No. 12419 INTHE SUPKEME COURT OF THE STATE OFPDNTANA



### JIMMY A. RICKS, Plaintiff and Respondent,

TESLOW CONSOLIDATED and ARGONAUT INSURANCE COMPANY, Defendants and Appellants.

Appeal from: District Court of the Eighteenth Judicial District, HonorableW. W. Lessley, Judge presiding. Counsel of Record: For Appellants: Harris, Jackson and Utick, Helena, Montana. Vern Harris argued, Helena, Montana. For Respondent : Bolinger and Wellcome, Bozeman, Montana. Page Wellcome argued, Bozeman, Montana.



## - Submitted: April 

### 25, 1973 Decided :

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### 2

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## lgn

Filed: 

### JUL

### 2

## 6

## 1975Mr. Justice Castles delivered the Opinion of the Court.

This isan appeal from an amended judgment of July 30, 1971, and a supplementary judgment entered on October 17, 1972, entered by the district court inGallatin County on findings of fact and conclusions of law in favor of a claimant forworkman's compensation.Through a hearing before the Industrial Accident Board on June 

### 3, 1970, claimant Jimmy A. Ricks sought workmen's compensation, based upon his claim for compensation which had been filed with the Board over three years and seven months after the date of his accident. The Industrial Accident Board (hereinafter called the Board) denied compensation. Claimant appealed to the district court and was awarded compensation for 500 weeks, atthe rate of $50 per week, payable ina lump sum. Subsequently, the district court entered an amended order nunc pro tunc which awarded compensation for

### a period not toexceed 500 weeks and deleted the provision for payment ina lump sum. Defendants appealed the amended judgment to this Court. The appeal resulted ina per curiam order, dated February 7, 1972, wherein this Court stated: "IT IS ORDERED that the causebe remanded to the State IndustrialAccident Board and that said Board conduct a hearing into the element of estoppelbased upon the action or inaction of the attorneys for Teslow Consolidated while representing claimant's interests. I' A second hearing was held before the Board on May 19, 1972, pursuant to this court's order. On June 

### 7, 1972, the hearings officer entered a memorandum opinion and findings of fact and conclusions of law denying compensation. The decision of the hearings officerwas adopted by the Board by order dated July 12, 1972. On claimant's second appeal tothe district court, that court entered additional findings of fact and conclusions of lawand a supplementary judgment which reversed the decision of the Board and awarded compensation for a period not toexceed 500 weeks. Defendants appeal from the district court's amended judgment of July 

### 30, 1971, and from the court's supplementary judgment of October 17, 1972. The sole issuehere is: Did the district court errin reversing the decision of the Board and in enteringjudgment forpayment of 500 weeks of workmen's compensation? On or about April 27, 1966, while inthe employ of Teslow Consolidated, claimant Jimmy A. Ricks sustained an accidental injury in the nature of a puncture would below his leftpatella. He also complained of a foreignbody inhis right eye. The knee was cleansed and dressed by Dr. J.M.Brooke of Ronan, Montana, and claimant's eye was examined, but no foreignbody was found. Dr. Brooke indicated claimant would possibly be off work one day, but would not incur any permanent disability. On April 29, 1966, Ricks was seenby 

### Dr. A. L. Vadheim of Bozeman, who indicated Ricks would be partially disabled for two weeks. Ricks was seen periodically following April 29, 1966, by Dr. Vadheim and ultimately by Dr. Francis Kelly, an orthopedic surgeon, inconsultation on February 10, 1967, following which physical therapy was recommended. Dr. Kelly diagnosed Ricks' difficultyas an inflamation of the leftkneecap, termed chondromalacia patella, involving theback surface lining of the kneecap and he injected the knee several times with cortisone. Sometime afterAugust 1, 1966, Ricks contacted Mr. H.A. Bolinger, an attorney and stockholder for two of the four Teslow Companies that owned Teslow Consolidated, who then was preparing

a suit for damages against the other party or parties involved in the accident. At the time of either the first or second visitwith Mr. Bolinger, Ricks engaged Bolinger to look after his legal interests inconnection with the accident. Ricks was made a party lai in tiff inthe suit for damages along with his employer, Teslow Consolidated. This suitwas eventually settled to the advantageof plaintiffs, with Ricks receiving a net amount (after attorneys' fees and costs of some $4,100 to $4,700) of $8,800 to $8,900. During the statutory time for filing a claim for compensation therewas only one attorney (Mr. Bolinger) forTeslow Consolidated involved with claimant Ricks. Two other attorneys entered the

case atvarying times later, but neither was inthe case within

one year afterthe accident. Mr. Andriolo became involved when he became associated with Bolinger inJuly orAugust of 1967. Mr. Wellcome, alsoupon becoming associated with Mr. Bolinger,

was not involved until 1969. On December 

### 1, 1969, over three years and seven months after the date of the accident, Ricks filed a claim forworkmen's compensation. Defendant, Argonaut Insurance Co., paid medical benefits through May 20, 1970, totaling $231. This sum represents all medical bills submitted on the claimwith the exception of one billfrom 

### Dr. Kelly inthe amount of $25 fora report tothe Department of Labor and Industries inthe stateof Washington. On April 5, 1971, the Board entered 

### its first findings of fact and conclusions of law. In 

### its conclusions numbered I1 and 111, the Board held specifically: "11. That the claimant filed a claim for compensation after the statutory period 

### as set forth in Section 92-601, R.C.M. 1947, had expired. "111. That the evidence 

### is insufficient to establishthat the defendant carrierbecause of their actions in this instant case are equitably estopped from raising the defense of the statute of limitations. II Upon the first appeal thematter was submitted to the district court on the transcript from the Industrial Accident Board and no

new evidence was offered. On June 23, 1971, the district court entered 

### its findings of

and fact,/conclusions of law, reversing the Board. As a basis of reversal, the court held that defendant Argonaut Insurance Co.

was equitably estopped from raising the defense of the statuteof limitations, as set forth in section 92-601, R.C.M. 1947. Thecourt further held that defendant Argonaut Insurance Co. had a duty toobtain a claim forcompensation from the plaintiff and to advise him it must be filedwithin one year from the date of the accident. The factsupon which the court based 

### its conclusions relate to the actions of ~rgonaut's agent, George Wood. The court found that Wood had a certainexpertise inthe workmen's compensation fieldand that his officenormally followed a procedure of sending

a claim for compensation form to a claimant and advising claimant he must filehis claimwithin twelve months of the date of the accident incases where the physician's firstreport or the employer's report indicates a loss of time inexcess of seven days. The court found this procedure was not followed in the instant case. It further found thatWood failed to send a copy of Dr. Vadheim's firstreport to the Board, althoughWood normally would have done

so. The court did not explain how the failure to forward Dr. ~adheim's report inany way prejudiced or affected the claimant. Finally, the court based 

### itsconclusion of equitable estoppel on the fact that defendant Argonaut Insurance Co. had "notice of the continuing difficultywhich the plaintiff was experiencingby and through medical reports

# ** *.If Defendants filed formal exceptions tothe court's findings and conclusions, which were subsequently denied. The testimony 

### isundisputed that claimant Ricks had never had any contact whatsoever with anyone connected withArgonaut Tnsurance Co. up tothe date of thehearing before the Board. There was nothing between claimant and theArgonaut Insurance Co.

or the Board toward making a claim, prior to the actual filing of the claim. Counsel forclaimant made some obscure references in the firsthearing to something between claimant and attorneys for the employer, Teslow Consolidated, who were also attorneys for claimant, but any contention of anything inthe nature of an estoppel inthis respect was abaondoned until after this Court's

### order of February 

### 7, 1972. Counsel's letter of January 21, 1971, to the chairman of the Board stated: 

# "*

# * Jc 

### wewill withdraw the contentionwhichwe made before the Board pertaining to an element of estoppel being based upon any action or inaction of the attorneys for Teslow, Inc. 

# **

# *" After this court's order of February 

### 7, 1972,claimant reasserted an issue of estoppel based upon the actions or inactions of claimant's and employert s counsel. At the second hearing before the Board on

## my' 19, 1972, Mr. Bolinger testified: 

### "Q. Then at that time, when these notes were made, did you agree to representMr. Ricks with any legal problems hemight have as a result of the accident? 

### "A. 1'm sure I did. Hewas a party-plaintiff in the accident case, and 1'm sure I was representing him inwhatever therewas, yes. "Q. Do you have any specific recollectionat this time as to any further discussion of the industrial accident claim? "A. 

### Idon't have any distinct recollectionof it. He was off 11days, it seems to me, and 

### I thought hewasn't off long enough to present a claim, and he had this large familyhe was having to support, is all I remember about it.II 

### On cross-examination,Mr. Bolinger testified: "Q. In answer to Mr. Wellcome's question as to whether or not you discussed workmen's compensation with Mr. Ricks, that phase of this accident,'you said, 

### Ibelieve, youmust have discussed it to some extent'. Do I understand correctly youmeant to the extent of these notes in Exhibit No. l? 'A. Yes, there's a couple things in that that would have pertained to it, like the timehewas off,and the reference at the bottom. 

### Iwould have had to have talked about industrial accident orworkmen's compensation to have written those notes. "Q. Of course, those matters could also have pertained to any claim against the driver and owner of the tractor, could they not, loss of time and claim formedical benefits?

1 

### "A. Well, yes,but the reference there that Industrial paid bills', means an industrial accidenthad to be mentioned at the time. 

### "Q. But youmight have been interested in that from the standpoint of a claim against the third party as owner of the tractor and driver of the tractor? 

### "A. That would be true."Q. And do I understand correctly that you don't have any independent recollection of discussing the industrial accident phase with Mr. Ricks at the time thesenotes were made? "A. Other than I remember him telling me he had so much family he'd have to go back towork sooner than he thought he should because he couldn't get by on what compensation he could get. I do remember that.

IIQ. You didn't make any note on that on Exhibit No. l? 'A. No. "Q. And that's the only thing you recall independently of this memorandum then? "A. I think that's correct, that's the only independent recollection I have of it. 1'm inclined to think thatwhen he was only off 

### 11 days, I told him itwasn't worth putting in a claim. "Q. you're not surewhether you told him that ornot7 "A. Well, I would think I did, but I can't remember saying thewords. I remember definitely his talking about his large family, I remember that. 11 claimant's recollection of any discussion of a compensation claim with Mr. Bolinger was also extremely hazy as to precisely what was said and when. In fact, claimant had testified atthe firstBoard hearing that he had discussed the subject of the claim filingrequirement within a year of the accident datewith

### Mr. Andriolo and 

### Mr. Andriolo had advised him as tothe filingreAtthe second hearing, claimant changed his story and stated that he had not discussed the filingrequirements until after the filingperiod had expired. Also, atthe second hearing, claimant changed his story as tohow he came to see Mr. Bolinger in the firstplace. Under cross-examination atthe firsthearing, claimant finallyadmitted that itwas his idea to contact Mr. Bolinger and

use the same lawyer asTeslow Consolidated. At the second hearing, claimant testified that he first saw Bolinger atthe request of

someone with Teslow Consolidated. There isno dispute, however, to the fact that claimant retained Mr. Bolinger to represent him inconnection with his

### injurieswithin the one year claim filing period. 

### On June 7, 1972, the Board entered its findings of fact and conclusions of law: "FINDINGS 

### OF FACT 

### "I. That there isno dispute that the Claimant suffered an accidental injury arising out of and in the course of his employmentwith Teslow, Inc. onApril 27, 1966, in Lake County,Montana. "11. That the Claimant received medical benefits pursuant to the provisions of Section 92-706, R.C.M. 1947. "111. That no Claim for Compensationwas filed within the statutory time for filing as required by Section 92-601,R.C.M. 1947. "IV. That the Claimantwas summoned to the office of Mr. 

### H. A. Bolinger, an attorney at Law, for the purpose of providing eyewitness information to be used in preparation of a suit for damages in a Court of Law onbehalf of the Claimant's employer,Teslow, Inc

# . "V. That Bolingerwas a stock holder in two of the four corporations that owned Teslow, Inc., and further that Bolingerwas and had been an attorney on a retainer and additional fee basis for the Teslow interests for a number of years prior to and at the time of his association with the Claimant. "VI. That the Claimant, subsequent to his meeting with Bolinger, became a party plaintiff alongwith Teslow, Inc. in a suit for damages filed in the 4th Judicial District, Polson,Montana, on November 9,1967, against another party or other parties, and that Bolinger acted as attorney in the common interests ofboth the Claimant and Teslow, Inc. and further that the Claimant retained Bolinger to representhis legal interests in connection with the accident.

"VII. That Bolinger pursued the interests ofhis clients, the Claimant and Teslow, Inc., to the point of a settlement without the necessity of a court decision. "~111. That the Claimant lost eleven (11) days work due to the injuries received in the accident Ghich occurred on April 27, 1966. "IX. That Pursuant to the provisions of Section 92-701, R.C.M. 1947as this section stood inApril 1966 the Claimantwould have been entitled to four 

### (4)days of compensation at the rate of $56.00 per week or a total of $32.00 for temporary total disability had a timely claimbeen filed. "X. 

### That the matter ofWorkman's Compensationwas only briefly discussed between the Claimant and Attorney Bolinger and that Bolinger mistakenly believed that the Claimant had not lost sufficient time fromwork to be entitled to receive compensation."XI. That Atcorney Andriolo, an associate of Rolinger, didnot enter the case or discuss the casewith the Claimant until after the statutory time for filinga claimhad run. "XII, That the preponderance of evidence fails to reveal that any of the elements of equitable estoppel, or estoppel inpais, areorwere present during the statutorytwelve (12) month period subsequent to the date of the accident.

"I. That the Claimant 

### was entitled tomedical benefits under the provisions of Section 92-706, R.C.M. 1947. "11. That no Claim for Compensation was filedby the Claimant or someone legally authorized toact inhisbehalf within the time period described in Section 92-601, R.C.M. 1947 and as a result the Claimant 

### is not entitled tocompensation under the provisions of theworkman's Compensation Act,I' Upon the second appeal tothe district court, the matter was again submitted to the court on the transcript from the Board and

no new evidence was offered. On October 

### 11, 1972, the district court entered 

### its findings of fact and conclusions of law, reversing the Board. The court adopted 

### its previous findings and conclusions and added thereto

an additional ground for equitable estoppelbased on the "actions, statements and assurances" of the attorneys for the defendant, Teslow Consolidated, who alsorepresented the claimant. The court, in

### its amended order of July 27, 1971, and reaffirmed in its supplementaryjudgment of October 17, 1972, held that claimant

### was permanently disabled as a result of his accidental injury and was thereby entitled tocompensation for a period not to exceed 500 weeks. This holding was based upon the court's first findings of fact that claimanthad sustained further injuries in addition tothe puncture wound below his left patella. The claimant's other injuries relied on by the court are set forth in its findings of fact as "sand inhis eye", "a tender left second toe1', "a contusion of the left thigh", and "a mental condition 

# * Jc

# * which manifested itself inhis being afraid to drive a truck and feeling that other vehicles coming towards him were in the process of crossing over the center line so as to strike the truck which he was driving. 11

### Dr. ~rooke's firstreport, as

### wellasclaimant's own testimony, indicates that the sand in claimant's eye was nothing of significance. Claimant testified that he had a piece of glass inhis eye which he removed himself. Dr. ~rooke's firstreport indicates that he examined claimant's eye and found no foreign body. Claimant, on cross-examination, testified: 

### "Q. You haven't had any trouble with your eye since this accident? "A. NO. II The only references in the record toa tender left second toe and a contusion of the left thigh occur in the initialreports and billings of 

### Dr. Vadheim. An examination of Dr. ~elly's

### testimony before the Board reveals that claimant's only complaint to him was the problem with his leftknee. In fact, claimant's attorney stated: "Q. (By 

### Mr. Harris) Maybe 

### I can shorten my cross-examination of the doctor, if I ask Mr. Wellcome one question---are you claiming anything in this procedure for any injury other than to the knee? "MR. IELLCOME: Only insofar as towhat Mr. Ricks has already testified to about the emotional problems which he has had indriving a truck and the fear that other trucks or cars are coming across the center linewhich affects his ability to drive also, as a result of this accident. 1I 

### As to the "mental problem", the only evidence in the record 

### isthe unsubstantiated, self-serving testimony of the claimant. There 

### isno indication whatsoever that claimant ever sought treatment for his "problem", or, for that matter, that he ever mentioned it tohis doctors. There 

### isno medical testimony corroborating the existence of this "problemf'. In fact, the record 

### is completely devoid of any medical testimony connecting this "problem" to the accident of April 

### 27, 1966. It 

### isapparent the Board feltthe evidence insufficient to support a finding of any other injurieswhen it found: "That the medical evidence reveals the claimant 

### is suffering from an inflamation of the knee, termed Chrondromalacia patella, which max possibly necessitate surgery at some future time.4s set out heretofore, the issue 

### iswhether the district court erred inreversing the decision of the Board and inentering judgment for payment of 500 weeks of workmen's compensation. It 

### is defendants'position that the districtcourt erred in granting any compensation whatsoever because a claim for compensationwas not filed until long after the statuteof limitations set forth in section 92-601, R.C.M., had expired; and there are absolutely no facts inthe casewhich would justify the imposition of an equitable estoppel against the insurer. This Court inBecktold v. IndustrialAccident Board, 137 Mont. 119, 125, 350 P.2d 383, said: "1f the evidence does not clearlypreponderate against the findings of the Board, the district court must affirm the ~oard's order. Moffett v. Bozeman Canning Co., 95 Mont. 347, 26 Pac.2d 973." Here, the question 

### is, inthelanguage of section 92-834, R.C.M. 1947:

l'* 

# *

# * whether ornot the findings of theboard ought tobe sustained, and whether ornot such findings are reasonable under allthe circumstances of the case.II InMoffett v. Bozeman Canning Co., 95 Mont. 347, 351, 26 P.2d 973, we said: "The case came tothe district court with the DresumDtion that the board had decided correctly. [ciiing cases]I' See also: Kerns 

### v. Anaconda Copper Mining Co., 87 Mont. 546, 289 P. 563. Was the Board arbitrary infinding that the evidencewas insufficient to establish an equitable estoppel against the defendant carrier? This Court inMeznarich v. Republic Coal Co., 101Mont. 78, 93, 53 P.2d 82, said: "The board's decision on this question can only be reversed ifarbitrary and founded on no substantial evidence. II claimant's accident of April 27, 1966 did not result in any claim for compensationbeing fileduntil December 1, 1969, or over three years and seven months thereafter. The Montana workmen'sCompensation Act has two requirements: (1) section 92-807, R.C.M. 1947, which requires notice insixty days after the accident; and (2) section 92-601, R.C.M. 1947, which provides:

II

In the case of personal injury

# *** allclaims shallbe forever barred unless presented inwriting 

# *** within twelve months from the date of the happening of the accident, eitherby the claimant or someone legally authorized toact forhim. II This Court, deeming section 92-601, R.C.M. 1947, tobe a

I1

sratute of limitations" has developed an exception known as

IIestoppel1'. This doctrine of estoppel applies where employer, insurer, orBoard as the case may be, has taken some positive actionwhich either prevents the claimant from

### making a claim

or leads him reasonably tobelieve he need not file such a claim. This Court has seen fittoapply the doctrine of estoppel only where therehave been affirmative actsbefore the statutoryperiod has run which eitherprevent the claimant from filing or lead him to believe he need not do so. The firstcase inMontana dealing with estoppel was Lindblom

v. ~m~lo~ers' Etc. Assur. Corp., 88 Mont. 488, 295 P.2d 1007, where itwas held that an estoppel would be applied as to the failure tofilea claimwhere the agent of an insurance company led the worker tobelieve his claimwould be settled, InMcCoy

v. Mike Horse Mining Co., 126Mont. 435, 252 P.2d 1036, the injured workman was told by the company doctor that he had not been injured. In Levo v. Gen.-Shea-Morrison, 128 Mont. 570, 280 P.2d 1086, the injuredworker was toldby a company lawyer and the company personnel manager that his claimwas not covered forworkmen's compensation. In Gugler v. IndustrialAccident Board, 117 Mont. 38, 157 P. 2d 89, the cityclerk and mayor of the city of Hamilton informed plaintiff that itwas not necessary forhim to filea claimwith the Board. In Yurkovich 

### v. IndustrialAccident Board, 132Mont. 77, 314 P.2d 866, a Plan 111 case, the claimantwrote to the Board, inquiring as towhat he should do about his injury and the Board led him tobelieve itwas not necessary to filea claim.Tn the instant case, claimant was never misled by anyone connected with the Board or the insurer. The undisputed evidence shows therewas never any communication between the claimant and anyone representing the insurer. Claimant's condition was fullydiagnosed by Dr. Kelly within

one year of the accident, and claimant knew of his condition. A review of the medical evidence shows the doctor's diagnosis has not changed and claimant's condition has not worsened. In other words, the claimant knew, within one year, the fullextent of his injury. The only affirmative act the insurance carrier took inthis matter after the accident

### was to pay formedical expense incurred by the claimant. Before the Board and the district court, claimant relied heavily on Gugler v. IndustrialAccident Board, 117 Mont. 38, 157 P.2d 89. Although the facts substantiating an estoppel or waiver were present inGugler, the Court based 

### its decision upon

a theory that the filing of a claim by a doctor forhis services

was the equivalent of the filing of a claimby the injuredworkman, which dispensed with thenecessity of any further claimby the workman. In 

### itshaste toabrogate the theory of Gugler, the legislature amended theWorkmen's Compensation Act toprovide that medical benefits were "an additional benefit separate and apart from compensationf',but neglected tohave the legislativebillprinted. By reason of this, the Court inO'Bannon v. Gustafson, 130 Mont. 402, 303 P.2d 938, held the amendment unconstitutional. In O'Bannon it was recognized that the 1945 legislative amendment would -9 have chznged the Gugler rulehad the amendment been constitutional. The pertinent sections have sincebeen reenacted and recodified

numerous times, so the constitutional defect of ~'Bannon no longer exists. It isnow clear that medical benefits are an additional benefit separate and apart from compensation. No claim formedical benefits need be made and the medical benefits 

### willbe paid during the first thirty-six months after the accident. InVetsch v. Helena Transfer & Storage Co., 154Mont. 106, 460 P.2d 

### 757, the issuewas raised as towhether payment of medicalclaims would toll the statute of limitations set forth in section 92-601, R.C.M. 1947. The Court held that estoppelwas inapplicable, thereby affirming the rule that payment of medical bills does not dispense with the necessity of a claim for compensation by

an injuredworkman. Inreversing the ruling of the Board inthe instant case, the district court partiallybased 

### its decision on the failure of Argonaut's agent, George Wood, to followhis own ordinary internal office procedure. The court decided ineffect, that Argonaut had a duty to obtain a claim for compensation from the claimant. This 

### is directly contrary to the plain, simple, unambiguous language of section 92-601, R.C.M. 1947: 

# "*** allcladms shallbe forever barred unless 

### resented inwritinn 

# ** within twelve months

Thus, the duty 

### isupon the claimant to filehis claim, not upon the insurer to solicit claims. The Workmen's Compensation Act has not changed the principle that he who asserts a right has the burden of proof or theburden of proceeding. In Nicholson



### v. Roundup Coal Mining Co., 

### 79 Mont. 358, 374, 257 P. 270, the Court said:

1'The burden 

### is therefore upon the claimant toprove injury, as above defined, resulting from (1) an industrial accident, (2) arising out of and (3) inthe course of the employment, and, as these terms areused conjunctively and not disjunctively in the statute, unless allthree of thesenecessary elements areproved by a preponderance of the evidence, no liability

### rests upon the employer topay compensation. [Citing cases].II Other cases holding that the burden of establishing a right tocompensation 

### is the claimant's are: Landeen v. Toole County Refining Co., 

### 85 Mont. 41, 277 P. 615; Woin v. Anaconda Copper Min. Co., 99 Mont. 163, 43 P.2d 663. In 

## - Yurkovich which was a plan I11 case, the Court did hold that the Board had a duty to fully advise an injured workman of the claim filingrequirements. But inYurkovich the claimant wrote to the Board asking for information as towhat he should do.In the instant case there 

### isno such request from the claimant. There was no communication whatsoever between claimant and the insurer or the Board. In fact, claimant was represented by counsel who surely should have known of the claim filingrequirements. The facts of the instant case are certainly distinguishable from Yurkovich. In addition, Yurkovich was decided on the theory that the Board was a trustee of the state fund, that it acted ina dual capacity and, therefore,had a greater duty toward claimants. Defendant Argonaut 

### isnot in the same position as the Board. 

### As pointed out, the district court partiallybased itsruling

on what it feltwas the failure of George Wood to follow his own internal office procedure. In 

### its findings of fact of April 

### 5, 1971, the district court found thatWood did not fileuntil 1970 a medical report with the Board which he had received in 1966 from Dr. Vadheim. This is immaterial to any issue of estoppel. There isno proof claimant had any knowledge that the report was not sent. Thus itwas impossible for the claimant to have been prejudiced or misled. Even ifthe report had been sent, it 

### is impossible to see how thiswould have affected the situation inany way. In 

### its findings of fact of April 

### 5, 1971, the district court found that under Wood's "standard procedure" ifa doctor's report indicated a claimant would be disabled, a letterwould be sent advising the claimant to filea claimwithin one year. There 

### is

no legalrequirement that the carriermust send such a letter. The burden 

### ison the claimant to filea claim, not on the insurer to 

# - solicit claims. Atthe firsthearing, claimant attempted tomake something of the fact that his former counsel was the same as the employer's counsel. However, as pointed out heretofore, any contention of estoppel in this respect was abandoned until after this Court's order of February 7, 1972. Atthe firsthearing, claimant's attorney stated:

## "m, ITELLCOME: 

### Yes, let me make this clear for the record, for the ~oard's record. We are not contending that therewas any overt misleading by anyone, either Teslow or any representative of Teslow.II 

### After hearing additional testimony on May 19, 1972, the hearings officer observed: "At the time the claimant engaged Bolinger to represent his legal interests in connectionwith the accident, he,Bolinger, became an agent of the claimant while at the same time hewas an agent forTeslow Consolidated. (Section 2-101,R.C.M. 1947) "The interests of the two principalswere parallel and the same in the pursuit of the action for damages, while at the same time the interests of the two principals could have been in conflict in the pursuit of any action relative to a workman's Compensation Claim. "A review of the evidence in the file and the testimony at the hearings fails to disclose any indication that this possible conflict had any influence whatsoever on ~olinger'sfailure to file a Claim for Compensation on behalf of his client and principal. He mistakenly believed that the claimantwas not entitled to compensation payments and apparently gaveno thought to possible future complications that may arise.I I 

### IfMr. Bolinger made a mistake in his understanding of the law at the time or in dismissing a possible compensationclaim

as not worth the effort, suchmistake is attributable to claimant and acts as a bar to any assertion of an equitable estoppel by claimant. Section 2-209,

### R.C.M. 1947, states:

''ik

# *

# * a principal is responsible to third persons for the negligence ofhis agent in the transaction of the business of the agency, includingwrongful acts committed by such agent in and as a part of the transaction of suchbusiness, and forhis willful omission to fulfill the obligations of the principal.11 

### Tn the instant case, claimant is the principal, Bolinger is the agent, and the employer and Argonaut InsuranceCo. are the third persons. This Court stated the essential elements of equitable estoppel in Lindblomv. ~mployers'Etc. Assur.Corp., 88 

### Mont. 488, 

### 494, 295

"Generally speaking, the following are the essential elementswhich must enter into and form a 

### part of an equitable estoppel in all of its applications: 

### '1. There must be conduct---acts, language, or silence--amounting to a representation or a concealment ofmaterial facts. 

### 2. These facts must be known to the party estopped at the time ofhis said conduct, or at least the circumstances

### must be such that knowledge of them isnecessarily imputed to him. 

### 3. The truth concerning these facts must be unknown to the other party claiming the benefit of the estoppel,at the timewhen itwas acted upon by him. 

### 4. The conduct must be done with the intention, or at leastwith the expectation, that it will be acted upon by the other party, or under such circumstances that it isboth natural and probable that itwill 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 theworse; in otherwords, he must so act that he would suffer a loss if hewere compelled to surrender or forego or alter what hehas done by reason of the first party being permitted to repudiate his conduct and to assert rights inconsistent with it. I II



### (Emphasis added) Thus, it is essential to establish an equitable estoppel that the party sought to be estopped have knowledge that he is misleading the claimant and an intention to mislead the claimant to his detriment. Here, Mr. Bolinger testified that at the time he talked to the claimanthe had a mistaken impression of the law. He did not know that hewas mistaken and he had no intention of misleading the claimant. Therefore, an equitable estoppelhas not been established. Before the Board, claimant relied on the case of Levo 

### v. Gene-Shea-Morrison,128Mont. 570, 280 P.2d 1086. However,Levo is clearly distinguishable in that there a "company" attorney gave advice to the claimant;

### hewas not an agent of the claimant as Bolinger was in the instant case. The Board was correct in ruling that claimantwas not entitled to compensation because no timely claim for compensationhad been filed. The district court erred in reversing that decision. Accordingly,we reverse and order the case dismissed.

/Chief Justice

### Mr. Justice Gene B. Daly dissenting:



### Irespectfully dissent to the view of the majority. Simply, stated, the doctrine of equitable estoppel, as applied to theMontana workmen's CompensationAct, creates an exception to the one year statute of limitations stated in section 92-601,R.C.M. 1947, if the claimant is misled or otherwiseprevented from filing his claimby (1) the employer or its agent (McCoy v. Mike Horse Mining Co., 126Mont. 435, 252 P.2d 1036 [company doctor]; Levo

v. Gene-Shea-Morrison,128 lont. 570, 280 P.2d 1086 [company lawyer and companypersonnel manager& (2) the insurer or its agent

(Lindblom v. ~mployer'sEtc. Assur. Corp. 

### 88 Mont. 488, 295 P@ 1007 [insurancecompany agent]); or (3) the IndustrialAccident Board or its agent (~urkovich v. IndustrialAccident Board, 132 Mont. 77, 314 P.2d 866 [agent of the board]]. The testimony ofMr. Bolinger, inhearing before the Board, quoted in the majority opinion,demonstrates that claimant Ricks relied upon Mr. Bolinger to resolvehis industrial accident case. The following additional testimonyby 

### Mr. Bolinger in the hearing before the Board demonstrates the misrepresentation made to Ricks: "Q. Did 

### Mr. Ricks ask you to file a claim. "A. 

### I wouldn't think he asked me to file a claim. 

### I don't think hewould have known whether he should or not. The thingwas discussed, but when he filed a claim I don't thinkhe said that. He didn't have another attorney, and 

### Iwas the one that knew the facts abouthis case. I did discussworkmen's compensation to the extent of whether or not he wasn't relying on anybody else as far as a claimwas concerned,and actually 

### Ithought---I was under the impression, unless youwere off 2weeks, itwasn't worth filing a claim. That's the recollection 

### Ihave about it. "Q. You thinkyoumay have advised him that itwas hardly worth foolingwith? "A. Yes. II 

### The quotation in the maj 

### ority opinion from Lindblom enumerating the essential elements of equitable estoppel is misleading because of the omission of the remaining five sentences in the quoted paragraph. They are:

### "'It will be seen that fraud is not given as an essential requisite in the foregoing statement. It is not absolutely necessary that the conduct mentioned in the first subdivisionbe donewith 

### - a fraudulent purpose or intent, orwith an actual and fraudulent intention of deceiving the other party; nor is this meaning implied by any of the language which I have used, The adoption of such an element as always essential would at once strike out some of themost familiar and best established instances of equitable estoppel. Undoubtedly a fraudulent design to mislead is often present as an ingredient of the conductworking an estoppel;but this only renders the result more clearly just, and, if I may use the expression,more conclusive.I 

### (2 ~omeroy'sEq.Jur., 4th ed. 1644.) This language does not conflict in anyway with what was said by this court inWaddell v. School District, supra.1I 

### (Emphasis added) The district court, in its disposition of this case,recognized the advice given to Ricks by the attorney representing both Ricks and Teslow concerning his workmen's compensation claimwas a misrepresentation ofmaterial legal facts. It does not appear that this misrepresentationwas made intentionallynor fraudulently, but that is not a necessary component for the application of the equitable estoppel principle. Ricks did not know the true facts of the law concerning his claim,and he reasonablyand predictably relied on the misrepresentation made to him, to his substantial detriment. The attorney-client relationship existent between the attorney and the defendants herein, at the time the misrepresentationwas made,precludes them from taking advantage of the consequences of that misrepresentation. This Court in its application of the law of estoppel in Levo v. Gen.-Shea-Morrison, 128Mont. 570, 576, 280 P.2d 1086, stated: "The doctrine of equitable estoppel is a flexible one, founded in equity and good conscience;its object is to prevent a party from taking an unconscionable advantage of his own wrong while asserting his strict legal right. Seemingly the only strict legal rightwe are asked to adhere to is the statute which was passed solely for the benefit of the employer and the insurance carrier, i.e. Statute of Limitations. 

# *** "Certainly, if there is any circumstance wherein the doctrine of equitable estoppel shouldbe extended, it is inmatters concerning an injuredworkman, where the law itself says that theWorkmen's CompensationAct shallbe construed liberally. "This Court inNewman v. Kamp, 140 Mont. 487, 490, 374 P.2d 100, stated: "In light of the foregoing findings of fact, we must keep inmind the following well-established rules concerning scope of review. TJe have held that this court 

### willnot reverse the finding of the district court except where the evidence clearlypreponderates against it. [Citing cases] Similarly, we stated inRirnie v. United States Gypsum Co., 134 Mont. 39, 44, 328 P.2d 133 (1958), that our duty 

### is todetermine whether there isany substantial evidence inthe record tojustify the conclusion of the court. 11 I find the decision of the district court tobe supported by ample and substantial evidence and I would affirm thejudgment