No. 88-613

IN THE SUPREME COURTOF THE STATE OF MONTANA
1989

RONALD F. HILBIG, Claimant and Appellant,-vsCENTRAL GLASS COMPANY, Employer, and STATECOMPENSATION INSURANCEFUND, Defendantand Respondent.

APPEAL FROM: TheWorkers' Compensation Court, The Honorable TimothyReardon,Judgepresiding.
COUNSELOF RECORD:
ForAppellant:
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. JusticeFred J.Weber delivered the Opinion of the Court.

Ronald Hilbig appeals a decision of theWorkers' Compensation Court denying a lump sum conversion of his benefits because theparties 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 contractualagreement? 2. Did the Workers' Compensation Court err in its award ofdomiciliary 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 onNovember 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 doesnot dispute. On July 17, 1985, twomeetings 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 a
d - 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 StateFund 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 offsetwas also discussed. TheWorkers' 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 apetition 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 courtdid grant claimant's claim topayment 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 hispetition. I Did the Workers' Compensation Court err in concluding that the parties' oral negotiations did not establish a binding contractualagreement? 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 intentionsof the parties are discernable to a reasonable degree and that the material elements of the agreement were stated, citing Thrasher v. Schreiber (1926)

### , 77Mont. 221, 227, 250 P. 600, 602,and SomontOil 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 claimantcould receivebiweekly benefits in the form of a lump sum payment. Despite these points of agreement, the State Fund argues that the parties' understanding ofhow those terms were to be acted upon is at issue and prevents the formation of avalid, enforceableagreement. 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 counselassumed a lump sumpaymentwould be forthcoming upon submission of thewritten proposal, while the StateFund 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 bepresent:
(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. TheWorkers' Compensation Court concluded that a lack of consentprecluded the formationof abinding 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 statutewas 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 chaptermay 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. Thedivision

### 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 compensationprovided in this chapter are void without the approval of the division. Approval of the divisionmust be in writing.


# .

# .. The statute requires written applicationby the worker (Mr. Hilbig) with the concurrence of the insurer (State Fund). Claimant failed to prove the concurrenceof the State Fund to the satisfaction of theWorkers' CompensationCourt. The record contains substantial evidence to support that conclusion. We therefore affirm the Workers' Compensation Court on this issue. As a result claimant isnot entitled to the claimed twenty percent penalty under § 

### 39-71-2907,MCA. I1 

### Did the Workers' Compensation Court err in its award of domiciliarycare? On January 9, 1987, the parties agreed upon a 

### pretrial orderwhich included the following issue:

Whether the StateFund haspaid allmedical expenses ofwhich payment isrequiredpursuant to section 39-71-704,MCA. The trial tookplace onJanuary 16, 1987. Prior to the entry of judgment, the State Fund sent a letter to claimant's counseldatedApril 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, 8hoursper day,at $7.50 per hour. This offerwas rejectedby the claimantby letter datedApril 20, 1987,which stated:

The offer of limited home care which you have extended comes after this case,and thatparticular 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 extentofhome care services. Mrs. Hilbig has been supplying home care services for 16 hours fivedays aweek and 24 hours two days a week, since November 17, 1983, and of course,expects tobe compensated forher services, both in the past and in the future.
OnApril 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 ofApril 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 necessarybecause:

Both parties have agreed that the question of domiciliary care to April 8, 1987, is an issue. Whether or not future domiciliary care isnecessary 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 thepetition of either party should disputesnotbe resolvedby theparties.
The court also noted that "[alt the end of the time period

(sixmonths from the date payment began) considerationwould be given to futureneeds of the claimant." The court's findings of fact, conclusions of law and proposed judgment were entered on June 20, 1988. The court determined thatMr. Hilbigwas entitled to 24 hour-a-day home health care, and awarded domiciliary care payable to claimant's wife in the amount of $7.50per hour for 24 hours aday 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 firsthad knowledge of the need or demand for domiciliary care, citing Carlson v. Cain (1985), 216Mont. 129, 140, 700 P.2d 607, 614. Regarding the April 8, 1987 cutoffdate,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 orderwhy home health care benefits were limited to a four-monthperiod 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 theparties and there is clearly nobasis 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 Judgmentof thisCourt. Claimant now appeals both the above order and the judgment rendered on the issue of domiciliary care. Firsthedisputes 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 thepart of the employer from thedate 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 benefitsbepaid, at the rate of 24 hoursper day,unless and until the State Fund demonstrates that such care isno longer needed. Wewill address these claims separately.

LIMITATION OF BENEFITSAS COMMENCINGONDECEMBER 18, 1986: The employer

### 's knowledge of the employee

### 's need for medical services athome resulting from the industrial injury is one factorwhich 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 apretrial conferencewas 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 24hour per dayhealth care fromthatdate. 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 PizzaParlor (Mont.1988), 751P.2d 1059, 1061-62, 45 St.Rep. 536, 537. We conclude that the record supports the lowercourt's findings and conclusions that therewas no knowledge
on the part of the employer until December 18, 1986,when domiciliary care was first requested by the claimant. We affirm theWorkers' CompensationCourt as to the commencement date ofdomiciliary care.

LIMITATIONOF BENEFITSTOAPRIL 8,1987: It is not clear from the court's findingswhy itplaced this cutoffdate onbenefitspayable toMrs. 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 futureneeds 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 8hours per day of such care at $7.50 per hour. The court assumed thatbenefits after thatdate would be decided at some laterdate following
a six-month observationperiod during which claimant's needs wouldbemonitored and evaluated. We note thatmore 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 issuewas 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 tothe Workers' Compensation Court for such additional proceedings as it shall determine tobe 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