NO. 82-387
I N T H E S U P R E M E C O U R T O F T H E S T A T E O F MONTANA
1983
JOHN A . D A V I S ( F A T A L )
V I V I A N MARIE DAVIS,
C l a i m a n t s and R e s p o n d e n t s ,
G E O R G E W. J O N E S , E m p l o y e r a n d
M O U N T A I N W E S T FARM BUREAU MUTUAL
I N S U R A N C E COMPANY,
Defendants and A p p e l l a n t s .
Appeal from: Workers' Compensation C o u r t
H o n o r a b l e ~ i R e a r d o n , Judge p r e s i d i n g .
m
C o u n s e l of Record:
For A p p e l l a n t s :
Utick, G r o s f i e l d & Uda, Helena, Montana
For R e s p o n d e n t s :
Joseph C . Engel 111, B u t t e , Montana
S u b m i t t e d on b r i e f s : February 3, 1983
Decided: A p r i l 1 4 , 1983
Filed:
AP K .i$ , 8
93
Mr. J u s t i c e L . C. G u l b r a n d s o n d e l i v e r e d t h e O p i n i o n of t h e C o u r t .
The insurer appeals from an order issued by the Workers'
C o m p e n s a t i o n C o u r t g r a n t i n g c l a i m a n t a w a i v e r of t h e t w e l v e - m o n t h
f i l i n g r e q u i r e m e n t i n s e c t i o n 39-71-601(1) MCA.
On F e b r u a r y 1 5 , 1 9 8 0 , t h e c l a i m a n t ' s h u s b a n d , a r a n c h h a n d ,
became unconscious while chopping a hole in some ice. His
employer, George J o n e s , s u g g e s t e d t h a t t h e h u s b a n d go home and
see a d o c t o r . The h u s b a n d w e n t to see some f r i e n d s and r e t u r n e d
home a t a b o u t 9 30 p.m. t h a t evening. H e l a t e r d i e d a t home of a
heart attack.
On F e b r u a r y 1 7 , 1 9 8 0 , t h e c l a i m a n t went to t h e e m p l o y e r f o r
h e r husband's l a s t paycheck. The e m p l o y e r g a v e t h e c l a i m a n t h e r
h u s b a n d ' s l a s t c h e c k p l u s a two h u n d r e d d o l l a r b o n u s . While t h e y
were discussing possible insurance coverage, the employer told
c l a i m a n t t h a t he had no r e s p o n s i b i l i t y b e c a u s e t h e husband had
d i e d a t home.
Claimant did n o t become a w a r e of p o s s i b l e w o r k e r s 1 compen-
s a t i o n coverage u n t i l one y e a r l a t e r , February 1 7 , 1981, while
t a l k i n g w i t h h e r a t t o r n e y on a s e p a r a t e matter. On F e b r u a r y 2 0 ,
h e r a t t o r n e y s e n t a l e t t e r t o t h e Workers1 Compensation D i v i s i o n
( D i v i s i o n ) , s t a t i n g t h e f a c t s s u r r o u n d i n g h e r h u s b a n d ' s d e a t h and
seeking a settlement. On A p r i l 1, 1 9 8 1 , a b o u t o n e y e a r and s i x
w e e k s a f t e r h e r h u s b a n d ' s d e a t h , c l a i m a n t f i l e d a claim w i t h t h e
Division.
After a hearing, the hearing examiner for the Division
c o n c l u d e d t h a t t h e i n s u r e r and e m p l o y e r were e q u i t a b l y e s t o p p e d
from asserting the one-year filing requirement because the
e m p l o y e r had d e n i e d a n y r e s p o n s i b i l i t y and b e c a u s e c l a i m a n t had
d e t r i m e n t a l l y r e l i e d on h i s r e p r e s e n t a t i o n . The case was t h e n
h e a r d b e f o r e t h e D i v i s i o n which r e v e r s e d the hearing examiner's
c o n c l u s i o n , and b a r r e d c l a i m a n t from a s s e r t i n g h e r claim b e c a u s e
of h e r f a i l u r e t o f i l e w i t h i n one y e a r . The D i v i s i o n s t a t e d t h a t
the claimant I s own t e s t i m o n y s u p p o r t e d n e i t h e r e q u i t a b l e e s t o p -
pel, nor the conclusion t h a t the employer prevented t h e claimant
from f i l i n g i n a t i m e l y manner.
The Workers ' Compensation Court reversed the Division's
conclusion. The C o u r t l o o k e d to t h e s i x e l e m e n t s of equitable
estoppel and concluded that the Division had made a n e r r o r of
law. C l a i m a n t was t h e n g r a n t e d a w a i v e r of the one-year filing
requirement.
The s o l e i s s u e on a p p e a l is w h e t h e r t h e d o c t r i n e of e q u i t a b l e
e s t o p p e l s h o u l d be a p p l i e d t o e s t o p t h e i n s u r e r and e m p l o y e r from
a s s e r t i n g a s t a t u t e of l i m i t a t i o n s d e f e n s e .
S e c t i o n 39-71-601(1), MCA, r e q u i r e s t h e f i l i n g of a workersf
compensation claim within one year from the happening of the
accident. The d o c t r i n e o f e q u i t a b l e e s t o p p e l a p p l i e s where an
e m p l o y e r or i n s u r e r h a s t a k e n some p o s i t i v e a c t i o n which e i t h e r
p r e v e n t s c l a i m a n t f r o m f i l i n g a t i m e l y claim or l e a d s him r e a s o n -
a b l y t o b e l i e v e he need n o t f i l e s u c h a claim. Ricks v. Teslow
Consolidated (1973), 1 6 2 Mont. 469, 512 P.2d 1304. Equitable
e s t o p p e l is a f l e x i b l e p r i n c i p l e which s h o u l d be a p p l i e d when a n
employer or insurer misleads a claimant by foisting onto the
claimant a misinterpretation of t h e Workers Compensation Act.
Levo v. General-Shea-Morrison (1955) , 128 Mont . 570, 280 P.2d
Six essential elements make up the doctrine of equitable
estoppel :
" G e n e r a l l y s p e a k i n g , t h e f o l l o w i n g are t h e
e s s e n t i a l e l e m e n t s which m u s t e n t e r i n t o and
f o r m a p a r t of a n e q u i t a b l e e s t o p p e l i n a l l of
its applications: '1. T h e r e m u s t be c o n d u c t
-- a c t s , l a n g u a g e , o r s i l e n c e -- a m o u n t i n g to
a r e p r e s e n t a t i o n or a c o n c e a l m e n t of m a t e r i a l
facts. 2. T h e s e f a c t s m u s t be known to t h e
p a r t y e s t o p p e d a t t h e t i m e o f h i s s a i d con-
d u c t , o r a t l e a s t t h e c i r c u m s t a n c e s m u s t be
s u c h t h a t k n o w l e d g e o f them is n e c e s s a r i l y
imputed t o him. 3. The truth concerning
t h e s e f a c t s m u s t be unknown t o t h e o t h e r p a r t y
c l a i m i n g t h e b e n e f i t of t h e e s t o p p e l , a t t h e
t i m e when i t was a c t e d upon by him. 4. The
c o n d u c t m u s t be d o n e w i t h t h e i n t e n t i o n , o r a t
l e a s t w i t h t h e e x p e c t a t i o n , t h a t it w i l l be
a c t e d upon by t h e o t h e r p a r t y , or u n d e r s u c h
c i r c u m s t a n c e s t h a t i t i s b o t h n a t u r a l and
p r o b a b l e t h a t i t w i l l be so a c t e d u p o n .
* * * 5 . The c o n d u c t m u s t be r e l i e d upon by
t h e o t h e r p a r t y , a n d , t h u s r e l y i n g , he m u s t be
l e d t o a c t upon i t . 6. H e must i n f a c t act
upon i t i n s u c h a manner a s t o c h a n g e h i s
p o s i t i o n f o r t h e worse i n o t h e r words, he
m u s t s o a c t t h a t he would s u f f e r a l o s s i f he
were c o m p e l l e d t o s u r r e n d e r o r f o r e g o or a l t e r
w h a t he h a s d o n e by r e a s o n of t h e f i r s t p a r t y
b e i n g p e r m i t t e d t o r e p u d i a t e h i s c o n d u c t and
t o a s s e r t r i g h t s i n c o n s i s t e n t with it. 1 II ..
Lindblom v. Employers L i a b i l i t y Assurance Corp. ( 1930 ) , 8 8 Mont .
4 8 8 , 4 9 4 , 295 P. 1 0 0 7 , 1 0 0 9 , c i t e d w i t h a p p r o v a l i n --..- i c k s ,s u p r a ,
~
F r o s t v. Anaconda Co. ( 1 9 8 2 ) , -. Mont . -.--- , 6 4 5 P.2d 4 1 9 , 39
St.Rep. 879, and Devlin v. Galusha, Higgins & Galusha (1982),
---- Mont . - , 6 5 5 P.2d 9 7 9 , 39 S t . R e p . 2378.
The Workers l Compensation Court carefully considered and
a p p l i e d e a c h one of t h e above e l e m e n t s . The C o u r t found t h a t t h e
e m p l o y e r had m i s r e p r e s e n t e d a m a t e r i a l f a c t , i . e . , t h a t the place
of t h e husband I s death precluded h i s r e s p o n s i b i l i t y f o r payment
of compensation insurance benefits. Knowledge of t h e f a c t s were
imputed to the employer, because the employer was held to a
higher standard of knowledge than the employee. See -,
Levo
supra. The c l a i m a n t d i d n o t know t h e m i s r e p r e s e n t a t i o n was n o t
true. The surrounding circumstances were such that it was
n a t u r a l and p r o b a b l e f o r claimant t o a c t upon the misrepresen-
tation. Claimant relied to her detriment on the employerls
r e p r e s e n t a t i o n by n o t making f u r t h e r i n q u i r i e s and b y f a i l i n g to
f i l e h e r claim w i t h i n o n e y e a r .
We agree with the above conclusions of the Workers1
Compensation C o u r t . The e m p l o y e r ' s m i s r e p r e s e n t a t i o n c r e a t e d t h e
reasonable belief in the claimant that the employer was not
responsible f o r any insurance compensation b e n e f i t s . Equitable
estoppel was therefore properly used to bar the employer and
i n s u r e r f r o m a s s e r t i n g a s t a t u t e of l i m i t a t i o n s d e f e n s e .
The o r d e r o f t h e W o r k e r s ' C o m p e n s a t i o n C o u r t is a f f i r m e d .
1 .
-
J u s t ice'
I;"
/
We concur: