No. 88-613 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1989 

RONALD F. HILBIG, 

Claimant and Appellant, 

-vsCENTRAL GLASS COMPANY, 

Employer, 

and 

STATE COMPENSATION INSURANCE FUND, 

Defendant and Respondent. 

APPEAL FROM: The Workers' Compensation Court, The Honorable 

Timothy Reardon, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

R. V. Aottomly; Bottomly Law Offices, Great Falls, 

Montana 

For Respondent: 

R. Scott Currey, Agency Legal Services, Helena, 

Montana 

( ' i.. 4. 

<. . . . .. . -4 

LL- r-4 

Submitted on Briefs: June 30, 1989 

Decided: August 11, 1989 

Filed: :: 
Mr. Justice Fred J. Weber delivered the Opinion of the Court. 

Ronald Hilbig appeals a decision of the Workers' Compensation Court denying a lump sum conversion of his benefits 

because the parties failed to enter into a binding agreement. 

Mr. Hilbig also appeals the lower court's denial of his 

petition for a larger award of domiciliary care. We affirm 

and remand for further proceedings consistent with this 

opinion. 

The issues are: 

1. Did the Workers1 Compensation Court err in concluding that the parties' oral negotiations did not establish a 

binding contractual agreement? 

2. Did the Workers' Compensation Court err in its award 

of domiciliary care? 

Ronald Hilbig had been employed as a glazier for 24 

years when he fell from scaffolding approximately 12 to 15 

feet to the ground while on the job on November 17, 1983. As 

a result of this fall, Mr. Hilbig suffered a severe head 

injury and was rendered permanently totally disabled, a fact 

which the State Fund does not dispute. 

On July 17, 1985, two meetings were held between claimant's counsel, and State Fund representatives in an attempt 

to negotiate a settlement agreement. The Workers' Compensation Court found that during these meetings, the parties 

agreed that claimant was permanently totally disabled and 

could receive a lump sum payment of $179,549.63 if claimant's 

counsel could "put together" a justification for the lump sum 

conversion. It is the parties' understanding of the phrase 

"put together1' which is the subject of this appeal. The 

Workers1 Compensation Court made the following findings in 

this regard: 
5. Mr. Bottomly [claimant's attorney] understood 

the phrase "put together" to mean that he would 

send Mr. Strizich [State Fund claims manaserl d - a 

petition and affidavit of justification, Mr. 

Strizich would then concur by signing and then 

submit it to the Insurance compliince -~ureau for 

approval. 

6. Mr. Strizich understood the term "put together" 

to mean that Mr. Bottomly would present documentation that would be acceptable to the State Fund and 

the Insurance Compliance Bureau to justify a lump 

sum conversion. 

Following the initial meeting, claimant's counsel prepared and submitted a written petition to the State Fund 

proposing that $120,000 of claimant's benefits be placed in 

an annuity to draw interest. This proposal was rejected by 

the State Fund. Another meeting was held between Mr. 

Bottomly; Mr. Currey, attorney for the State fund; and Mr. 

Strizich, in an attempt to settle the dispute. At the meeting, a social security offset was also discussed. The Workers' Compensation Court found that the parties' testimony 

conflicted as to what was resolved at that meeting, because 

Mr. Bottomly testified that an agreement was made on the 

social security issue at that time, Mr. Strizich denied the 

making of any agreement, and Mr. Currey was not able to 

recall. The second meeting resulted in a written lump sum 

proposal dated January 21, 1987, in which, after a dispute 

over the social security offset language, the State Fund 

would not concur. 

Claimant then filed a petition in the Workers' Compensation Court seeking to enforce the lump sum conversion which 

he contended was agreed to by the parties. The Workers' 

Compensation Court denied claimant's petition based on a 

finding that there was no enforceable agreement reached by 

the parties regarding a lump sum settlement. The lower court 
did grant claimant's claim to payment for 24-hour domiciliary 

care, however, the payments were limited to a four-month 

period from December 1986 to April 1987. Claimant appeals 

the limitation of this award along with the lower court's 

denial of his petition. 

I 

Did the Workers' Compensation Court err in concluding 

that the parties' oral negotiations did not establish a 

binding contractual agreement? 

Claimant argues that a valid and enforceable agreement 

was created as a result of the parties' oral negotiations 

during the two meetings. He bases this contention on the 

fact that the intentions of the parties are discernable to a 

reasonable degree and that the material elements of the 

agreement were stated, citing Thrasher v. Schreiber (1926) , 

77 Mont. 221, 227, 250 P. 600, 602, and Somont Oil Co., Inc. 

v. Nutter (Mont. 1987), 743 P.2d 1016, 1019, 44 St.Rep. 1685, 

1689. The State Fund concedes that the parties did in fact 

agree to claimant's disability status as permanently totally 

disabled and that claimant could receive biweekly benefits in 

the form of a lump sum payment. Despite these points of 

agreement, the State Fund argues that the parties' understanding of how those terms were to be acted upon is at issue 

and prevents the formation of a valid, enforceable agreement. 

As pointed out by the hearing examiner, this issue hinged 

upon the parties' understanding of what it meant to "put 

together" a justification for a lump sum conversion. The 

Workers' Compensation Court's findings reflect that claimant's counsel assumed a lump sum payment would be forthcoming 

upon submission of the written proposal, while the State Fund 

representative understood that further approval would be 

necessary. The record supports these findings and the par- 
ties do not disagree as to the source of the 

misunderstanding, but only as to its effect. 

In order for a valid and enforceable contract to exist, 

the following elements must be present: 

(1) identifiable parties capable of contracting; 

(2) their consent; 

(3) a lawful object; and 

(4) a sufficient cause or consideration. 

Section 28-2-102, MCA. 

The Workers' Compensation Court concluded that a lack of 

consent precluded the formation of a binding contract requiring the insurer to concur in the written petition later 

submitted by the claimant. We agree. The facts here indicate that there was no meeting of the minds on the basic 

elements of an enforceable agreement. Claimant's counsel 

assumed that mere preparation of the terms in written form 

was sufficient. This assumption, however, is not consistent 

with the statutory procedure for conversion of biweekly 

benefits to a lump sum payment as set forth in $ 39-71-741, 

MCA. That statute was amended retroactively in 1985. However, this Court reinstated all pre-1985 injuries under the 

language of the statute prior to the 1985 amendment in 

Buckman v. Montana Deaconess Hospital (Mont. 1986) , 730 P.2d 

380, 43 St.Rep. 2216. The relevant statute, therefore, is § 

39-71-741, MCA (1983), which reads: 

Compromise settlement and lump-sum payments 

--division approval required. The biweekly payments provided for in this chapter may be converted, in whole or in part, into a lump-sum payment. 

Such conversion can only be made upon the written 

application of the injured worker or the worker's 

beneficiary, with the concurrence of the insurer, 

and shall rest in the discretion of the division, 

both as to the amount of such lump-sum payment and 

the advisability of such conversion. The division 
is hereby vested with full power, authority, and 

jurisdiction to allow and approve all compromises 

of claims under this chapter. All settlements and 

compromises of compensation provided in this chapter are void without the approval of the division. 

Approval of the division must be in writing. . . . 

The statute requires written application by the worker 

(Mr. Hilbig) with the concurrence of the insurer (State 

Fund). Claimant failed to prove the concurrence of the State 

Fund to the satisfaction of the Workers' Compensation Court. 

The record contains substantial evidence to support that 

conclusion. We therefore affirm the Workers' Compensation 

Court on this issue. As a result claimant is not entitled to 

the claimed twenty percent penalty under § 39-71-2907, MCA. 

I1 

Did the Workers' Compensation Court err in its award of 

domiciliary care? 

On January 9, 1987, the parties agreed upon a pretrial 

order which included the following issue: 

Whether the State Fund has paid all medical expenses of which payment is required pursuant to section 

39-71-704, MCA. 

The trial took place on January 16, 1987. Prior to the entry 

of judgment, the State Fund sent a letter to claimant's 

counsel dated April 8, 1987, stating that: 

The State Fund will authorize Mr. Hilbig to 

obtain domiciliary care from the Northern Rocky 

Mountain Easter Seals Society for a period of 6 

months, 8 hours per day, at $7.50 per hour. 

This offer was rejected by the claimant by letter dated April 

20, 1987, which stated: 

The offer of limited home care which you have 

extended comes after this case, and that particular 

issue, is before the Workers' Compensation Court, 
and the issue has been submitted for the Court's 

decision. The Workers1 Compensation Court now is 

the exclusive forum to deal with the issue of the 

need and extent of home care services. 

Mrs. Hilbig has been supplying home care 

services for 16 hours five days a week and 24 hours 

two days a week, since November 17, 1983, and of 

course, expects to be compensated for her services, 

both in the past and in the future. 

On April 14, 1987, prior to receipt of the above letter, 

the State Fund filed a motion to clarify issues relating to 

domiciliary care. The State Fund contended that due to its 

offer of April 8, 1987, the issue of future benefits had been 

resolved and was no longer an issue before the court. The 

court determined that clarification of the issue was not 

necessary because: 

Both parties have agreed that the question of 

domiciliary care to April 8, 1987, is an issue. 

Whether or not future domiciliary care is necessary 

depends upon the evidence presented and the court 

will not create new issues at this late date. 

Issues not decided at this hearing can return by 

the petition of either party should disputes not be 

resolved by the parties. 

The court also noted that "[alt the end of the time period 

(six months from the date payment began) consideration would 

be given to future needs of the claimant." 

The court's findings of fact, conclusions of law and 

proposed judgment were entered on June 20, 1988. The court 

determined that Mr. Hilbig was entitled to 24 hour-a-day home 

health care, and awarded domiciliary care payable to claimant's wife in the amount of $7.50 per hour for 24 hours a day 

from December 18, 1986, to April 8, 1987. The date which 

payment was ordered to begin was the date the lower court 

found the employer first had knowledge of the need or demand 

for domiciliary care, citing Carlson v. Cain (1985), 216 
Mont. 129, 140, 700 P.2d 607, 614. Regarding the April 8, 

1987 cutoff date, the court concluded that: 

The defendant State Fund has acknowledged claimant's entitlement of domiciliary benefits of $7.50 

per hour for eight hours a day to claimant's wife 

beginning April 8, 1987, but not before that date. 

No other justification appears in the court's order why home 

health care benefits were limited to a four-month period or 

the need for future domiciliary care. 

On June 20, 1988, claimant filed a petition with the 

Workers' Compensation Court requesting that the court revise 

its order of June 17, 1988, to provide for domiciliary care, 

past and future, based on the court's finding that claimant 

is entitled to 24 hours of domiciliary care. Claimant's 

petition was denied by order dated July 12, 1988, which 

stated: 

The issues decided by the hearing examiner were 

those presented by the parties and there is clearly 

no basis for the claimant to now request additional 

issues beyond those submitted to the Court. The 

record amply supports the findings of the hearing 

examiner and the Judgment of this Court. 

Claimant now appeals both the above order and the judgment 

rendered on the issue of domiciliary care. First he disputes 

the court's finding that the employer did not have knowledge 

of claimant's need for domiciliary care until December 18, 

1986. He argues that the evidence clearly establishes constructive notice on the part of the employer from the date of 

claimant's discharge from the hospital on December 6, 1983. 

Claimant also disputes the court's limitation of home 

health care benefits to April 8, 1987, arguing that such a 

conclusion is inconsistent with the court's finding that 

claimant requires 24 hours of care each day and that his 
condition is "not improving and is likely to decline." 

Claimant requests that this Court reverse the lower court's 

imposition of a cutoff date and order that home health care 

benefits be paid, at the rate of 24 hours per day, unless and 

until the State Fund demonstrates that such care is no longer 

needed. We will address these claims separately. 

LIMITATION OF BENEFITS AS COMMENCING ON DECEMBER 18, 1986: 

The employer ' s knowledge of the employee ' s need for 

medical services at home resulting from the industrial injury 

is one factor which must be met when considering eligibility 

for domiciliary care. Larson v. Squire Shops, Inc. (Mont. 

1987), 742 P.2d 1003, 1008, 44 St.Rep. 1612, 1619. The 

Workers' Compensation Court determined that December 18, 

1986, was the date the employer first knew of the need or 

demand for domiciliary care. On that date, the Workers' 

Compensation Court found that a pretrial conference was held 

in which the claimant first requested domiciliary care. The 

court further found that the medical reports prior to tha.t 

date did not recommend home health care for the claimant. 

Claimant argues that the employer had constructive 

knowledge of his need for home health care based on medical 

reports demonstrating the severity of head injury and the 

effects upon claimant, such as a memory loss, headaches, 

depression and anxiety. Claimant contends that this constructive knowledge dates back to December 6, 1983, when he 

was released from the hospital, and that Mrs. Hilbig should 

be reimbursed for 24 hour per day health care from that date. 

The conclusion of the Workers' Compensation Court will 

not be disturbed if there is substantial evidence in the 

record to support its findings. Giacoletto v. Silver Bow 

Pizza Parlor (Mont. 1988), 751 P.2d 1059, 1061-62, 45 St.Rep. 

536, 537. We conclude that the record supports the lower 
court's findings and conclusions that there was no knowledge 

on the part of the employer until December 18, 1986, when 

domiciliary care was first requested by the claimant. We 

affirm the Workers' Compensation Court as to the commencement 

date of domiciliary care. 

LIMITATION OF BENEFITS TO APRIL 8, 1987: 

It is not clear from the court's findings why it placed 

this cutoff date on benefits payable to Mrs. Hilbig. In its 

Order Denying Defendant's Motion to Clarify the Domiciliary 

Care Issue, the court stated: 

On April 8, 1984, [I9871 State Fund claims 

examiner, Larry Thomas, informed the claimant's 

counsel, R.V. Bottomly, that the State Fund is 

authorizing domiciliary care for a period of six 

months, at eight hours per day, at $7.50 per hour. 

At the end of that time period, consideration would 

be given to future needs of the claimant. 

The record shows that the Workers' Compensation Court 

limited domiciliary care to benefits due prior to April 14, 

1987, the date of the State Fund offer of 8 hours per day of 

such care at $7.50 per hour. The court assumed that benefits 

after that date would be decided at some later date following 

a six-month observation period during which claimant's needs 

would be monitored and evaluated. We note that more than one 

year had expired from the April 14, 1987 offer to the June 

20, 1988 court order. The six-month period had long expired. 

In addition, we note that the pretrial order of January 9, 

1987 provided that the issue was whether the State Fund had 

paid all medical expenses under 5 39-71-704, MCA, which 

included the domiciliary care issue. 

We affirm the Workers' Compensation Court award of 

domiciliary care of $7.50 per hour, 24 hours a day, from 

December 6, 1986, to April 8, 1987. We remand this cause to 
the Workers' Compensation Court for such additional proceedings as it shall determine to be necessary in order that the 

court may determine the extent of the domiciliary care to 

which claimant i.s entitled from and after April 8, 1987. 

We Concur: A