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, Judgepresiding.

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 Judgmentawarding the claimantEarl 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 iswhether the WorkersrCompensation Court correctly calculated Deshnertstotal 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 someweekly overtimehours. His starting salarywas $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. OnMarch 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 liabilityand paid temporary total disability payments of $153.82 per week. Deshner filed a petition for hearing on March 8, 1993, contending that hisweekly compensationbenefits 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 injurypursuant 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),245Mont. 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 reviewthe 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 shallbe 66 2/3% of the wages received at the time of the injury

# .... 39-71-123. 

### Wages defined. (1) I1Wagesq' means the gross remunerationpaid inmoney, or ina substitute formoney, for services rendered by an employee

# ....

.... (3) For compensation benefit purposes, the average actual earnings for the four pay periods immediately preceding the injuryarethe employee's wages, except if:(a) the term of employment for the same employer is less than four pay periods, inwhich 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 shownby the claimant,the use of the four pay periods does not accurately reflect the claimant's employmenthistorywith the employer, inwhich case the insurer may use additional pay periods. Deshner argues that the Workers' Compensation Court incorrectly calculatedhisweekly 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 calculatehis benefit. He also claims that the Workers' CompensationCourt's conclusion conflicts with theplain 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 authorizinga different calculationof theweekly 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 inapplicablehere. The difficulty 

### in the present case stems from the fact that 4the 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 workergssalary 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 salariesand because Deshner is entitled to be paid benefits which bear a reasonable relationship to his actual wage loss.Section 39-71-701(3),MCA, statesthat theweekly 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 fourpay periods prior to his injury. However,he received a raise and his salary increased to $7.25 per hour on March 1, 1992. He was hired and maintained as a fulltime employee working 40 hours per week plus sporadic overtime. Using the formulaprovided under 5 39-71-701, MCA, we calculate the following weekly compensation benefit:$ 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 Workers1Compensation 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 fourpay periodspreceding the injury shouldbe utilized. However, 

### 5 39-71-701(3),MCA, states thatweekly compensation benefits shall be 66 2/3% of the claimant's wages "received at the time of the injury." Deshner argued,andwe agree, that subsection (b)of 539- 71-123(3),MCA,whichprovides an exceptionto 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 todetermine theweekly compensation rate. The subsection states that if the claimant can show good

cause as towhy the use of the fourpay 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 theprecedingmonths. A 

### calculation of his weekly compensation rate at an hourlywage of $6.00 

### does not adequately reflect his employment history. The WorkerstCompensationCourt shouldhaveutilized apay 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 regardingwage-lossbenefits. 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 tomake an injured worker whole; they are intended to assist a worker at a reasonablecost 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 compensationbenefit calculated at $7.25 per hour bears a muchmore reasonable relationshipto Deshner'sactualwases lost as
a result of his injury than does a calculation using $6.00 per hour. The appropriate total temporarydisabilitycompensationrate

(or weekly compensation benefit) is $193.34, calculated by multiplying 66 2/3% by anhourlywage rate of $7.25 at 40hours per week. Because we are unclear as to how, if at all, the Workers' CompensationCourt 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' CompensationCourt 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 OFSERVICE thatthefollowingcertifiedorderwassent

### byUnitedStatesmail,prepaid,

EDSMITH CLERK

### OFTHESUPREME COURT STATEOF MONTANA 

### BY

# b&
Deputy tothe