NO. 92-488 IN THE SUPREME COURT OF THE STATE OF MONTANA 1993

JESS BEERY, Conservator and Guardian for Danny Beery, an incapacitated person, Petitioner and Appellant,

-vsGRACE DRILLING, Employer, and CNA INSURANCE COPIPANY, Defendant and Respondent.

APPEAL FROM: Montana Workers1Compensation Court, The Honorable Timothy W. Reardon, Judge presiding.

COUNSEL OF RECORD: For Appellant: Gene R. Jarussi; Jarussi & Bishop Billings, Montana For Respondent: Todd A. Hammer;Warden, Christiansen, Johnson & Berg, Kalispell, Montana

Filed: Submitted on Briefs: April 1, 1993 Decided: August 26, 1993Justice John Conway Harrison delivered the Opinion of the Court,

This is an appeal from a judgment entered in the Workerst Compensation Court, the Honorable Timothy W. Reardon presiding. TheWorkers' Compensation Court determinedthat the claimant,Danny Beery (Beery), was not entitled to receive domiciliary care benefits, nor was he entitled to his costs, attorney's fees, or a penalty. We affirm. In his brief, Beery raises issues concerning equitable estoppel, waiver,breachof contract,judicialestoppel,attorney's fees and costs, and statutory penalties. For reasons discussed below, however, the only issue before this Court is whether the Workerst Compensation Court erred in concluding that CNA was not equitably estopped from contesting Beery's entitlement to domiciliary care benefits. 9- ?Zovemkcrr 4,1984,Beery a:: industrial injur-;.r;il= working forGraceDrilling. He fell approximately twenty-five feet from an oil rig, suffering multiple fractures to his left leg, first, secondand thirddegree burns,and a closedhead injury that initially went undetected. Respondent CNA InsuranceCompany (CNA) served as Grace Drilling's insurer under Plan I1 of the Workerst Compensation Act. Beery is currently receiving permanent total disabilitybenefits. Those benefits are not contested or at issue here.In February 1989, CNApetitioned the district court to have a limited guardian and conservator appointed to represent Beery and manage his affairs regarding his workerstcompensation claim. The 2district court appointed Beery's son, Jess, for that purpose. Because Beery does not contest the Workers* Compensation Court's ultimate determination that he is not entitled to domiciliary care benefits under the five part test adopted in carlsonv. Cain (19851, 216 Mont. 129, 700 P.2d 607, an extensive discussion of themedical evidence is not necessary. A summary of the three medical panel evaluations Beery underwent provides sufficient background for an understanding of this matter. InMay 1987, the YellowstoneValley Medical Evaluation Panel found that Beery demonstrated significant organic brain syndrome and that his intellect, thinking ability, judgment, affect, and potential were "markedly impaired." The panel expressed concerns about Beery's competency to manage his own affairs but found him self-sufficient. It suggested psychological retesting in six to twelve months. In November 1987, the samepanel found that therehad been *'no significant change' in the test results from the May evaluation; therefore, the panel anticipated that Beery's condition had stabilized. The panel felt that although Beery did not require constant supervision he would need **at least once daily assistance and supervision." It did not feel that he needed an attendant to help him perform independentlythe activities of daily living such

as bathing, dressing, feedingand meeting basic bodily needs. The panel did feel that Beery would need assistance in handling his financial and legal affairs. At CNA's request,

### aKalispellmedical panel evaluatedBeery inApril 1991. The members of this panel conducted their own evaluations and reviewed Beery's extensivemedical records and the results of the two previous medical panel evaluations. They also reviewed surveillance reports and video tapes of Beery that showed him driving his truck onnumerous occasionsand operating a tractor

on his farm. The panel concluded that Beery did not need a personal attendant or domiciliary care. Prior to receiving the Kalispell report, CNA had been paying Beery domiciliary care benefits. In a letter dated September 25, 1987,James Putman,CNA's adjuster, stated that CNA would initiate payments "pending further evaluation as to thenecessityand extent of your client's domiciliary requirements 

# . . . [and] as a compromise in an effort to avoid premature litigation

# .. .." In

a letter dated March 17, 1988, Putman agreed to pay $616 per week for Beery's past care and to continue at that rate in the future. On April 30, 1988, the parties entered an agreement entitled compromise, Settlement And Release Of Claim For Payment For Domiciliary Care PreviouslyPro~ided.'~ That settlement coveredthe period fromNovember 24, 1984 throughApril 16, 1988. The parties stated that they desired to "resolv[e] such claim without further cost, time, litigation or expense," and the settlement was made "without any admissions on anyone's part." After entering that settlement,CNA continued topay benefits at the rate of $616 per week. Then, based on the report of the Kalispell panel, CNA terminated all payments for domiciliary care

on August 12, 1991.Beery responded to the terminationof benefits by petitioning the Workers' Compensation Court for a hearing, praying that domiciliary care benefits be reinstated. The parties stated the issues in the pretrial order 

### as follows: 1. Whether the claimant has been since August 12, 1991, and currently is entitled to receive domiciliary care paid for by the Defendant? 2. Is the claimant entitled to a penalty, reasonable costs and attorney fees pursuant to Montana law? The partiesb "Statement of Contentionsw in the pretrial order merely reiteratedthe issues stated above. Beery raised the issues of waiver, breach of contract,and judicial estoppel for the first time in his proposed findings of fact, conclusions of law and judgment. Beery raised and briefed the issue of equitable estoppel for the first time in his reply to CNAtsproposed findings, conclusions, and judgment. *

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## -- L-J LII~ wuLnrLb- buIuprllbabLuu CUULL UUUULuaL DrrLy uau failedto support his need fordomiciliary carebymedical evidence

as required by Carlson. The court also concluded that CNAwas not equitably estopped from terminatingbenefits. Inreviewingadecisionof theWorkers' CompensationCourt,we determine whether substantial credible evidence supports its findings. Richardson v. Columbia Falls Aluminum Co. (1991), 248 Mont. 41, 43, 808 P.2d 500, 501. In reviewing conclusions of law

we determine whether the Workers' Compensation Courtbs interpretation of the law is correct. Stanley Structures v. Scribner (1992), 253 Mont. 236, 239, 833 P.2d 166, 169. TheWorkers' Compensation Court did not address the issues of 5waiver, breach of contract, or judicial estoppel, presumably because these were not raised in the petition or the pretrial order. Under Rule 16(e), M.R.Civ.P., the pretrial order gscontrol[s] the subsequent course of the actionunless modified by

a subsequent order." The pretrial order "should be liberally construed to permit any issues at trial that are 'embracedwithin its language." Bell 

### v. Richards (1987), 228 Mont. 215, 217, 741 P.2d 788, 790 (citationsomitted). However, the limited statement of issues in thepretrial order in this case cannotbe construed so liberallyas to embrace the issuesof waiver, judicial estoppel and breach of contract. The threshold question in determining entitlement to domiciliary care benefits is whether the five part test of Carlson ismet. Furthermore,we said inMontana Deaconess Medical Centerv. Doherty (1990), 241Mont. 243, 246, 786 P.2d 669, 671, that "[w]e may on appeal review only those issues decided by the District Court 

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# . . 11 We distinguish this case from Akhtar 

### v. Van De Wetering (1982), 197 Mont. 205, 642 P.2d 149,where we found that there was sufficient indication that due process was an issue at the trial level to consider it on appeal. There,we relied on the fact that due process was referred to extensively in the appellant's trial brief and proposed conclusions of law and the district court made

a specific finding regarding due process. 642 P.2d at 152. In the present case, Beery did not argue these issues before the hearing, but only interjected them into his proposed findings and conclusions. As the Workerss compensation Court did not addressthese issues, we will not address them either. Beery does not contest the Workers1 Compensation Court's conclusion thathe failed tomeet the fivepart test of Carlson for entitlement to domiciliary care benefits, Because he did not raise

or argue this issue inhis brief, the issue is deemed waived and we need not address it. Teesdalev. Anschutz DrillingCo. (1960), 138 Mont. 427, 431, 357 P.2d 4, 7: Hagerty v. Hall (1959), 135 Mont. 276, 283, 340 P.2d 147, 151. See also Schaubel v. Pversen (Mont. 1993), 848 P.2d 489, 50 St.Rep. 213 (issue of whether district court erred indetermining that appellantshad failed to establish prima facia case of negligence was waived because not raised or argued in their brief). "This Court will not endeavor to review a matter when appellant has directed no argument toward it." Sands

v. Nestegard (1982), 198 Mont. 421, 428, 646 P.2d 1189, 1193. Furthermore, because we hold that CNA properly terminated domiciliary care benefits, Beery is not entitled to attorney's fees, costs or a penalty. See 55 39-71-611 and 39-71-2907, MCA (1983). Eauitable EstoDDel Beery raised and briefed the issue of equitable estoppel in his reply to CNA1s proposed findings, conclusions and judgment. He explained that he raised the issue then for the first time because "it was not until receipt of the Defendant's Proposed Findings, Conclusions, and Judgment that the Claimant realized that the Defendant was going to ask this Court to relieve it from the obligation topay for domiciliarycarewhich itwillingly undertookin 1988 by revealing that it really didn't mean what it said when the contract was negotiated." The Workersv Compensation Court addressed the issue of equitable estoppel,concluding that Beery failed tomeet the first of six elementsrequired for the doctrine to apply. We have stated the elements as follows: "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 concerningthese factsmust be unknown to the otherparty claimingthebenefit of the estoppel,at the timewhen it was acted uponby 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. Hemust in fact act upon it in such a manner as to change his position for the worse. 

# . . . It Mellem v. Kalispell Laundry & Dry Cleaners (1989), 237 Mont. 439, 442, 774 P.2d 390, 392 (quoting Davis 

### v. Jones (1983), 203 Mont. 464,467, 661P.2d 859,861). We reaffirmedand readopted these as the six essential elements inDagel v. City of Great Falls (1991), 250 Mont. 224, 819 P.2d 186. However, "[elstoppel is not favored and will only be sustained upon clear and convincing evidence.vv



### , 819 P.2d at 193 (quoting Kenneth D. Collins Agency v. Hagerott (1984), 211 Mont. 303, 310, 684 P.2d 487, 490). We also pointed out in Daqel that 9 26-1-601,MCA, should be considered in an equitable estoppel case. 819 P.2d at 193. That statute provides:List of conclusive presu8lptions. The following presumptions are conclusive:

(1) the truth of a declaration, act, or omission of a party, as against that party in any litigation arising out of such declaration, act, or omission, whenever he has,by suchdeclaration,act,or omission,intentionally led another to believe aparticular thing true and to act upon suchbelief[.] Inthepresent case, CNA's aajuster,Pitman, sent a letter to Beery's lawyer onJanuary 7,1988,stating amongother things, "For the record, the insurerdoes

## not contestyour client's entitlement to domiciliary care, the full extent and value of which is yet to be determined." Beery relies solely on this statement to argue that "it must be conclusively presumed that Danny entitled to compensated domiciliary care." We disagree. The statement is qualified as to both extent andvalue. CNAmade no representation that Beery would always be entitled to domiciliary care benefits. The extent of careBeery required certainlycould change over time. The medical evidence from the Kalispell panel was that Beery did not require domiciliary care in April of 1991. Therefore, this statement did not establish conclusively that Beery was and would always be entitled to domiciliary care. This is distinguishable from &g.g& where the defendant made an affirmative, unqualified statement that the plaintiff was not covered by a contract or grievance procedure. 819 P.2d at 188. As for equitable estoppel, the Workers' Compensation Court found that Beery failed to meet the first of the six elements--a representation or concealment of material fact. The Workers' Compensation Court reviewed the parties' entire correspondence,concluding that it showed CNA's reservations about Beerj's entitlement to domiciliary care benefits. Specifically, the court relied on the documentdatedApril 30, 1988, entitled "Compromise, Settlement And Release Of Claim For Payment For Domiciliary Care Previously Provided." In that document the parties compromised and settled Beery's claim for domiciliary care for the period November 24, 1984, to April 16, 1988. They acknowledged that the purpose of the agreement was to resolveany claimBeeryhad for domiciliary care during thatperiod to avoid further cost, time, litigation, or expense. They also stated that it was made "without any admissions on anyone's part." Based on this, theWorkers' Compensation Court concluded that Beery could not argue thathe was never advised that CNA acknowledgedhis entitlement to domiciliary care only for the purpose of settlement and to avoid litigation. Beery arguesto thisCourt that the language in theApril 1988 settlement referred only to the specific time period stated therein--November 24, 1984 to April 16, 1988--and no other. ,- However, it was entered into three months after the January p3, 1988, letter onwhich Beery solely relies and covered any benefits he received during that period. The fact that those three months of payments were made only in the spirit of compromiseand "without anyadmissionsw supports theWorkers' CompensationCourt's findings and conclusions that no representation or concealment occurred. The Workers' Compensation Court also concluded that the fact that the document of April 16 did not mention domiciliary careafter that date could not be construed to mean that CNA admitted Beery was entitled to benefits after that date. The correspondence between the parties indicates CNA's reservations about Beery's need for domiciliary care. It also indicates CNA's willingness to initiate and pay benefits without admitting liability fortkereasons statedabove. Inthe September 25, 1987, letter to Beery's counsel indicating that CWA would initiate benefits, Putman stated: [Tlhiscorrespondencewill serveto confirmthe insurer's agreement to initiate biweekly domiciliary payments 

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. pending further evaluation as to the necessity and extent of your client" domiciliary requirements. This agreement is intended as a compromise in an effort to avoid premature litigationand is not tobe construed as an admission of liability [or] waiver of any future rights of defense. 

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# . . [I]t is my understanding that you agree that the payment of these benefits are in lieu of further investigation of your client's cognitive impairment and the extent of cognitive deficit through further medical panel evaluation 

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sent Beery's counsel a letter on December 10, 1987, stating: In addressing your concerns regarding the issue of your domiciliarycare, 

### Iwill remain flexibleon this issueas well. However,prior toany finaldeterminations inthis regard, I believe it would be appropriate to see what changes result from the recommended treatment. To thispoint, CNAhad made no representationor concealed anything from Beery. The January 7, 1988, letter on which Beery relies followed. In that letter, Putman prefaced the specific statement Beery relies on by stating, "In conclusion,my correspondence of December 10, 1987 clearly references the insure[rI1s position regarding the domiciliary care issue." The statement Beery relies on cannot be read in a vacuum. Itmust be read in light of the other correspondence between the parties and the agreement of April 16, 1988. Itmust also be read in light of the prefacing statement and the qualifying language in the statement itself. When read in this manner, it does not amount to the ''express[ 

### 1 represent[ation], without qualificationp'that Beery argues CNA made. Furthermore, even if the first element of equitable estoppel were satisfied, Beery could not satisfy the sixth element, which requires that he be put inaworse position thanhe would have been had there not been a representation or concealment. The Workers' Compensation Court specifically concluded that Beery failed to satisfy the requirements that 1) the preponderance of credible medical evidence demonstrate a need for home nursing care, with a description of that care; 2) the services be performed under the direction of a physician; and 3) the services be of the type normally renderedby trained attendants and not within the scopeof normal household duties. Beery argues that because he relied on Putmanps statementhemade no further attemptafter January 1988 to establish the five elements of the Carlson test. However,Beeryhad a full opportunity to develop this evidence forthehearing. The record before theWorkers*CompensationCourt contained the depositions of Beery's wife and two sons and the depositions of some of the doctors from the medical panels that evaluated Beery. It also contained the extensive medical records and reports and the surveillance tapes produced by the insurer's investigator. The Workers' Compensation Court concluded that theevidence showed Beery was not entitled to domiciliary care. Because he had full opportunity before the hearing to develop his

case to show that domiciliary care was medically necessary, Beery cannot claim he was put in a worse position than he would have been. See Berglund and Berglund, Inc. v. Contributions Bureau

(1990), 241 nont. 49, 784 P.2d 933 (equitable estoppel not applicable where plaintiff could not showby clear and convincing evidence that he relied on misrepresentation to his detriment). We hold that the Workers1 Compensation Court correctly concluded that CNA was not equitably estopped from contesting Berry's entitlement to domiciliary care benefits. Aff inned.August26,1993 CERTIFICATEOFSERVICE Ihereby certifythatthe followingorderwas sentbyUnitedStates mail,prepaid,tothe following named:

Gene R.Jarussi Jarussi&Bishop P.O. Box3353 Billings,MT 59103

ToddA. Hammer Warden,Christiansen, Johnson&Berg P.O. Box3038 Kalispell,MT 59903-3038 EDSMITH CLERKOFTHESUPREME COURT STAWOFMONTANA