Jones v. Mountain States Tel. & Tel. Co.

• Decision Date: 04 October 1983
• Docket Number: No. 13721,13721
• Citation: 105 Idaho 520,670 P.2d 1305
• Parties: Ron JONES, Plaintiff-Respondent, Cross-Appellant, v. MOUNTAIN STATES TELEPHONE AND TELEGRAPH COMPANY, aka Mountain Bell, a foreign corporation, Defendant-Appellant, Cross-Respondent.
• Court: Idaho Court of Appeals

Page 1305

670 P.2d 1305

105 Idaho 520

Ron JONES, Plaintiff-Respondent, Cross-Appellant, v. MOUNTAIN STATES TELEPHONE AND TELEGRAPH COMPANY, aka Mountain Bell, a foreign corporation, Defendant-Appellant, Cross-Respondent.

No. 13721.

Court of Appeals of Idaho.

Oct. 4, 1983.

Rehearing Denied Oct. 4, 1983.

B. Newal Squyres, Jr., and Richard A. Riley of Eberle, Berlin, Kading, Turnbow & Gillespie, Boise, for defendant-appellant, cross-respondent.

Jay D. Sudweeks of May, May, Sudweeks, Shindurling & Stubbs, Twin Falls, for plaintiff-respondent, cross-appellant.

ON DENIAL OF PETITION FOR REHEARING

SWANSTROM, Judge.

Ronald Jones is a disabled former employee of Mountain Bell. He sued the Company, contending that under the Company's employee benefit plan he was entitled to "accident disability benefits" as opposed to the "disability pension" which the Company actually awarded him. The trial court agreed and entered judgment against the Company for the unpaid benefits. The Company appealed from the judgment. Jones cross-appealed from the order denying his request for attorney fees. We affirm the trial court's judgment, but vacate the order concerning attorney fees and remand for further consideration of the attorney fee question.

The basic legal issue in this case stems from the parties' conflicting interpretations of the employee benefit plan. The Company, relying on a literal reading of the plan's text, asserts that for an employee to be eligible for accident disability benefits, the employee's disabling injury must have resulted "solely" from an accident during and in direct connection with the performance of the employee's duties. The trial judge, however, arrived at a different interpretation. He noted that the booklet containing the full text of the plan also contained a brief description of the plan which seemed to contradict the more restrictive language of the official text. The brief description stated that an employee could receive accident disability benefits if he became disabled "because of" an on-the-job accident. The court construed this "ambiguity" against the Company. The judge decided that an employee is entitled to receive accident disability benefits where his medical problems are proximately caused by an on-the-job accident. The court thus substituted "proximate cause" for "sole cause" as the governing language of the contract. The Company contends that the trial court erred by altering the terms of the contract.

The second major issue is whether the trial court erred by finding that the Company acted arbitrarily and capriciously and by concluding that Jones was entitled to the benefits he sought. The plan contains a provision that it shall be exclusively administered by an "Employees' Benefit Committee" appointed by the Company's Board of Directors. The Company asserts that the action of the committee in denying Jones accident disability benefits should be upheld because the committee did not act arbitrarily and capriciously. The Company argues that the record establishes, as a matter of law, an adequate factual basis for the committee's decision and therefore the trial court's judgment should be reversed.

Before analyzing these two issues, we will summarize the facts disclosed by a lengthy record. Jones started work for the Company in 1949 and was retired because of poor physical condition in March, 1975. During his employment Jones endured numerous episodes of injury, illness and medical treatment. In 1953, 1956 and 1957 Jones fell from poles while working, but apparently did not sustain serious or permanent injuries. After 1959 his health began to deteriorate. In 1963 he experienced a "foot drop" problem with his left foot. This problem spontaneously corrected itself, but led to discovery that Jones had "an early arthritic reaction" of the spine in the lower back. He received sickness benefits under the company plan when he was forced to be absent from work.

The most scrutinized episode among Jones' misfortunes concerns his fall from a telephone pole in February, 1964. His "climbers" slipped and he fell between fifteen and twenty feet to the ground. There is no question but that Jones suffered a painful injury to his right knee in this accident when he struck a solid object with his knee before landing on his feet. Jones was hospitalized for five days after the fall for treatment of a gastric internal hemorrhage which developed several hours after the accident. Dr. Vaughn Pond, Jones' doctor, also observed that Jones' right knee was tender and effusive and noted that Jones complained of pain in his right knee, right flank and the lumbosacral area.

After his fall on February 4, Jones, complaining of a sore right knee, remained off work until the latter part of April. Dr. Pond performed an aspiration of fluid from Jones' swollen knee on February 13th and again on February 18th. On March 2, 1964, Dr. William Tregoning reported to the Company in Boise that he had examined Jones, who had been complaining of pain and discomfort in his right knee. Dr. Tregoning diagnosed Jones' condition as chondromalacia, i.e., softening of the cartilage, involving the articular surface of the kneecap.

In April, 1964, two of Jones' supervisors talked to him about excessive absenteeism--over 500 days during the previous five years--and warned that this could not continue. They offered Jones a cash settlement in return for his resignation and a waiver of all future benefit claims. Jones refused. He was offered a different job that did not involve pole climbing, but which paid less. Jones objected to the pay cut but was ordered to report to work in five days for the new job. Jones went back to work.

Almost immediately after Jones' accident in February, the Company began to categorize Jones' knee problems as symptoms of a disease or chronic illness rather than as the product of an accidental injury. In March, 1964, a supervisor directed the Company's payroll office in Salt Lake City to reclassify the monies paid to Jones during his absence as illness pay rather than accident benefits. Dr. Q.W. Mack, the Company's medical director in Boise, determined that Jones' knee condition did not arise from his fall but was symptomatic of a chronic knee disease. Dr. Mack's determination was based on the opinion of Dr. George Warner, a company consultant. Dr. Warner examined Jones on March 30, 1964. He reported to Dr. Mack on July 3, 1964, that he had examined Jones again on June 29, 1964. He stated that although Jones complained of constant aching in his right knee, and also of occasional, more severe pain, he could not account for Jones' disability on the basis of physical findings. In a letter to Jones' supervisor, Dr. Warner expressed his belief that Jones had a tendency to magnify his symptoms.

The Company's disenchantment with Jones was further aggravated by an incident which occurred on July 15, 1964, when Jones fell and struck his right knee after his knee "buckled" when he was climbing down a ladder. Reporting to a company supervisory foreman, Dr. Warner stated that Jones suffered a small bruise from the accident and that in his opinion the injury did not warrant further lost time. By late 1964, Jones' supervisors, in memoranda to each other concerning Jones' absences, were derisively referring to him as "our friend."

On December 7, 1964, the Idaho benefit committee, consisting of company managerial personnel from Idaho, approved payment of partial disability benefits to Jones to compensate him for his reduction in pay due to his reclassification from repairman to frameman. Jones contends that by grounding him after his February 4th fall the Company had implicitly recognized that the accident had left him disabled. The Company, on the other hand, maintains that it grounded Jones solely because of his general health, his accident proneness, and the Company's need for greater supervision over him. When the employee benefit committee met in Denver on January 4, 1965, it rejected the recommendation of the Idaho committee and concluded unanimously that the injuries Jones sustained on February 4, 1964, were not accidental injuries within the meaning of section 5.5 of the plan. The committee determined that no partial disability benefits were therefore payable. The committee evidently agreed with Dr. Mack's conclusion that Jones' recurrent knee problems were the product of disease rather than of his fall on February 4.

During the eleven-year period between the date of Jones' accidental fall and his retirement, he made regular complaints to the Company concerning pain in his right knee and lower back. During this same period he was examined and treated by several doctors, some employed by the Company and some employed by Jones.

In August, 1965, Dr. Pond operated on Jones' right knee, removing "multiple loose bodies." In June, 1966, Dr. Pond removed the knee cap. He later testified at trial that the accidental fall from the pole on February 4, 1964, was the cause of Jones' knee problems. After each of these operations Jones remained off work for several months.

Beginning in 1968, Jones' back problems began to overshadow his knee as his major health problem. Two doctors reported the results of their examinations to the Company. In December, 1968, Dr. Powell operated on Jones' spine for a herniated disk that he attributed to the February, 1964 fall. In Dr. Powell's opinion, a compressed nerve in the back could have caused pain and discomfort to the right knee. Other doctors, including a panel of four physicians, examined Jones. The panel reported to the Company that Jones suffered from a permanent partial impairment of 33 1/3% compared with the loss of a leg at the hip. The examining doctors gave varying opinions as to the cause and extent of Jones' back condition.

Jones continued to experience pain radiating from his back to his right knee. He sought additional treatment from Dr. Powell at company expense....