No. 94-474

IN THE SUPREME COURT OF THE STATE OF MONTANA

1995

JERRY PINYERD,

Petitioner and Appellant,

v.

STATE COMPENSATION INSURANCE FUND,

Respondent and Insurer for

PRESTIGE TOYOTA,

Employer.

APPEAL FROM: In the Workers' Compensation Court,

The Honorable Mike McCarter, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Patrick R. Sheehy, Halverson, Sheehy

& Plath, Billings, Montana

For Respondent:

Daniel J. Whyte, Legal Counsel, State

Compensation Insurance Fund, Helena, Montana

1* ‘..

Submitted on Briefs: February 16, I995

Decided: April 25, 1995
Justice Terry N. Trieweiler delivered the opinion of the Court.

The claimant, Jerry Pinyerd, filed a petition in the Workers'

Compensation Court for the State of Montana in which he sought

medical and disability benefits from the State Compensation Mutual

Insurance Fund for injuries he alleged were sustained during the

course of his employment with Prestige Toyota. After a trial, the

Workers' Compensation Court denied Pinyerd's claim for benefits,

based on its conclusion that his injury did not arise out of his

employment. Pinyerd appeals this conclusion. We reverse the

judgment of the Workers' Compensation Court.

The following issue is presented on appeal.

Did the Workers' Compensation Court err when it concluded that

the assault which caused Pinyerd's injuries did not arise out of

his employment?

FACTUAL BACKGROUND

Jerry Pinyerd was born and raised in California and moved to

Billings in 1993. In June of that year, he began working for

Prestige Toyota in Billings. Prestige Toyota is insured against

compensation claims by the State Compensation Mutual Insurance Fund

(State Fund). On September 18, 1993, while working for Prestige,

Pinyerd was involved in an altercation with fellow employee Robert

"Jake" Jacobson during which Pinyerd was struck several times and

from which he claims he was injured. Pinyerd and Jacobson were the

only witnesses called to testify before the Workers' Compensation

Court.

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Both Pinyerd and Jacobson testified that the work environment

at Prestige was highly competitive.

Prestige divided its salespeople into two teams which competed

against each other, and imposed quota requirements on each member.

In addition, team members competed against their own "teammates"

for commissions and quotas. Bonuses were paid at the end of each

month based on sales volume, and daily sales meetings were held at

which each salesperson's progress toward his or her quota was

discussed in front of the other sales staff. Pinyerd and Jacobson

were salesmen on the same team.

At Prestige, a potential customer who enters the business

premises is referred to as an "up." There was no organized system

for assigning salespeople to "ups." The first salesperson to reach

the "up" got the "up." Prestige offered cash incentives ("spiffs")

for test drives and for getting an "up" into the financial office.

Prestige also encouraged "turns." If one salesperson was not

making progress with a potential customer, he or she was supposed

to "turn" the customer to another salesperson. Any commission was

split between the staff involved in the turn.

Pinyerd testified that the staff argued over who was entitled

to an "up." Because no organized procedure was established,

salespeople would "stash" themselves among the cars to approach

"UPS . " This caused daily conflict among the sales staff.

He also testified that sharing a commission based on a l'turnl'

created problems when one staff member spent more time with the

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customer than the other. Prestige did not have a formal method for

resolving commission disputes. There was additional friction over

bad "turns" if one staff member turned a "flake," who would likely

never buy a car, over to another staff member simply to waste his

or her time so he or she could not compete for other "ups." This

and other testimony indicated that Prestige was a highly

competitive work environment.

When Pinyerd first arrived at Prestige, he made few sales

because he was shut out by the other salespeople. However, after

the intervention of management, he became more successful. During

July and August he was "hot" at a large Autorama sale with other

car dealers. He earned the second largest amount for "spiffs"

among 16 salespeople, and a substantial amount for commissions.

Pinyerd testified that Jacobson was resentful of his success.

He testified that Jacobson expressed jealousy about his money, car,

and property, and that he received bad "turns" from Jacobson.

The two witnesses disagreed about the cause of the altercation

that occurred at Prestige's parking lot in September 1993. Pinyerd

testified that Jacobson had invited him in for a beer after he

drove Jacobson home from work several days earlier, and that while

in the home he noticed an open bottle of pills which he advised

Jacobson to close and put in a more secure location. Pinyerd

stated that he was surprised to learn the following day that

Jacobson believed he had stolen some of the pills and was very

upset with him.
Jacobson testified that ten pills were missing and that he was

furious that Pinyerd stole some of his pills. He added that he

knew Pinyerd stole the pills because a co-worker told Jacobson that

Pinyerd had a pill. Jacobson claims that his outrage from the

alleged theft was the sole cause of his attack on Pinyerd at work

several days later.

Pinyerd testified that for several days after he was at

Jacobson's, he was informed by others at work that Jacobson was

after him. He avoided Jacobson by situating himself in the

driver's seat of a pickup truck located on the car lot. On the

date that Pinyerd claims he was injured, he states that he saw

Jacobson run toward the truck, and that when he reached him,

Jacobson started punching him through an open window of the truck.

Pinyerd testified that he leaned over to avoid being struck in the

face and instead was repeatedly punched in the back and leg. He

testified that at some point before or during the attack, Jacobson

yelled, "Get off the lot. Get out of this town. You'll never work

in this town again. You have no business working here to begin

with."

The Workers' Compensation Court found that Jacobson was

resentful because he did not accomplish as much as Pinyerd at

Autorama. The court also found that Jacobson's testimony was not

credible, including his testimony that Pinyerd came to his house

for drugs to relieve back pain. The court found that the immediate

cause of the assault was Jacobson's belief that Pinyerd stole some

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pills, but that resentment about Pinyerd's recent "success in car

sales" contributed to Jacobson's general hostility toward Pinyerd.

Based on its findings, the court concluded that the assault did not

arise out of and in the course of employment as required by

§ 39-71-407, MCA. Therefore, the court denied Pinyerd's claim for

benefits.

DISCUSSION

Did the Workers' Compensation Court err when it concluded that

the assault which caused Pinyerd's injuries did not arise out of

his employment?

This issue involves the application of Montana law to the

facts of this case. Our standard of review of a Workers'

Compensation Court's conclusions of law is whether the court's

interpretation of the law was correct. Stordalen v. Ricci’s Food Farm

(1993), 261 Mont. 256, 258, 862 P.2d 393, 394 (citing Martelliv.

Anaconda-Deer Lodge County (1993), 258 Mont. 166, 168, 852 P.2d 579,

580).

Pinyerd contends that the assault occurred in the course of,

and arose out of, his employment with Prestige. He claims he was

performing his job on his employer's premises when he was

assaulted. He adds that Penny v. Anaconda Co. (1981), 194 Mont. 409,

632 P.2d 1114, which the Workers' Compensation Court relied on, is

factually distinguishable, and that the court misapplied our

holding in that case.

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The State Fund responds that the Workers' Compensation Court

correctly applied Penny, and correctly concluded that any injuries

caused by Jacobson's blows did not arise out of Pinyerd's

employment with Prestige.

Section 39-71-407(l), MCA, of the Workers' Compensation Act

provides:

Every insurer is liable for the payment of compensation,

in the manner and to the extent provided in this section,

to an employee of an employer that it insures who

receives an injury arising out of and in the course of

employment . . . .

(Emphasis added.)

We note at the outset that the Workers' Compensation Court

erroneously concluded that the assault did not occur in the course

of employment. The language "in the course of employment,"

generally refers to the time, place, and circumstances of an injury

in relation to employment. Landeen v. Toole County ReJining Co. ( 192 9 ) , 8 5

Mont. 41, 54, 277 P. 615, 620. The injury here was in the course

of employment because it occurred on the employer's car lot, during

work hours, when both Pinyerd and Jacobson were supposed to be

performing work duties. The critical question is whether the

assault "arose out of" employment. The phrase "arising out of" is

related to the concept of causation. See 1 Arthur Larson, Workmen’s

Compensation Law, § 6.10 (1993) ; see also Landeen, 277 P. at 620 (stating

that the words "out of" point to the cause of the accident and are

descriptive of the relationship between the injury and employment).

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Our decision in Penny involved an assault in the workplace.

Penny was an employee who was involved in a fight with a co-worker

that occurred on the employer's premises. The hearing examiner

found that Penny started the fight solely to gratify personal

feelings of hatred or anger toward a co-worker. The hearing

examiner also found that the fight was not connected to a

disagreement that had occurred over union policies four years

earlier. Based on findings that the fight resulted from personal

animosity unrelated to employment, the hearing examiner concluded

that the injuries from the fight did not arise out of Penny's

employment. The Workers' Compensation Court adopted these findings

and conclusions as its basis for its judgment, and Penny appealed.

Penny, 632 P.2d at 1116-17.

In this Court's opinion, we held that pursuant to § 39-71-407,

MCA, an injury must arise out of and occur in the course of

employment before it is compensable. Penny, 632 P.2d at 1116. We

stated that unless a reasonably immediate service to the employer

is discernible, the determination of "whether an injury arises out

of and occurs in the scope of employment is controlled by the

particular facts and circumstances of each case." Penny, 632 P.2d

at 1116-17 (citing Guuruscio v. Industrial Accident Board (1962), 140 Mont.

497, 502, 374 P.2d 84, 86). We recognized that there are two lines

of authority regarding work-connected assaults in which conditions

of employment place employees under strain. Penny, 632 P.2d at 1117

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(citing 1 Larson, Workmen’s Compensation Law, 5 11.16). We followed the

rule set forth by the Connecticut Supreme Court in Willisv. Taylor&Fenn

Co. (Conn. 19511, 79 A.2d 821, 822, which provides that:

"'The fact that employees sometimes quarrel and fight

while at work does not make the injury which may result

one which arises out of their employment. There must be

some reasonable connection between the iniurv suffered

and the employment or the conditions under which it is

pursued.'"

(Emphasis added.) The Court in Penny held that substantial evidence

supported the finding that the fight was not reasonably connected

to Penny's employment. Penny, 632 P.2d at 1117.

In Penny and WiZlis, the fact finders found that the claimant was

the aggressor. In Penny, the hearing examiner found that Penny was

motivated solely by feelings of personal animosity and hatred. In

this case, Pinyerd was not the aggressor, nor were Jacobson's

feelings of animosity unrelated to the conditions under which he

and Pinyerd pursued their employment at Prestige.

While the Workers' Compensation Court found that the

precipitating cause of Jacobson's assault was his belief that

Pinyerd had stolen pills from him, the court also found that

Jacobson's resentment of Pinyerd's success in car sales contributed

to his general hostility toward Pinyerd.

Pursuant to our decision in Penny, the issue is not simply what

precipitated Jacobson's assault, but whether there was a reasonable

connection between Pinyerd's injury and the conditions under which

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he pursued his employment. That connection was established when

the court found that Jacobson's hostility toward Pinyerd was

contributed to by his resentment of Pinyerd's sales success.

Jacobson and Pinyerd met because of their employment at

Prestige. They had to compete against each other for sales quotas

and commissions without any organized framework within which to

compete. Evidence established that Prestige's policies created

daily friction among its sales staff and were substantial cause for

animosity.

Since this underlying animosity was caused in part by the

employer's policies, it was incidental to a salesperson's duties.

For these reasons, we conclude that Jacobson's assault of

Pinyerd which occurred on September 18, 1993, did "arise out of"

and occur in the course of his employment with Prestige Toyota. We

reverse the judgment of the Workers' Compensation Court and remand

for further proceedings consistent with this opinion.

/

us Ice

We concur:

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