No. 92-274 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

JOSEPH MARTELLI, 

Petitioner and Appellant, 

-vANACONDA-DEER LODGE COUNTY, 

Defendant/Employer and Respondent. 

APPEAL FROM: Workers' Compensation Court 

Of the State of Montana 

The Honorable Timothy Reardon, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Bernard J. "Ben" Everett, Knight, Dahood, McLean, 

Everett & Dayton, Anaconda, Montana 

For Respondent: 

Leo S. Ward, Browning, Kaleczyc, Berry & Hoven, 

Helena, Montana 

Filed: 

Submitted on Briefs: December 17, 1992 

Decided: May 6, 1993 
Justice R. C. McDonough delivered the Opinion of the Court. 

This is an appeal from an order of the Workers' Compensation 

Court, dismissing Martelli's claim for permanent total disability 

benefits. We affirm. 

The dispositive issue is whether the Workers' Compensation 

Court correctly dismissed Martelli's claim. The court dismissed 

his claim because he had failed to appeal a previous order of the 

Employment Relations Division of the Department of Labor and 

Industry (the Division), which concluded that he could return to 

work in a suitable related occupation. 

On August 10, 1988, Martelli suffered a soft tissue injury to 

his neck when another vehicle struck his vehicle from the rear. 

The injury occurred in the course and scope of his employment as a 

law enforcement officer for Anaconda-Deer Lodge County. 

The insurer designated a rehabilitation provider pursuant to 

§ 39-71-1015, MCA (1987). The rehabilitation provider determined 

that eight full-time occupations were suited to Martelli's 

education and skills. Later, the provider determined that Martelli 

could return to his previous occupation. 

When Martelli did not return to work, the insurer notified the 

Division, which had jurisdiction of the matter pursuant to 5 39-71- 

1033, MCA (1987), 5 39-71-1018, MCA (1987) and 24.29.207 ARM. 

After the parties completed all of the administrative steps within 

the Division, the Division granted Martelli's request for a 

hearing. 
Following a contested hearing, the Division issued a final 

order, stating that an appropriate rehabilitation option under 5 

39-71-1012, MCA (1987) was for Martelli to return to a related 

occupation suited to his education and skills. The Division's 

order also stated that "[alny party in interest may appeal this 

order to the Workersf Compensation Court within ten (10) working 

days after the mailing of this final order as provided in Section 

39-71-1018, MCA." Martelli failed to appeal the order. Instead, 

over a year later, he filed a petition with the Workers' 

Compensation Court seeking permanent total disability benefits. 

Acting on a motion by Anaconda-Deer Lodge, the Workers' 

Compensation Court dismissed Martelli's petition. The court 

concluded that Martellits failure to appeal the Division's final 

order precluded him from raising the permanent total disability 

issue before the court. This appeal followed. 

Our review of the Workers' Compensation Court's conclusions of 

law is plenary. We determine whether the court's conclusions are 

correct. Steer Inc. v. Dept. of Revenue (lggO), 245 Mont. 470, 

474-75, 803 P.2d 601, 603. 

Martelli contends that the Workers' Compensation Court erred 

in declining to exercise jurisdiction in this case. He argues that 

by dismissing his petition for a hearing, the court not only 

abandoned its exclusive jurisdiction over the issue of whether he 

was entitled to benefits under the Workers' Compensation Act, but 

also gave the Division jurisdiction over the matter. See 5 39-71- 
2905, MCA (1987) (giving the workers' compensation judge exclusive 

jurisdiction over claims for benefits). 

Anaconda-Deer Lodge contends that the doctrine of collateral 

estoppel bars Martelli from litigating in Workers' Compensation 

Court the issue of whether he was permanently and totally disabled. 

Anaconda-Deer Lodge argues that because of the interplay between 

the issue before the Workers' Compensation Court and the issue 

previously litigated before the Division, the court would have to 

relitigate the issue decided by the Division to determine whether 

Martelli was entitled to permanent total disability benefits. We 

agree. 

The doctrine of collateral estoppel, also called issue 

preclusion, "precludes relitigation of issues actually litigated 

and determined in [a] prior suit regardless of whether it was based 

on the same cause of action as the second suit." Lawlor v. 

National Screen Service (1955), 349 U.S. 322, 326, 75 s.c~. 865, 

867, 99 L.Ed. 1122, 1127; see also Smith v. Schweigert (1990), 241 

Mont. 54, 58, 785 P.2d 195, 197. The three elements of collateral 

estoppel are: 

1. The issue has been decided in a prior adjudication 

and is identical to the one presented. 

2. A final judgment on the merits was issued. 

3. The party against whom the plea is asserted was 

either a party or in privity with a party to the 

prior adjudication. 

Schweicxert, 785 P.2d at 197. 
It is clear and undisputed that the present case meets the 

second and third elements of collateral estoppel. The Division 

issued an order of final determination which Martelli could have 

appealed to the Workersr Compensation Court. See § 39-71-1018, MCA 

(1987). Martelli did not appeal the Division's order so it became 

a final judgment. Thus, the second element of collateral estoppel 

is clearly met. All parties to this cause were also parties to the 

litigation before the Division. The third element of collateral 

estoppel is therefore satisfied. 

The first element, however, is in dispute. To meet the first 

element, the precise issue must have been litigated in a prior 

action. Marriage of Stout (1985), 216 Mont. 342, 350, 701 P.2d 

729, 734. 

Martelli contends that the issue before the Division was not 

the same as that before the Workers' Compensation Court. He argues 

that the issue before the Workerst Compensation Court was whether 

he was entitled to benefits for a permanent total disability as 

defined in 3 39-7l-l16(15), MCA (l987), whereas the issue before 

the Division was to determine which rehabilitation option under 5 

39-71-1012, MCA (1987), would be appropriate for him. 

Under the circumstances of this case, the two issues are so 

intertwined that to decide the issue before it, the Workers' 

Compensation Court would have to rehear the precise issue 

previously decided by the Division. The definition of permanent 

total disability is "a condition resulting from injury as defined 

in this chapter after a worker reaches maximum healing, in which a 
worker is unable to return to work in the worker's job pool after 

exhausting all options set forth in 39-71-1012, MCA." One of the 

options set forth in that statute is the precise issue previously 

resolved by the Division--whether the worker could "return to a 

related occupation suited to the claimant's education and 

marketable skills." See 5 39-71-1012(c), MCA (1987). 

To rule that Martelli was permanently and totally disabled, 

the Workers' Compensation Court would have to determine that 

Martelli could not return to a related occupation suited to his 

education and skills. See 55 39-71-116 (15) , 39-71-1012 (c) , MCA 

(1987). As stated above, the Division had previously ruled that 

Martelli could return to work in a suitable related occupation and 

Martelli did not appeal the Division's order. The doctrine of 

collateral estoppel, therefore, precluded the parties from 

relitigating the issue before the Workers' Compensation Court. See 

Schweisert, 785 P.2d at 197. 

Because the parties could not relitigate the issue, the 

Workers1 Compensation Court was bound by the Division's 

determination that Martelli could return to a related occupation 

suited to his education and skills. Because he could work in a 

suitable occupation, the Workers' Compensation Court could not 

determine that Martelli was permanently and totally disabled. 

Thus, the court was correct in dismissing the claim. 

Affirmed. 
We Concur: A' 
Justice Terry N. Trieweiler dissenting. 

I dissent from the majority opinion. 

The effect of the majority opinion is to amend the Workers' 

Compensation Act by eliminating the role of the Workers' 

Compensation Court in determining a claimant's right to total 

disability benefits. 

On January 29, 1992, claimant filed a petition for hearing 

before the Workersv Compensation Court in which he asked that court 

to find that he was permanently totally disabled and entitled to 

permanent total disability benefits. 

By statute, the Workers' Compensation Court is given exclusive 

jurisdiction to determine the nature and extent of benefits to 

which an injured worker is entitled. Section 39-71-2905, MCA 

(1987), which was in effect on the date of claimant's injury, 

provides as follows: 

A claimant or an insurer who has a dispute concerning any 

benefits under chapter 71 of this title may petition the 

workersv compensation judge for a determination of the 

dispute after satisfying dispute resolution requirements 

otherwise provided in this chapter. The judge, after a 

hearing, shall make a determination of the dispute in 

accordance with the law as set forth in chapter 71 of 

this title. If the dispute relates to benefits due a 

claimant under chapter 71, the judge shall fix and 

determine any benefits to be paid and specify the manner 

of payment. After parties have satisfied dispute 

resolution requirements provided elsewhere in this 

chapter, the workers' compensation iudcre has exclusive 

iurisdiction to make determinations concerninq disputes 

under chapter 71, except as provided in 39-71-317 and 

39-71-516. [Emphasis added.] 
The claimant in this case did comply with the dispute 

resolution requirements provided for in 5 39-71-2401, MCA (1987), 

and 55 39-71-317 and -516, MCA, are not applicable to this case. 

It is our obligation to construe statutes in a way that gives 

effect to the substance of the statute, and if several statutes 

appear to conflict, to construe them in a way that gives effect to 

all of the statutes. Section 1-2-101, MCA (1987), provides: 

In the construction of a statute, the office of the judge 

is simply to ascertain and declare what is in terms or in 

substance contained therein, not to insert what has been 

omitted or to omit what has been inserted. Where there 

are several provisions or particulars, such a 

construction is, if possible, to be adopted as will give 

effect to all. 

The majority has concluded that when a hearing examiner for 

the Division of Workers' Compensation decided claimant's employment 

options under Part 10 of the Workers1 Compensation Act which 

relates to vocational rehabilitation, that hearing examiner 

effectively decided what disability benefits claimant was entitled 

to under the Workers1 Compensation Act. To construe the 

administrative procedures provided for in Part 10 of the Act in 

that manner does not satisfy this Court's statutory obligation to 

give effect to all the provisions of the Workers* Compensation Act. 

The only way to accomplish that obligation is to conclude that 

Part 10 of the Workers1 Compensation Act relates solely to 

eligibility for vocational rehabilitation benefits and Part 29 of 

the Workers1 Compensation Act relates to the procedure for 

determining disability benefits. 
Although claimant had a right to appeal to the Workers' 

Compensation Court from the final order of the Legal Services 

Division of the Department of Labor and Industry, the scope of 

review on that appeal would have been limited and would not have 

been the equivalent of a hearing before the Workerst Compensation 

Court. In State Compensation Mutual Insurance Fund v. Lee Rost Logging ( 19 92 ) , 

252 Mont. 97, 827 P.2d 85, we held that 5 2-4-704(2) (a) (v), MCA, of 

the Administrative Procedure Act applied to the Workers' 

Compensation Court's review of an agency decision. Therefore, if 

claimant had appealed the decision of the Legal Services Division, 

the Workers' Compensation Court could only have reversed that 

decision if it was Itclearly erroneous in view of the reliable, 

probative, and substantial evidence on the whole record." That 

limited form of review is not the equivalent of the fact-finding 

responsibility given exclusively to the Workerst Compensation Court 

by 5 39-71-2905, MCA, when claimant's disability benefits are at 

issue. For that reason, the right of appeal provided for in 5 39- 

71-1018(4), MCA, was not the equivalent of the hearing guaranteed 

in Part 29 of the Act. The majority's decision, therefore, 

effectively amends the Workers' Compensation Act by eliminating the 

rights and jurisdiction provided for in Part 29. 

The statutory scheme enacted by the Legislature in 1987 

recognized the need for an independent court to decide the most 

important issue that could arise in disputes between injured 

workers and the insurer for their employer. For that reason, the 

Legislature gave the Workers' Compensation Court exclusive 

10 
jurisdiction to decide those issues. This Court, by this decision, 

has eliminated that procedural safeguard and placed all injured 

workers in this state at greater risk in the process. For these 

reasons, I dissent from the majority opinion. I would reverse the 

judgment of the Workers' Compensation Court. 

Justice William E. Hunt, Sr., joins in the foregoing dissent. 
May 6, 1993 

CERTIFICATE OF SERVICE 

I hereby certify that the folIowing order was sent by United States mail, prepaid, to the following 

named: 

Bernard J. "Ben" Everett 

Knight, Dahood, McLean, Everett & Dayton 

P. 0, Box 727 

Anaconda, MT 59711 

Leo S. Ward 

Attorney at Law 

P. 0. Box 1697 

Helena, MT 59624-1697 

ED SMITH 

CLERK OF THE SUPREME COURT 

STATE,OF MONTANA