McHorse v. Portland General Elec. Co.

• Decision Date: 11 April 1974
• Citation: 268 Or. 323,521 P.2d 315
• Parties: H. B. McHORSE, Respondent-Cross-Appellant, v. PORTLAND GENERAL ELECTRIC COMPANY, an Oregon corporation, Appellant-Cross-Respondent.
• Court: Oregon Supreme Court

Page 315

521 P.2d 315

268 Or. 323

H. B. McHORSE, Respondent-Cross-Appellant, v. PORTLAND GENERAL ELECTRIC COMPANY, an Oregon corporation Appellant-Cross-Respondent.

Supreme Court of Oregon, In Banc.

Argued and Submitted Dec. 6, 1973.

Decided April 11, 1974.

Jarvis B. Black, Portland, argued the cause for appellant and cross-respondent. With him on the briefs were Phillips, Coughlin, Buell, Stoloff & Black, Portland.

Lawrence N. Brown and D. Keith Swanson, Salem, argued the cause for respondent and cross-appellant. With them on the brief were Brown, Burt & Swanson, Salem.

HOWELL, Justice.

Plaintiff filed this suit to require defendant to specifically perform a long-term disability income plan which the defendant had initiated for the benefit of its employees. The trial court entered a decree in favor of plaintiff, and defendant appeals. Plaintiff states that his complaint is in equity and the defendant denominates the plaintiff's case as a declaratory judgment proceeding. Both parties agree that the cause should be determined as a suit in equity. Under these circumstances we will try the issues De novo.

The facts are generally undisputed.

Plaintiff had been employed by defendant as a journeyman lineman and working line foreman from 1949 until December, 1971, when he terminated his employment pursuant to his doctor's orders. Plaintiff applied for and received benefits under the defendant's Long-Term Disability Income Plan. The plan contained the following provisions:

'DEFINITION OF TOTAL DISABILITY

'4. Total disability as used herein may result from sickness (except those disabilities specifically excluded) or an accident. Total disability as used herein does not mean a state of absolute physical helplessness. It is sufficient if the disability is such that common care and prudence require the employee to desist from transacting any business in order to Effect a cure or if he is unable to engage in any occupation for which he is reasonably suited by experience, education or training.

* * *

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'INTERPRETATION AND ADMINISTRATION

'12. The Company reserves the right to interpret and administer the plan, and such decisions shall be final. The Company reserves the right to discontinue this plan at any time.' (Emphasis in text)

Shortly after the plaintiff had filed his application for the benefits, he had a conversation with defendant's manager of industrial relations. Plaintiff enjoyed fishing and boating, and the manager, in a discussion with plaintiff about jet boating, became suspicious that one who could qualify for total disability under the plan could also operate a jet boat, so private investigators were hired to place plaintiff under surveillance. Motion pictures were taken showing plaintiff operating a riding lawn mower, bending over the hood of his car, unhooking his boat and placing it in the river, and fishing. The pictures were shown to Dr. Davis, who had examined plaintiff and had qualified plaintiff for the benefits under the plan. After seeing the movies, the doctor modified his opinion of plaintiff's condition and the defendant terminated the benefits, resulting in this cause being filed by plaintiff.

The trial court, in a letter opinion, found that plaintiff qualified for total disability under the plan. The defendant contends that the court erred, but admits that there is evidence in the record to support the finding. After reviewing the record, we agree with the trial court.

Section 4 of the plan states that an employee is totally disabled if he is unable to engage in any occupation for which he is reasonably suited by experience, education or training.

The plaintiff is 51 years of age with a fifth grade formal education.

In Fagerlie v. New York Life Ins. Co., 129 Or. 485, 498, 278 P. 104, 107 (1929), we adopted the following as the test for total disability in the context of an insurance policy:

'* * * (T)he proper test of disability is to determine whether the insured can do sufficient work so that he may engage in some occupation for remuneration or profit: * * *. (Citations omitted).

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* * *

'In annotations at page 1376, 41 A.L.R. we find thus:

"As stated in the earlier annotations, the weight of authority supports the view that provisions in accident policies for indemnity in the event the insured is totally or wholly disabled to not require that the accident shall render the insured absolutely helpless, but such provisions are construed as meaning such a disability as renders him unable to perform the substantial and material acts of his business or occupation in the usual and customary way. * * *"

In the context of a workmen's compensation claim,

'* * * permanent total disability is defined as any condition which permanently incapacitates a workman from regularly performing any work at a gainful and suitable occupation. * * *' Swanson v. Westport Lumber Co., 4 Or.App. 417, 419, 479 P.2d 1005, 1006 (1971); ORS 656.206(1).

Dr. Holm, an orthopedic physician and surgeon who had been plaintiff's treating physician for years, testified that plaintiff's hip was abnormal, 'the socket is shallow, and the ball that fits in the socket is asymmetrical and increased in size.' Plaintiff also had osteoarthritis of the spine and a 'discrepancy in leg length' resulting in a curvature of the spine. In Dr. Holm's opinion, plaintiff was totally disabled, and even if he had surgery, plaintiff would still be unable to carry on any type of suitable work.

Dr. Rinehart, a rheumatologist, testified that plaintiff had a congenitally shallow hip socket which produces arthritis. He also found plaintiff 'was totally disabled with regard to any gainful activity.'

Both Dr. Holm and Dr. Rinehart testified that the motion pictures of plaintiff engaging in various activities would not change their opinion of his disability.

Assuming that plaintiff exaggerated his symptoms to Dr. Davis, we believe that the record nonetheless shows that plaintiff is disabled. Dr. Davis testified concerning his original diagnosis:

'My impression was that this man had degenerative arthritis of the right hip, secondary to an old anomoly of the acetabulum, and that he had degenerative arthritis of the cervical and lumbar spine areas. * * * I can't conceive an occupation that this man would engage in.'

He stated the following regarding his opinion after viewing the motion pictures:

'A As a result of my examination, I would have believed that he would have been incapable of carrying out the things that I saw him doing in these movies.

From what I found on examination, I thought that he would be incapable of doing the things that I saw him doing in the movies, so I would have to change my opinion in relation to this man's ability to do some things in society, which I didn't think he could do as a result of my examination originally.

'Q I think we are agreed that he couldn't continue work as a lineman under any circumstances?

'A No, I think this man has enough objective evidence of disease that he would not be able to work as a lineman. I further believe this man cannot continually work in a standing, walking or twisting occupation.

'Q If it were in and out of a car, for instance, for short periods of walking, short periods of standing, or at a desk job, do you have an opinion as to whether or not Mr. McHorse could do this, after seeing--

'* * *.

'A I don't know that I would--not having ever engaged in selection of workmen for occupations--I'm no occupational expert--but, as a physician, specializing in the local motor system, I would feel that this man could engage in some occupations preferably those occupations that would give him the ability to move around some, but also the ability to rest in a sitting position.' (Emphasis supplied.)

He also stated:

'Q You don't still quarrel with your first findings that he had a degenerative hip condition, degenerative arthritis of the right hip, and degenerative arthritis of the cervical and lumbar spine? You still don't quarrel with those findings?

'A Those are accurate diagnoses.

'Q Are we in accord, too, that this type of physical condition does not improve with time?

'A Do I expect is to improve?

'Q Yes.

'A No, I don't expect it to improve.'

The defendant's manager of industrial relations testified that it was company policy under the plan that if an employee could function in a less strenuous job he was not eligible for total disability classification. He suggested that while plaintiff could no longer work as a lineman, he could possibly work as an estimator, a service inspector, or a storeroom operator. However, he also testified that he would not give plaintiff employment in any one of these positions 'because he wasn't honest with us.'

A retired lineman for defendant who knew plaintiff testified plaintiff could not perform 'estimate work' because of the necessity of walking over rough terrain; he could not qualify as a service inspector because it would require 'wading through mud and snow'; he could not be a storeroom man because it would entail heavy lifting; he was not sure whether plaintiff could be a traveling operator or not because a substantial amount of driving would be required.

Considering all the testimony, the following facts are undisputed: the plaintiff has, Inter alia, a serious congenital hip defect and degenerative arthritis of the hip and spine which will become progressively worse; he is 51 years old with a fifth grade education; he has had no occupational training except as a lineman; while there was some evidence that he could perform in a job allowing some minor movements but with opportunity to rest by sitting down, there was no showing that such jobs were available.

We conclude that plaintiff qualifies for total disability under the plan.

The next issue is whether the defendant's decision to terminate plaintiff's benefits under Clause 12 of the plan is a final decision binding on the parties.

The courts have viewed plans such...