No. 93-500 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1994 

EARL DESHNER, 

Claimant and Appellant, 

TOWN AND COUNTRY FOODS, INC., and 

STATE COMPENSATION MUTUAL INSURANCE 

FUND, 

Employer, Defendant and 

Respondent. 

APPEAL FROM: Workers' Compensation Court 

The Honorable Timothy J. Reardon, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Tom L. Lewis, Great Falls, Montana 

For Respondent: 

Thomas E. Martello, State Compensation Insurance 

Fund, Helena, Montana 

Submitted on Briefs: June 30, 1994 

Decided: August 30, 1994 

Filed: 

. ~
Justice James C. Nelson delivered the Opinion of the Court. 

This is an appeal from a Workers' Compensation Court Findings 

of Fact, Conclusions of Law and Judgment awarding the claimant Earl 

Deshner $167.17 per week as his total temporary disability 

compensation rate, based upon an average weekly wage of $250.63. 

We reverse. 

The sole issue on appeal is whether the Workersr Compensation 

Court correctly calculated Deshnerts total temporary disability 

compensation rate. 

BACKGROUND 

Earl Deshner (Deshner) commenced employment with Town and 

Country Foods as a stocker in September, 1991 on a full-time basis 

with some weekly overtime hours. His starting salary was $5.00 per 

hour but in October of 1991, his salary was raised to $6.00 per 

hour. He received a $250.00 bonus on December 31, 1991 and on 

March 1, 1992, his salary was again increased, to $7.25 per hour. 

On March 17, 1992, he "suffered an industrial injury arising out of 

and in the course of his employment with Town and Country Foods, 

I~C.~' Town and Country accepted liability and paid temporary total 

disability payments of $153.82 per week. 

Deshner filed a petition for hearing on March 8, 1993, 

contending that his weekly compensation benefits should be $199.89 

per week based upon his actual wage at the time of the injury, 

which was $7.25 per hour. On September 2, 1993, the Workers' 

Compensation Court filed its Findings of Fact, Conclusions of Law 

and Judgment, stating that Deshnerls total disability compensation 

2 
rate should be $167.17 per week. The Workers' Compensation Court 

based its calculations upon the claimant's four pay periods 

previous to his injury pursuant to 5 39-71-701(3), MCA. Deshner's 

hourly wage during the four preceding pay periods was $6.00 per 

hour. From this conclusion of the Workers' Compensation Court, 

Deshner appeals. 

STANDARD OF REVIEW 

The standard of review for conclusions of law is whether the 

lower tribunal correctly interpreted the law. Steer Inc. v. 

Department of Revenue (1990), 245 Mont. 470, 474-475, 803 P.2d 601, 

OPINION 

In order to determine the proper total temporary disability 

compensation rate (weekly compensation benefit) for Deshner, we 

review the applicable statutes. The following excerpts of statutes 

were in effect at the time of Deshner's injury and control the 

calculation of wages and weekly compensation benefits: 

39-71-701. Compensation for temporary total disability - 

exceptions. (I) Subject to the limitation in 39-71-736 

and subsection (4) of this section, a worker is eligible 

for temporary total disability benefits when the worker 

suffers a total loss of wages as a result of an injury 

and until the worker reaches maximum healing. . . . . (3) Weekly compensation benefits for injury 

producing temporary total disability shall be 66 2/3% of 

the wages received at the time of the injury .... 

39-71-123. Wages defined. (1) I1Wagesq' means the gross 

remuneration paid in money, or in a substitute for money, 

for services rendered by an employee .... .... (3) For compensation benefit purposes, the average 

actual earnings for the four pay periods immediately 

preceding the injury are the employee's wages, except if: 
(a) the term of employment for the same employer is 

less than four pay periods, in which case the employee's 

wages are the hourly rate times the number of hours in a 

week for which the employee was hired to work; or 

(b) for good cause shown by the claimant, the use of 

the four pay periods does not accurately reflect the 

claimant's employment history with the employer, in which 

case the insurer may use additional pay periods. 

Deshner argues that the Workers' Compensation Court 

incorrectly calculated his weekly compensation benefits because it 

did so on the basis of his previous hourly rate of $6.00 per hour. 

Deshner contends that at the time of the injury, his salary had 

been increased to $7.25 per hour, and that is the correct amount to 

be used to calculate his benefit. He also claims that the Workers' 

Compensation Court's conclusion conflicts with the plain wording of 

§ 39-71-701(3), MCA. Finally, he asserts that either subsection 

(a) or subsection (b) of § 39-71-123(3), MCA, should be applied, 

both authorizing a different calculation of the weekly compensation 

benefit. 

Town and Country counters that S 39-71-123(3), MCA, mandates 

that the four pay periods preceding Deshner's injury should be 

utilized to calculate his wages; Deshner's hourly rate for those 

pay periods was $6.00 per hour. Town and Country states that 

claimant cannot rely on the language of 5 39-71-701(3), MCA, which 

states that "temporary total disability shall be 66 2/3% of the 

wages received at the time of injury" because the four preceding 

pay periods must be used in order to determine Finally, 

Town and Country also states that subsections (a) and (b) of g 39- 

71-123(3), MCA, are inapplicable here. 

The difficulty in the present case stems from the fact that 

4 
the claimant was earning $6.00 per hour for the four pay periods 

prior to his injury but he was earning $7.25 per hour, a 

substantially higher wage, at the actual time of the injury. In 

general, a worker's hourly wage for the four preceding pay periods 

will be the same as his hourly wage at the time of the injury. 

Therefore, in most cases, 5 39-71-701, MCA, which establishes 

weekly compensation benefits based on "wages received at the time 

of the injury" and 5 39-71-123, MCA, which establishes weekly 

compensation benefits based on the workergs salary over the four 

preceding pay periods, will not conflict. However, in this case, 

the conflict occurs because there is such a dramatic difference 

between the two salaries and because Deshner is entitled to be paid 

benefits which bear a reasonable relationship to his actual wage 

loss. 

Section 39-71-701(3), MCA, states that the weekly compensation 

benefit for an injury which produces a temporary total disability 

shall be 66 2/3% of the claimant's wages received at the time of 

the injury. Deshner's hourly wage at the time of the injury was 

$7.25 per hour, not the $6.00 per hour used by the Workers9 

Compensation Court. Deshner was earning $6.00 per hour during the 

four pay periods prior to his injury. However, he received a raise 

and his salary increased to $7.25 per hour on March 1, 1992. He 

was hired and maintained as a fulltime employee working 40 hours 

per week plus sporadic overtime. Using the formula provided under 

5 39-71-701, MCA, we calculate the following weekly compensation 

benefit : 
$ 7.25 hourly wage at time of injury 

x 4 0 hours worked per week 

-------------- 

$ 290.00 weekly wages 

$290.00 weekly wages 

x 66 2/3 % percentage to be applied pursuant to 

5 39-71-701 (3), MCA. 

-------------- 

$193.34 weekly compensation benefit 

The weekly compensation benefit for Deshner using the hourly 

wage he was actually earning at the time of injury would be 

$193.34. However, this compensation rate does not take into 

account any overtime pay or bonus pay received by Deshner. On 

remand, the Workers1 Compensation Court may also consider whether 

and, if so, to what extent, overtime pay and bonus pay should be 

included in determining Deshner's final total temporary disability 

compensation rate. 

The determination of $193.34 as the base compensation rate 

differs from the Workers' Compensation Court's calculation, which 

used a $6.00 hourly wage and totalled $167.17. The application of 

5 39-71-123(3), MCA, used by the Workers' Compensation Court, 

appears to conflict with 5 39-71-701(3), MCA, in the instant case. 

Section 39-71-123(3), MCA, states that to determine the claimant's 

weekly compensation benefit, the average actual earnings for the 

four pay periods preceding the injury should be utilized. However, 

5 39-71-701(3), MCA, states that weekly compensation benefits shall 

be 66 2/3% of the claimant's wages "received at the time of the 

injury." Deshner argued, and we agree, that subsection (b) of 539- 

71-123 (3), MCA, which provides an exception to 5 39-71-123 (3), MCA, 

is applicable to the instant case, conforms with 5 39-71-701(3), 

6 
MCA, and authorizes the weekly compensation benefit calculated 

herein. 

Subsection (b) provides an exception to the standard use of 

the four preceding pay periods to determine the weekly compensation 

rate. The subsection states that if the claimant can show good 

cause as to why the use of the four pay periods does not accurately 

reflect the claimant's employment history, then additional pay 

periods can be used. According to Deshner's employment history 

with Town and Country, he was earning $7.25 per hour at the time of 

his iniury, albeit earning $6.00 per hour for the preceding months. 

A calculation of his weekly compensation rate at an hourly wage of 

$6.00 does not adequately reflect his employment history. The 

Workerst Compensation Court should have utilized a pay period which 

reflected his actual wage at the time of his injury, which was 

$7.25 per hour. Deshner has demonstrated that there is good cause 

to use a pay period which accurately reflects his actual wages at 

the time of the injury to determine his weekly compensation 

benefit. 

This decision also conforms with the public policy of the 

State regarding wage-loss benefits. Section 39-71-105, MCA, states 

in pertinent part: 

. . . . (1) [i]t is an objective of the Montana workerst 

compensation system to provide, without regard to fault, 

wage supplement and medical benefits to a worker 

suffering from a work-related injury or disease. Wageloss benefits are not intended to make an injured worker 

whole; they are intended to assist a worker at a 

reasonable cost to the employer. Within that limitation, 

the waqe-loss benefit should bear a reasonable 

relationship to actual waqes lost as a result of a work- 
related iniurv or disease. (Emphasis added.) 

A weekly compensation benefit calculated at $7.25 per hour bears a 

much more reasonable relationship to Deshner's actual wases lost as 

a result of his injury than does a calculation using $6.00 per 

hour. The appropriate total temporary disability compensation rate 

(or weekly compensation benefit) is $193.34, calculated by 

multiplying 66 2/3% by an hourly wage rate of $7.25 at 40 hours per 

week. Because we are unclear as to how, if at all, the Workers' 

Compensation Court calculated Deshner's total temporary disability 

rate with respect to overtime pay and bonus pay, the Workers' 

Compensation Court should consider these two issues on remand in 

order to determine Deshner's final compensation benefit rate. 

We hold that the Workers' Compensation Court incorrectly 

determined the claimant's total temporary disability compensation 

rate because the Workers' Compensation Court should have applied 5 

39-71-123(3)(b), MCA. We reverse and remand for entry of an order 

for temporary total disability benefits consistent with this 

opinion. REVERSED AND REMANDED. /-77% 
August 30, 1994 

CERTIFICATE OF SERVICE 

that the following certified order was sent by United States mail, prepaid, 

ED SMITH 

CLERK OF THE SUPREME COURT 

STATE OF MONTANA 

BY b& 

Deputy 

to the