No. 85-87 INTHE SUPREMECOURTOF THE STATEOF MONTANA 1986

JACK BREWINGTON, Claimant andAppellant,

-vsBIRXENBUEL, INC., Employer, and EMPLOYERS' FIRE INSURANCECO., Defendant and Respondent

APPEAL FROM: TheWorkers' CompensationCourt, The Honorable Timothy Reardon,Judgepresiding.

COUNSEL OF RECORD:

ForAppellant: Utick & Grosfield; Andrew J. Utick, Helena,Montana

ForRespondent: William L. Baillie,Great Falls,Montana

Submitted onBriefs: March 13, 1986 Decided: August 12, 1986

Filed: 

# AUG12

## 1986



# 2222

# Z?,i7r~ ClerkMr. Justice William E. Hunt, Sr., delivered the Opinion of the Court.

Jack Brewington appeals a Workers' Compensation Court order which ruled that he is permanently partially disabled and awarded him 400 weeks of indemnity benefits under S 39-71-706, MCA. The issues on appeal are: (1) whether the lower court erred in ruling that appellant is not permanently totally disabled; (2) whether the lower court erred in awarding appellant 400 weeks of indemnity benefits rather than 500 weeks, the statutory maximum; and,

(3) whether the lower court erred in failing to increase appellant's award by 20% under 5 39-71-2907,MCA, because of respondent's allegedly unreasonable delay or refusal in paying benefits. We reverse and remand. Appellant is 61 years of age, with an eighth grade education, and since 1960 has generally worked as a millwright, welder or carpenter. He also worked as a supervisor in a Missoula paper mill and he has worked for very short periods of time in other supervisory positions. These other supervisory jobs lasted only two to three days but details on how long he worked as a supervisor in the papermill are lacking. In December 1974, appellant suffered a compensable injury during the course of his employment with Birkenbuel, Inc. Due to the collapse of some scaffolding, appellant fell twelve feet to the ground landing on his right hand and shoulder. Appellant was able towork for some time afterhis accident although he experienced pain and difficultieswith his coordination. Appellant stoppedworking for threeweeks in March 1975 because of his injury but he resumed workingthereafter. Due to the injury, appellant suffered substantial pain in his neck, shoulder and arm. After working through 1975, 1976 and part of 1977, appellant suffered another industrial accident in July 1977 inwhich he sawed off the tips of two fingers on his left hand. Appellant has never worked since this second accident. Any disability he has from the second injury is not at issue in the instant case. Dr. Nelson, appellant's treating physician, first examined appellant in August 1977. Dr. Nelson diagnosed appellant as having brachial plexus neuritis, bilaterally, but greater on the right side. Brachial plexus neuritis is

an inflammationof thenerves in theneck and shoulderswhich may be brought on by direct blows or other injuries. Dr. Nelson later made an additional diagnosis of appellant as having thoracic outlet syndrome; i.e. a kinking or pinching of the artery and nerve as the shoulderand arm are elevated. These problems stem from appellant's 1974 accident. The doctor stated that appellant's conditionhad stabilized,and his healingperiodwas overby October 1982. On September 7, 1982,appellant was examined by Dr. Cahill at the request of the respondent. Dr. Cahill agreed with Dr. Nelson's diagnosis. In January, 1984, appellant described his health problems stemming fromhis 1974accident. He stated that he had problems with his neck and if it was cold or if he bent over a lot, his neck would lock and he had a lot of pain; that he had pain all the time in his shoulder,ranging from pain "like a toothache" most of the time to a burning sensation at other times; that he had pain all the time, and

no coordination most of the time, in his right arm; that anyphysical work made his arm and shoulder worse; and that he could do woodworking for about 1% hours before his right arm hurt him and hewas required to stop. Dr. Nelson testified at deposition that appellant's arm and shoulder injuries prevent him fromdoing laboriouswork; that is, "overhand, overhead, climbing, lifting, prolonged, repetitive usage of the arm and shoulder to any degree of strength." The doctor also recommended no prolonged bending by appellant or even long-distance driving. Dr. Nelson had no objections to appellant attemptingtowork asa foremanor supervisor. He stated that appellant should be in a "sedentary" occupation, which he described as something educative or supervisory or something appellant could take periodic breaks from if he had to do repetitive physical work. Dr. Nelson recommended vocational training for appellantas long as it would outfithim for lightwork. The doctor rated appellant's disability as a 10% impairment of the whole body. Dr. Cahill agreed with Dr. Nelson's impairment rating and conclusion that appellant was limited to a sedentary-type occupation. After quitting work after his second accident, appellant attempted to secure work as a supervisor with several Lewistown construction firms and as a welding instructor. The construction firms indicated that he would have to be a working foreman and he felt he was physically unable to handle such a position. Appellant apparently did not inquire into many jobs which could be classified as "sedentary" because, as he stated, he would not accept any job unless he could earn $1,000 a month. He concluded that he could probably enter into a retraining program and find work ifhe could stay close to hiswife,who isgoing blind.Respondent hired National Rehabilitation Consultants to work with appellant to improve his employment chances. Appellant declined the services of the rehabilitative consultants and admitted that he did so because he had decided to try and obtain a lump sum settlement of his Workers' Compensation benefits, and because acceptance would have required him to travel far fromLewistown and his ailingwife. R.espondent accepted liability for appellant's first injury and initially paid him temporary total disability benefits. Respondent paid these benefits until February 1983. In January 1983,National Rehabilitation Consultants advised respondent thatappellanthad refused their services. Within amonth,respondentstopped paying appellant temporary total disability benefits and began paying appellant lesser benefits for permanent partial disability. At the time of this change, respondent had reports from Dr. Nelson and Dr. Cahill which stated that appellant had reached his maximum point of recovery and could return to sedentary-type work. Appellant disagreed with respondent's decision to pay him permanent partial disability benefits and, in June 1983, he filed a petition for a hearing with the Workers' Compensation Court claiming a right to permanent total disability benefits. The lower court held a hearing in January 1984, before a hearing examiner who disqualified himself for conflict of interest reasons and the parties stipulated that the judge could complete the case. The judge did not hear any of the testimony but rather issued his decision in January 1985 based on the record. The court concluded that appellant was 80% permanently partially disabled,based upon an impairment rating of 10% of thewhole

man. The court awarded appellant 400 weeks ofbenefits, 80%of the statutory maximum of 500 weeks. The court refused to impose a 20% penalty upon respondent. This appeal followed. The first issue is whether the lower court erred in finding that appellant is partially rather than totally disabled. The oft-cited standard of review is that, "Our function in reviewing a decision of the Workers' Compensation Court is todeterminewhether there is substantial evidence to support the findings and conclusions of that court. We cannot substituteour judgment forthatof the trial court as to the weight of evidence on questions of fact. Where there is substantial evidence to support the findings of the Workers

## ' Compensation Court, this court cannot overturn the decision." (Citations omitted.) Metzgerv. ChemetronCorp. (Mont. 1984), 687~.2d 1033, 1035, 41 St.Rep. 1788, 1790; citing Nielsen v. Beaver Pond, Inc. (Mont. 1983), 661P.2d 47, 49, 40 St.Rep. 489, 491. But we have also stated that where the Workers' Compensation Court received the critical evidence by deposition "this Court, although sitting in review, is in as good a position as the Workers' Compensation Court to judge the weight to be given to such record testimony, as distinguished from oral testimony, where the trial court actually observes the characterand demeanor of the witnesses

on the stand." Lamb v. Missoula Imports, Inc. (~ont. 1984), 684P.2d 498, 500, 41 St.Rep. 1414, 1416; citingJonesv. St. Regis Paper Co. (1981), 196 Mont. 138, 639 P.2d 1140; and Hert 

### v. J. J. Newberry Co. (1978), 178 Mont. 355, 584 P.2d 656. The Workers' Compensation judge did not hear any oral testimony but decided the case on the same record that we have beforeus. Appellant claims that he has a permanent total disability, which is defined at § 39-71-116(13)

## , MCA, as: 

### [a] condition resulting from injury as defined in this chapter that results inthe loss of actual earnings or earning capability that exists after the injured worker is as far restored as the permanent character of the injurieswill permit and which results in the worker having no reasonable prospect of finding regular employment of any kind in the normal labormarket. Disability shallbe supported by a preponderance of medical evidence. In expanding upon the statutory definition,we adopted the followingtest inMetzger. To establish the existence of no reasonable prospect of employment in the normal labor market, a claimant must introduce substantial credible evidence of (1) what jobs constitute his normal labor market, and (2) a complete inability to perform the employment and dutiesassociatedwith those jobsbecause of his work-related injury. Spooner v. Action Sales, Inc., I11 Workers' Compensation Court Decisions No. 85

(January24, 1983)

# . Metzqer, The Workers' Compensation Court concluded claimant failed to meet thisburden. The courtplaced great emphasis

on the fact that claimant has worked as a foreman,and could do such work again. The court incorrectly determined that claimant's normal labormarket includesworking as a foreman. As stated above, claimant's work as a foremanwas extremely limited, amounting to two or three days on each of several occasions. This does not qualify theposition of foreman as part of claimant's normal labor market. Even so, claimant contacted several construction firms and the rehabilitation services division in an attempt to secure employment as a foreman, but was unsuccessful. The only available jobs as a foremanrequired claimant tobe a working foreman, a position claimant cannotperform. Further, claimant testified he refused the services of a private rehabilitation firm of respondent's choice.Although he admitted he could likely be retrained, he declined the services because acceptance would have meant moving far from Lewistown. Claimant's wife is going blind and he testified he needed to stay close to her in order to care for her. While weight is given to claimant's opinion that he could probably be retrained and that he voluntarily declined the services of the private rehabilitation firm, such testimony isnotdeterminative. The medical evidence as well as claimant's lifetime work history support the conclusion that claimant was rendered permanently totally disabledby his industrialaccident. We conclude that claimant has met hisburden asdefined in Metzger. He testified in great detail concerning his injuries and limitations. He suffers constant pain in his right arm and right shoulder, and intermittent pain in his neck. Physical work worsens the condition. Dr. Nelson testified that claimant's injuries prevent him from doing laborious work, that is, "overhand, overhead, climbing, lifting, prolonged, repetitive usage of the arm and shoulder to any degree of strength." This is the very work claimant had done allhis life. He attempted to secure work as a supervisor with several Lewistown construction firms and as a welding instructor, but was unsuccessful. Claimant conclusively established an inability to perform the jobs in his normal labor market. Claimant meets the requirements of § 39-71-116(13),MCA, forpermanent totaldisability. Because of our ruling on the first issue we need not consider the second issue in this case. Claimant's final issue iswhether the lower courterred in failing to increase his award by 20% under § 39-71-2907,MCA, because of respondent's allegedly unreasonable delay or refusal topay benefits. We hold claimant is entitled to the 20% penalty. TheWorkers1CompensationCourt concluded: 6. Under these facts the penalty provided for under 

### 5 92-824.1 R.C.M., now MCA 

### 5 39-71-2907

(1983), does not apply. Reducing claimant's benefits from temporary total to permanent partial because the claimant refused towork with a private rehabilitation firm is unreasonable. However, from the Court's record, it appears that the insurer coincidentally had sufficient information allowing itto reduce the claimant's benefits from temporary total to permanent partial.

The defendant is not without a remedy if rehabilitation is appropriate and the claimant refuses to participate. The proper procedure is delineated inMCA 

### 5 39-71-1005. Thisprocedurewas not followed in the caseatbar.

The lower courtessentially concluded that respondent's actions would have been unreasonable had the record not supported the conclusionthat claimantwaspermanent partial, not permanent total. It follows that sincewe now hold that claimant is permanent total, he is also entitled to the 20% penalty. Respondent reduced claimant's benefits in retaliation for his refusal to work with a private rehabilitation firm. Such action is unreasonable. Respondent should have followed theprocedure delineated in § 39-71-1005, MCA. Claimant is entitled to a 20% penalty pursuant to § 39-71-2907,MCA. Reversed and remanded to the Workers' Compensation Court to enter judgment for the claimant on his claim of permanent total disability, and to award claimant a 20% increase inhisaward pursuant to 

### 5 39-71-2907,MCA. A'WeConcur:

Chief Justice

JusticesMr. Justice L. C. Gulbrandson,dissenting.

I respectfully dissent. Appellant must prove, by a preponderance of the probative, credible evidence, that he is entitled to permanent totaldisabilitybenefits. Dumontv. Wickens Bros. Const. Co. (1979), 183 Mont. 190, 598 P.2d 1099. c his he has notdone. To establish that he is permanently totally disabled under the Metzger test cited in the majority opinion, the appellant must show a complete inability to perform the employment and duties associated with the jobs constituting his normal labor market. Although appellant is clearly permanently disabled, he has not satisfied the Metzger standard for permanent total disability. There are three main problems with themajority opinion,which simplyglosses

over the voluminous evidence in this case. First, the only expert medical opinions entered into evidence tend to show that appellant is 

### - not permanently totally disabled. Dr. Nelson diagnosed appellantashaving a 10% impairment of the whole body. He testified that appellant should be in some type of sedentary employment

(primarily educative or supervisory, or doing something, if repetitive, from which he could take breaks periodically). Dr. Cahill alsorated appellantashaving a 10% impairmentof the wholebody. Dr. Cahill's opinion in 1982was that: The patient's present physical condition shows

# . . .he has stabilized and has reached a maximum point of recovery. I do think he would be able to return to work, but I think that heavy lifting and using his upper extremities excessively other than for writing and desk work would be very difficult forhim.Second, the majority finds that appellant's normal labor market does not include working as a foreman. This finding is perplexing as it runs against the majority's recitationof facts and the appellant's testimony. The facts stated in themajority opinion are that: [Appellant] also worked as a supervisor in a Missoula paper mill and he has worked for very short periods of time

[two to three days] in other supervisory positions 

# ..

# .details on how long he worked as a supervisor in the paper mill are lacking. It is unclear how the majority can find that appellant's normal labor market does not include a foreman position when themajority isunsurehow long heworked as a foreman. Appellant's testimonywas as follows: Q. Did you ever work in any of these occupations strictly as a supervisor? A. Iwas a supervisor in the paper mill inMissoula for awhile.

9. Other than that job, did you ever work strictlyas a supervisor? A. Not forany lengthof time,no. The testimony is simply unclear as to how long appellant worked as a supervisor. Appellant has not establishedwhat his normal labor market is. Appellant did attempt to find employment as a supervisor with three or four construction firms in Lewistown. This indicates that appellant considers supervisory positions as within his normal labor market and that he believes he can perform the duties of those positions. Third, appellant explicitly stated that he would not accept any jobunless he could earn at least $1,000 a month. Although appellant conceded that he had worked as a laborer,he stated that he had not applied for work at any of the shops or stores, such as hardware stores,convenience stores

orgas stations,inhis hometown of Lewistown. Appellant did not introduce evidence showing a complete inability to perform these jobs or the supervisory jobs. The majority states that appellant has conclusively established an inability to perform the jobs in his normal labor market. The record does not support this assertion. The record does show that appellant refuses to even consider any job paying less than $1,000 a month. The majority opinion has dispensed with the requirements of the Metzger test. Lastly, I dissent from the majority's imposition of a 20% penalty upon the respondent under § 39-71-2907, MCA. That section allows the lower court to increase an award by 20% because of an insurer's unreasonable delay or refusal to

Whether an action is "unreasonable" under this statute is a question of factwhich is subject on appeal to the limited review of the substantial evidence test.

[Citation omitted.] If there is substantial evidence to supporta finding of "unreasonableness",this Court cannot overturn the finding. Wight v. Hughes Livestock Co., Inc. (Mont. 1981), 634 P.2d 1189, 1192, 38 St.Rep. 1632, 1636. The same standard of review applies to a lower court's finding of reasonableness. Substantial credible evidence supports the lower court's finding of "reasonableness"and its refusal to impose the penalty. The majority finds that respondent acted unreasonably because respondent reduced appellant's benefits in retaliation for appellant's refusal towork with aprivaterehabilitation firm. The opinion cites 

### - no evidence directly supporting thisassertion. Peter McGraw, a claims manager and insurance adjuster who worked on appellant's claim, testified as to why the insurerhad reduced appellant'sbenefits frompermanent total topermanentpartial. McGraw stated that the insurer reduced the benefitsbecause the insurerhad receivedmedical reports from Dr. Nelson and Dr. Cahill that stated: (1)appellant's conditionhad stabilizedand hehad reachedhismaximumpoint of recovery; (2) that appellant was able to go back to a sedentary-type of work; and (3) that appellant had a 10% impairment rating of the whole body. There was evidence at the hearing that the insurer senta letter to appellantwhich stated that the reduction inbenefitswas due to thedoctor's reports. Moreover, McGraw specifically refuted the suggestion that the insurer reduced appellant's benefits as retaliation. There is substantial, credible evidence which supports the lower court's refusalto impose the 20%penalty. The reduction of benefits was a reasonable action and no penalty should be imposed. 

# A

Mr. JusticeFred J. Weber: I join inthe foregoingdissent ofMr. Justice Gulbrandson.

. d Mr. Chief JusticeJ. A. Turnage: Ialso join in the foregoing dissent of

### Mr. Justice L. C. Gulbrandson.