NO. 92-050 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

MICHAEL H. TEHLE, 

Claimant and Respondent, . . . . ,...f:<l:. i 

-vsALPINE PLUMBING, 

Employer, 

and 

STATE COMPENSATION MUTUAL INSURANCE FUND, T 

Defendant and Appellant. 

APPEAL FROM: The Workers' Compensation Court, 

The Honorable Timothy Reardon, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Charles G. Adams, Legal Counsel, State Compensation 

Mutual Insurance Fund, Helena, Montana 

For Respondent: 

Patrick R. Sheehy, Halverson, Sheehy & Plath, P.C., 

Billings, Montana 

Filed: 

Submitted on Briefs: June 4, 1992 

~ecided: July 9, 1992 r 'a 

I 

Clerk 
Justice John Conway Harrison delivered the Opinion of the Court. 

State Compensation Mutual Insurance Fund (State Fund) appeals 

from an order and judgment of the Montana Workersr Compensation 

Court. The court held that Michael Tehle (Mike) suffered a total 

loss of wages due to work-related injuries, despite the fact that 

his plumbing business actually increased gross income receipts. 

The court determined that Mike was entitled to temporary total 

disability benefits. We affirm. 

We review the following dispositive issue: 

Whether the Workers1 Compensation Court erred in determining 

that Mike suffered a total loss of wages. 

Sometime in 1985, Mike and his wife Cheryl, opened a plumbing 

business, Alpine Plumbing and Heating, in Billings, Montana. Mike 

performed all the physical plumbing work himself, while Cheryl 

handled all the financial aspects of the business including 

clerical and scheduling duties. In approximately October of 1986, 

Mike obtained Workers' Compensation insurance coverage from State 

Fund. The policy covered Mike as an individual owner doing 

plumbing work. 

On July 30, 1987, Mike suffered severe injuries when a ditch 

in which he was installing sewer lines collapsed upon him. Mike 

was buried in dirt almost to the top of his head. While Mike was 

rescued by his son and a backhoe operator who dug him out of the 

collapsed ditch, he was crushed by the weight of the dirt. As a 

result of the severe compression, Mike suffered a basal skull 

fracture and was treated with steroids which later produced various 
complications. He received damage to cranial nerves in his face 

which resulted in his inability to close his right eyelid for a 

period of two months. He also sustained a hearing loss and 

suffered a fractured left clavicle, fractured ribs, a dislocated 

arm, a fractured jaw and related dental problems. Throughout this 

period State Fund paid Mike temporary total disability benefits. 

During the period of Mike's convalescence, his son, father and wife 

continued to operate Alpine Plumbing and Heating. 

After returning to work on March 25, 1988, Mike began to have 

problems with his hips which resulted from the use of steroids to 

treat his other injuries. These complications resulted in the 

complete replacement of Mike's left hip joint and a core 

decompression of his right hip. In approximately September of 

1988, Mike and Cheryl were forced to hire employee plumbers to keep 

the business in operation due to Mike's physical limitations. When 

not in severe pain and recovering from his injuries and surgeries, 

Mike contributed minimally to the operation of the plumbing 

business. He sometimes answered the phone and gave recommendations 

and directions to his employee plumbers. 

Cheryl's involvement in the business increased and she 

continued to schedule the plumbing jobs for the recently hired 

employees and complete all necessary paper work. Mike has not 

performed any plumbing activities since approximately November 

1989. On December 10, 1990, the State Fund discontinued Mike's 

Workers' Compensation benefits due to the fact that Alpine Plumbing 

and Heating remained profitable and actually increased its income 
since Mike's injuries. Mike challenged the discontinuance of his 

benefits and the Workers1 Compensation Court reinstated Mike's 

temporary total disability benefits. State Fund appeals and we 

affirm. 

Two recent cases of this Court have set forth the appropriate 

standard of review in Workersq Compensation cases. The Workers' 

Compensation Court's conclusions of law will be upheld if the 

interpretation of the law is correct. Grenz v. Fire and Casualty 

of Connecticut (1991), 250 Mont. 373, 378, 820 P.2d 742, 745; 

citing Steer, Inc. v. Dept. of Revenue (1990), 245 Mont. 470, 474- 

475, 803 P.2d 601, 603, The Workers1 Compensation Court's findings 

of fact will be upheld if supported by substantial credible 

evidence. Nelson v. Semitool, Inc. (Mont. 1992) , 829 P. 2d 1, 3, 49 

St.Rep. 253, 254. 

This case hinges upon the distinction between two important 

concepts: ttwagesrt and "income from prof its. tt Mike asserts that due 

to his injuries he sustained a total loss of wages. While he 

performs minor duties for the business, he is not involved in any 

of the physical plumbing activities in which he previously engaged. 

Further, he has not taken a salary draw from the business since his 

injuries. Consequently, he has earned no wages and is therefore 

entitled to continued temporary total disability benefits under 

5 39-71-701, MCA (1987). 

State Fund contends that the profits and subsequent income to 

Mike from Alpine Plumbing and Heating has increased since Mike's 

injuries, therefore, Mike has not suffered a total loss of wages as 
required by the statutes. We disagree. 

Section 39-71-118(2), MCA (1987), provides: 

If the employer is a partnership or sole 

proprietorship, such employer may elect to include as an 

employee within the provisions of this chapter any member 

of such partnership or the owner of the sole 

proprietorship devoting full time to the partnership or 

proprietorship business . . . For premium ratemaking and 

for the determination of weekly wage for weekly 

compensation benefits, the insurance carrier shall assume 

a salary or wage of such electing employee to be not less 

than $900 a month and not more than 1 5 times the average 

weekly wage as defined in this chapter. 

Pursuant to the aforementioned statute, Mike elected coverage 

and complied with the requirements of the statute. State Fund 

processed his application and promised coverage that insured Mike 

against injury that affected his wages. 

We acknowledge that the concepts of wages and income from 

profits are often used interchangeably but they are not the same, 

and it is error to use them synonymously. In the case at bar, 

State Fund made such an error. 

A review of the record indicates that the success of Alpine 

Plumbing and Heating and its subsequent increase in profitability 

was not attributed to the ongoing efforts of Mike in his capacity 

as a plumber. In fact, the record illustrates the determination 

and tenacity of Mike's wife Cheryl and the rest of his family as 

they faced and survived the circumstances that befell them. During 

Mike's initial infirmity period, Mike's son and father carried out 

the physical aspects of the business while Cheryl continued to 

schedule plumbing jobs and prepare all necessary paperwork. When 

Mike was further unable to work due to his hip surgeries, Cheryl 
and Mike decided to hire employee plumbers to carry on their 

business. This business decision apparently enabled Alpine 

Plumbing and Heating to not only remain operational, but increase 

in popularity and success, resulting in increased profits. It is 

clear that these increased profits have not come as a result of 

Mike's involvement in the business post-injury. Therefore, we will 

not allow State Fund to escape responsibility under the valid 

contract of insurance which they negotiated with Mike. This Court 

does not dispute that Mike is now in a better financial position 

than he was prior to his injury, however, that does not establish 

grounds on which to deny him coverage under a valid insurance 

contract. 

State Fund attempts to support its position by stating that 

the income received from the business is currently being derived 

partly from the Tehles' initial investment and their reputation for 

good work. Consequently, Mike is still receiving wages from the 

business. Again, we cannot agree. Section 39-71-123, MCA (1987), 

defines wages as: 

[Tlhe gross remuneration paid in money, or in a 

substitute for money, for services rendered by an 

employee. Wages include but are not limited to: 

(a) commissions, bonuses, and remuneration at the 

regular hourly rate for overtime work, holidays, 

vacations, and sickness periods; 

(b) board, lodging, rent, or housing if it 

constitutes a part of the employee's remuneration and is 

based on its actual value; and 

(c) payments made to an employee on any basis other 

than time worked, including but not limited to piecework, 

an incentive plan, or profit-sharing arrangement. 
Although the statute does not contain an all-inclusive list of 

what constitutes wages in Montana, we do not find any similarity 

with the terms listed therein. Certainly, we do not find that 

income from profits are contained in the definition of "wages.' 

Previously, we addressed the problem of whether the ability to 

acquire income was equal to the ability to work. In Chatfield v. 

Industrial Accident Board (1962), 140 Mont. 516, 374 P.2d 226, we 

answered in the negative. We said: 

Finally, it would seem that the board correlates ability 

to acquire income with ability to work. Any income which 

the claimant has received from the ranch is a result of 

his capital investment and not from the sweat of his 

brow. The fact that claimant was able to "boss" his own 

ranch does not indicate an ability to compete on the 

labor market for a similar position elsewhere. 

Chatfield, 140 Mont. at 520, 374 P.2d at 228. Chatfield is 

analogous to the case at bar in that both claimants obtained income 

from a business they previously operated. The point of both the 

Chatfield case and the case at bar is not that the individual is 

able, through alternative business arrangements, to make a profit 

from their business, but that they can no longer perform the 

activities which State Fund insured. 

After a review of the record in the case at bar, we find that 

the Workers1 Compensation Court possessed the requisite evidence 

and testimony to support its findings and conclusions. The 

Workers' Compensation Court supported its findings of fact with 

substantial credible evidence and it made correct conclusions of 

law. Therefore, we will not overturn the Workers Compensation 

Court's ruling. Accordingly, Mike is entitled to temporary total 
benefits from November 14, 1989, until there is a change in his 

medical status that would require compensation or denial thereof 

according to relevant Montana statutes. 

We concur: 

+ Chief Justice