No 

No. 98-346

IN THE SUPREME COURT OF THE STATE OF MONTANA

1999 MT 88N

KEITH WARREN SMITH, 

Petitioner and Appellant,

v. 

OLD REPUBLIC INSURANCE COMPANY,

Respondent and Insurer for 

BOISE CASCADE CORPORATION,

Employer.

APPEAL FROM: Workers' Compensation Court 

State of Montana

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The Honorable Mike McCarter, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Keith Warren Smith, Roundup, Montana (pro se)

For Respondent:

Robert E. Sheridan, Garlington, Lohn & Robinson, Missoula, Montana

Submitted on Briefs: December 17, 1998

Decided: April 27, 1999

Filed:

__________________________________________

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Clerk

Justice James C. Nelson delivered the Opinion of the Court.

¶1. Pursuant to Section I, Paragraph 3(c), Montana Supreme Court 1996 Internal 

Operating Rules, the following decision shall not be cited as precedent but shall be 

filed as a public document with the Clerk of the Supreme Court and shall be 

reported by case title, Supreme Court cause number and result to the State Reporter 

Publishing Company and to West Group in the quarterly table of noncitable cases 

issued by this Court.

¶2. Keith Warren Smith (Smith), appearing pro se, appeals a decision of the 

Workers' Compensation Court denying his claim against Old Republic Insurance 

Company (Old Republic) for medical and travel expenses with respect to a July 25, 

1997 consultation with a specialist in Seattle, Washington. We affirm.

¶3. We address the following issues on appeal:

¶4. 1. Whether the Workers' Compensation Court erred by not setting aside the 

settlement agreement between the parties on the basis of mutual mistake of material 

fact.

¶5. 2. Whether the Workers' Compensation Court properly rejected Smith's claim 

that the doctrines of estoppel and laches preclude Old Republic from denying 

liability for Smith's July 25, 1997 consultation in Seattle.

¶6. 3. Whether the Workers' Compensation Court erred in denying Smith's claim 

against Old Republic for medical benefits and travel expenses in connection with the 

July 25, 1997 consultation in Seattle.

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Factual and Procedural Background

¶7. Smith was injured on June 14, 1990, while within the course and scope of his 

employment as a truck driver with Boise Cascade Corporation (Boise Cascade). At 

the time of Smith's injury, Boise Cascade was enrolled under Plan II of the Workers' 

Compensation Act and Old Republic was Boise Cascade's compensation carrier. Old 

Republic accepted liability for Smith's injury and paid various compensation and 

medical benefits on his behalf.

¶8. The primary injury sustained by Smith was to his left shoulder. Dr. Willard Hull 

in Billings provided initial treatment of the shoulder injury. As part of that 

treatment, Dr. Hull performed surgery on Smith's shoulder on October 1, 1990. 

¶9. Smith returned to work as a warehouse person and forklift operator in March 

1991. However, he left work on June 17, 1991, due to pain in his left shoulder. Smith 

subsequently sought a second opinion from Dr. Thomas Johnson, an orthopedic 

surgeon in Billings. Dr. Johnson became the primary treating physician for Smith in 

September 1991. He determined that Smith had a recurrent tear of the rotator cuff 

of his left shoulder. Dr. Johnson referred Smith to Dr. Frederick Matsen, III, 

Chairman of the Department of Orthopedics at the University of Washington 

Medical Center in Seattle, Washington. Smith traveled to Seattle to consult with Dr. 

Matsen on October 11, 1991. Old Republic paid for that visit together with Smith's 

travel expenses to Seattle.

¶10. Dr. Matsen concurred with Dr. Johnson's diagnosis of a rotator cuff tear and 

recommended physical therapy and additional surgery. Hence, on February 4, 1992, 

Dr. Johnson performed a second surgery to repair the rotator cuff in Smith's left 

shoulder. 

¶11. On December 2, 1992, Smith and Old Republic entered into an agreement to 

settle Smith's entitlement to compensation benefits. In that agreement, Smith 

reserved the right to future hospital and medical benefits. This agreement was 

approved by the Department of Labor and Industry on December 15, 1992.

¶12. Smith traveled to Seattle for follow-up evaluations with Dr. Matsen in October 

1995 and March 1997. Old Republic paid for both consultations and for travel 

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expenses for each visit. On February 20, 1997, Dr. Johnson noted, during a follow-up 

evaluation in his office, that further treatment on Smith's shoulder was not needed at 

that time.

¶13. On May 8, 1997, Smith visited with Dr. Johnson about a deposition in an 

unrelated matter. During that visit, Smith mentioned he was having some 

intermittent tingling and numbness down his left arm and asked whether he might be 

suffering from thoracic outlet syndrome. Dr. Johnson recommended that Smith see 

Dr. John Moseley or Dr. John Cook, as they were the two physicians in Billings who 

had the most expertise in that area. Smith had not previously been diagnosed with 

thoracic outlet syndrome by either Dr. Johnson or Dr. Matsen.

¶14. Rather than seeing either Dr. Moseley or Dr. Cook, Smith requested that Dr. 

Johnson write a letter of referral to Dr. Matsen. Smith then contacted Gary Doerr, 

Senior Claims Examiner for Sedgwick Claims Management Services, who was 

handling Smith's claim for Old Republic, and requested that Old Republic pay his 

travel expenses to Seattle as well as Dr. Matsen's fee for another consultation. Upon 

receipt of Smith's request, Doerr contacted Dr. Johnson's office to obtain more 

information regarding the proposed trip to Seattle. On July 21, 1997, Dr. Johnson's 

office notified Doerr by telephone that there was no necessity for the visit with Dr. 

Matsen. Doerr then contacted Smith and advised him that Old Republic would not 

pay for the visit with Dr. Matsen or for travel expenses to Seattle. Nevertheless, 

Smith elected to proceed with the trip to Seattle. 

¶15. Smith saw Dr. Matsen on July 25, 1997. That same day, Dr. Matsen wrote a 

letter to Dr. Johnson summarizing his visit with Smith. The letter is silent concerning 

any diagnosis or consideration of thoracic outlet syndrome.

¶16. On October 10, 1997, Smith filed a pro se petition with the Workers' 

Compensation Court requesting that Old Republic be required to pay for the July 

25, 1997 consultation with Dr. Matsen together with Smith's travel expenses to 

Seattle. A trial was conducted in Billings on February 2, 1998, with Smith 

representing himself.

¶17. On March 4, 1998, the Workers' Compensation Court issued its Findings of 

Fact, Conclusions of Law and Judgment wherein the court denied Smith's 

entitlement to medical and travel expenses in connection with the July 25, 1997 

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consultation. Smith appeals the decision of the Workers' Compensation Court.

Standard of Review

¶18. This Court employs two standards of review for Workers' Compensation Court 

decisions: We review the court's findings of fact to determine if they are supported 

by substantial credible evidence and we review the court's conclusions of law to 

determine if they are correct. Turjan v. Valley View Estates (1995), 272 Mont. 386, 

390, 901 P.2d 76, 79 (citing Caekaert v. State Comp. Mut. Ins. Fund (1994), 268 Mont. 

105, 110, 885 P.2d 495, 498).

Issue 1.

¶19. Whether the Workers' Compensation Court erred by not setting aside the 

settlement agreement between the parties on the basis of mutual mistake of material fact.

¶20. Smith argues that the Workers' Compensation Court erred by not setting aside 

the settlement agreement on the grounds of mutual mistake of material fact in that 

the settlement agreement was entered into based upon a diagnosis of rotator cuff tear 

and that he now may have thoracic outlet syndrome. Old Republic argues that Smith 

has raised the issue of mutual mistake for the first time on appeal and that, even if we 

assumed that this issue was properly raised in the trial court, the facts of this case do 

not satisfy the requirements for reopening a claim based upon a mutual mistake of 

material fact. 

¶21. In his original petition in the Workers' Compensation Court, Smith asked that 

the settlement agreement be reopened on the basis of mutual mistake of material 

fact. Smith, however, failed to include this issue in the Pretrial Order as one of the 

issues to be determined by the Workers' Compensation Court. The procedural rules 

governing proceedings in the Workers' Compensation Court found at Title 24, 

chapter 5, subchapter 3 of the Administrative Rules of Montana, require that a 

pretrial order "supersede all other pleadings and shall govern the trial proceedings." 

24.5.318, A.R.M. Hence, because this issue was not included in the Pretrial Order, 

the Workers' Compensation Court was not given the opportunity to consider it. 

¶22. This Court may not consider for the first time on appeal an issue that was not 

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raised at the trial court level. Sherrodd, Inc. v. Morrison-Knudsen Co. (1991), 249 

Mont. 282, 285, 815 P.2d 1135, 1137 (citing Morse v. Cremer (1982), 200 Mont. 71, 81, 

647 P.2d 358, 363-64). The basis for this rule has been set forth as follows:

The rule applies to both substantive and procedural matters, as well as to a change in a 

party's theory of the case. It is based on the principle that it is fundamentally unfair to 

fault the trial court for failing to rule correctly on an issue it was never given the 

opportunity to consider. Furthermore, it is unfair to allow a party to choose to remain 

silent in the trial court in the face of error, taking a chance on a favorable outcome, and 

subsequently assert error on appeal if the outcome in the trial court is unfavorable.

Day v. Payne (1996), 280 Mont. 273, 276-77, 929 P.2d 864, 866 (emphasis added).

¶23. Since the Workers' Compensation Court was precluded from considering the 

issue of mutual mistake because it was not raised in the Pretrial Order, Smith has 

waived this issue and we may not now consider it on appeal. Sherrodd, 249 Mont. at 

285, 815 P.2d at 1137.

Issue 2.

¶24. Whether the Workers' Compensation Court properly rejected Smith's claim that the 

doctrines of estoppel and laches preclude Old Republic from denying liability for 

Smith's July 25, 1997 consultation in Seattle.

¶25. Smith contends that Old Republic is estopped from denying payment for 

Smith's July 25, 1997 visit to Dr. Matsen and the travel expenses associated with that 

visit because Old Republic had previously paid for other visits with Dr. Matsen in 

October 1991, October 1995 and March 1997. Smith also argues that the doctrine of 

laches dictates that Old Republic should pay the cost of the July 25, 1997 

consultation with Dr. Matsen together with the travel expenses.

Estoppel

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¶26. "Equitable estoppel has long been recognized in Montana and is invoked to 

promote justice, honesty and fair dealing." Billings Post No. 1634 v. Dept. of Rev.

(1997), 284 Mont. 84, 90, 943 P.2d 517, 520 (citing In re Marriage of K.E.V. (1994), 

267 Mont. 323, 331, 883 P.2d 1246, 1251). It is designed to prevent one party from 

suffering a gross wrong at the hands of another party who has brought about the 

condition. Kelly v. Wallace, 1998 MT 307, ¶ 40, 972 P.2d 1117, ¶ 40, 55 St.Rep. 1271, 

¶ 40 (citations omitted).

¶27. Equitable estoppel is based on the principle that a party cannot intentionally 

induce another party to unknowingly and detrimentally alter his position and then 

subsequently deny the just and legal consequences of those intentional acts. Hence, 

equitable estoppel claims rest on the concealment or representation of facts by the 

estopped party. Kelly, ¶ 43 (citations omitted). 

¶28. To satisfy the doctrine of equitable estoppel, a party must demonstrate the 

following six essential elements:

(1) there must be conduct, acts, language, or silence amounting to a representation or 

concealment of material facts; (2) these facts must be known to the party estopped at the 

time of his conduct, or at least the circumstances must be such that knowledge of them is 

necessarily imputed to him; (3) the truth concerning these facts must be unknown to the 

other party claiming the benefit of the estoppel at the time it was acted upon by him; (4) 

the conduct must be done with the intention, or at least with the expectation, that it will be 

acted upon by the other party, or under the circumstances that it is both natural and 

probable that it will be so acted upon; (5) the conduct must be relied upon by the other 

party, and, thus relying, he must be led to act upon it; and (6) he must in fact act upon it in 

such a manner as to change his position for the worse. 

Kelly, ¶ 40 (citing Dagel v. City of Great Falls (1991), 250 Mont. 224, 234-35, 819 P.2d 

186, 192-93). All six elements must be established before the doctrine of equitable 

estoppel can be applied. Billings, 284 Mont. at 90, 943 P.2d at 520 (citing Elk Park Ranch, 

Inc. v. Park County (1997), 282 Mont. 154, 166, 935 P.2d 1131, 1138). We have 

previously stated that equitable estoppel "is not favored and will be sustained only upon 

clear and convincing evidence." Kelly, ¶ 40 (citing Ducham v. Tuma (1994), 265 Mont. 

436, 441, 877 P.2d 1002, 1006). Furthermore, the party asserting equitable estoppel bears 

the affirmative burden of proving its elements. Kelly, ¶ 43 (citations omitted).

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¶29. In the case sub judice, Old Republic is not liable for the July 25, 1997 visit with 

Dr. Matsen simply because Old Republic paid for Smith's previous visits with him. 

The earlier visits were clearly related to the rotator cuff injury which Smith 

sustained in his industrial accident. The July 25, 1997 consultation with Dr. Matsen 

was based on Smith's desire to be evaluated for thoracic outlet syndrome. 

¶30. Moreover, Smith has failed to establish that he relied, to his detriment, on a 

representation or concealment by Old Republic. Doerr wrote to Smith on July 21, 

1997, and advised him that Old Republic would not pay for the visit with Dr. Matsen 

or the travel expenses to Seattle. The following day, Doerr's office telephoned Smith 

and again advised him that Old Republic would not pay for the visit with Dr. Matsen 

or the travel to Seattle. Consequently, Smith knew, prior to leaving for Seattle, that 

Old Republic would not authorize and pay for the July 25, 1997 visit to Dr. Matsen 

and related travel expenses. Hence, Smith cannot now claim that he relied on the fact 

that previous visits with Dr. Matsen had been paid when he was specifically notified 

that Old Republic would not authorize or pay for the July 25, 1997 visit. 

¶31. Accordingly, we hold that the Workers' Compensation Court did not err in 

rejecting Smith's claim that Old Republic is equitably estopped from denying 

liability for Smith's July 25, 1997 consultation with Dr. Matsen.

Laches

¶32. This Court has previously stated that laches exists "where there has been an 

unexplainable delay of such duration or character as to render the enforcement of an 

asserted right inequitable, and is appropriate when a party is actually or 

presumptively aware of his rights but fails to act." Larson v. Undem (1990), 246 

Mont. 336, 340, 805 P.2d 1318, 1321 (citations omitted). In order to apply the 

doctrine of laches, parties asserting laches must show that the passage of time has 

prejudiced them or has rendered the enforcement of a right inequitable. Kelleher v. 

Board of Social Work Exam'rs (1997), 283 Mont. 188, 191, 939 P.2d 1003, 1005 (citing 

Helena Aerie No. 16 v. Mont. Dept. of Rev. (1991), 251 Mont. 77, 81, 822 P.2d 1057, 

1059).

¶33. In the case before us on appeal, Smith's assertion of laches suggests that Old 

Republic was tardy in notifying him that it would not pay for the visit to Dr. Matsen. 

On the contrary, immediately upon receiving information concerning the basis for 

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Dr. Johnson's referral to Dr. Matsen, Doerr notified Smith in writing that Old 

Republic would not authorize or pay for the visit with Dr. Matsen or the travel 

expenses associated therewith. Furthermore, Doerr's office telephoned Smith the 

following day to notify him that the visit with Dr. Matsen was not authorized. There 

was no delay on Old Republic's part which would justify the application of the 

doctrine of laches. 

¶34. Accordingly, we hold that the Workers' Compensation Court did not err in 

rejecting Smith's claim that the doctrine of laches precludes Old Republic from 

denying liability for Smith's July 25, 1997 consultation with Dr. Matsen.

Issue 3.

¶35. Whether the Workers' Compensation Court erred in denying Smith's claim against 

Old Republic for medical benefits and travel expenses in connection with the July 25, 

1997 consultation in Seattle.

¶36. The Workers' Compensation Court determined that Smith had the burden of 

proving that the consultation with Dr. Matsen, and the need to travel to Seattle for 

that consultation, were medically reasonable. The court concluded that Smith failed 

to sustain his burden, thus he is not entitled to medical benefits or travel expenses in 

connection with the July 25, 1997 consultation with Dr. Matsen.

¶37. Smith argues that the Workers' Compensation Court erred in denying his claim 

because the settlement agreement does not require that he provide statements of 

medical necessity or emergency. He contends that the denial of his claim 

compromises his freedom to choose his own physician. Smith also argues that in his 

initial conversation with Doerr on July 21, 1997, Doerr agreed to pay Smith's travel 

expenses to Seattle and that this constituted a verbal contract which Doerr 

subsequently breached. 

¶38. Old Republic, on the other hand, does not dispute that Smith reserved the right 

to future medical and hospital benefits at the time he settled his claim in December 

1992. Rather, it is Old Republic's position that it is liable only for reasonable and 

necessary medical expenses arising from the injuries which were sustained by Smith 

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in the July 14, 1990 accident.

¶39. The benefits which an injured worker is entitled to receive are determined by 

the law in effect at the time of the injury. Kraft v. Flathead Valley Labor & Contr.

(1990), 243 Mont. 363, 367, 792 P.2d 1094, 1096 (citing Young Motor Co. v. Div. of 

Workers' Comp. (1985), 219 Mont. 1, 3, 710 P.2d 58, 59). Since Smith's injury 

occurred on June 14, 1990, Smith's benefits must be determined by reference to the 

provisions of the Workers' Compensation Act of 1989, specifically § 39-71-704, MCA. 

This section provides, in pertinent part:

Payment of medical, hospital, and related services--fee schedules and hospital rates.

(1) In addition to the compensation provided by this chapter and as an additional benefit 

separate and apart from compensation, the following must be furnished:

(a) After the happening of the injury, the insurer shall furnish, without limitation as to 

length of time or dollar amount, reasonable services by a physician or surgeon, reasonable 

hospital services and medicines when needed, and such other treatment as may be 

approved by the department for the injuries sustained.

. . .

(c) The insurer shall reimburse a worker for reasonable travel expenses incurred in travel 

to a medical provider for treatment of an injury pursuant to rules adopted by the 

department.

Section 39-71-704, MCA (1989) (emphasis added).

¶40. Therefore, Smith had the burden of proving that the July 25, 1997 consultation 

with Dr. Matsen was medically reasonable and was related to the injuries he 

sustained in his 1990 accident. See Dumont v. Wickens Bros. Const. Co. (1979), 183 

Mont. 190, 201, 598 P.2d 1099, 1105-06. Smith has failed to meet this burden.

¶41. It is clear from a review of the record that Dr. Johnson's referral to Dr. Matsen 

for the July 25, 1997 consultation was not based upon a diagnosis that Smith had 

thoracic outlet syndrome, but was solely to accommodate Smith's request that he be 

evaluated for that condition and only after Smith had rejected Dr. Johnson's 

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recommendation that Smith consult with one of two knowledgeable and qualified 

physicians in Billings regarding thoracic outlet syndrome. Moreover, in his 

deposition introduced at trial, Dr. Johnson testified that not only had he never 

diagnosed Smith with thoracic outlet syndrome, he had never considered such a 

diagnosis during the course of his evaluation and treatment of Smith. Neither was 

there any indication in Dr. Johnson's records or his deposition testimony to 

substantiate that the referral to Dr. Matsen was related to the injuries Smith 

sustained in the 1990 accident.

¶42. In his own testimony at the hearing in this matter, Smith states:

Q. Prior to you mentioning [thoracic outlet syndrome] to Dr. Johnson on May 8, 1997, Dr. 

Johnson had never indicated to you that that was a possible diagnosis of your condition, 

did he?

A. No, sir . . . .

. . .

Q. Did Dr. Matsen in his subsequent evaluation of you on the 25th of July diagnose that 

you had the condition known as thoracic outlet syndrome?

A. He did not.

Hence, Smith has failed to sustain his burden of proof in establishing that the visit to 

Dr. Matsen was reasonable and necessary. At best, Smith's evidence established that the 

only basis for the referral was his own desire to be evaluated for thoracic outlet syndrome, 

a condition which was never diagnosed by either Dr. Johnson or Dr. Matsen.

¶43. Smith also contends that the evidence supports a finding that he is entitled to 

payment for the aggravation of his preexisting conditions because he was returned to 

work as a forklift driver prior to his reaching maximum medical healing. This latter 

question has nothing whatsoever to do with the controversy in the case before us on 

appeal. Here, the controversy arises out of the refusal of Old Republic to pay for the 

July 25, 1997 consultation with Dr. Matsen and the travel expenses related thereto. 

Payment for the aggravation of Smith's preexisting conditions was not an issue raised 

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in or considered by the Workers' Compensation Court and we will not address it on 

appeal. Sherrodd, 249 Mont. at 285, 815 P.2d at 1137.

¶44. Accordingly, we hold that there is substantial credible evidence in the record to 

support the Workers' Compensation Court's determination that the July 25, 1997 

consultation with Dr. Matsen was not medically reasonable. Consequently, the 

Workers' Compensation Court did not err in denying Smith's claim against Old 

Republic for medical and travel expenses in connection with the July 25, 1997 

consultation with Dr. Matsen.

¶45. Affirmed.

/S/ JAMES C. NELSON

We Concur:

/S/ J. A. TURNAGE

/S/ WILLIAM E. HUNT, SR.

/S/ JIM REGNIER 

/S/ TERRY N. TRIEWEILER

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