Reil v. Billings Processors, Inc.

• Citation: 44 St.Rep. 1985,746 P.2d 617,229 Mont. 305
• Decision Date: 05 January 1988
• Docket Number: No. 87-157,87-157
• Parties: Kenneth REIL, Claimant and Respondent, v. BILLINGS PROCESSORS, INC., Employer, and State Compensation Insurance Fund, Defendant and Appellant.
• Court: United States State Supreme Court of Montana

Page 617

746 P.2d 617

229 Mont. 305

Kenneth REIL, Claimant and Respondent, v. BILLINGS PROCESSORS, INC., Employer and State Compensation Insurance Fund, Defendant and Appellant.

No. 87-157.

Supreme Court of Montana.

Submitted on Briefs Aug. 6, 1987.

Decided Dec. 3, 1987.

Rehearing Denied Jan. 5, 1988.

James M. Scheier, Agency Legal Services, Nancy Butler, State Comp. Ins., Helena, for defendant and appellant.

Lloyd Hartford, Billings, for claimant and respondent.

GULBRANDSON, Justice.

The State Compensation Insurance Fund appeals a Workers' Compensation Court judgment finding Kenneth Reil to be entitled to temporary total disability benefits and medical benefits. The Workers' Compensation Court found that Mr. Reil had suffered a compensable injury arising out of and in the scope of his employment and that he had given his employer sufficient notice of the injury pursuant to Sec. 39-71-603, MCA. We reverse the decision of the Workers' Compensation Court on the notice issue and remand with directions to dismiss the case.

Ken Reil suffers a congenital deformity in the radioulnar joints of his arms. At age fourteen, Reil underwent four surgeries in an attempt to correct these deformities. The deformities cause Reil a considerable amount of pain in his hands, wrists and elbows. The pain has bothered Reil for years and his condition continues to worsen over time.

Reil underwent two later surgeries in 1980 and 1981 for an injury to his left wrist suffered in an industrial accident while employed with a Billings meat packing plant. Reil received a $25,000 settlement of his workers' compensation benefits for the February 1980 injury. Thereafter, Reil continued to experience pain both as a result of the 1980 accident and his congenital deformities.

After the 1980 accident, Reil's doctor advised him to avoid heavy work. Pursuant to the doctor's suggestions, Reil enrolled in a computer program training course of instruction at Eastern Montana College. Reil quit school after one academic quarter to take a job as a computer operator with Yellowstone Processors of Billings. At his initial job interview, Reil informed Yellowstone Processors of his congenital deformities and progressive pain. Yellowstone Processors was the predecessor company of Billings Processors.

Reil's initial position with Yellowstone Processors, and later with Billings Processors, required that he load and unload computer tape reels from a computer. Sometime in 1982, Yellowstone Processors transferred Reil to a data storage position. Reil's responsibilities in data storage were to pick-up and deliver client computer tapes, stack boxes of computer tapes, catalogue tapes, and file tapes. Reil worked with Yellowstone in data storage until the spring of 1984 when he was laid-off. Reil experienced pain in his arms throughout his tenure with Yellowstone Processors.

Reil next ran a high pressure power spray washer for a company called High Plains Power Wash. Operating the high pressure washer caused Reil pain in his elbows and wrists. Reil returned to Billings to work for Carey Data as a computer tape cataloger after one month with High Plains Power Wash. Reil experienced pain in his elbows and wrists while lifting twenty to thirty pound boxes of computer tapes for Carey Data. In August of 1984, while with Carey Data, Reil began a second job as a computer operator with Billings Processors. With the exception of one person, the personnel and management at Billings Processors were the same people Reil had worked with at Yellowstone Processors. After a month of holding down two jobs, Reil's position with Carey Data was discontinued.

Reil loaded and unloaded one-pound computer tape reels, lifted twenty to thirty pound boxes to waist level, and typed for Billings Processors. Reil also performed light janitorial work on his own initiative. All of these activities caused Reil varying degrees of pain and discomfort. During slower work periods, Reil was allowed to watch a television he stored in a false ceiling above his desk. In addition, Reil played basketball with his supervisors and fellow employees on a weekly basis and went hunting in the fall. Lifting the television, playing basketball, and hunting also caused Reil pain in his arms as did most activities utilizing his arms or hands.

Reil occasionally complained to his employers that his arms and wrists hurt. However, Reil did not relate to his employers that this pain was as a result of his work related duties. Reil's employers assumed that his problems were merely the consequences of the congenital deformities. Reil did not ask to be reassigned to another position nor did he request that his employers modify his duties to reduce the necessity for use of his arms and hands.

Reil's congenital arm problems progressively worsened from August to December of 1985. On January 7, 1986, Reil's doctor advised him that he would have to undergo more surgeries to his left and right wrists on January 20, and March 24, 1986, respectively. These surgeries were to remove prosthetic devices that had been previously implanted into Reil's arms. At Reil's request, Billings Processors laid him off the job so that he could undergo surgery and collect unemployment compensation during convalescence. Reil's last day on the job with Billings Processors was January 16, 1986. Thereafter, Reil received six months of unemployment benefits and did not return to work for Billings Processors.

On July 11, 1986, more than five months after leaving Billings Processors, Reil filed a claim for compensation with the Division of Workers' Compensation. The State Insurance Fund denied compensation on the grounds that Reil failed to give his employer sufficient notice pursuant to Sec. 39-71-603, MCA, and he had not suffered a compensable injury as defined by Sec. 39-71-119(1), MCA. The Workers' Compensation Court heard the matter and found that Reil suffered a compensable injury for which Billings Processors had sufficient actual knowledge. The State Compensation Insurance Fund appeals and raises the following issues:

(1) Did the claimant fail to comply with the notice requirement of Sec. 39-71-603, MCA?

(2) Is there insufficient evidence to establish that the claimant suffered a compensable injury under the Workers' Compensation Act?

On cross-appeal, Reil asserts the following issues:

(1) Whether the Workers' Compensation Court's failure to impose the 20% penalty against the insurer for its refusal to pay compensation and medical benefits is justified where substantial evidence of record fails to demonstrate the existence of a bona fide controversy?

(2) Whether the Workers' Compensation Court erred when it ordered the insurer and claimant to apply accrued compensation benefits to repay the Unemployment Insurance Division the unemployment benefits claimant received during the period in question where Sec. 39-71-743, MCA, prohibits said funds being used to reduce such debts?

(3) Whether the appellant's appeal is frivolous and therefore subject to the penalties set forth in Rule 32, M.R.App.P.?

We find the State Insurance Fund's first issue to be dispositive of this appeal. The Workers' Compensation Court considered certain facts cumulatively and interpreted Sec. 39-71-603, MCA, to impute constructive knowledge of an injury to the employer, Billings Processors. The appropriate standard of review in this matter, therefore, is to determine whether the lower court's interpretation of the law, as applied to the particular facts of this case, is correct. Wassberg v. Anaconda Copper Co. (Mont.1985), 697 P.2d 909, 912, 42 St.Rep. 388, 391. Accordingly, we are free to examine the lower court's legal analysis and draw our own conclusions. Wassberg, supra.

This Court consistently stresses the importance of employee compliance with the sixty day notice provision of Montana's workers' compensation laws. Masters v. Davis Logging (Mont.1987), 743 P.2d 104, 44 St.Rep. 1664; Hunt v. Sherwin Williams Co. (Mont.1981), 624 P.2d 489, 38 St.Rep. 358. Under Sec. 39-71-603, MCA, notice of an industrial accident is "mandatory and compliance with [the requirements of the statute ] are indispensable to [maintaining] a claim for compensation ..." Dean v. Anaconda Co. (1959), 135 Mont. 13, 16, 335 P.2d 854, 856. Section 39-71-603, MCA, provides the following:

No claim to recover benefits under the Workers' Compensation Act, for injuries not resulting in death, may be considered compensable unless, within 60 days after the occurrence of the accident which is claimed to have caused the injury, notice of time and place where the accident occurred and the nature of the injury is given to the employer or the employer's insurer by the injured employee or someone on the employee's behalf. Actual knowledge of the accident and injury on the part of the employer or the employer's managing agent or superintendent in charge of the work upon which the injured employee was engaged at the time of the injury is equivalent to notice.

It is undisputed that Reil did not give his employer written notice of a work related injury. The Workers' Compensation Court found, however, that Billings Processors had sufficient actual knowledge to satisfy the statute. We disagree with the lower court's application of the facts to the law of this case.

The Workers' Compensation Court made the following findings of fact relevant to the issue of notice:

28. Claimant states that he notified his employers that he was having pain in his arms and he was going to see his doctor on January 7, 1986.

29. After finding out he needed surgery, claimant asked his employers if he could be laid off so that he could draw unemployment while he had his surgery.

30. Claimant's initial request to be laid off was refused, but within a matter of a few days (possibly the next day) the decision was made to grant claimant his request and he was laid off.

31. Claimant states that he asked his employer if h...