Reeverts v. Sears, Roebuck & Co.

• Court: Montana Supreme Court
• Writing for the Court: TRIEWEILER; TURNAGE
• Citation: Reeverts v. Sears, Roebuck & Co., 881 P.2d 620, 266 Mont. 509, 51 St.Rep. 894 (Mont. 1994)
• Decision Date: 16 September 1994
• Docket Number: No. 93-497,93-497
• Parties: Arlis REEVERTS, Claimant and Appellant, v. SEARS, ROEBUCK & COMPANY, Employer, Respondent, and Cross-Appellant.

Page 620

881 P.2d 620

266 Mont. 509

Arlis REEVERTS, Claimant and Appellant, v. SEARS, ROEBUCK & COMPANY, Employer, Respondent, and Cross-Appellant.

No. 93-497.

Supreme Court of Montana.

Submitted on Briefs May 12, 1994.

Decided Sept. 16, 1994.

Tom L. Lewis and Andrew D. Huppert, Great Falls, for appellant.

Michael C. Prezeau, Garlington, Lohn & Robinson, Missoula, for respondent.

TRIEWEILER, Justice.

Claimant Arlis Reeverts sustained a work-related injury to her back on March 16, 1984, which resulted in substantial permanent physical impairment. Reeverts' employer, Sears, Roebuck & Company , paid her an indemnity benefit based on her impairment rating, but no other partial disability benefits for this work-related injury were paid. On April 6, 1989, while working for the same employer, she suffered a subsequent industrial injury which caused her total disability. The Workers' Compensation Court awarded Reeverts 500 weeks of permanent partial disability benefits pursuant to § 39-71-703, MCA (1983), for the injury sustained in 1984, but suspended payment of these benefits until her entitlement to total disability benefits for the subsequent injury terminated. The court also awarded Reeverts attorney fees and costs, but denied her request for a 20 percent penalty pursuant to § 39-71-2907, MCA (1983).

We affirm in part and reverse in part.

The following issues are before this Court:

1. Did the Workers' Compensation Court err when it concluded that Reeverts is entitled to 500 weeks of permanent partial disability benefits pursuant to § 39-71-703, MCA (1983), for her 1984 injury?

2. Did the Workers' Compensation Court err when it concluded that Reeverts' permanent partial disability benefits should not be paid concurrently with her permanent total disability benefits pursuant to § 39-71-737, MCA (1983)?

3. Did the Workers' Compensation Court err when it refused to award a 20 percent penalty pursuant to § 39-71-2907, MCA (1983)?

Arlis Reeverts began working for Sears, Roebuck & Company in 1965. At the time of her injury in 1984, Reeverts was 53 years old and was earning $6.31 per hour working in Sears' Great Falls store in the drapery department.

On March 16, 1984, Reeverts severely injured her back while loading freight onto a freight car. Her injury resulted in spinal surgery with a lumbar-sacral fusion and required a lengthy period of recovery. Based on her physician's permanent physical impairment rating of 15 percent, Sears paid Reeverts an impairment award. No other partial disability benefits were paid.

On July 31, 1985, Reeverts was released by her physician to return to work with the restriction that she avoid heavy lifting. As a result, she could no longer perform her previous job duties and Sears placed her in its mail order department where she was responsible for taking catalog orders over the telephone. However, in April 1989, the new job Reeverts had been given with modified duties was eliminated, and she was transferred back to her former job in the drapery department. On the first day that she resumed her former duties, she re-injured her back and was subsequently declared permanently totally disabled . At the time of this injury on April 6, 1989, Reeverts was approximately 58 years old and was earning $7.83 per hour.

Although Sears accepted liability for payment of total disability benefits as a result of the 1989 injury, Reeverts and Sears were unable to agree on her entitlement to partial disability benefits for the 1984 injury. Reeverts, therefore, filed a petition with the Workers' Compensation Court in an effort to recover those benefits.

A trial was held on December 2, 1992, before Hearing Examiner Robert J. Campbell. The evidence consisted of Reeverts' medical records, and testimony by Reeverts, Sears' claims adjuster, and two vocational consultants. In an order issued on June 7, 1993, the Workers' Compensation Court adopted the hearing examiner's proposed findings of fact, conclusions of law, and judgment. The court concluded that Reeverts had suffered a permanent impairment to her earning capacity as a result of the 1984 injury and was entitled, pursuant to § 39-71-703, MCA (1983), to permanent partial disability benefits. However, the court concluded that her entitlement to these disability benefits terminated when she was subsequently injured on April 6, 1989. Based on this conclusion, Reeverts was awarded 117 weeks of partial disability benefits at the rate of $88.84 per week. The court further awarded Reeverts reasonable costs and attorney fees, but did not rule on her request for a 20 percent penalty pursuant to § 39-71-2907, MCA (1983).

In an amended judgment issued on August 31, 1993, the court reversed its prior determination that Reeverts' entitlement to permanent partial disability benefits terminated due to her subsequent injury, and concluded that Reeverts was entitled to 500 weeks of disability benefits as a result of her 1984 injury. However, the court ordered that the benefits which had accrued prior to her second injury were payable in a lump sum and "[t]he remaining permanent partial disability benefits are payable bi-weekly after claimant reaches 65 years of age, if her disability results from her March 16, 1984 injury." As a basis for its determination that payment of partial disability benefits for the 1984 injury should be suspended until Reeverts reached the age of 65 and total disability benefits for the 1989 injury were terminated, the court relied on § 39-71-737, MCA (1983), which states "[c]ompensation shall run consecutively and not concurrently, and payment shall not be made for two classes of disability over the same period."

Finally, the court ordered that Reeverts was not entitled to a 20 percent increase in her award as a penalty.

Reeverts appeals the court's conclusion that payment of partial disability benefits for the 1984 injury is suspended until the time that her total disability benefits for the 1989 injury terminate. She also appeals the court's refusal to award a 20 percent penalty pursuant to § 39-71-2907, MCA (1983). Sears cross-appeals the court's conclusion that Reeverts is entitled to permanent partial disability benefits for the injury sustained in 1984.

STANDARD OF REVIEW

The standards employed by this Court when reviewing a Workers' Compensation Court decision are well established. This Court will not substitute its judgment for that of the Workers' Compensation Court and will uphold its findings if there is substantial evidence in the record to support them. Houts v. Kare-Mor, Inc. (1993), 257 Mont. 65, 68, 847 P.2d 701, 703; Kraft v. Flathead Valley Labor and Contractors (1990), 243 Mont. 363, 365, 792 P.2d 1094, 1095. We will uphold the court's conclusions of law if its interpretation of the law is correct. Chapman v. Research Cottrell (1993), 259 Mont. 329, 333, 856 P.2d 234, 237. Finally, the law in effect at the time of the injury establishes the benefits to which a claimant is entitled. Buckman v. Montana Deaconess Hospital (1986), 224 Mont. 318, 321, 730 P.2d 380, 382; Chagnon v. Travelers Insurance Company (1993), 259 Mont. 21, 25, 855 P.2d 1002, 1004.

ISSUE 1

Did the Workers' Compensation Court err when it concluded that Reeverts is entitled to 500 weeks of permanent partial disability benefits pursuant to § 39-71-703, MCA (1983) for her 1984 injury?

Sears contends that the court erred when it concluded that Reeverts was entitled to 500 weeks of permanent partial disability benefits because the injury she suffered in 1984 did not result in an actual diminution of her earning capacity. It is Sears' contention that, under the pertinent statute in effect at the time of Reeverts' first injury, there is no entitlement to benefits unless the claimant can prove that an actual diminution in earning capacity results from a disabling injury. Sears bases its argument solely on the fact that with normal annual salary increases, Reeverts earned more after returning to work for Sears than at the time of her injury. Because there was no actual decrease in Reeverts' actual earnings, Sears contends that she was not entitled to benefits under § 39-71-703, MCA (1983).

At the time of Reeverts' injury, § 39-71-703, MCA (1983), read in pertinent part:

(1) Weekly compensation benefits for injury producing partial disability shall be 66 2/3% of the actual diminution in the worker's earning capacity measured in dollars, subject to a maximum weekly compensation of one-half the state's average weekly wage.

We have considered this provision on several occasions and have made clear that "earning capacity," for workers' compensation purposes, is not determined by merely comparing pre-injury wages with post-injury wages. Sedlack v. Bigfork Convalescent Center (1988), 230 Mont. 273, 277, 749 P.2d 1085, 1087. Rather, a determination of an injured worker's earning capacity includes the consideration of such factors of age, occupation, skills and education, previous health, number of productive years remaining, and degree of physical or mental impairment. Sedlack, 749 P.2d at 1087-88; Hurley v. Dupuis (1988), 233 Mont. 242, 246-47, 759 P.2d 996, 999. The correct test for loss of earning capacity, cited time and again by this Court, is whether the industrial accident has caused "a loss of ability to earn in the open labor market." Shaffer v. Midland Empire Packing Co. (1953), 127 Mont. 211, 213-14, 259 P.2d 340, 342; Fermo v. Superline Products (1978), 175 Mont. 345, 348, 574 P.2d 251, 253; Hafer v. Anaconda Aluminum Co. (1982), 198 Mont. 105, 109-10, 643 P.2d 1192, 1195, aff'd on remand (1984), 211 Mont. 345, 684 P.2d 1114.

For Sears to argue that a claimant must demonstrate an actual wage loss to be entitled to partial disability benefits pursuant to § -703 is a notion that has been soundly and repeatedly rejected by this Court. We find Sears' attempt to argue otherwise without merit.

In this instance, the record demonstrates...