engineering Corporation (1964), 74 N.M. 45, 390
P.2d 283; and United States Steel Corporation v. Iwaskewycz
(1972), 7 Pa. Comwlth. 211, 298 A.2d 62.
Arthur Larson, in his treatise on workers' compensation
law, discusses the effect of voluntary payments of compensation
on statutory limitations for the filing of workers' compensation
claims. The relevant section is S78.43, - - - Workers'
The Law of
Compensation, by Arthur Larson, pages 15-111 through 15-145.
Larson states on page 15-115 that "(w)hen payment of ...
income . . . has been made by a private employer-employee
benefit association or insurance plan, this has usually been
held to toll the statute."
The Florida court in Watson v. Delta Airlines, Inc.
(Fla. 1973), 288 So.2d 193, held that voluntarily furnished
remedial treatment and voluntarily paid disability benefits
served to toll the statute for the filing of a workers'
compensation claim.
The Tennessee court in Norton Co. v. Coffin (Tenn.
1977), 553 S.W.2d 751, held that the employer's voluntary
payment of compensation and medical services tolled the
statute of limitations for filing a workers' compensation
claim. Similar decisions can be found in Mihesuah v. Workmen's
Compensation Appeals Board (1973), 29 Cal.A~p.3d 337, 105
Cal.Reptr. 561, 37 Cal.Comp.Cas. 790; Caterpillar Tractor
Co. v. Industrial Commission (1965), 33 I11.2d 78, 210
N.E.2d 215; Dunay v. International Smelting and Refining Co.
(1960), 60 N.~.Super. 546, 160 A.2d 80; and Drinkwater v.
Orkin Exterminating Co. (Okla. 1961), 361 P.2d 834.
A second factor required to toll the statute of limitations
is knowledge on the part of the employer that he is paying
compensation as a result of an industrial accident. "To
constitute the payment of compensation there is a minimal
necessity that the employer shall have some knowledge of the
effect of what he is doing. . ." Buxbaum v. Cumberland
Provision Co. (1961), 14 A.D.2d 425, 221 N.Y.S.2d 339, at
page 342.
The Anaconda Company, in the instant case, contends
that they had no knowledge that claimant's inability to work
was due to an industrial accident. We disagree. The facts
show that the foreman had knowledge that Frost's injuries
were industrial related. The foreman's knowledge should be
imputed to The Anaconda Company. "Notice of an accident to
one's supervisor is adequate notice to the employer."
Hester v. Westchester General Hospital (Fla. 1972), 260
So.2d 505.
The decision of the Workers' Compensation Court is
affirmed for the reasons discuss+,above. .
We Concur: