Court Opinion

ID: 882824
Source: CourtListenerOpinion
Date Created: 2013-06-05 01:50:33.771697+00
Date Added: 2024-06-11T13:56:35.240651
License: Public Domain

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,
     -vs-
GRACE DRILLING,
            Employer,
     and
CNA INSURANCE COPIPANY,
            Defendant and Respondent.

APPEAL FROM:     Montana Workers1 Compensation 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

                                Submitted on Briefs:         April 1, 1993
                                                  Decided:   August 26, 1993
Filed:
Justice 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.
The Workers' Compensation Court determined that 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, breach of contract, judicial estoppel, 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.
               4, 1984, Beery
     9- ?Zovemkcrr                           a industrial injur- ; r i =
                                             :                    .;l

working for Grace Drilling. He fell approximately twenty-five feet
from an oil rig, suffering multiple fractures to his left leg,
first, second and third degree burns, and a closed head injury that
initially went undetected. Respondent CNA Insurance Company (CNA)
served as Grace Drilling's insurer under Plan I1 of the Workerst
Compensation Act.       Beery is currently receiving permanent total
disability benefits. Those benefits are not contested or at issue
here.
     In February 1989, CNA petitioned the district court to have a
limited guardian and conservator appointed to represent Beery and
manage his affairs regarding his workerst compensation claim. The
                                   2
district 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
carlson v. Cain (19851, 216 Mont. 129, 700 P.2d 607, an extensive
discussion of the medical evidence is not necessary. A summary of
the three medical panel evaluations Beery underwent provides
sufficient background for an understanding of this matter.
     In May 1987, the Yellowstone Valley 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 same panel found that there had 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 **atleast once daily assistance
and supervision."   It did not feel that he needed an attendant to
help him perform independently the activities of daily living such
as bathing, dressing, feeding and meeting basic bodily needs. The
panel did feel that Beery would need assistance in handling his
financial and legal affairs.
    At CNA's request, a Kalispell medical panel evaluated Beery in
April 1991.    The members of this panel conducted their own
evaluations and reviewed Beery's extensive medical 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 on numerous occasions and 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 the necessity and 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 Previously Pro~ided.'~
                                      That settlement covered the
period from November 24, 1984 through April 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 to pay 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 termination of 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 reiterated the 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 CNAts proposed findings,
conclusions, and judgment.
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failed to support his need for domiciliary care by medical evidence
as required by Carlson. The court also concluded that CNA was not
equitably estopped from terminating benefits.
     In reviewing a decision of the Workers' Compensation Court, 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.
     The Workers' Compensation Court did not address the issues of
                                        5
waiver, 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 action unless modified by
a subsequent order."        The pretrial order "should be liberally
construed to permit any issues at trial that are 'embraced within
its language."       Bell v. Richards (1987), 228 Mont. 215, 217, 741
P.2d 788, 790 (citations omitted).          However, the limited statement
of issues in the pretrial order in this case cannot be construed so
liberally as to embrace the issues of 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 is met.     Furthermore, we said in Montana Deaconess
Medical Center v. Doherty (1990), 241 Mont. 243, 246, 786 P.2d 669,
671, that "[w]e may on appeal review only those issues decided by
the District Court     ....   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 address
these issues, we will not address them either.
     Beery does not contest the Workers1 Compensation Court's
conclusion that he failed to meet the five part test of Carlson for
entitlement to domiciliary care benefits, Because he did not raise
or argue this issue in his brief, the issue is deemed waived and we
need not address it. Teesdale v. Anschutz Drilling Co. (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 in determining that appellants had 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 5 5 39-71-611 and 39-71-2907, MCA
(1983).
Eauitable EstoDDel
     Beery raised and briefed the issue of equitable estoppel in
his reply to CNA1sproposed 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 to pay for domiciliary care which it willingly undertook
in 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 to meet the first
of six elements required 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
     concerning these facts must be unknown to the other party
     claiming the benefit of the estoppel, at the time when it
     was acted upon by 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. He must 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, 661 P.2d 859, 861). We reaffirmed and readopted these as
the six essential elements in Dagel 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 such declaration, act, or omission, intentionally
       led another to believe a particular thing true and to act
       upon such belief[.]
       In the present case, CNA's aajuster, Pitman, sent a letter to
Beery's lawyer on January 7, 1988, stating among other things, "For
the record, the insurer does   not contest your 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 and value.      CNA made no representation
that Beery would always be entitled to domiciliary care benefits.
The extent of care Beery required certainly could 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 document dated April 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
resolve any claim Beery had for domiciliary care during that period
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, the Workers' Compensation Court concluded that Beery
could not argue that he was never advised that CNA acknowledged his
entitlement to domiciliary care only for the purpose of settlement
and to avoid litigation.
        Beery argues to this Court that the language in the April 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 on which 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 compromise and "without
any admissionsw supports the Workers' Compensation Court'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 care
after 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 fortke reasons stated above. In the September
25,   1987, letter to Beery's counsel indicating that CWA would

initiate benefits, Putman stated:
      [Tlhis correspondence will serve to confirm the insurer's
      agreement to initiate biweekly domiciliary payments
      . 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 litigation and is not to be construed as
      an admission of liability [or] waiver of any future
      rights of defense.  ...    [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   ....

sent Beery's counsel a letter on December 10, 1987, stating:
      In addressing your concerns regarding the issue of your
      domiciliary care, I will remain flexible on this issue as
      well. However, prior to any final determinations in this
      regard, I believe it would be appropriate to see what
      changes result from the recommended treatment.
To this point, CNA had made no representation or 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.   It
must be read in light of the other correspondence between the
parties and the agreement of April 16, 1988. It must 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 in a worse position than he 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 rendered by trained attendants and not within the scope of
normal household duties.   Beery argues that because he relied on
Putmanpsstatement he made no further attempt after January 1988 to
establish the five elements of the Carlson test.
     However, Beery had a full opportunity to develop this evidence
for the hearing. The record before the Workers* Compensation Court
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 the
evidence 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 show by 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.
    Affinned.
                                         August 26, 1993

                                  CERTIFICATE OF SERVICE

I hereby certify that the following order was sent by United States mail, prepaid, to the following
named:

Gene R. Jarussi
Jarussi & Bishop
P.O. Box 3353
Billings, MT 59103

Todd A. Hammer
Warden, Christiansen, Johnson & Berg
P.O. Box 3038
Kalispell, MT 59903-3038

ED SMITH
CLERK OF THE SUPREME COURT
S T A W O F MONTANA