Wiard v. Liberty Northwest Ins. Corp.

• Citation: 79 P.3d 281,318 Mont. 132,2003 MT 295
• Decision Date: 30 October 2003
• Docket Number: No. 01-673.,01-673.
• Parties: Richard WIARD, Petitioner and Appellant, v. LIBERTY NORTHWEST INSURANCE CORP., Respondent/Insurer and Respondent, for Daw Forest Products, Employer.
• Court: Montana Supreme Court

79 P.3d 281

2003 MT 295

318 Mont. 132

Richard WIARD, Petitioner and Appellant, v. LIBERTY NORTHWEST INSURANCE CORP., Respondent/Insurer and Respondent, for Daw Forest Products, Employer.

No. 01-673.

Supreme Court of Montana.

Submitted on Briefs March 14, 2002.

Decided October 30, 2003.

For Appellant: Eric Rasmusson, Bulman Law Associates, P.L.L.C., Missoula, Montana.

For Respondent: Larry W. Jones, Senior Attorney, Liberty Northwest Insurance Corp., Missoula, Montana.

Justice JIM RICE delivered the Opinion of the Court.

¶ 1 Richard Wiard (Wiard) appeals the Montana Workers' Compensation Court's holding that medical benefits resulting from Wiard's 1992 work-related neck injury terminated after his employer's insurer, Liberty Northwest Insurance Corporation (Liberty), paid no medical claims resulting from this injury for 60 months, pursuant to § 39-71-704(1)(d), MCA (1991). We affirm.

¶ 2 Wiard raises the following issues on appeal:

¶ 3 1. Whether the Workers' Compensation Court erred in its interpretation of the medical benefit provision within the Petition for Compromise and Release Settlement.

¶ 4 2. Whether Wiard was denied medical benefits without due process of law.

¶ 5 3. Whether Liberty should be equitably estopped from asserting § 39-71-704(1)(d), MCA (1991), as a defense.

¶ 6 4. Whether Liberty violated the implied covenant of good faith and fair dealing and the Unfair Trade Practices Act.

¶ 7 5. Whether the Workers' Compensation Court erred by finding that a prior determination of Wiard's maximum medical improvement precluded further medical benefits.

FACTUAL AND PROCEDURAL BACKGROUND

¶ 8 Upon stretching in bed on the morning of August 5, 1992, Wiard experienced intense neck pain that radiated down his arm to the index and long fingers of his right hand. Dr. Richard C. Dewey diagnosed a herniated cervical disc between C6-C7, which was attributed to the repeated jostling and jarring Wiard endured as a crane operator for DAW Forest Products in Superior, Mineral County, Montana. Wiard underwent a partial discectomy in early 1993. According to Dr. Dewey, Wiard suffered a 10 percent impairment of the whole man as a result of the industrial injury. Within a few months, Wiard resumed work as a heavy equipment operator.

¶ 9 Liberty provided workers' compensation insurance for Wiard's employer. Acting pro se, Wiard entered into negotiations with Liberty to settle his claim. The parties executed a Petition for Compromise and Release Settlement (agreement) on February 24, 1994, in which the insurer accepted liability for Wiard's neck injury. The Montana Department of Labor and Industry (DOLI) approved the agreement by written order. According to the agreement, the insurer compensated Wiard for lost wages in the amount of $5,085.60; paid Wiard's medical costs of $6,647.64; and proffered permanent partial disability payments totaling $8,550.05. Wiard's future medical and hospital benefits were expressly reserved by the agreement.

¶ 10 On April 25, 1995, Wiard returned to Dr. Dewey with intrascapular pain and tingling in his right arm, which Wiard associated with his attempt to grab at a falling cabinet five to six weeks earlier while he was assembling cabinets for another employer. Liberty denied the claim for Wiard's office visit based upon Dr. Dewey's conclusion that Wiard's recent neck and right arm pain was caused by a new injury, for which Liberty was not the insurer. Wiard disagreed that he had sustained a new injury but did not contest Liberty's denial. He received no further treatment as a result of the 1995 incident. Wiard did not seek medical care with respect to his neck again until September 2000.

¶ 11 After experiencing discomfort for about two weeks, Wiard awoke early in the morning of September 5, 2000, unable to move his head. Acute pain radiated down his right arm and numbed his right fingers. Attributing these problems to Wiard's original 1992 injury and subsequent neurosurgical decompression, Dr. Carter E. Beck performed a complete anterior discectomy and fusion at C6-C7. The surgical procedure and treatment by other health care providers generated approximately $25,000 in medical expenses. Liberty refused to pay Wiard's surgery-related costs because Wiard had not submitted any medical claims for a 60-month period, pursuant to the limitations set forth in § 39-71-704(1)(d), MCA (1991).

¶ 12 Wiard sought redress in the Workers' Compensation Court. In addition to the 60-month argument, Liberty also asserted a factual defense that Wiard's surgery was necessitated by an injury he had sustained two weeks prior to September 5, 2000, but that issue was not reached. On cross-motions for partial summary judgment, the court granted Liberty's motion on June 8, 2001, and denied Wiard's motion to reconsider on July 20, 2001, concluding that because Wiard had not filed any claims for medical benefits related to his 1992 work-related injury for a period exceeding 60 consecutive months, the statutory limitation relieved Liberty of liability for Wiard's surgery-related expenses incurred in September 2000. After being advised by the parties that the partial summary judgment had disposed of all issues, the Workers' Compensation Court entered a final judgment and dismissed Wiard's petition with prejudice. Wiard appeals. For purposes of this appeal, the parties do not dispute Wiard's assertion that he required surgery in September 2000 as a result of his 1992 work-related injury.

STANDARD OF REVIEW

¶ 13 We review a grant of summary judgment de novo. Dyess v. Meagher County, 2003 MT 78, ¶ 7, 315 Mont. 35,

¶ 7, 67 P.3d 281, ¶ 7 (citing Grenz v. Fire & Cas. of Conn., 2001 MT 8, ¶ 10, 304 Mont. 83, ¶ 10, 18 P.3d 994, ¶ 10). We review a trial court's conclusions of law to determine whether those conclusions are correct. Dyess, ¶ 7.

DISCUSSION

Issue 1

¶ 14 Whether the Workers' Compensation Court erred in its interpretation of the medical benefit provision of the Petition for Compromise and Release Settlement.

¶ 15 The Workers' Compensation Court concluded that, although Wiard's 1994 agreement with Liberty reserved future medical benefits, that provision was subject to the limitations set forth by the Workers' Compensation Act (the Act), including § 39-71-704(1)(d), MCA (1991), which states, in pertinent part:

Except for the repair or replacement of a prosthesis furnished as a result of an industrial injury, the benefits provided for in this section terminate when they are not used for a period of 60 consecutive months. [Emphasis added.]

¶ 16 The agreement between Wiard and Liberty was memorialized by use of Form 820, a standardized "Petition for Compromise and Release Settlement" produced by the DOLI. The agreement was signed by the parties on February 24, 1994, and states, in pertinent part:

The undersigned claimant was accidentally injured on August 5th, 1992, while employed by DAW Forest Products, an employer enrolled under Compensation Plan No. II of the Montana Workers' Compensation Act. The insurer assumed liability for the injury and paid compensation and medical benefits to the claimant.

....

The parties to this matter have agreed to fully and finally conclude all compensation and/or rehabilitation payments due the claimant under the Workers' Compensation Act, wherein the insurer shall pay to the claimant the sum of Eight Thousand Five Hundred Fifty and 05/100 Dollars ($8,550.05). Unless otherwise indicated in this petition, the settlement amount shall be paid in a lump sum and paid in addition to all sums previously paid by the insurer.* Further medical and hospital benefits are hereby expressly reserved by the claimant.

....

* Special Provisions: Insurer is entitled to a credit for all permanent partial disability benefits paid prior to final approval. All rehabilitation benefits are expressly closed. [Emphasis added.]

¶ 17 Wiard points out that while the agreement expressly limits compensation and rehabilitation benefits to the lump sum payment, the agreement also expressly reserves medical benefits related to his 1992 industrial injury without restriction. Citing South v. Transportation Ins. Co. (1996), 275 Mont. 397, 401, 913 P.2d 233, 235, as authority for the precept that workers' compensation settlement agreements are contracts that are subject to contract law, Wiard argues that basic principles of contract law require Liberty to honor his September 2000 medical claim based on the clear intention of the parties at the time of contract formation and the unambiguous language of the agreement. Wiard contends that the agreement neither incorporates the Workers' Compensation Act generally, nor specifically references the 60-month limitation set forth in § 39-71-704(1)(d), MCA (1991).

¶ 18 Wiard also maintains that, as an unsophisticated party to the settlement agreement with Liberty, he possessed unequal bargaining power and urges this Court to interpret the plain language of the agreement in his favor. Wiard notes that Liberty was in the business of providing workers' compensation insurance in Montana, but he was a crane operator who knew little about workers' compensation or contract law. At the time the agreement was signed, the stated public policy of the Workers' Compensation Act was to eliminate attorneys from proceedings. Unrepresented by counsel in negotiations with Liberty, Wiard asserts that he nonetheless bargained for future medical benefits that were not limited in duration.

¶ 19 Liberty responds that the provisions of the Workers' Compensation Act are an integral part of its agreement to pay future medical benefits to Wiard. Arguing that the agreement was created under the authority of the Act, Liberty asserts that lack of explicit reference to § 39-71-704(1)(d), MCA (1991), does not manifest an intent on the part of the insurer to extend medical benefits to Wiard that exceed the entitlement established by the Legislature under the Act.

¶ 20 It is well...