No. 13359 INTHE SUPREME COURT OF THE STATE OF MONTANA 1976

JOHN KENNETH SKRUKRUD, Claimant and Appellant,

GALLATIN LAUNDRY CO., INC., Employer, and EMPLOYERS COMMERCIAL UNION INSURANCE COMPANY, INSURER, Defendants and Respondents.

Appeal from: District Eighteen, Workers'Compensation Court William E. Hunt, Judge presiding Counsel of Record: For Appellant: Morrow, Nash and Sedivy, Bozeman, Montana James H. Morrow argued, Bozernan, Montana For Respondents: Keefer and Roybal, Billings, Montana Neil S. Keefer argued, Billings, Montana

Submitted: October 19, 1976Mr. Justice Frank I. Haswell delivered the Opinion of the Court.

This is an appealby an injured employee from the findings of fact and conclusions of law of the workers' compensation court in favor of the employer and its insurer. In substance, the workers' court held that the injured employee's proper category of disabilitywas "temporary total disability"; that his compensation

was fixed inamount and duration by such classification until further order; that a statutory offset for social security disability applied to hisworkers' compensation benefits; that he

was not entitled toa lump sum settlement from the insurer; and, that hisworkers' compensation benefits were to cease when he attains the age of sixty-five. The relevant facts are shown by the record: John Kenneth Skrukrud, claimant, was injured inan automobile accident in October 1972, while in the course and scope of his employment with Gallatin Laundry Company, Inc., employer. Employer was enrolled under Plan I1 of theWorkmen's Compensation Act as it existed in 1972; Employers Commercial Union Insurance Company

was its insurance carrier. Claimant was singlewith no dependents atthe time of the accident. As a result of his injury, claimant received chiropractic treatments and medical attention. He continued towork until March 8, 1973, when he was referred to an orthopedist. Thereafter he was hospitalized and received surgery for a herniated cervical disc and fusion of cervicalvertebrae, and was twice again surgically treated forvertebrae fusion. Claimant has not worked since March 8, 1973, and continues toreceive frequent medical attention.Claimant has been receiving federal social security disability benefits fromApril 1973, to the present. InMay 1975,claimant made settlementwith the United Statesgmennnent in compensation for the injuries he sustained in October 1972. The insurer has been partially satisfied

as to its subrogation rights under section 92-204,R.C.M. 1947,

as it existed in 1972. There is no dispute as to insurer's continuing right to subrogation to claimant's settlement. Insurer has been paying bLweekly compensation to claimant effective sinceMarch 1973,based upon the classification of claimant's injury as "temporary total disability". Initially these paymentswere $50per week, then corrected to $55 per week. However,when insurer established that claimantwas receiving social security disability benefits, it reduced its weekly workers' compensation benefits by offsetting fifty percent of his weekly social securitybenefit against the payments made underworkers' compensation. Thiswas done pursuant to section 92-701,R.C.M. 1947 as it existed in 1972 (Sec. 1,Ch. 174,Laws 1971), which sectionpertained solely to compensation for injury producing temporary total disability. The effect was to reduce claimant's workers' compensation benefits by almost half. As a result of the higher payments made to claimant prior to commencement of the offset reduction, insurer asserted it had overpaid claimant. InJuly 1975, the insurer requested a hearing before the workers' compensation court to resolve factual and legal disputes which had arisen between claimant and insurer. Hearing was had in September 1975 before Workers' Compensation JudgeWilliam 

### E. Hunt in Bozeman,Montana. On March 2, 1976, theworkers' court issued its findings of fact and conclusions of lawwhich held ashereinbefore set forth. As no judgment or orderwas forthcoming, claimant appealed from the findings and conclusions to this Court pursuant to section 92-852(2), R.C.M. 1947. Claimant presents five issues for review: 1. Did the workers' court err in finding that claimant's injury resulted in temporary total disability rather than permanent total disability? 2. Did the workers' court err in its determination of claimant's pre-injury earnings? 3. Did the workers' court err in refusing to order the balance ofworkers' compensationpayments to be made in a lump sum settlement? 

### 4. Did the workers' court err in holding that claimant's workers' compensation benefits shall cease absolutely when he attains the age of sixty-five years? 5. Do the various social security offset reductionprovisions ofMontana's workers' compensation laws violate the state and federal constitutions? 

### A determination of issues one through four requires this Court to review the record, findings and conclusions of the workers' court. This is the first appeal from the workers' compensation court to be reviewed by the Supreme Court. The law as it applied to judicial review of Workmen's CompensationDivision decisions prior to July 1, 1975 is summarized in Miller v. City of Billings,

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# . , 555 P.2d 747, 749, 33 St.Rep. 984, 986: "The findings and decision of theWorkmen's CompensationDivision are presumed to be correct and if supportedby credible evidencemust be affirmed. Section 92-822,R.C.M. 1947 (since repealed;Birnie v. UnitedStatesGypsum Co., 134Mont. 39, 44, 328 P.2d 133; Hurlbut v. Vollstedt Kerr Co., Mont., 538 P.2d 344,347, 32 St. Rep. 752, 755. The district court must affirm the Division order if the evidence does not clearly preponderate against its findings. Becktold v. Ind. Acc. Bd., 137Mont. 119, 125, 350 P.2d 383; Stordahl v. Rush Implement Co., 148Mont. 13, 417 P.2d 95; 3 Larson's Workmen's Compensation Law, Q 80.20. Section 92-834, R.C.M. 1947 (in effect in 1966, but sincerepealed), provided the district court, may upon good cause shown admit additional evidence. Section 92-835, R,C.M, 1947 (in effect in 1966, but since repealed), provided that if this additional evidence is substantial, the district court may be justified inreversing the Division even though the evidence adduced before the Division clearly preponderates in favor of its order. Murphy v. Industrial Accident Board, 93Mont, 1, 16 P.2d 705; Hurlbut v. Vollstedt Kerr Co., supra. "Where the appeal to the district court is heard only on the Division's certified record orwhen the district court permits additional evidence to be introduced that isnot important or adds nothing new to the case, the court isbound by the same rule of appealwhich applies where the appeal isheard only on the certified record and the Division is entitled to a presumption the casewas decided correctly. Kelly v. West Coast Construction Co., 106 Mont. 463, 78 P.2d 1078; McAndrews v. Schwartz, 164Mont. 402, 523 P.2d 1379; Erhart v. Great Western Sugar Co., Mont., 546 P.2d 1055, 33 St.Rep. 302." See also: Kimball v. Continental OilCo., Mont

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Under the law as it now exists, this Court directly reviews the decision of the workers' court, section 92-852(2), R.C.M. 1947. The workers' court proceedings areadministrative innature and quasi-judicial, sections 92-852(1) and 82A-1016, R.C.M. 1947. The appropriate scope of this Court's review should be no different than itwas under former law asexpressed in above cited cases; that is, worker's court decisionswillnot be overturned if there is substantial evidence to support its findings and conclusions.With the foregoing inmind, we discuss the issues. With respect to claimant's injuries, the workers' court made this finding: 

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# * * That the medical evidence viewed in its totality and particularly the report of July 7, 1975, from Dr. Robert C. Wood, neurosurgeon, with the Billings Clinic of Billings, Montana, claimant's Exhibit 5, wherein Dr. Wood states: "'It ismy impression thisman has the following diagnosis: 1. Postoperative anterior cervical disc removals and fusions x 3 with chronic residual neck and right arm pain. 2. Secondary severe cervical spine limitation of motion. 3. Functional weakness of both arms. "'This man ispermanently disabled by his disease and his operations. These problems have rendered this man 100 percent permanently and totally disabled. Solidifying this patient's disability ishis emotional reaction to the problem as he is obviously convinced in his own mind thathe has been totally disabled and he willever be so. "'Ido not think there isa ghost of a chance of ever returning thisman to gainful employment. He is certainly not an operative candidate due tohis functional augmentation of his present problems; and, if anything, he has had more than his share of surgery already.' "Place claimant's disability under the category of 'temporary total disability,' for a period of time-not to exceed 300 weeks from date of injury, asprovided by Section 92-701, R.C.M. 1947, as it provided on October 14, 1972,

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# **. That the emotional reaction complication to claimant's disabilityhas not been determined tobe permanent innature and not subject to psychiatric treatment. That until this showing has been made to the satisfaction of this Court by either the claimant or the insurance carrier the proper classification for claimant's disability should be 'temporary total disability' 

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# * *.I' The record, including Dr. Wood's report, does not sustain this finding. Allthat isnecessary is toread the quoted portion of Dr. Wood's report. Dr. Wood was retained by insurer toexamine claimant, and his "Attending Physician's" report unequivocally classified claimant as "100%", "permanently" disabled. claimant's orthopedic surgeon stated several times that claimant should beconsidered unemployable for any kind ofwork. There is no evidence to contradict these matters of record. The fact that claimant's "emotional reaction" to his condition is "solidifying" to his problem does not warrant the workers' court to find that the problem is temporary; there is simplyno evidencewhich supports any conclusion other than that claimantwas found by insurer's own choice of doctor to be permanently totally disabled

as a result ofhis injuries. Because the workers' court erred in placing claimant in the category of "temporary total disability", its conclusionof lawnumber 2, that claimant's disabilitywas governed by section 92-701,R.C.M. 1947, is error. At the time of claimant's injury, section 92-702,pertaining to permanent total disability,was in effect and is controlling in this case. Upon remand, the workers' court shall apply the provisions of section 92-702, as it existed in 1972, to determine claimant's proper compensation rate. Claimant's second issue concerns the workers' court determination of claimant's pre-injury earnings. Inasmuch aswe have held that former section 92-702applies to his rate of compensation, this questionbecomes moot. Under either claimant's or insurer's calculations,claimant is entitled to the same statutorymaximum of compensation for the 500week period provided in section 92- 702,R.C.M. 1947, in 1972. Claimant's third issue concernshis request in writing that he be awarded a lump sum settlement for the balance of his compensation,as authorized in former section 92-715,R.C.M. 1947. Theworkers

### 'court found claimanthad demonstrated no financial need for such settlement. Inview of the fact that section 92-715 vested the Industrial Accident Board (now the Workers' CompensationDivision) with discretion in matters of settlement,and there is substantial evidence to support the court's finding,we see

no reason to reverse the workers' court finding; if good cause later appears for such a settlement, theWorkersrCompensation Division has continuing authority to so order. Claimant's fourth issue concerns the worker's court decision that when claimant attains age sixty-five in January 1977,and his social securitydisability payments automatically convert by operation of federal law into equal social security retirement payments, claimant is deemed by federal law to have completelywithdrawn from the regular labor market and is therefore no longer entitled to any workers' compensation benefits under state law. That is, removal from the labor market terminates the state's obligation to compensate one who is no longer a member of the federally recognized labor force; or, as insurer states in its brief, "compensation ceases when the fact of inability to earn in the open labormarket ceases." It is difficult to determine from the workers' court findings or from the insurer's brief and argument whether this position is related to the statutory offset for social securitybenefits under section 92-701,R.C.M. 1947,or whether it is urged as a general proposition relating to allworkers' compensationbeneficiaries. In either case,however, it is clear the workers' court erred. No authority is cited,andwe have foundnone, for the flat proposition that workers' compensation benefits terminate upon retirement. Insurerasserts this practice is suggested by the statutory framework of Montana's Workers' CompensationAct because workers'

### compensation is compensation for loss of earning capacity and retired persons do not have earning capacity. The superficial logic of this argument is overcome by the specific statute applicable in the instant case. Section 92-702,R.C.M. 1947,as effective in 1972,provided the rates of compensation for permanent total disability and stated inpart: 

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# ** Such compensation shallbe paid during the period of disability,but for the period not exceeding five hundred (500) weeks from the date of injury.

# ***I1 No provision is made for early cessation ofbenefits, if the injured employee reaches retirement agebefore the running of the 500week period. Obviously, the legislaturewould have included such an important provision if it had so intended the statute to operate. In construing a statute,courts cannot insert what has been omitted. Section 93-401-15,R.C.M. 1947; Dunphy

v. Anaconda Co., 151Mont. 76, 438P.2d 660and cases cited therein. Therefore, claimant's workers' compensation benefits shallnot terminatewhen he attains the age of sixty-five. Finally,claimant asks this Court to rule on the constitutionality of the social security offset reduction provisions of sections 92-701 (now repealed), 92-701.1 and 92-702.1,R.C.M. 1947. We have determined that section 92-701is inapplicable to this case;and, the latter two sectionswere not enacted until after claimant's injury andwere not relied uponby the workers' court. Therefore, the constitutional question is not in issue and this Courtwill not decide suchquestionswhen not necessary to its decision. Taylorv. Taylor, 167Mont. 164, 537 P.2d 483, 32 

### St.Rep. 575;Montana State Universityv. Ransier, 167Mont. 149, 536 P.2d 187, 32 St.Rep. 569,and cases cited therein.This case isremanded to the workers' court with directions to enter a finding to the effect that claimant ispermanently totally disabled, and that his compensation shallbe paid over a period of 500 weeks from the date of injury. There shallbe no reduction of workers' compensation benefits for social security payments received by claimant since April 1973, and benefits shallnot ceasewhen claimant attains age sixty-five. Past payments to claimant shallbe adjusted inconformity with the law. Reversed and remanded with directions.



# . Justice

Concur: 

# Qi?t?t/!LL- Hon. Jack L. Green, District Judge, sittingforjustice Wesley Castles.