No. 87-182

LN THE SUPREME COURT OF THE STATE OF MONTANA 1987

ALAN MILENDER,
Claimantand Respondent,-vsJOHN CARPENTER, d/b/a ROCKY MOUNTAIF? RODEO, Employer, and STATE COMPENSATION INSUPANCE FUND,
Defendant and Appellant.

APPEAL FROM: TheWorkers' CompensationCourt, The HonorableTimothy Reardon, Judge presiding.
COUNSEL OF RECORD:
For Appellant: Browning, Kaleczyc, Ferry & Hoven; OliverGoe, Helena, Montana For Respondent:
Edward A. Cumn~ings, b!issoula, Montana

Submittedon Briefs: Oct. 1, 1987 Decided: December 31, 1987

Filed:

ClerkMr. Justice William E. Hunt, Sr., delivered the Opinion of the Court.

State Compensation Insurance Fund appeals an order from the Workers' Compensation Court awarding claimant $7,146.09 for temporary total benefits, 20 percent penalty on that amount and attorney fees. We affirm the decision of the Workers' Compensation Court. The issues presented for our review are as follows: 1. Did the Workers' Compensation Court err in awarding temporary total disability benefits from the date of claimant's injury, when he continued to receive an amount equal to his preinjury salary althoughnot actuallyworking? 2. If entitled to such benefits, is the correct amount properlybased on combined temporary total benefits fromboth of claimant's employments or solely on his employment with the insured? 3. Did the Workers' Compensation Court err in awarding a penaltypursuant to S. 39-71-2907, MCA? 4. Did the Workers' Compensation Court err in holding that claimant was entitled to attorney fees pursuant to 5 39-71-611,MCA? Theuncontested facts are as follows: Claimant,Alan Milender, was severely injuredAugust 10, 1985, in Superior, Montana, when gored by a bull. Both of Milender's legs sustained compound fractures, one of which later developed a bone infection. At the time of the injury, claimant was working in a temporary part-time capacity for JohnCarpenter d/b/a Rocky Mountain Rodeo. His job consisted of tending rodeo stock for approximately two hours a day for twodays.Since 1975,until he was injured,claimantwas employed full-time for Sletten Construction Company working as a working construction foreman. At the time of his injury, claimant was earning $600per week computed at a rate of $15 per hour for a 40 hour work week. Claimant received this amount regardlessof actualhours worked. Milender receivedweekly Workers' Compensation temporary total benefits of $28.33 from August 11, 1985, through October 15, 1986,based onhis employment with Rocky Mountain Rodeo. From the date of his injury until February 15, 1986, Sletten Construction Company continued to pay claimant $600 per week with usual state and federal tax withholdings. The $600 per week was discontinued on February 15, 1986,because it became evident that claimant would not be able to return towork in the foreseeable future. On April 23, 1986, Milender submitted a letter to the State Fund requesting benefits of $293 per week. Thiswould be the amount owed if his Sletten Construction wages were also used in the basis for computing temporary total benefits. State Fund denied his request for an increase on June 18, 1986. On June 26, 1986, claimant was threatened with forclosure on his home. On October 15, 1986, State Fund agreed to pay $293 per week retroactively from February 15, 1986 and agreed that for the purpose of computing benefits, wages from Sletten Construction would be included in the basis amount. A hearing was held to determine whether claimant was entitled to $293 per week fromAugust 11, 1985, the date of injury, not just from February 15, 1986, the date Sletten discontinuedpaying Milender $600per week. The hearing examiner concluded, and the Workers

### ' Compensation judge adopted the judgment that claimant should have received full benefits fromAugust 11, 1986, aswell as an award of attorney fees and a 20 percent penalty againstconclusions on conflicting evidence, this Court will not set them aside unless clearly erroneous. It is not our function to determine whether there is substantial credible evidence to support contrary findings. Currey v. 10 Minute Lube

(Mont. 1987), 736 P.2d 113, 115, 44 St.Rep. 790, 792. We will notdisturb thisdecision. Sletten's president testified further that although he consideredMilender an employee as long ashewasbeing paid, the payments were in no way intended to be in lieu of Workers' Compensationbenefits. In this case,Sletten isnot
even responsible for Milender's benefits. On occasion,when injured Sletten employees were receiving Workers' Compensation benefits, Sletten continued to pay an amount equal to their wages as a gesture of good will and good. businesspractice. To adopt the argument of the State Fund in this case would be to grant a benefit to the State Fund at Milender's expense. Sletten did not intend to benefit State Fund by paying Milender $600 per week for six months. Sletten's payments were gratuitous and are not a valid reason for reducing Milender's benefits to $28.33 per week during the sixmonth period. We hold that theWorkers' CompensationCourt did not err by concluding that paymentsmade by Sletten to Milender from August 11, 1985,through February 15, 1986,were not "wages."

Is the amount of benefits correctly computed fron a basis of just Milender's employment with Rocky Mountain Rodeo,or froma combinationofboth employments? Milender's employment with Sletten Construction was terminated due to injuries sustainedwhile working for Rocky Mountain Rodeo. He was unable to perform duties associated with his position as working foreman. As previouslyState Fund on the amount owed fromAugust 11, 1985, through February 15, 1986. From this judgment, State Fund appeals.

Is Milender entitled to temporary total benefits from the date of his injury even though he continued to receive $600 per week from an employer who is not a party to this lawsuit? The parties agree that Milender's wages from two employments, the one at Sletten Construction, and the other for Rocky Mountain Rodeo, should be combined for thepurpose of computing the basis of Milender's benefit rate. The injury suffered while tending rodeo stock made it impossible forMilender towork at either job. The general rule is that earnings from concurrent employmentsmay be combined if the employments are sufficiently similar so that a disabling injury at one employment would necessarily disable the employee in respect to the other employment.
Harmon v. State Comp. Insurance Fund (Mont. 1986)

## , 716 P.2d 605, 607,43 St.Rep. 514, 516. State Fund has agreed to make payments for the time period after Sletten Construction discontinued giving Milender $600per week. At issue is a period of sixmonths, between August 11, 1985,and February 15, 1986, whenMilender

was not able to work due to his injuries. State Fund denies liability for those six months, claiming that Milender does not fall under the definition of temporary total disability during that time. Section 39-71-116(19), MCA (1985), defining tempera-ry total disabilityas:



# . ..a condition resulting from an injury as defined in this chapter that results in total loss of wages and exists until the injuredworker is as far restored as the permanent character of the injuries will permit



## .

# . ."Wages" aredefined inS 39-71-116(20),MCA (1985),as 

### "[tlhe average gross earnings received by the employee at the time of the injury for the usual hours of employment in a week

# . .." (Emphasisadded.) In Gee v. Cartwheel Restaurant (1982), 197 Mont. 335, 642P.2d 1070, thisCourtheld thatwageswhichwere received by an employee from one employer while he continued to receive his usual monthly salary from a concurrent employer
were "gratuitouswages." Benefits for disabilitiesarebased

on the usual hours of employment of theworker. See Lave

### v. School Dist. No. 2 (Mont. 1986), 713 P.2d 546, 43 St.Rep. 165. Likewise, this Court in Gee emphasized that § 39-71-116(20),MCA (1985)

## , only covered amounts received for usual weekly employment. When noworkwasperformed, amounts receivedwere considered to be gratuitous. FromAugust 11, 1985,through February 15, 1986,Sletten Construction paid Milender $600 per week for no work done because they hoped thathe would return towork for themwhen he recovered. Sletten's president testified that Milender

was considered a key employee. Itwasworth $600perweek to the company to have him as an employee when well. On one occasion, Sletten asked Milender to check on a job site near his home. Milender testified that he drove by the job site two times,without getting out of his vehicle, and responded back to Slettenas to the statusof the constructionproject. "Usualhours of employment" does not mean strict adherence to actual work for every hour compensated. Denend v. Bradford Roofing (Mont. 1985), 710 P.2d 61, 42 St.Rep. 1778. The Workers' Compensation Court did not conclude thatMilender's quick drive by a job site two times in a six month period constituted actual performance of his "usual weekly employment." When the lower court bases its findings anddiscussed, it is entirely appropriate for purposes of benefits calculation to combine the wages of concurrent employments when both are affected by an injury. We hold that the Workers' CompensationCourt did not err in calculating Milender's benefits fromAugust 11, 1985,at a rate of $293per week. 111. Was a 20 percent penalty on the amount owed between August 11, 1985, and February 15, 1986, properly awarded? A penalty pursuant to 5 39-71-2907, MCA, is properly awardedwhen an insurerunreasonably delays or refuses topay benefits owed. Withholding or a delay of payment must be unreasonable. Unreasonableness is a question of fact. Paulsen v. Bozeman Deaconess Foundation Hospital (Mont. 1984), 673 P.2d 1281, 1283, 41 St.Rep. 62, 64. On appeal, a finding of unreasonableness will not be overturned if supported by substantial evidence. Coles v. Seven Eleven Stores (Mont. 1985), 704 P.2d 1048, 1052, 42 St.Rep. 1238, 1242.It is not this Court's job on review to determine whether therewas substantial credible evidence to support an opposing position. The State Fund refused to pay ~ilender any amount above $28.33 per week from August 11, 1985, through October 15, 1986. In October, State Fund agreed to pay Milender the correct amount of $293 per week retroactively only from February 15, 1986,not from the date of his injury. This substantially supports the impositionof

apenalty. Me affirm the Workers' Compensation Court on the issue of a 20percent penalty. IV. Is claimant entitled to attorney fees? Section 39-71-611,MCA, states:In the event an insurer denies liability for a claim for compensation or terminates compensation benefits and the claim is later adjudged compensable by the workers

### ' compensation judge or on appeal, the insurer shall pay reasonable costs and attorneys' fees as established by theworkers' compensation judge.
State Fund denied liability for Milender's claim for benefits for the time period between August 11, 1985, and February 15, 1986. TheWorkers' CompensationCourt and this Courthave both "adjudged" that claim compensable. We affirm the award of reasonableattorney fees. Affirmed on all issues.

We Concur:Mr. JusticeL. C. Gulbrandsondissenting.

I respectfully dissent to the affirmance of the award of temporary total benefits for the period from the date of injury to the date of termination of claimant's employment with Sletten Construction Company, February 15, 1986. Because I believe that award to be in error I also disagree with the affirmance of a twentypercent penalty and attorney fees. Themajority hasmisinterpreted this Court's holding in Gee v. Cartwheel Restaurant, supra, by quoting "this Court held that wages which were received by an employee from one employer while he continued to receive his usual monthly salary from a concurrent employer were 'gratuitouswages. I" In that case, this Court reversed the increased award of temporary total benefits and stated: Applying even the most liberal statutory construction favoring the claimant, to conclude that his average gross earnings should include wages from this job at which he is no longer employed does not fairlyor reasonably represent wages lost from his usual weekly hours of employment. The amount of compensation must bear some reasonable relation to the loss sustained on account of disability.

In essence, the Workers' Compensation Court has determined that the claimant is entitled to temporary total disability benefits based upon lost wages for two concurrent jobs,while the evidence inno way establishes that the claimant was actually concurrently employed at the Book Store or had suffered a loss ofBook Store wages. To hold that the claimant should receive benefits based upon more weekly hours tha-nhe has actually everworked does not represent compensation based upon his usual weekly hours of employment. (Emphasis in original.) Gee, 642 P.2d at 1071, 1072. Claimant Gee was found by this Court to be employed by one employer at the time of his injury, and the claimant here obviouslyhad two employers at the time ofhis injury. In my view the issue is whether the employer-employee relationship between Sletten Construction Company and the claimant continued until February 15, 1986 and if itdid,did the claimant suffer a total loss of wages to be entitled to benefits based upon two employments under 39-71-116(19), MCA (1985). In this case, the critical evidence regarding the payment of $600per week by Sletten ConstructionCompany from the date of injury to February 15, 1986, is contained in the depositions of the claimant and Robert Robertson, president of Sletten Construction Company, and this Court is entitled to judge the weight tobe given such record testimony. The evidence in this case is undisputed that Sletten Construction Company had a corporate policy of paying disabled supervisory personnel, such as the claimant, full wages until such time as itwas determined that the disabled supervisor would be unable to return to work within a reasonable period of time. The claimant had been a supervisor with Sletten since 1978 and, at the time of the injury on his concurrent two-day job, was paid $600per week whether heworked no hours aweek or sixtyhours aweek. The testimony is undisputed that Sletten Construction Company paid the claimant his full $600 per week salary, less withholding for federal and state income tax and for Social Security purposes until February 15, 1986 at which time thecorporate president made the decision to terminate claimant

as an employee. Sletten Construction Company further paid workers1 compensationpremiums based upon the salarypaid to claimant until February 15, 1986. The claimant attended the company Christmas party in 1985, and readily inspected a bridge construction site on several occasions prior to February 15, 1986, at the request of his employer without claiming additionalreimbursement. In my opinion, for the majority to hold, in effect, that the $600weekly salary benefitswere gratuitous and that the claimant suffered a total loss of wages from Sletten Construction Company fromAugust 10, 1985 until February 15, 1986 is unrealistic and ignores normal corporate business practices and specifically the corporate practice of Sletten Construction Company. See, Larson, Workmen's Compensation Law,S 57.42: An occasional court will say that such a payment is to be deemed a gratuity,but this, in the absence of special facts indicating a charitable motive, is unrealistic. In fact, in the case of corporate employers, it is doubtful that themanagementhas the right to give away the corporationls money as gratuities even if it wanted to. As a matter of corporation law, it would have to be assumed that the payment was made in discharge of a legal obligation, if any such actual or potential obligationcould be found that would reasonably account for the expenditure.
The effect of the majority decision is to award the claimant temporary total disability benefits which, combined with the salary received from Sletten Construction Company, result in a post-injury monthly income of $3,572, far in

excess of his reqular salary of $2,400. This result in myjudgment, does not complywith the 

### - Gee requirement that "the amount of compensationmust bear some reasonable relation to the loss sustained on accountofdisability." Iwould reverse upon the basis that the award tends to make the Workers' Compensation system unworkable, and is not in accord with $$ 39-71-116(19),MCA (1985) and the previous holdings of this Court.