No. 90-587 IN THE SUPREME COURT OF THE STATE OF MONTANA 1992

JAY ANDERSON, Claimant, Respondent, and Cross-Appellant,

JERRY D. HAMMER and STATE COMPENSATIONMUTUAL INSURANCE FUND, Defendant, Appellant, and Cross-Respondent.

APPEAL FROM: Workers8 Compensation Court, The Honorable Timothy W. Reardon, Judge presiding.

COUNSEL OF RECORD: For Appellant and Cross-Respondent: Kelly M. OfSullivan,Agency Legal Services Bureau, Helena,Montana. For Respondent and Cross-Appellant: Chris J. Ragar, Beck Law Offices, Bozeman, Montana.

Filed: Submitted: January 14, 1992 Decided: February 21, 1992

ClerkJustice William E. Hunt, Sr., delivered the opinion of the Court. The original opinion in this case, dated September 16, 1991, and filed that same date, was withdrawn on November 22, 1991. We hereby clarify that original opinion. The Workers1Compensation Court awarded claimant 500weeks of permanent partial disability benefits at the rate of $57.86 per week. Both claimant and the State Fund appeal. We reverse and remand as to issues one and three. We affirm issue two. Claimant raises the following issue: 1. Whether in computing lost earning capacity,theWorkers1 compensation Court erroneously compared 1981 "olddollarswto 1990 l1newdollars9Iwithout updating the 1981 figures. The State Fund raises two additional issues: 2. Whether the Workers1CompensationCourt erred in finding that claimant suffered a whole person injury and therefore was entitled to 500 weeks of benefits. 3. Whether theWorkers1Compensation Court erred in failing to include thevalue of room and board provided to claimantby his employer as part of his compensation in the calculation of his post-injury wages. Claimant Jay Anderson, a cowboy, maintained a sporadic and short term pre-injury work history. Heworked as a laborer in the summer months forhis uncles as a block layer and carpenter. Hewas not fully apprenticed in either occupation. He sheared sheep for his father for approximately twomonths a year. In 1979,claimantbegan working for the Peavey Company as a feedplant operator. He worked in that position for about two and one-half years. His ending salary was $5.35 per hour. In 1981, claimant began working as a ranch hand for Mr. Hammer. His typical duties included fencing, calving, herding cattle, and repairing bridges. On July 23, 1986,while trying to round up a stray calf, claimant fell from his horse. The horse rolled on top of him, fracturinghis left upper arm. At the time of the injury,claimantwas earning $650permonth. Inaddition to a monthly salary, Hammer provided claimant with fringe benefits which included a mobile home, lunches,one-half of a beef per year, and somepasturage for claimant's horse. Claimant's x-rays revealed a comminuted fracture through the mid-shaft of the lefthumerus. Dr. Frank Humberger, an orthopedic surgeon, noted radial nerve palsy of the left arm. On July 24, 1986,Dr. Humbergerperformed surgeryon claimant's left humerusto stabilize the bone. Claimant's arm failed to heal properly. In April 1988, Dr. Humberger performed a successful bone graft to stimulate healing. Subsequently, claimant's humerus healed. However, claimant developed significant problems with the radial

nerve. He experienced numbness and considerable pain in the left upper extremity. Claimant continued towork for Hammer but hashad significantpain when performing his tasks. Dr. Humberger stated that claimant has residual problems in his shoulder consisting of bicipital tendonitis, significant symptoms of rotator cuff tendonitis, and symptoms of subacromialbursitis. He also testified that claimant will continue to have permanent residual problems from the arm injury and that claimant has reached maximum healing with regard to his injury. The State Fund's witness, Dr. Canty, assigned an impairment ratingof 15percent permanentpartial impairment of theupper left extremity. This represented a nine percent permanent partial impairment of the whole person. Based on this conclusion, the State Fund paid a Holton award of 45weeks at claimant's permanent partial disability rate of $149.50 per week. Dr. Canty did not disagree with Dr. Humberger's deposition and he agreed that the orthopedicsurgeon shouldultimatelydecidewhat the claimantcould and could not do for employment activities. Gary Lusin, a licensedphysical therapist, examined claimant

on November 3 and December 13, 1989, to prepare a Functional Capabilities Assessment (FCA). The FCA qualified claimant for the medium physical demand level. The medium range required lifting 50 to 75pounds on an occasionalbasis, 20 pounds frequently, and 10 pounds constantly. Claimant just met the lower threshold requirement of the medium physical demand level. In Mr. Lusints opinion, claimant had a limited range of motion of combination shoulder flexion and abduction, and limited external rotation of the left shoulder. He foundvisible and palpable atrophy over the infraspinatus,teres minor,trapezius,andpectoralis,andweakness throughout the rotator cuff muscles. Norm Johnson, an employment counselor,met with claimant and reviewed the depositions of claimant, Drs. Humberger and Canty,Jerry Hammer, Gary Lusin, and Karen Black. Johnson administered the General ~ptitude Test Battery to claimant. The results of the test demonstrated that claimant would be slow in jobs requiring numerical skills and hearing skills, as well as general learning skills and reasoning ability. Johnson concluded claimant has a pre-injury earning capacity at Peavey in Miles City of $7.10 per hour, plus $1.56 per hour in fringe benefits, with seven years experience. Johnson's contact with an individual at Peavey (now ConAgra) indicated that entry level employees startedat $5.00 per hour and went up to $5.50 per hour after 60days. Karen Black, a vocational expert, contacted a personnel officerwho stated that a feedplant operator earned from $6.00 per hour to $6.50 per hour at the entry level. Black testified she did not knowwhat claimantIspre-injury earning capacitywas. Shealso did not estimate claimant'sdecrease of access to the labormarket. She concurred that claimant's current employment should be limited within the range of the FCA. OnAugust 27, 1990,theWorkers

### ' Compensation Court issued its findings. The court concluded that as a result of his injury, claimant's ability to earn in the open labor market had been substantially reduced. The court concluded claimantwas entitled to 500 weeks of permanent partial disability benefits at the rate of $31.00 per week because he suffered an injury to the whole person and not just tohis left arm. The courtrejected claimant's lost earning capacitybased upon jobs as a construction laborer or hod carrier because claimant lacked experience 

### in those areas.In the original order, the court made a mathematical error with regard to claimant's pre-injury wage. The claimant moved to amend the decision and requested a rehearing, asking the court to reconcile its finding of Peaveypre-injurywages of $5.35 perhour, with its later conclusion that claimant earned $5.25 per hour to correct a mathematical error, and to update the claimant's 1981 Peavey wages to the present time for the purposes of pre-injury earning capacity. The court amended its earlier decision by finding that claimant's Peavey wages were $5.35 per hour and that claimant's lost earning capacity is $2.15 per hour. The court granted claimant 500 weeks of benefits at $57.36 per week, but refused to update claimant's 1981 wages to 1990 and denied the rehearing. Both claimant and the State Fund appealed from the original and amended order. On September 16, 1991, this Court issued an opinion which reversed and remanded on issue one and affirmed as to issues two and three. Inthe original opinion,weheld that thevalue of room and board provided by the employer should not be included in the calculation of claimant s post-injury wages. On September 30, 1991, the State Fund petitioned this Court for a rehearing on this issue. On November 22, 1991, this Court granted the petition for rehearing and classified this case for oral argument. Oral argumentwas limitedtodiscussion of whether thevalue of roomand board provided by the employer should be included in the calculation of claimant's post-injury wages. On January 9, 1992,this Court, sitting enbanc,heard oral argument. We now issue the following opinion.

Whether in computing lost earning capacity, the Workers1 Compensation Court erroneously compared 1981 "olddollarswto 1990 "newdollarswwithout updating the 1981 figures. Because the injury occurredprior to 1987,pre-1987 statutory and case law applies. Watson v. Seeking (1988), 234 Mont. 309,

We will not disturb a decision by the Workers1 Compensation Court where there is substantial credible evidence to support the findings of the court. Dunn v. Champion International Corp. (1986), 222 Mont. 142, 147, 720 P.2d 1186, 1189. Claimant argues that the court failed to bring his pre-injury earning capacity of $5.35 per hour in 1981 to 1990 wage levels. We agree. As we have previously stated: "Theultimate objective of thedisabilitytest isby discounting the above variables to determine the wage thatwould have beenpaid in the open labormarket under normal employment conditions to claimant as injured, taking wage levels,hours ofwork, and claimantIs age and state of training 

### as of exactly the sameperiod used for calculating actual wages earned before the injury.I1 McDanold v. B.N. Transport, Inc. (1984), 208 Mont. 470, 480, 679 P.2d 1188, 1193 (quoting Fermo v. Superline Products (1978)

### , 175 Mont. 345, 349, 574 P.2d 251, 253). The court found claimantlspre-injury earning capacity at Peavey tobe $5.35 per hour andhis post-injury earning capacityto be $3.20 per hour. The court then subtractedthe 1990post-injuryearning capacity fromthe 1981pre-injury earning capacity to find claimant's lost earningcapacity. "Thismethod isa misapplication of the law in 

### Olson [v. Manion's Inc. (1973), 162 Mont. 197, 510 P.2d 61 and directly contradicts later holdings of this Court that pre-injury and post-injury wages must be compared for the same period of time." McDanold, 679 P.2d at 1193. It is patently unfair to compare wages in 1990 to wages in 1981. McDanold, 679 P.2d at 1193. The court should take into account increases in wages during the periods of pre-injury earning capacity and post-injury earning capacity. [Elarning capacity must be measured by comparing pre-injury earning capacity with post-injury earning capacity 

### inthesame timeframe. So, in order to properly calculate claimant's permanent partial disability rate, we would need to know what the job claimant held in September of 1978 would pay today. No evidence was presented as to that pay rate. Lambv. Missoula Imports,Inc. (1988), 230Mont. 183, 198, 748P.2d 965, 967. Here evidence indicated that claimant'swages increased over the last nine years. Norm Johnson testified by deposition that Peavey would pay $7.10 per hour,plus fringebenefits, after seven years of experience. He also testified that his contacts with Peavey indicated entry level employees started at $5.00 per hour and increased to $5.50 per hour after 60 days. Karen Black testified that entry level jobs at Peaveywould pay between $6.00 and $6.50 per hour. In addition, claimant testified he received pay raises over his two and one-half years of working at Peavey.There is no evidence that Peavey wages have remained static over nine years. Therefore, the court must determine what claimant would have earned in 1990 as a plant operator. Claimant requested that this Court issue a finding regarding claimant's pre-injury wage because the evidence comes from depositiontestimony. Dunn, 720 P.2d at 1189. We decline todo so because of the conflicting nature of the testimony regarding claimant's pre-injury wage. Instead, we remand to the Workers' Compensation Court to determine claimant's pre-injury earning capacity.

Whether theWorkers' Compensation Court erred in finding that claimant suffered awhole person injury and therefore was entitled to 500 weeks of benefits. TheStateFund relied primarily on 5 39-71-705(1), MCA (1985), which reads as follows: (1) In addition to temporary total disability benefits allowed in this chapter, indemnity benefits for loss of a member shall be paid at the weekly rate provided in 39-71-703 and shall be paid for the followingperiods: one arm at or near shoulder.

# .................. 280 weeks



## . 

# . . . The court held that claimant was permanently partially disabled and entitled to 500weeks of permanentpartial disability benefits because the injurywas not limited to the arm and shoulder area, but to the "whole person." There is substantial credible evidence to support the court's finding. Dr. Humberger stated that claimant continued to experience intermittent problems of painassociated with the radial nerve injury. The radial nerve is easily reinjured whenever claimant bumps the arm. Claimant complained of pain over the apex of the shoulder and over the shoulder blade. He complained of pain in and about the shoulder when lifting and carrying. The soft tissue injuries claimant suffered are permanent. The doctor stated claimant has had symptoms of bicipital tendonitis, rotator cuff tendonitis, and symptoms suggestive of subacromial bursitis. Claimant would continue to have residual problems. The doctor stated that these symptoms were a result of the accident in 1986. Mr. Lusin testifiedthat claimant suffered fromatrophy inthe infraspinatus, teres minor, upper trapezius, and pectoralis. Claimant's FCA report confirmed claimant's weakness in the left shoulder and upper extremity which appear to be a result from the injury. The StateFund'switness,Dr. Canty,did not disagree with Dr. Hurnberger's opinion with regard to claimant's injury. Claimant's testimony was consistent with the conclusions of the doctor and physical therapist. He stated his chest muscles would start tightening up and aching. He had pain in and around the shoulder area. The StateFund argued thatObiev. Obie Sons, Inc. (1963), 143 Mont. 1,386 P.2d 68,was controlling. Inthat case,we overturned

a district court's finding on appeal from the Industrial Accident Board that claimant was entitled to 500 weeks of benefits because the court did not have any additional evidence relating to the physical condition of the claimant. In this case, we will notdisturb the Workers1 Compensation Court's findingswhere there is substantial evidence to support those findings. Dunn, 720 P.2d at 1189. We conclude that there is substantial evidence touphold the Workers' Compensation Court's finding of a whole person injury. I11 Whether the WorkersfCompensation Court erred in failing to include the value of room and board provided to claimant by his employer as part of his compensation in the calculation of his post-injury wages. In determining claimant's post-injury earning capacity, the Workers' Compensation Courtused claimant's $750monthly salaryand did not include room and board. The court arrived at $3.20 per hour as claimant's post-injury earning capacity. The relevant statute is 5 39-71-116(20), MCA (1985), which defines wages as: [Tlheaverage gross earnings received by the employee at the time of the injury for the usual hours of employment in a week, and overtime is not to be considered. Sick leave benefits accrued by employees of public corporations, as defined by subsection (16) of this section, are consideredwages. Previously,we have interpreted thisdefinition of Nwages'las simply meaning gross earnings. Scyphersv. H & H Lumber (1988), 237 Mont. 424, 426, 774 P.2d 393, 394. In Scvphers, this Court adopted the economic gain standard in determiningwhat constituted gross income. Scvphers, 774 P.2d at 394. The distinction rested upon whether the payment was actually a reimbursement for employment-related expenses, orwhether thepayment consisted of areal economic gain to the employee. Scvphers, 774P.2d at 394. We approved of the analysis as described by Professor Larson in his treatise on workersrcompensation: In computing actual earnings as the beginning point of wage-basis calculations, there should be included not onlywages and salary but any thing of value received as consideration for the work, as, for example, tips, bonuses, commissions and room and board, constituting real economic gain to the employee. [Emphasisadded.] 2 Larson, The Law of WorkmenstCompensation, 5 60.12(a) (1989). In Scvwhers, the claimant, a long haul truck driver, was compensatedby the employer at a rate of $0.14 per mile,plus $0.03 per mile "perdiem." The claimantwasnot required tokeeprecords of expenses for meals and lodging. Instead, the employer simply paid the I1perdiem" amount. We concluded that the three-cents-per mile "perdiemMwas not a reimbursementto the injured employee for out of pocket expenses, but insteadconstituted real economicgain. Scvwhers, 774 P.2d at 394-95. The Court notes that in 1987 the legislature enacted 5 39-71-123, MCA, providing that ll[w]ages include but are not limited to 

# . . . (b) board, lodging, rent, or housing if it constitutes a part of the employee's remuneration and is based on its actual value 

# . . . . II In this instance, room and board was provided to claimant as partial compensation for working on the ranch. The room and board

wasnot a reimbursementtothe claimant for out-of-pocket expenses, rather it constituted a real economic gain to the claimant. We hold that the value of the room and board constituted grossearnings and that it be included in claimant's post-injury wages. We affirm as to issue two. We reverse and remand issues one and three to the WorkerstCompensation Court to determine claimant's pre-injury earning capacity, and 

### if possible on the record before it, the value of the room and board.

We concur: 

# 4w<w~ Chief JusticeJustice Terry N. Trieweiler specially concurring. I concurwith the result of the majority opinion,but do not agree with all that is said in part I11 of that opinion. Specifically, Idisagree that 5 39-71-116(20), MCA (1985), is the relevant statuteunder which to analyze claimant's disability benefits pursuant to 1 39-71-703, MCA (1985). partial disability benefits,pursuant to § 703,arebased upon the differencebetween pre-injury and post-injury "earning capacity.

## " Wages are only one factor to be considered and are not determinative of either preinjury orpost-injury capacity. However, Iagree that thevalue of claimant's room and board were relevant to a determination of claimant's post-injury earning capacity, just as it is relevant to a determination of his pre-injury earning capacity. I also fully agree with the Court's decision in Issues I and I1 of its opinion.