No. 88-462 

TM THE SUPREME COURT OF THE STATE OF MONTANA 

1989 

DENNIS SCHAUB, 

Claimant and Appel-lant, 

-vsVITA RICH DAIRY, Employer, 

and 

STATE COMPENSATION LNSURANCE FUND, 

Defendant and Respondent. 

APPEAL FROM: The Workers' Compensation Court, The Honorable Timothy 

Reardon, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

John B. Whiston; Rosshach & Whiston, Missoula, 

Montana 

For Respondent : 

R. Scott Currey, Aqency Leqal Services Bureau, 

Helena, Montana 

Submitted on Briefs: Feh. 9, 1989 

Decided: March 9, 1989 

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Mr. Justice John Conway Harrison delivered the Opinion of the 

Court. 

This is an appeal from an order of the Workers' 

Compensation Court, adopting the findings and conclusions of 

Hearing Examiner Robert Campbell. We reverse. 

The claimant, Dennis Schaub, was employed by Vita-Rich 

Dairy in Havre, Montana. On October 15, 1984, claimant 

suffered an injury when a bag of flour fell from the stack he 

was unloading, pulling his arm and causing a burning 

sensation. Claimant immediately reported the accident to his 

shift supervisor, who indicated he would complete the 

necessary paperwork for filing a compensation claim. Despite 

numerous reminders from the claimant and the supervisor's 

corresponding assurances, the claim for compensation was not 

filed. 

The same day of the injury, claimant sought medical 

attention from Dr. J. E. Elliot. In turn, Dr. Elliot 

referred him to Mr. R. Don Tigny for physical therapy. Mr. 

Tigny noted claimant's related "onset of pain in the neck and 

lower back area when lifting sacks of Fl-our." Claimant 

testified that as a result of the physical therapy, he 

experienced only minor pain and soreness for the next four 

months. However, claimant's condition deteriorated after a 

few months, and he began to experience problems with his 

shoulder, neck and severe headaches. 

In May, 1985, less than eight months after the injury, 

Mrs. Schaub contacted Ardele Kulbeck, the owner of Vita-Rich 

Dairy, to inquire whether the medical bills and prescriptions 

would be paid by workers' compensation. Mrs. Kulbeck replied 

that the injury was not compensable. In November, 1985, Mrs. 

Kulbeck received a letter from the Division of Workers' 

Compensation, advising her that the Division had received 

notice of a possible injury to claimant dated October 15, 
1984, and requesting she file an Employer's First Report of 

Injury. The letter resulted from the filing of a medical 

bill by a health care provider. In response, Mrs. Kulbeck 

stated that the injury was not job related. 

On April 21, 1986, claimant filed a claim for 

compensation. The Division rejected a requested waiver of 

the twelve month statute of limitations and denied 

compensation. At trial, Hearing Examiner Robert Campbell 

found the claimant barred from benefits by his failure to 

file a claim for compensation within twelve months of his 

injury. In addition, claimant did not meet the requirements 

of equitable estoppel necessary to waive the twelve month 

filing requirement. On August 2, 1988, the Workers' 

Compensation Court adopted the Hearing Examiner's findings 

and conclusions and entered judgment. 

The sole issue on appeal is whether the doctrine of 

equitable estoppel should be applied to estop the defendant 

from asserting a statute of limitations defense. We believe 

the doctrine is applicable in the instant case. 

Initially, we note the standard of review applied in 

workers' compensation matters. As to questions of fact, we 

limit our examination to the record to determine if 

substantial credible evidence exists to support the court's 

findings. Wassberg v. Anaconda Copper Co. (1985), 215 Mont. 

309, 697 P.2d 909; Weigand v. Anderson-Meyer Drilling Co. 

(Mont. 1988), 758 P.2d 260, 45 St.Rep. 1138. However, if the 

issue is one of law, we are not so restricted in our review. 

"In such a case, the appropriate standard of review is simply 

whether the lower court's interpretation of the law is 

correct. We are not bound by the lower court's conclusion 

and remain free to reach our own. " Wassberq, 697 P.2d at 

912. The instant case deals with an issue of law. We accept 

the following relevant findings of fact made by the I-ower 

court: 
11. Claimant, with the aid of his 

employers, had previously filed four 

workers' compensation claims between 1977 

and 1984. (Depo. of claimant at 20-26.1 

12. The procedure at Vita Rich Dairy 

directed the claimant to report any 

in jury to his foreman (Dan Schaub) , and 

then to the plant supervisor (Rich 

Semans) . Mr. Semans would go to the 

office and have the paperwork (Form 37 

Employer's First Report--Form 54 Claim 

for Compensation) prepared and brought to 

the claimant for his signature. (Depn. 

of claimant at 24.) 

13. The morning of the October 15, 1984 

injury, the claimant testified that he 

notified his foreman (Dan Schaub) of the 

injury and was told to report it to plant 

superintendent (Rich Semans) also. 

(Depo. of claimant at 27.) 

14. Claimant reported the injury to Mr. 

Semans in the lunchroom that morning and 

was told, "OK, I'll take care of it." 

(1a. - Fellow employee (Kevin 

Christiansen) was in the lunchroom at the 

time and testified at the trial that he 

did hear the claimant tell Mr. Semans 

about the injury he had received that 

shift. (Trans. at 33, 36.) Mr. 

Christiansen denied telling Rich Semans 

earlier that he had no recollection of 

claimant's statement to Mr. Semans. 

(Trans. at 36, 74.) 

15. Within three weeks, the claimant 

asked Mr. Semans three times if "it has 

been taken care of" and his responses 

went from "1'11 take care of it," to a 

sarcastic, "No, but I'll do it. I ' 1. I. 

take care of it." (Id. - at 28.) 

16. Rich Semans testified by deposition 

and at trial that he had no recollection 

of a lunchroom conversation or reminders 

from the claimant to complete a claim for 

his injury in October, 1984. (Depo. of 

R.L. Semans at 22; Trans. at 77-78.) 
We disagree with the lower court's application of the facts 

to the law. From our review, these facts speak of estoppel. 

Section 39-71-601, MCA (1985), provides in pertinent 

part : 

Statute of limitations on presentment of 

claim-waiver. (1) In case of personal 

injury or death, all claims shall be 

forever barred unless presented in 

writing to the employer, the insurer, or 

the division, as the case may be, within 

12 months from the date of the happening 

of the accident, either by the claimant 

or someone legally authorized to act for 

him in his behalf . . . 

While the provision is mandatory, it is not without 

exception. Through the years, this Court developed and 

continues to recognize an estoppel exception. See, 1,indblom 

v. Employers' Liability Assurance Corp. (1930), 88 Mont. 488, 

295 P. 1007; Levo v. ~eneral-~hea-Morrison (1955) , 128 Mont. 

570, 280 P.2d 1086; Frost v. Anaconda Co. (1982), 198 Mont. 

216, 645 P.2d 419. While certainly not a novel theory, Dean 

Larson explained its application in his oft-quoted treatise: 

A familiar defense to assertion of 

the bar of late claim is the plea that 

the lateness was the result of the 

employer's assurances, misrepresentations, negligence or even deliberate 

deceptions. . . 

The commonest type of case is that 

in which a claimant . . . contends that 

he was lulled into a sense of security by 

statements of employer or carrier 

representatives that "he will be taken 

care of" or that his claim has been filed 

for him or that a claim will not be 

necessary because he would be paid 

compensation benefits in any event. 

3A Larson, Workmen's Compensation Law, S 78.45. This Court 

has seen fit to apply the doctrine only when the employer has 

taken some positive, affirmative action which either prevents 
the claimant from making a claim or leads him to reasonably 

believe he need not file such a claim. Ricks v. Teslow 

Consolidated (1973), 162 Mont. 469, 481, 512 P.2d 1304, 1311. 

In Lindblom, we set forth the elements necessary to 

find an estoppel: 

1. There must be conduct-acts, 

language, or silence -amounting to a 

representation or a concealment of 

material facts. 2. These facts must be 

known to the party estopped at the time 

of his said 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 

when 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 such 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. 

6. He must in fact act upon it in such a 

manner as to change his position for the 

worse; in other words, he must so act 

that he would suffer a loss if he were 

compelled to surrender or forego or alter 

what he has done by reason of the first 

party being permitted to repudiate his 

conduct and to assert rights inconsistent 

with it. 

Lindblom, 295 P. at 1009. 

Relying on the employer's own policy, claimant gave 

proper notice to the supervisor. With the supervisor's 

repeated assurances, claimant reasonably thought his claim 

would be promptly filed. This belief is aptly supported by 

the fact that on each of the four prior industrial accidents, 

the employer filed all the necessary papers to the Workers' 

Compensation Division, including the Employer's First Report 

of Injury and claimant's Claim for Compensation. This fact 
remained undisputed throughout the testimony. Clearly, 

elements one, two and three of the Lindblom test were 

satisfied. Because the procedure was well established among 

both employees and management, it appears more than probable 

that the claimant would rely to his detriment upon his 

supervisor's repeated assurances. Indeed, the claimant did 

not file a claim and was thereafter denied compensation. The 

final three criteria are met. 

The order of the Workers' Compensation Court adopting 

the findings and conclusions of Hearing Examiner Robert 

Campbell is hereby reversed and remanded for further 

proceedings consistent with this opinion. 

We concur: _ICj 

/ C 'ef Justice