No. 13456 

IN THE SUP= COUE OF THE STATE OF MONTANA 

1978 

RON PALTER, 

Claimant and Respondent, 

VS. 

PUBLIC AUCTION YARDS, Ehployer, 

and 

NATIONAL AUTOE43BILE & CASUALTY INSURANCE CO . , 

Defendant and Appellant. 

Appeal from: Workers' Compensation Court 

Honorable William Hunt, Judge presiding. 

Counsel of Record: 

For Appellant: 

Andrew J. Utick, Helena, Montana 

For Respondent: 

Pbulton, Bellingham, Longo & Mather, Billings, Montana 

4 ,979 Filed : 

Submitted on briefs: August 10, 1978 

Decided : 

!hR 2 1 197!3 
Mr. Justice Gene B. Daly delivered the Opinion of the Court. 

~hrough hearings before the Workers' Compensation Court 

in Helena, Montana, on October 24, 1975, and in Billings, 

Montana, on February 4, 1976, claimant sought workers' 

compensation benefits for an injury to his right knee which 

occurred on February 16, 1973. On April 5, 1976, the Workers' 

Compensation Court entered findings of fact and conclusions 

of law ordering the insurer to pay permanent partial disability benefits to the claimant based upon a weekly wage of 

$87.50 from the date of the claimant's last payment, such 

payments to be made indefinitely, until changed by order of 

the court. 

On April 26, 1976, the insurer filed a petition for 

rehearing and an alternative motion to amend and supplement 

the findings of fact and conclusions of law. The insurer 

objected to the computation of claimant's compensation 

benefits based upon a weekly wage of $87.50 rather than upon 

a weekly wage of $18.36; it objected to payment of benefits 

for an indefinite period of time rather than limiting such 

benefits to the statutory maximum set forth in section 92- 

709, R.C.M. 1947, now section 39-71-705 MCA; and it submitted findings and conclusions designed to retain jurisdiction of the matter in the Workers' Compensation Court 

until all medical testimony was completed and the full 

extent of claimant's permanent partial disability could be 

determined. By order dated June 30, 1976, the Workers' 

Compensation Court denied the insurer's petition and motion 

and summarily returned the file to the administrator of the 

Workers' Compensation Division. The insurer appeals. 
There is no dispute that claimant Ron Walter suffered a 

compensable industrial accident. On February 16, 1973, 

while in the employ of Western Livestock Reporter, d/b/a 

Public Auction Yards, claimant sustained an accidental 

injury to his right knee when he was kicked by a cow. He 

was first treated by Dr. L.C. Allard who diagnosed a rupture 

of the tibia1 collateral ligament of the right knee. Dr. 

Allard referred claimant to Dr. Peter V. Teal for possible 

surgery. That same day, February 16, 1973, claimant was 

seen by Dr. Teal. Dr. Teal felt that claimant had suffered 

a partial tear of the medial collateral ligament of the 

right knee. He placed claimant's right leg in a cylinder 

cast. 

On March 6, 1973, claimant filed a timely claim for 

compensation benefits for injury to his right leg. 

Subsequent to his treatment by Dr. Teal, claimant 

returned to his primary occupation of operating his farm 

where he continued to experience difficulty with his right 

knee. In January 1974, claimant, after consulting with Dr. 

Ronald Losee, decided to undergo surgery. On January 15, 

Dr. Losee performed a lateral meniscectomy on claimant's 

right knee. At that time Dr. Losee estimated claimant would 

be off work for six weeks and felt there would be no permanent impairment other than a little joint looseness. 

After surgery, claimant continued to see Dr. Losee. 

However, upon the latter's refusal to submit an impairment evaluation claimant was sent by the insurer to Dr. 

Frank Humberger of Bozeman for evaluation. Dr. Humberger 

felt that because claimant continued to complain of problems with his right knee, another arthrogram (the first 

one having been done at Dr. Teal's direction) should be 

done. After consulting with Dr. Losee, claimant refused 

to undergo this procedure. Dr. Losee advised that healing 
was completed; that he would not recommend a repeat arthrogram; that compensation benefits should be discontinued; and 

that the claimant would be reexamined in the spring. 

The next medical report from Dr. Losee is a handwritten 

report, dated March 10, 1975, which states: 

"Diagnosis on Ron Walter: 

"Medial Capsular Insufficiency and Arthrosis 

Rt Knee. 

"Accounts for his pain and instability. 

"R. E. Losee'!' 

There is no further medical information contained in the 

file. 

At the hearings before the Workers1 Compensation Court, 

it was brought out that the claimant's principal occupation 

was that of a farmer and he regularly supplemented his farm 

income by outside employment during the winter months. At 

the time of his injury, he was employed part-time by Public 

Auction Yards helping with livestock sales. Claimant stated 

he had been similarly employed the year before his injury 

and had earned over the course of the previous year $954.30 

from such employment. These 1972 wages were broken down by 

calendar quarters: First quarter, $824.74; second quarter, 

$90.78; third quarter, $0; and fourth quarter, $36.78. 

Claimant further testified that his average weekly wage at 

the time of injury was roughly $75.00; and that he expected 

to work approximately the same schedule in 1973 as he had in 

1972 at an hourly rate of $2.00. 

Additionally, the Court had before it the employer's 

first report of injury which showed claimant's weekly wage 
to be $80.00; the claim for compensation which showed that 

claimant worked 12 1/2 hours per day for three to four days 

per week for $75.00; and the fact that the defendant-insurer 

had made payments based upon a weekly wage of $45.00. 

The Workers' Compensation Court entered the following 

findings of fact and conclusions of law: 

"1. The uncontradictory (sic) testimony of Ron 

Walter was that he would expect to work 

an average of 43-3/4 hours per week in 1973. 

"2. His average earnings in 1973 were $2 

per hour. 

"3. His average weekly wage for 1973 was 

$87.50. 

"4. Compensation should be determined based 

upon the average weekly earnings of Ron 

Walter. 

"That Ron Walter is entitled to receive benefits 

for permanent partial disability based upon 

his average anticipated earnings of $87.50 

per week from the date of his last payment 

until changed by order of this court." 

The issues before us are: 

(1) Whether the Workers' Compensation Court correctly 

computed the average weekly wage of claimant at $87.50; 

(2) Whether the payment of permanent partial disability 

benefi'ts for an indefinite period of time was proper; and 

(3) Whether the Workers' Compensation Court erred 

in returning the files of the Workers' Compensation Court 

without receiving additional medical testimony. 

We shall discuss each issue in turn. 

This accident occurred in February 1973. Therefore, 

the applicable statute (since repealed) in effect was 

section 92-703, R.C.M. 1947, as amended by Ch. 207, Sec. 3, 

Laws of Montana (1967). That section fixed the amount of 
weekly compensation to be paid for partial disability at a 

percentage between 50% and 66 2/3 of "the difference between 

the wages received at the time of the injury and the wages 

that such injured employee is able to earn thereafter." 

This exact percentage depends upon claimant's marital status 

and the number of dependents. 

"Wages" as used in then section 92-703, R.C.M. 1947, 

was defined in then section 92-423, R.C.M. 1947, as follows: 

"'Wages' mean the average daily wages received 

by the employee at the time of the injury 

for the usual hours of employment in a 

day, and overtime is not to be considered." 

We considered the term "average daily wage" in Mahlum 

v. Broeder (1966), 147 Mont. 386, 412 P.2d 572, where we 

stated: 

". . . [Tlhat the first step in the formula 

for compensation is to determine the 

average daily wage. This is a simple 

arithmetical computation of dividing a 

man's earnings over a reasonable period 

of time by the total number of days he 

worked, excluding all overtime. What 

-- is a reasonable period -- of time, - of course, 

depends -- on the circumstances of --- each case. 

The period must be sufficiently long -- --- to take 

into account seasonal fluctuations - for hours, 

wage rates, vacations, - and any other factors 

which may materially affect the average daily 

wage." 147 Mont. at 394-95, 412 P.2d at 576-77. 

(Emphasis added. ) 

The insurer contends that, under the foregoing case, and the 

decision in Infelt v. Horen (1959), 136 Mont. 217, 346 P.2d 

556, that the Workers' Compensation Court in this case was 

required to take the full earnings of the claimant for the 

previous year, $954.30, and divide the same by 52 weeks, to 

arrive at an average of $18.36 per week. The result to the 

claimant would be that instead of receiving a percentage of 

$87.50 per week as found by the Workers' Compensation Court, 

he would receive a percentage of $18.36. 
Whatever we may have said in previous cases, it appears 

clear that the intent of former section 92-703, R.C.M. 1947, 

with respect to partial disability, was to compensate the 

injured employee by a percentage of the "difference between 

the wages received at the time of the injury and the wages 

that such injured employee is able to earn thereafter". In 

reality, the section sets up a test of loss of earning 

capacity. It is apparent here that the claimant did in fact 

lose earning capacity by virtue of his compensable accident. 

Not only was he unable to work fully at his job in the sales 

yard, but in the operation of his farm, he found himself in 

a situation where he could not lift weights in excess of 25 

to 30 pounds and had to pay other help to perform jobs that 

he usually performed. He definitely suffered a loss of 

ability to earn wages. As we said in Mahlum, supra, the 

determination of his average daily wage depends upon the 

circumstances of each case. We agree with the Workers' 

Compensation Court that in this case a determination that 

his average daily wage would result in earnings of $87.50 

per week was fairly computed and is within the objective of 

such Workers' Compensation statutes. The ultimate objective 

of such statutes is to reflect fairly the claimant's probable 

future earning loss. 2 Larson, Workmen's Compensation 

- Law, S60.11 at 10-363. 

When it is considered that the claimant's injury 

adversely affected not only his ability to work in the 

salesyard, but his ability to be an effective farmer as 

well, the contention that the Workers' Compensation Court 

awarded claimant a "windfall" must be rejected. His working 

capacity was certainly reduced and his former ability to 

earn $87.50 per week is established in the evidence. 

-6- 
The second issue brought by this appeal is the 

ruling by the Workers' Compensation Court that compensation 

is to be paid to the claimant "from the date of his last 

payment until changed by order of this court." This is 

error and must be corrected on remand. 

The Workers' Compensation Court concluded the 

claimant was "entitled to receive benefits for permanent 

partial disability." Neither section 92-703 nor section 

92-709, R.C.M. 1947, of the Workers' Compensation Act 

relating to partial disability as they read at the time 

of claimant's injury contain any authorization for an 

open-ended award of compensation. 

Section 92-703 provided that compensation be paid 

not longer than 500 weeks subject to the proviso that 

"compensation for partial disability resulting from the 

loss of or injury to any member shall not be payable for 

a greater number of weeks than is specified in section 

92-709 for the loss of such member." Under section 92-709 

claimant's injury to his right knee entitles him to no 

more than 200 weeks of compensation. Jensen v. Zook 

Brothers (1978) , Mont . , 582 P.2d 1191, 1194, 

35 St.Rep. 1066, 1070; Johnson v. Industrial Accident 

Board (1971), 157 Mont. 221, 224, 483 P.2d 918, 920. 

The third issue relates to insurer's contention that 

the Workers' Compensation Court should have received 

additional medical evidence which would assign a percentage 

of disability based on the injury of claimant's knee. 

The Workers' Compensation Court stated at the close 

of the evidence that, "I think there has been some pretty 

convincing testimony here." 

The trial judge was obviously referring to the 

evidence before him that claimant was unable to handle 
the work in the salesyard or the work he had performed on 

his farm; the evidence of claimant's wife as to his inability 

to perform his usual farm work and the pain he suffered; and 

the medical evidence that was in fact before the court. It 

is not necessary that in determining disability, the Workers' 

Compensation Court resort solely to medical evidence. We 

held in Robins v. Anaconda Aluminum Co. (1978) , Mont . 

"We are of the opinion that the question 

of disability is not a purely medical 

question. In 3 Larson, Workmen's 

Compensation Law, S79.53, it is pointed 

out : 

"I. . . Disability is not a purely 

medical question: it is a hybrid 

quasi-medical concept, in which are 

commingled in many complex combinations 

the inability to perform, and the 

inability to get, suitable work . . . 1 II 

There was sufficient evidence before the Workers' 

Compensation Court to support its finding of disability. 

It should be remembered there are safeguards built into 

the Workers' Compensation Law in Montana. In cases of 

enumerated or scheduled injuries under section 92-709, a 

loss such as here is subject to the limitations set forth in 

the schedule in section 92-709; further, the Workers' Compensation Court retains jurisdiction to reduce or terminate 

disability payments to meet changing conditions under section 

92-713, R.C.M. 1947, now section 39-71-739 MCA. 

The order of the Workers' Compensation Court is modified 

to limit claimant's payments for permanent partial disability 

to a maximum of 200 weeks. In all other respects, the 
We Concur: 

.............................. Chief Justice 

yE-&-L&e9 Justices ------ 

Mr. Chief Justice Frank I. Haswell did not participate in 

this cause.