author: JUSTICE WEBER

text:
    MURLAND W. SEARIGHT and VIRGINIA SEARIGHT, Petitioners and Appellants, v. BONNIE JEAN HOWELL, wage claimant, and the COMMISSIONER OFLABOR AND INDUSTRY, State of Montana, Respondents and Respondents.
    No. 90-551.
    Submitted on briefs Mar. 7, 1991.
    Decided Apr. 22, 1991.
    248 Mont. 122.
    809 P.2d 588.

      Murland Searight, Columbia Falls, for petitioners and appellants.
    Darrell S. Worm, Ogle & Worm, Kalispell, Daniel B. McGregor, Dept, of Labor & Industry, Helena, for respondents and respondents.
   JUSTICE WEBER

delivered the Opinion of the Court.

This appeal arises from a Department of Labor and Industry decision awarding respondent, Bonnie Jean Howell, $1,110.14 in wages and the same amount in penalty. The District Court for the Eleventh Judicial District, Flathead County, affirmed the Hearing Officer’s decision. Mr. and Mrs. Searight appeal. We affirm.

We restate the issues presented as follows:

1. Whether the Department of Labor and Industry possessed jurisdiction to award wages to Ms. Howell.
2. Whether the Hearing Officer applied the proper standard of proof.
3. Whether the District Corut erred in concluding that Ms. Howell’s wage claim was not barred by the doctrine of res judicata.

On October 29,1986, Bonnie Jean Howell (Ms. Howell) filed a wage claim against Mr. and Mrs. Searight (Searights) with the Department of Labor and Industry (Department). The claim, filed solely in Ms. Howell’s name, also demanded wages for her two sons. The Department split the claim and considered that portion pertaining to Ms. Howell at a hearing held on June 4, 1987. The Hearing Examiner held in favor of Ms. Howell after making the following findings of fact:

1. Ms. Howell was employed by the Searights from April 8, 1985 through May 17, 1985 (Stipulated Fact.)
2. Ms. Howell has received $250.00 from the Searights in the form of a personal check for $150.00 and $100.00 cash (Stipulated Fact.)
3. A list of chores was provided by the Searights for Ms. Howell at the rate of $5.00 per hour (Stipulated Fact.)
4. The Searights hired Ms. Howell to house-sit their home and to perform certain chores while they were on an extended trip to China.
5. Prior to employment, a verbal employment agreement was made between Virginia Searight and Ms. Howell. Also involved and affected by the agreement were Ms. Howell’s sons, Carl Howell and Robert Howell. Ms. Howell was to receive $20.00 per day or $150.00 per month [sic] for house-sitting. In addition, and as shown above in Stipulated Fact, Ms. Howell was to receive $5.00 per hour for work performed relative to a list of chores provided by Ms. Searight. Robert Howell was to receive $10.00 per day for playing with the Searight’s dog and Carl Searight was to receive $1.00 per day for grooming the dog and cleaning up after the dog. (NOTE: The payment or non-payment of services performed by Carl Howell and Robert Howell is not at issue in this matter; their employment agreements are mentioned only to clarify the employment agreement of [Ms. Howell].)
6. Ms. Howell recorded hours worked relating to the additional chores to be performed at the rate of $5.00 per hour.
7. Ms. Howell claims the following:
House sitting — 5 weeks plus 5 days at $150.00 per week $856.14
115 hours worked at $5.00 per hour 575.00
Less certain items received by Ms.
Howell 72.00
Less $250.00 received by Ms. Howell 250.00
Total owed to Ms. Howell $ 1,110.14

The Hearing Officer concluded that the Searights owed Ms. Howell $2,220.28 in wages and statutory penalty and ordered payment accordingly. The Searights petitioned for judicial review from the Order of the Hearing Officer. The District Court affirmed the Hearing Officer’s decision. The Searights filed a motion to vacate judgment which the District Court subsequently denied. The Searights appeal.

I.

Whether the Department of Labor and Industry possessed jurisdiction to award wages to Ms. Howell.

The issues raised on appeal in this case are questions of law. In reviewing questions of law, this Court will merely “determine if the agency’s interpretation of the law is correct, instead of applying the inappropriate abuse of discretion standard”. Steer Inc. v. DOR (1990), [245 Mont. 470,] 47 St.Rep. 2199, 2200, 803 P.2d 601.

The Searights maintain that the Department lacked jurisdiction in this case because Ms. Howell was not an employee but an independent contractor. They urge that under Foster v. Commissioner of Labor and Indus. (1987), 225 Mont. 246, 731 P.2d 1313, the Hearing Officer could not award back wages to an independent contractor. The Searights also contend that Ms. Howell’s labor constituted household or domestic service which is excluded from the definition of “employment” under Montana’s unemployment insurance statutes.

Ms. Howell maintains first that the “independent contractor” argument was not raised during the proceedings before the Department, and is thus, beyond the scope of judicial review under § 2-4-702(l)(b), MCA. We agree. Section 2-4-702(l)(b), MCA, provides:

“A party who proceeds before an agency under the terms of a particular statute shall not be precluded from questioning the validity of that statute on judicial review, but such party may not raise any other question not raised before the agency unless it is shown to the satisfaction of the court that there was good cause for failure to raise the question before the agency.” (Emphasis added).

The independent contractor issue was addressed by the District Court as follows:

“Whether a person is an employee or an independent contractor is a factual question. If [the Searights] had raised the issue of whether Ms. Howell was an independent contractor and had presented evidence on that issue, the hearing officer would have been required to make specific findings on that question which the Court could then review. Here, [the Searights] did not raise the issue nor did they present any evidence regarding it. More importantly, [the Searights] stipulated that Ms. Howell was employed by them. The Court concludes, therefore, that [the Searights] cannot now raise the issue of whether Ms. Howell was an independent contractor.

We conclude that § 2-4-702( l)(b), MCA, is determinative here. We affirm the District Court in holding that the Department possessed jurisdiction to award wages to Ms. Howell.

II.

Whether the Hearing Officer applied the proper standard of proof.

In his conclusion regarding the sufficiency of the evidence presented before him, the Hearing Officer stated:

“The Searights did not keep any hourly records as to the amount of time spent by Ms. Howell working on the chores for which she was to be paid $5.00 per hour. Ms. Howell proved by reasonable inference that she worked hours for which she was not compensated. The Searights did not disprove these hours. See Garsjo vs. (sic) Department of Labor, 172 Mont. 182, 562 P.2d 473 (1977).”

The Searights contend that the Hearing Officer applied the incorrect standard of proof and that the preponderance of the evidence would have been the proper standard to apply. Ms. Howell maintains that while the Hearing Officer observed that the Searights had not kept hourly time records, Ms. Howell kept records and submitted a summary of her records in support of her claim. She contends that Garsjo does not create a different standard of proof, but rather, endorses the use of circumstantial evidence to establish a reasonable approximation of the hours worked in constituting substantial evidence to support a claim. See Holbeck v. Stevi-West, Inc. (1989), 240 Mont. 121, 125-126, 783 P.2d 391, 394-395.

Here, Ms. Howell presented exhibits which detailed the work done. She kept track of exactly what she did each day and how much time was spent on it. As the Department argues, this evidence, coupled with Ms. Howell’s testimony and the stipulated fact that she was employed from April 8, 1985 through May 17, 1985, clearly constituted substantial evidence to support the Hearing Officer’s conclusion. See Garsjo and Holbeck. We hold that the Hearing Officer applied the correct standard of proof.

III.

Whether the District Court erred in concluding that Ms. Howell’s wage claim was not barred by the doctrine of res judicata.

The Searights contend that the findings and conclusions of the separate proceedings involving Ms. Howell’s sons are contrary to the findings and conclusions in this case, and thus, the doctrine of res judicata requires accepting those findings and conclusions over those entered here. They argue that the findings of fact established that the employments of Ms. Howell, Carl and Robert were for the identical time period, at the identical location, under one agreement, by the identical family members.

The doctrine of res judicata applies when (1) the parties or their privies are the same; (2) the subject matter of the action is the same; (3) the issues related to the subject matter are the same; and (4) the capacities of the person are the same in reference to the subject matter and the issues between them. Phil-Co Feeds v. 1st Natl Bank in Havre (1989), 238 Mont. 414, 777 P.2d 1306.

The parties are not the same in the two cases. They are only of the same family. Here, Ms. Howell is the wage claimant. In the previous case, Ms. Howell’s sons, Carl and Robert, were the claimants. In the case at bar, the issue is whether Ms. Howell is owed unpaid wages for work performed pursuant to express orders. In the sons’ case, the issue was whether they were owed wages at all for caring for the Searights’ dog. We hold that the District Court was correct in ruling that the doctrine of res judicata did not bar Ms. Howell’s claim.

Affirmed.

CHIEF JUSTICE TURNAGE and JUSTICES HARRISON, McDONOUGH and HUNT concur.


source: Caselaw Access Project

author: JUSTICE GRAY

license: Public Domain

text:
    CITY OF HELENA, Plaintiff and Respondent, v. DWIGHT BRISTOL HOY, Defendant and Appellant,
    No. 90-495.
    Submitted on briefs Mar. 7, 1991.
    Decided Apr. 11, 1991.
    248 Mont. 128.
    809 P.2d 1255.

      Michael Donahoe, Helena, for defendant and appellant.
    David Hull, City Atty., Bob Wood, Deputy City Atty., Helena, for plaintiff and respondent.
   JUSTICE GRAY

delivered the Opinion of the Court.

Defendant and appellant, Dwight Hoy, appeals from his conviction in the First Judicial District Court, Lewis and Clark County, of driving under the influence of alcohol. We affirm.

The only issue presented on appeal is whether the District Court erred in admitting, over objection, alleged hearsay evidence.

On February 25, 1990, at approximately 2:10 a.m., Helena City Police Officer Debra Badger observed a pickup truck twice swerve to the side of the road and then come back towards the center, as it traveled eastbound on Eleventh Avenue. Officer Badger activated her police car lights and stopped the pickup. Upon approaching the driver’s side window to ask the driver for his driver’s license and vehicle documents, she detected the odor of alcohol and requested the driver, appellant Hoy, to step out of his vehicle.

Officer Badger asked appellant to perform several field sobriety tests, on the results of which she placed him under arrest. Appellant was transported to the Lewis and Clark County Jail where he was videotaped performing the sobriety tests a second time. At this point appellant agreed to take a breathalyzer test.

At trial, subsequent to her testimony of the facts set forth above, Officer Badger identified the printout card from the breathalyzer. When she was asked to identify some handwriting on the card, she began to explain the function of a display screen located on the breathalyzer and stated that it shows both the calibration check and the subject’s test results. At that point, the parties adjourned to chambers for defense counsel's objection to her testimony regarding the readings she observed on the display screen and wrote on the printout card. Conceding that the printout card itself was admissible evidence, defense counsel further objected that the printout speaks for itself and should not be varied by oral testimony. The District Court overruled the objections and allowed the testimony.

Officer Badger testified that the printout card itself is produced by the printer which is separate from, but attached to, the breathalyzer machine and that the handwritten numbers on the card were written by her. She explained that she had experienced difficulties in obtaining clear printouts prior to the time of appellant’s arrest and, thus, was aware that it might be necessary to read the numbers from the screen.

Officer Badger testified that the numbers she wrote on the printout card — as to both the calibration and breathalyzer result — were identical to those she observed on the screen at the time the test was being administered to the appellant. She testified that the calibration check, .095, reflected that the breathalyzer was functioning properly; that is, that the breathalyzer result she copied from the screen and wrote on the card was accurate. Finally, Officer Badger testified that the breathalyzer result, .212, was consistent with appellant’s behavior and field sobriety test results.

The issue presented on appeal is whether the District Court erred in admitting the officer’s testimony regarding the numbers she had observed on the display screen and subsequently recorded on the printout card.

Appellant argues that such testimony is hearsay, does not fall within any recognized exceptions to hearsay, and consequently, is inadmissible in evidence. We disagree.

The results of a chemical analysis of a defendant’s breath for alcohol, when introduced for the truth of the results shown, are hearsay under Rule 801(c), M.R.Evid. Hearsay is not admissible in evidence “except as otherwise provided by statute, these rules, or other rules applicable in the courts of this state.” Rule 802, M.R.Evid.

Appellant appears to suggest that the printout card itself is admissible for the truth of the matter stated under Rule 803(6), M.R. Evid., as a business record and, therefore, does not argue that the card is inadmissible. In any event, we note that the card is admissible under the statutory hearsay exception contained in § 61-8-404, MCA.

Appellant argues that the officer’s testimony regarding her observations of the display screen, unlike the printout card, does not fall within any exception to the hearsay rule and, as a result, that the testimony is inadmissible hearsay evidence. We reject this argument.

Assuming arguendo that the testimony and the handwritten numbers on the printout card are hearsay, they fall within recognized exceptions which allow for their admissibility. They come within the statutory hearsay exception in § 61-8-404, MCA: they are evidence and a report of the results of a chemical analysis of a person’s breath.

In addition, the numbers which Officer Badger wrote on the card constitute a present sense impression under Rule 803(1), M.R.Evid. “A statement describing or explaining an event or condition made while the declarant was perceiving the event or condition,” is an exception to hearsay and admissible evidence. Rule 803(1), M.R.Evid.

Astatement is an oral or written assertion. Rule 801(a), M.R. Evid. The numbers Officer Badger recorded on the printout card were a written assertion describing a condition, namely appellant’s blood alcohol content results, made at the time she was perceiving the event or condition.

If Officer Badger had not handwritten the numbers on the card, but had attempted to testify, from memory, as to the numbers she had observed on the display screen, the guarantee of authenticity that is required of hearsay exceptions might be questionable. Not only her memory, but her motives, might be suspect under such circumstances. However, Officer Badger knew the printer was not functioning properly. She testified that when the printer was functioning properly, the numbers on the display screen were identical to the numbers printed on the card. By recording the numbers from the screen onto the card, Officer Badger merely served the same function the printer was intended to perform, specifically, to make a written record of the test results in order that they could be subsequently used as evidence. The guarantee of trustworthiness is sustained by the immediate recording of the numbers and the resulting reduced likelihood of deliberate misrepresentation or fabrication. This is particularly true in this case, where examination of the printout card as it was introduced reflects that the handwritten calibration number and the printout calibration check are identical; only a few fines on the card are garbled. Finally, there exists the opportunity for cross-examination regarding the admitted evidence. The record in this case clearly indicates that defense counsel cross-examined Officer Badger extensively on this matter.

We find the testimony was properly allowed and not inadmissible hearsay.

Affirmed.

CHIEF JUSTICE TURNAGE and JUSTICES HARRISON, McDONOUGH and WEBER concur.


author: JUSTICE McDONOUGH

text:
    LINDA NEWMAN MILLER, Claimant and Respondent, v. MAURINE FRASURE,d/b/a O’HAIRE MOTOR INN RESTAURANT, Employer, and WESTERN GUARANTY FUND SERVICES, Defendant and Appellant.
    No. 90-372.
    Submitted on briefs Feb. 21, 1991.
    Decided Apr. 16, 1991.
    248 Mont. 132.
    809 P.2d 1257.

      K. Dale Schwanke, Jardine, Stephenson, Blewett & Weaver, Great Falls, for defendant and appellant.
    Randall H. Gray, James, Gray & McCafferty, Great Falls, for claimant and respondent.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

This appeal from an order of the Workers’ Compensation Court involves an increase in an injured worker’s weekly compensation benefits. The defendant insurer, Western Guaranty Fund Services appeals the order of the court awarding claimant Linda Miller an increase in benefits from $80.00 per week to $138.30 per week. The award was based on Miller’s claim that she had earned substantially more in tips and had failed to report such tips to her employer and the IRS. The court also awarded her certain attorney’s fees and costs. The insurer appeals and the claimant has cross-appealed the attorney’s fee award. We affirm.

The insurer raises two issues on appeal:

(1) Did the Workers’ Compensation Court err in determining that claimant was entitled to an increased rate of compensation benefits due to tip income she allegedly had earned but failed to report?
(2) Did the Workers’ Compensation Court err in awarding the claimant certain attorney’s fees and costs?

The claimant raises the following issue on cross-appeal:

(3) Did the Workers’ Compensation Court fail to award the claimant an adequate amount of attorney’s fees?

The claimant suffered a compensable industrial injury while working as a waitress at her employer’s coffee shop on or about July 10, 1984. On July 23, 1984 claimant filed a claim for benefits in which she set forth her gross earnings for the four month period immediately prior to her injury and added the phrase “plus tips not inclu.” The insurer initially denied her claim for benefits. The insurer took the position that it had accepted the claim in 1985. The court found that the insurer first accepted the claim in June, 1988 so that benefits paid -until then had been paid under a reservation of rights. Although disputed by the parties, for purposes of the attorney fee issue they stipulated that the insurer had accepted liability at least by June of 1988.

In 1983 the claimant had reported $899 in tip income to her employer and in 1984 she reported $512 of tip income to her employer up to the time of her injury. She reported the same amount of tip income in the federal and state tax returns she filed for these years.

On October 4, 1988 the insurer calculated claimant’s temporary total disability benefits at $80.00 per week, based upon the four pay periods prior to the date of the injury as reported in her claim for compensation. The claimant subsequently amended her 1984 tax return to show tip income of $2,486.00 and her 1983 tax return to show tip income of $4,425.00.

Based on these amended returns the Workers’ Compensation Court found the claimant’s actual income in 1984 was $87.44 per week more than the rate used by the defendant to compute her compensation rate. The court recalculated the claimant’s compensation rate and concluded that it should be increased by $58.30 per week retroactive to the time of injury. The court also concluded that because a genuine dispute existed between the parties, the claimant was not entitled to a penalty of 20 percent pursuant to § 39-71-2907, MCA, and that the claimant was entitled to recover her attorney’s fees and costs.

On appeal the insurer argues that the record lacks substantial evidence to support the finding that the claimant under-reported her tip income and that the doctrines of estoppel and laches bar claimant from relying on previously unreported income to support her claim. The insurer also appeals the award of attorney fees to the claimant, and the claimant has cross-appealed on the ground the attorney’s fee award is inadequate.

I. Claimant’s Tip Income

Is there substantial evidence in the record to support the finding that the claimant under-reported her tip income?

The claimant testified that she had kept track of her tips for IRS reporting purposes on IRS Form 4070 provided by her employer. She testified that her employer told her that she should report her tip income for each pay period by multiplying the number of hours worked in the pay period by $.60. She further testified that it was her understanding that her employer did not want her to report more than $.60 per hour and she was concerned that if she did report more her job would be in jeopardy. She also testified that following each work shift and after she went home, she counted and recorded each day’s actual tip income on her own personal calendar. This calendar was entered into evidence.

The insurer argues that the record of tips the claimant kept on her personal calendar is fabricated. As evidence of this fabrication the insurer first points out that claimant’s employer testified that she gave each employee a booklet that included a tip diary in which to record their tips, and this booklet contained removable IRS Forms 4070 to be used for tax reporting. Thus, the insurer argues there was no need for the claimant to record tips on her own personal calendar. Claimant, on the other hand, testified that the tip forms were available at work and the employees simply removed the Forms 4070 when necessary for tax reporting.

Second, the insurer points out that all the tip amounts recorded on claimant’s personal calendar are all even dollar amounts for every single day recorded, and argues that this is highly unlikely. The claimant testified that patrons generally tip in even dollar and half dollar amounts, and thus it is a coincidence that the amounts in her 1984 tip record are all even dollars.

Third, the insurer alleges that the tips now claimed by the claimant are extremely high for a coffee shop waitress. The employer’s accountant testified that generally 25% of patrons leave no tip at all. He testified that if this were the case with claimant’s tables, they would have had to tip her an average of 42% of their purchases to equal the tips she now claims. Assuming that all her patrons tipped, they would have to tip approximately at a rate of 21% of all purchases.

Fourth, the insurer argues that claimant’s testimony regarding her employer’s “suggestion” that she claim her tips at a rate of $ .60 per hour is inconsistent with what she actually reported. The insurer points out that claimant first testified that she was told she “had to” claim $.65 per hour, she later testified that she “could” report at $.65 per hour, and finally she “could” report at $.60 per hour. The insurer also argues that claimant never actually reported $.60 per hour in tips, rather she reported a range of $.40 to $.68 per hour. Claimant on the other hand argues that she was told that she should report tip income for each pay period by multiplying the number of hours worked in that period by $.60. She presented evidence that the tip income she reported to her employer on IRS Form 4070 in fact averaged $.60 per hour throughout 1983 and until her injury in 1984.

Finally, the insurer argues that there was no reason for the employer to tell her employees to report their tip income differently than what the IRS required. The claimant, on the other hand, testified that she was instructed to report her tips at a certain rate and that she believed it would jeopardize her job not to do so. Claimant’s expert witness, a CPA, testified that the employer did have a motive for requesting employees to falsify their tip income. He testified that the greater the amount of tips reported by its employees, the greater the unemployment insurance premium would be for the employer. Claimant also presented the deposition testimony of Barbara Stoneberg, a coemployee. Stoneberg testified that she was told by her employer to report tip income at $.60 per hour.

The amended income tax returns filed by the claimant subjected her to approximately $1,700.00 of additional Federal Income and Social security tax, not including penalty and interest.

In its order the Workers’ Compensation Cotut adopted the hearing examiner’s conclusion that the claimant was credible. Our standard for reviewing a decision of the Workers’ Compensation Court is to determine if there is substantial evidence to support the findings and conclusions of that court. Where there is substantial evidence to support the Workers’ Compensation Court, this Court cannot overturn the decision. Coles v. Seven Eleven Stores (1985), 217 Mont. 343, 347, 704 P.2d 1048, 1050; Hume v. St. Regis Paper Company (1980), 187 Mont. 53, 59, 608 P.2d 1063, 1066.

Substantial evidence is that evidence that a reasonable mind might accept as adequate to support a conclusion; it consists of more than a mere scintilla of evidence but may be somewhat less than a preponderance. Although it may be based on weak and conflicting evidence, in order to rise to the level of substantial evidence it must be greater than trifling of frivolous. Barrett v. Asarco (1990), [245 Mont. 196,] 799 P.2d 1078, 1080, 47 St.Rep. 1980, 1982.

Here, although the evidence is conflicting on the issue, it is sufficiently substantial to support the Court’s findings and conclusions.

Did the Workers’ Compensation Court err in determining that the doctrines of estoppel and laches do not bar the claimant from relying on previously unreported income to support her claim?

This Court set out the elements of equitable estoppel in Sampson v. Broadway Yellow Cab Co. (1987), 226 Mont. 273, 277, 735 P.2d 298, 300:

“(1) there must be conduct, acts, language, or silence amounting to a representation or a concealment of material facts; (2) these facts must be known to the party estopped at the time of his conduct, or at least the circumstances must be such that knowledge of them is necessarily imputed to him; (3) the truth concerning these facts must be unknown to the other party claiming the benefit of the estoppel at the time it was acted upon by him; (4) the conduct must be done with the intention, or at least the expectation, that it will be acted upon by the other party, or under the circumstances that it is both natural and probable that it will be so acted upon; (5) the conduct must be relied upon by the other party, and, thus relying, he must be led to act upon it, and (6) he must in fact act upon it in such a manner as to change his position for the worse.”

Sampson, 735 P.2d at 300, quoting Sweet v. Colborn School Supply (1982), 196 Mont. 367, 372-373, 639 P.2d 521, 524. For an insurer to prevail on this defense each element must be met. Sweet, 639 P.2d at 524. In Sampson, we remanded the case to the Workers’ Compensation Court to determine whether the claimant was equitably es-topped from claiming that previously unreported tip income should be included in his wages in determining his compensation rate. Sampson, 735 P.2d at 300. Upon remand, the Workers’ Compensation Court determined that the claimant was precluded by the doctrines of equitable estoppel and laches from relying upon previously unreported tip income to increase his benefit rate. Sampson v. Broadway Yellow Cab Co., WCC No. 8512-3369, decided June 9, 1988, Vol. X, No. 588.

The case at bar is distinguishable from Sampson. There the claimant did not report his tips to the IRS at the time he was earning them nor did he mention the amount of his tips to his employer on his claim form when injured. The claimant waited 10 years before alleging that unreported tips should be used to recalculate his benefit rate. Upon remand from this Court the Workers’ Compensation Court found that the claimant had concealed a material fact by failing to report his tip income. The defendant insurer could also demonstrate the remaining elements of equitable estoppel. Here, the claimant sufficiently proved to the hearing’s examiner that she was induced by her employer’s instructions as to how she should report her tips, and that she believed she would face reprisal and possibly lose her job if she reported her tips other than pursuant to her employer’s “suggestion.” Furthermore, her claim specifically stated that tips were not included in the wages listed. This does not amount to a concealment of material facts such as the act of the claimant in Sampson. We hold that the Workers’ Compensation Court did not err in determining that equitable estoppel does not apply.

Upon remand in Sampson for factual determinations regarding equitable estoppel, the Workers’ Compensation Court also applied the doctrine of laches. Laches, a defense sounding in equity, precludes recovery to those who sleep on their rights:

“Laches ... is a concept of equity; it means negligence in the assertion of a right; it is the practical application of the maxim, ‘Equity aids only the vigilant;’ and it exists when there has been unexplained delay of such duration of character as to render the enforcement of the asserted right inequitable.”

In the Matter of the Estate of Wallace (1980), 186 Mont. 18, 26, 606 P.2d 136,140. In Sampson, laches operated to preclude the claimant from asserting that unreported tip income should increase his compensation benefits where the claimant had waited ten years to assert his claim. See Sampson, WCC No. 8512-3369, decided June 9, 1988, Vol. IX, No. 588, p. 7. Here, the delay was for approximately two years rather than ten. Additionally, unlike Sampson, the claim filed here expressly stated that tips were not included in the wages listed. Furthermore, in Sampson the insurer was prejudiced by destruction of the claimant’s employment records during the ten year interim between his injury and his claim for a benefit increase. Here, the claimant’s employment records were always available to the insurer for the two year period before she petitioned for an increase.

The insurer argues that it changed its position and accepted liability based on claimant’s original claim and now it is inequitable for her to raise her unreported tip income. This argument is of no moment on these facts; it really pertains to the fifth and sixth elements of equitable estoppel concerning reliance. We hold that the Workers’ Compensation Court correctly concluded that laches and equitable estoppel do not apply in this case.

II. Attorneys’ Fees

We will first discuss the merits of claimant’s cross-appeal. Claimant alleges that the Workers’ Compensation Court awarded her inadequate attorney fees. Claimant’s entitlement to attorney’s fees and costs is governed by § 39-71-612, MCA, as it was in effect at the time of the claimant’s injury on July 10, 1984. The statute provides:

“39-71-612. Costs and attorneys’ fees payable based on difference between amount paid by insurer and amount later found compensable. (1) If an employer or insurer pays or tenders payment of compensation ... but controversy relates to the amount of compensation due and the settlement or award is greater than the amount paid or tendered by the employer or insurer, a reasonable attorney’s fee as established by the division or the workers’ compensation judge if the case has gone to a hearing, based solely upon the difference between the amount settled for or awarded and the amount tendered or paid, may be awarded in addition to the amount of compensation.” (Emphasis added.)

Section 39-71-612, MCA (1983). The parties stipulated that based on their usual hourly rates, the claimant’s firm spent a total of $22,450.00 of time on all aspects of the claimant’s case, including $12,378.00 of time on the issues that went to trial. Of the $22,450.00 in fees, $6,701.00 in fees were accumulated prior to the time of the submission and approval by the Division of the Attorney Retainer Agreement between claimant and counsel. The contingent fee agreement provided attorney’s fees “[fjor cases that go to a hearing before the Workers’ Compensation Judge or the Supreme Court, twenty five percent (25%) of the amount of the additional compensation payments the claimant receives. ...” Based on § 39-71-612, MCA, and the fee agreement, the Workers’ Compensation Court awarded the claimant’s attorney fees of 25% of the increase in the amount of her temporary total disability rate, i.e. 25% of $58.30 per week due on all temporary total disability benefits from the date of her injury forward.

Relying on the criteria discussed in Wight v. Hughes Livestock Co., Inc. (1983), 204 Mont. 98, 664 P.2d 303, claimant’s counsel requested that his fee be determined on an hourly basis rather than under the contingent fee contract. In Wight, this Court set forth the following considerations:

“[I]n determining a reasonable attorneys fee ... [the judge] must engage in a balancing process and consider on contingent basis the following factors:
“(1) The anticipated time and labor required to perform the legal services properly.
“(2) The novelty and difficulty of legal issues involved in the matter.
“(3) The fees customarily charged for similar legal services.
“(4) The possible total recovery if successful.
“(5) The time limitations imposed by the client or the circumstances of the case.
“(6) The nature and length of the attorney client relationship.
“(7) The experience, skill and reputation of the attorney.
“(8) The ability of the client to pay for the legal services rendered.
“(9) The risk of no recovery. (Citations omitted.)”

Wight, 664 P.2d at 311-12. When considering these factors, there is a presumption that the amount due the claimant’s attorney under the contingent fee contract is a reasonable fee. If the workers’ compensation judge does not set a fee in accordance with the contingent fee contract, he is required to state with particularity in writing the reasons why the contingent fee contract is not followed. Such reasons must be based upon strong countervailing evidence. Wight, 664 P.2d at 312.

In it’s order the Workers’ Compensation Court stated:

“The issue presented and prevailed upon by the claimant was a determination of the correct temporary total disability rate.... There was no issue of liability. This issue and the proof relied on is fairly routine in this Court. The only novel part of this case turns on claimant’s decision, made in 1988, to amend her 1984 tax returns to conform to the actual tips received.
“We acknowledge counsel’s time and effort on behalf of his client, but do not believe these facts and the evidence presented are sufficient to overcome the reasonableness of the contingent fee agreement.”

Having properly considered the factors from Wight, the Workers’ Compensation Court did not abuse its discretion in determining that the claimant’s attorney should be awarded a fee based on the 25 percent contingent fee agreement.

Claimant also argues in her brief that she reserved the right to “amend” the contingent fee agreement to the form in use at the time of the claimant’s injury if the court determined that attorney’s fees should be based upon the contingent fee agreement. Such an agreement would provide for a contingent fee of 33 percent after hearing and 40 percent on appeal. Claimant cites no authority to support this position nor was this position raised and considered before the Workers’ Compensation Court. Accordingly, we decline to consider this argument. See e.g. Martinez v. Montana Power Company (1989), 239 Mont. 281, 285, 779 P.2d 917, 920.

We now turn to the insurer’s appeal regarding the propriety of the attorney’s fees awarded to the claimant. The insurer alleges that claimant’s counsel actually began representing the claimant prior to entering a contingent fee agreement. This is evidenced by some of the costs and fees itemized in claimant’s attorney’s affidavit showing services commenced in January of 1986. The claimant and her attorney entered into the agreement on June 8, 1987. The statute regulating attorney’s fees in effect at the time of the claimant’s injury provides:

“39-71-613. Regulation of attorneys’ fees — forfeiture of fee for noncompliance. (1) When an attorney represents or acts on behalf of a claimant or any other party on any workers’ compensation claim, the attorney shall submit to the division a contract of employment stating specifically the terms of the fee arrangement between the attorney and the claimant.
“(3) If an attorney violates a provision of this section, a rule adopted ■under this section, or an order fixing attorney’s fee under this section, he shall forfeit the right to any fee which he may have collected or been entitled to collect.”

Section 39-71-613, MCA (1983). The corresponding administrative rule, A.R.M. 24.29.3802, provides that “[a]n attorney representing a claimant on a workers’ compensation claim shall submit to the division within thirty days of undertaking representation of the claimant ... a contract of employment stating specifically the terms of the fee arrangement.” Thus, the insurer argues that pursuant to the above statute and regulation the claimant’s attorney must forfeit any fee award because the attorney and claimant did not enter into a fee agreement until seventeen months after representation had begun.

The insurer relies on Hartford v. Young (1989), 239 Mont. 527, 782 P.2d 365, in arguing that a forfeiture is mandatory in this case. However, Hartford is distinguishable from the case at bar. In Hartford, the claimant’s attorney attempted to recover fees for advance payments received by virtue of the claimant’s efforts. In the lower court, the attorney argued that he was entitled to such fees because they were debts the insurer waived through his negotiating efforts. He conceded this argument for the first time on appeal and admitted that he was not entitled to those fees, instead he argued that he was merely mistaken in his calculations. We noted that if his earlier argument was incorrect at the appellate level, he should have known it was incorrect below. We held that his attempts to overcharge his client were in violation of the attorney fees regulation and workers’ compensation statutes and upheld total forfeiture of fees under the mandate of § 39-71-613, MCA.

Here, the claimant and her attorney entered into the agreement on June 8,1987. The agreement was later filed with and approved by the Division as required by the regulations. The attorney began representing the client officially when the agreement was entered. While the claimant’s attorney did attempt to recover fees incurred prior to entering the contingent fee contract on an hourly basis pursuant to Wight, the attorney was not attempting to charge the claimant for recovery received pursuant to the claimant’s own efforts as in Hartford. Claimant’s attorney here was attempting to build his case for additional fees on the ground that the fees were inadequate under Wight. Although we do not accept the merits of his argument, we do not conclude that it warrants a total forfeiture as in Hartford. Accordingly, the Workers’ Compensation Courts’ award of attorney fees was proper in this case. The order of the Workers’ Compensation Court is

AFFIRMED.

CHIEF JUSTICE TURNAGE and JUSTICES HARRISON, TRIEWEILER and HUNT concur.


author: JUSTICE HARRISON JUSTICE WEBER,

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. ANDREW P. FELANDO, Defendant and Appellant.
    No. 90-433.
    Submitted on briefs Feb. 14, 1991.
    Decided Apr. 22, 1991.
    248 Mont. 144.
    810 P.2d 289.

      Benjamin R. Anciaux, Poison, for defendant and appellant.
    Marc Racicot, Atty. Gen., Patricia J. Jordan, Asst. Atty. Gen., Helena, Larry J. Nistler, Lake County Atty., Poison, for plaintiff and respondent.
   JUSTICE HARRISON

delivered the Opinion of the Court.

This is an appeal from the District Court of the Twentieth Judicial District, Lake County, Montana. The appellant, Andrew P. Felando, was convicted, by jury verdict, of intimidation, a felony, and assault and disorderly conduct, both misdemeanors. Felando appeals his convictions. We affirm in part and reverse in part.

The issues presented by appellant are:

1) Whether the venue of the misdemeanor assault charge was properly in Lake County.
2) Whether the evidence is sufficient to support all three convictions.

Andrew P. Felando was charged by information with the offenses of felony intimidation as defined by § 45-5-203(2), MCA; misdemeanor assault as defined by § 45-5-201(l)(d), MCA; and disorderly conduct as defined by § 45-8-101, MCA. The facts alleged in the information were as follows:

Count I (Intimidation)

“That on or about May 23, 1989, in Lake County, Montana, the ... Defendant, (Felando) knowingly communicated a threat of a pending fire to Janet Read, which would endanger her life and her home.

Count II (Assault)

“That on or about the month of March, 1989, in Lake County, Montana, the ... Defendant, purposely or knowingly caused reasonable apprehension of bodily injury in James R. Underwood by threatening to kill him.

Count III (Disturbing the Peace)

“That on or about May 20, 1989, in Lake County, Montana, the ... Defendant, disturbed the peace by making loud or unusual noises and using threatening, profane or abusive language and discharging firearms.”

Following a jury trial on April 12 and 13,1990, the defendant was convicted of the charged offenses. The defendant was sentenced to ten years in prison with five suspended on Count I, six months in jail on Count II, and ten days in jail on Count III, to be served concurrently. Appellant now appeals his convictions.

The standard of review on issues of substantial evidence is that the conviction cannot be overturned if the evidence, when viewed in a light most favorable to the prosecution, would allow any rational trier of fact to find the essential elements of the crime beyond a reasonable doubt. State v. Laverdure (1990), 241 Mont. 135, 785 P.2d 718. Both sides presented extensive testimony to foster their respective claims. The testimony conflicted in many areas. The jury, as fact finder, was left to decide which witnesses were most credible. The weight of the evidence and the credibility of the witnesses are exclusively within the province of the jury for its own determination. Laverdure at 138, 785 P.2d at 720.

I.

ASSAULT

Appellant was convicted of violating § 45-5-201, MCA which provides:

“(1) A person commits the offense of assault if he:

“(d) purposely or knowingly causes reasonable apprehension of bodily injury in another.”

Jim Underwood and appellant were neighbors. Underwood testified that in March of 1989, while talking from their parked vehicles on Whitetail Road in Lake County, appellant and Underwood’s conversation became heated when Underwood asked appellant if he was the one who had posted a sign which labeled Dale Matitus as a poacher. After appellant denied posting the sign, Underwood responded “it sounds like something you [appellant] would do.” Upon that statement, Underwood testified that appellant began “hollering and screaming, calling me filthy names.” Appellant ceased the verbal onslaught when Underwood’s four-year-old son stood up from inside Underwood’s vehicle and came into appellant’s view.

Underwood and his passenger, Rick Sorenson, both testified that, during this confrontation, appellant threatened to shoot anyone that accused him of posting the sign. Appellant denied making the threat. Underwood also testified he did not perceive appellant to be a threat at that time. To this end, the following testimony was elicited from Underwood during cross examination:

“Q. [By Counsel]: Well, did you fear at the time you were up on the road that he [Felando] would shoot you?
“A. [By Underwood]: No, I did not.”

Afew days after the Lake County confrontation, appellant allegedly told Mike Wood to relay a threat to Underwood that appellant would shoot Underwood “if he messed with him.” Mike Wood is a neutral party and an acquaintance of both appellant and victim. Mike Wood testified that upon making this second threat, appellant was obviously upset, was red in the face, and was to be taken seriously. However, regarding this alleged threat, Wood’s testimony inherently conflicts since he also testified that: “I’ve known Andy and I didn’t take it real serious.” Wood and Underwood both testified that when Wood communicated this threat to Underwood, Underwood was frightened. Appellant denied ever making this second threat.

Roughly one week later appellant and Underwood had a second hostile confrontation at the Femdale store which is located in Flathead County. Underwood testified, along with passenger Dale Matitus, that appellant stated he would have shot Underwood, on Whitetail Road during their prior Lake County encounter, if not for the presence of Underwood’s son. Appellant denied making this statement, and denied ever making any such threat. Underwood testified, during cross examination, as follows:

“Q. [By Counsel]: And did you fear at the time of being at the store that he [Felando] would have shot you?
“A. [By Underwood]: I didn’t figure he’d shoot me at the store. I figured maybe if he seen me on the roadside somewhere he’d probably shoot, yes; or if he seen me out in my yard when he was driving by, yes.”

The jury heard all the testimony and viewed the witnesses as they testified. Based on the evidence, the jury convicted the appellant of misdemeanor assault. Appellant now argues that the State failed to prove that the victim had any apprehension of bodily injury, that the victim’s apprehension, if any, was unreasonable, and that the requisite mental state of appellant was not proven.

The defense’s first argument is totally without merit since it completely ignores Underwood’s unequivocal testimony that he did indeed think appellant might very well shoot him. This Court will not substitute its judgment for that of the jury; a jury which, in this case, was able to view firsthand the evidence presented, observe the demeanor of the witnesses, and weigh the credibility of each party.

The defense next contends that Underwood’s apprehension was unreasonable. We agree. Consider threat #1, alleged to be made in Lake County. This threat communicated the general message that appellant would shoot anyone who accused him of posting a certain sign. Underwood testified that this threat did not cause apprehension of bodily harm. Underwood did not recant this testimony. Next, consider threat #2 communicated to Underwood through Mike Wood. Appellant denies the threat. Wood, as the State’s witness, testified during direct as follows:

“Q. [By Counsel]: When you spoke to Mr. Felando in March of’89 about Mr. Underwood, what did the defendant tell you?
“A. [By Wood]: ... he said that the next time he seen Jim [Underwood] “he just better watch it.’ He was going to mess with him basically.
“Q: Andy said what? The defendant Andy Felando said what?
“A. He was basically going to mess with him.
“Q. What did ‘mess with him’ mean?
“A. Well, basically shoot at him or kill him.”

During cross examination, Wood further clarified the alleged threat:

“Q. [By Defense Counsel]: What were [Felando’s] exact words, if you can recall?
“A. Well basically, just like I said, [Felando] just threatened Jim’s [Underwood’s] life. He said he was going to shoot him the next time he messed with him is what it boils down to, you know. And I took Andy seriously.
“Q. So all Underwood had to do in avoiding getting shot is not mess with Andy, right?
“A. I guess. That’s what it boiled down to in my opinion ...”

In our opinion, if indeed appellant made such a statement, the only thing appellant promised to do was defend himself in the event that somebody “messed” with him. How appellant chose to define the phrase “mess with” is as uncertain as the evidence which tended to establish that making this statement amounted to misdemeanor assault. Appellant’s alleged statement evidenced a strong desire of his to simply be left alone, and although hostile, this statement was not criminal.

Lastly, consider threat #3 allegedly made at the Femdale store. Appellant is alleged to have said to Underwood something to the effect of: if not for the presence of your son, I would have shot you on the road in Lake County. This statement could not reasonably have caused apprehension of bodily harm for two reasons. First, as defense counsel asserts, the statement refers to a past act and so necessarily could not be interpreted to communicate a future threat of any kind. Secondly, the statement, by its very conditional nature, necessarily negates any potential threat of bodily harm. Any other interpretation defies logic. Although making this statement was possibly hateful, we do not find any evidence to support a finding that appellant was guilty of misdemeanor assault for making this statement. Based on the foregoing, we hold that the evidence presented was insufficient to allow any rational trier of fact to find essential elements of misdemeanor assault existed beyond a reasonable doubt. We therefore reverse the conviction on the assault charge, and thus need not rule on the issue of venue.

II.

DISORDERLY CONDUCT

Appellant was convicted of violating § 45-8-101(l)(b), (c), and (d), MCA, which provides:

“Disorderly Conduct. (1) A person commits the offense of disorderly conduct if he knowingly disturbs the peace by:

“(b) making loud or unusual noises;
“(c) using threatening, profane, or abusive language;
“(d) discharging firearms.”

Janet Read and appellant had been next door neighbors for roughly five years. Ms. Read testified that on May 20, 1989, she called the sheriff’s office concerning a profane sign on the property line between appellant’s and Ms. Read’s land. Deputy Perry Mock responded to the call. There were four signs, made of paper plates, which displayed powerful profanity, derogatory language, and other unneighborly expletives all directed at Ms. Read. The State admitted two of these signs into evidence during trial. Appellant testified that he had, indeed, posted the signs, his reason being that he considered Ms. Read was trespassing each time she walked up to the fence line; the signs were meant as a warning to stop her from trespassing. Appellant was referring to times when Ms. Read approached the fence, which allegedly lay inside his property line, in order to question him regarding backhoe work performed in his back yard which tended to adversely affect a stream which ran through their properties. Ms. Read and Deputy Mock testified that Ms. Read was very frightened and quite upset with the language on the signs. Ms. Read and the deputy walked over to the fence where the signs had been posted. As Ms. Read and the deputy returned toward the deputy’s car, they heard screaming and two gunshots coming from appellant’s property. Deputy Mock described the noise as “nerve wracking.” Ms. Read identified the screaming as appellant’s and testified that the shots and screams were threatening in nature as they were directed toward her and the deputy. Apparently, appellant was angered by these alleged trespassers. According to appellant, he was shooting at a target and yelling at his horse. The jury convicted him of disorderly conduct. Appellant contends that the State failed to prove that appellant had the requisite mental state, arguing that he did not know he was disturbing anyone’s peace. We disagree.

Circumstantial evidence is sufficient to establish mental state. State v. Krum (1989), 238 Mont. 359, 361, 777 P.2d 889, 890. The appellant was, according to defense counsel, “almost fanatic” about his property line, and the signs were meant as a warning for Ms. Read to stop “harassing” him. Appellant testified that he was very protective of his property, that he knew exactly were the boundary line was, and that it lay just a few feet outside of his barbed wire fence. In view of his “fanatic” attitude the jury could have found that the screaming and shooting was directed at the deputy and Ms. Read because the appellant considered them trespassers as they approached the fence. Considering all the evidence together, under these circumstances, we hold that it would be sufficient for any reasonable trier of fact to establish all the elements of disorderly conduct beyond a reasonable doubt. We affirm the jury verdict for this conviction.

III.

INTIMIDATION

The jury convicted appellant of felony intimidation in violation of §45-5-203(2), MCA, which provides:

“A person commits the offense of intimidation if he knowingly communicates a threat or false report of a pending fire, explosion, or disaster which would endanger life or property.”

The facts alleged in the information regarding intimidation are as follows:

Count I

“That on or about May 23, 1989, in Lake County, Montana, the ... Defendant, [Felando] knowingly communicated a threat of a pending fire to Janet Read, which would endanger her life and her home.” These threats were recorded by Ms. Read and the tape was played for the jury and admitted into evidence. The tape contained a collection of appellant’s vulgar and derogatory remarks all directed to Ms. Read which evidenced the hostility which appellant felt toward Ms. Read. The tape also contained appellant’s threat that he planned to “put a bullet through” her neck and threatened to force her to engage in sodomy. In its most pertinent part, the tape revealed appellant’s threat of a pending fire:

“I’m warning you, you [expletive], you better back the f_up or we’re talking about burning somebody’s place down. I’m surprised your place is still standing, [expletive].
“Now you better watch out or you won’t have a house you stupid [expletive]. I see you hiding, J_c_you’re sleazy f_ing [expletive].
“You better sell that place quick while it’s still standing.”

Appellant did not deny making the threats, but argues for a different interpretation of the tape. However, the jury was the trier of fact and it was within its province to resolve such a question. Laverdure, 241 Mont. at 138, 785 P.2d 720. Ms. Read testified that she definitely understood appellant’s words as threats to burn her house down. The question of whether an intention to commit a felony is present must be decided on the basis of an objective standard, and “whether a statement constitutes a true threat is to be determined by the trier of fact.” State v. Lance (1986), 222 Mont. 92, 104, 721 P.2d 1258, 1267 (citing United States v. Kelner (2d Cir. 1976), 534 F.2d 1020 and United States v. Merrill (9th Cir. 1984), 746 F.2d 458. The threats were made at the culmination of several days of harassment of Ms. Read by the appellant. Ms. Read testified that she was so frightened by appellant that she began hiding in her house, coming out only when necessary. Based on this testimony, the jury convicted appellant of intimidation. In this case we hold that the evidence produced a fear in the neighbor Janet Read that appellant’s threats would be carried out. Therefore, we affirm the jury’s verdict for this conviction and for the conviction for disorderly conduct, but reverse as to the assault conviction.

JUSTICES GRAY, HUNT and TRIEWEILER concur.

JUSTICE WEBER,

dissenting:

I respectfully dissent from the majority’s reversal of the misdemeanor assault conviction. The record contains substantial evidence to support the conviction for misdemeanor assault.

In substance § 45-5-201(l)(d), MCA, provides that a person commits the offense of assault if he purposely or knowingly causes reasonable apprehension of bodily injury in another person. While the majority concedes that Mr. Underwood was apprehensive of bodily injury, it concludes such apprehension was not reasonable and so reverses the assault conviction.

We agree with the standard of review cited in the majority opinion: a conviction cannot be overturned if evidence, when viewed in a light most favorable to the prosecution, would allow any rational trier of fact to find essential elements of the crime beyond a reasonable doubt. State v. Laverdure (1990), 241 Mont. 135, 785 P.2d 718. That case emphasizes that the weight of the evidence and the credibility of witnesses are exclusively to be determined by the jury.

The majority isolates portions of the testimony instead of considering the totality of the circumstances presented by the evidence. During the first encounter on the road, while there was no threat of bodily injury to Mr. Underwood, the defendant was shouting and screaming filthy names at him and stopped only when Mr. Underwood’s four-year old son appeared. The second occurrence took place a few days later when Mr. Wood told Mr. Underwood that the defendant had relayed the information that the defendant was going to shoot Underwood if he “messed with him.” Wood testified the defendant was serious, that he was red in the face, excited, and screaming. Mr. Underwood testified he took the threat seriously. Mr. Wood testified that Mr. Underwood was scared at the time he conveyed the message to him. The third incident took place a few days later at the Ferndale Market. At that time the defendant started screaming again and calling Mr. Underwood names. He told Mr. Underwood that if the boy hadn’t been there, he would have shot him on the road. Mr. Matitus, who was with Mr. Underwood in the store, testified that the defendant was upset, red in the face and yelling bad words. Mr. Matitus further testified that Mr. Underwood was nervous, scared and upset by what the defendant said. Mr. Underwood testified that he took the defendant’s threats seriously and believed he meant to do him bodily harm.

The majority has concluded that the apprehension of bodily harm was not reasonable. I suggest that this disregards the testimony of Mr. Wood and Mr. Matitus who both observed that Mr. Underwood was scared. The totality of the circumstances suggests there was a basis for apprehension of bodily harm on the part of Mr. Underwood.

The majority emphasizes the aspect of “messing with” in its review of the testimony of Mr. Wood. It ignores testimony of the same Mr. Wood who observed the apprehension on the part of Mr. Underwood.

Had the jury viewed the evidence in the same manner as the majority does in its opinion, I would be constrained to agree that there was sufficient evidence to support that conclusion. However, in this instance the jury, not the majority, was the trier of fact. I conclude there was clearly sufficient evidence, when viewed in the light most favorable to the prosecution, to allow the jury to find defendant caused reasonable apprehension of bodily injury in Mr. Underwood.

I would affirm the conviction for misdemeanor assault.

CHIEF JUSTICE TURNAGE and JUSTICE McDONOUGH concur in the foregoing dissent.


text:
    CAROL A. HASH, Petitioner and Appellant, v. MONTANA SILVERSMITH, Employer, and STATE COMPENSATION MUTUAL INSURANCE FUND, Insurer/Defendant and Respondent.
    No. 90-462.
    Submitted on briefs Jan. 24, 1991.
    Decided Apr. 22, 1991.
    Rehearing Denied May 24, 1991.
    248 Mont. 155.
    810 P.2d 1174.

      Denise Ackerman, Lloyd E. Hartford, Billings, for petitioner and appellant.
    Richard E. Bach, State Compensation Mut. Ins. Fund, Helena, for insurer/defendant and respondent.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

Carol Hash appeals from a judgment of the Workers’ Compensation Court, which held she failed to establish that she suffered a compensable back injury. The insurer, State Compensation Mutual Insurance Fund, has cross appealed the Workers’ Compensation Court’s judgment which held that Mrs. Hash suffered a compensable injury to her hands. We affirm.

The only issues we find necessary for review are:

1. Whether the Workers’ Compensation Court’s decision that Carol Hash failed to prove she suffered a compensable back injury is supported by substantial evidence;
2. Whether the Workers’ Compensation Court’s decision that Carol Hash suffered a compensable hand injury is supported by substantial evidence.

At the time of trial, Carol Hash (claimant) was fifty years old. She had worked for Montana Silversmith since 1981. Apparently she worked in the “buckle department” on a full time basis until she terminated her employment on April 24, 1987.

In 1985, claimant began having problems with her hands. In response to these problems, she sought medical attention from Dr. Phillip Griffin, a Billings rheumatologist. Dr. Griffin noted the formation of Heberden nodes in the claimant’s fingers and concluded that the pain in her hands was caused by degenerative or primary osteoarthritis. According to Dr. Griffin, osteoarthritis is a disease of unknown cause or origin. During his deposition, he testified that the claimant’s work activities could aggravate her condition. However, this aggravation would be temporary in character. Once the work activity ceased, the aggravation would cease as well. In his opinion, no permanent damage would result from claimant’s job related activities.

In December 1986 claimant saw Dr. Dernbach and complained about back pain, which was hurting to the point that she had numbness in her right leg. Eventually, she was referred to Dr. James Johnson who diagnosed her back condition as spondylolisthesis or spondylolysis. He prescribed physical therapy for her back. Dr. Johnson did not recall making any inquiry as to the nature of claimant’s work and consequently did not have an opinion as to whether her condition was related to her employment. However, he did state his belief that her back condition was a congenital problem.

In early 1987, claimant informed her immediate supervisor that her job was aggravating her back and hands. On April 15, 1987, claimant informed her employer that she was going to file a claim for compensation on her back. Eventually the claimant terminated her employment due to ongoing problems with her back and hands.

As a result of claimant’s filing for benefits, respondent, the State Fund, sent her to Dr. Susan English. Dr. English diagnosed osteoarthritis of the hands and spondylolisthesis of her back. In Dr. English’s opinion the hand and back problems were not related. Based upon her examination of the claimant, Dr. English concluded that the claimant’s job duties did not cause the osteoarthritis. She believed that claimant’s work would, at the most, temporarily aggravate claimant’s hand condition and that the work would not produce any permanent effect. During her deposition, Dr. English testified that the claimant would have the same osteoarthritis problems regardless of her employment. It is “medically possible” however that micro trauma, associated with claimant’s job could aggravate her osteoarthritis.

Initially, the State Fund agreed to accept liability for Mrs. Hash’s claim as an occupational disease. The State Fund agreed to pay disability benefits until an occupational disease panel evaluation could be performed to determine what percentage of claimant’s osteoarthritis was caused or contributed to by her employment. The panel evaluation was performed by Dr. William Shaw on June 19, 1989. Based upon this evaluation, Dr. Shaw concluded that claimant’s disability was unrelated to occupational causes. As a result, claimant’s benefits were terminated on September 11, 1989.

Claimant then filed a petition for a hearing before the Workers’ Compensation Court. Following trial, before hearings examiner Robert J. Campbell, the Workers’ Compensation Court found that claimant suffered a compensable injury to her hands. However, it found that she did not suffer a compensable injury to her back. The court could not determine, from the evidence presented, the nature and extent of her permanent disability. It therefore ordered her to file a new petition “with evidence of maximum healing and an election of permanent partial entitlement supported by appropriate evidence.” This appeal followed.

Our function in reviewing a decision of the Workers’ Compensation Court is to determine whether there is substantial evidence to support the findings and conclusions of that court. We cannot substitute our judgment for that of the trial court as to the weight of evidence or questions of fact. Steffes v. 93 Leasing Co. Inc. (1978), 177 Mont. 83, 580 P.2d 450. However, decisions of the Workers’ Compensation Court must be based upon substantial credible evidence. O’Brien v. Guaranty Fund Services (1990), 241 Mont. 267, 786 P.2d 1169. If the conclusions of law are not supported by the court’s findings of fact, those conclusions must be reversed. Hume v. St. Regis Paper Co. (1980), 187 Mont. 53, 608 P.2d 1063.

In accordance with this standard of review, the claimant argues that she established that she suffered a compensable injury to her back and that this Court should reverse the conclusions of the Workers’ Compensation Court. Claimant correctly points out that an employer takes an employee the way he finds him. An employee who suffers from a preexisting condition is entitled to compensation if the condition was aggravated or accelerated by an industrial injury. Shepherd v. Midland Foods Inc. (1983), 205 Mont. 146, 666 P.2d 758.

However, before a worker is entitled to Workers’ Compensation benefits, she must establish by a preponderance of evidence that an “injury” in fact occurred. Dumont v. Wickens Bros. Const. Co. (1979), 183 Mont. 190, 598 P.2d 1099. For the purposes of this case, injury is defined as

“a tangible happening of a traumatic nature from an unexpected cause or unusual strain resulting in either external or internal harm and such physical condition as a result therefrom and excluding disease not traceable to injury ...” Section 39-71-119, MCA (1985).

The claimant argues that she suffered an injury to her back, as defined by the above statute. She maintains that her back problems were a preexisting condition which was exacerbated by her employment. Eventually, her back condition became so bad she was forced to quit. In making this argument, claimant relies upon Shepherd v. Midland Foods Inc. (1983), 205 Mont. 146, 666 P.2d 758 and Hoehne v. Granite Lumber Co. (1980), 189 Mont. 221, 615 P.2d 863.

In Shepherd, the claimant suffered from degenerative arthritis in his knees. This preexisting condition was aggravated by the heavy work requirements of his job. Eventually, the claimant’s knees collapsed and he was forced to quit work. The Workers’ Compensation Court held he was ineligible for future benefits because he could not show that his condition was work related. On appeal, we reversed and held that uncontested medical evidence supported the conclusion that Mr. Shepherd’s work related activities accelerated the arthritic condition of his knees and led to their eventual breakdown. Shepherd, 666 P.2d at 763.

In Hoehne, this Court recognized that a “tangible happening of a traumatic nature” need not be a single isolated incident, but may well be a “chain of incidents” leading to an injury. In Hoehne, the claimant’s injury resulted from his job which required him to stack lumber on a daily basis. Eventually, this activity led to the development of carpal tunnel syndrome, which this Corut found to be an injury arising out of the claimant’s employment.

Neither of these cases are applicable to the facts surrounding Mrs. Hash’s back injury. In both cases, it was clear that the claimants’ conditions were caused by their work activity. In Shepherd, the medical evidence established that the claimant’s work aggravated his preexisting condition until his knees eventually broke down following a fall, which occurred at work. In Hoehne, the claimant established that the repetitive nature of his work directly led to the development of carpal tunnel syndrome. There was medical evidence to establish that Mrs. Hash suffered from a preexisting condition which was neither caused nor aggravated by her work.

All doctors agree that her back condition was a congenital defect which was not created by her employment. Because her spondylolysis is not traceable to any injury, the condition is not compensable and the judgment of the Workers’ Compensation Corut on this issue is affirmed.

The court did find, however, that claimant was entitled to compensation for her hands. The State Fund maintains that her hand condition, like that of her back, is not a compensable injury. It argues that the medical testimony illustrates that the osteoarthritis in claimant’s hands would have been no different had she not engaged in her employment with Montana Silversmith and that the Workers’ Compensation Court erred in awarding benefits. We disagree.

Both Dr. English and Dr. Griffin testified that it was possible that micro-trauma associated with Mrs. Hash’s work aggravated her underlying condition. Proof of medical possibility can be used in conjunction with other evidence to support a grant of workmen’s compensation benefits because of such aggravation. Viets v. Sweetgrass County (1978), 178 Mont. 337, 583 P.2d 1070.

It is uncontroverted that Mrs. Hash’s hand condition manifested itself while she was employed with Montana Silversmith. Eventually, the pain in her hands became so severe she was forced to quit work. The micro-trauma associated with her work combined with her underlying condition to produce her disability.

After trial and after reviewing the witness testimony, the Workers’ Compensation Court found that Mrs. Hash suffered a compensable injury to her hands. We cannot reverse this judgment unless there is no substantial evidence to support it. Taking all of the testimony as a whole, we hold that the judgment of the Workers’ Compensation Court is supported by substantial evidence. The finding of the court that Mrs. Hash suffered a compensable injury to her hands is therefore affirmed.

Finally, Mrs. Hash maintains that the Workers’ Compensation Court erred when it failed to determine the amount of permanent compensation benefits she was entitled to. We have reviewed the pretrial order in this matter and it is apparent that the issue of permanent benefits was not submitted to the court for resolution during trial. Therefore it would have been inappropriate for the Workers’ Compensation Court to decide this matter. In order to determine the extent of her entitlement, Mrs. Hash must submit appropriate evidence to determine the nature and extent of her permanent disability rating. The judgment of the Workers’ Compensation Court, on this issue, is affirmed.

CHIEF JUSTICE TURNAGE and JUSTICES TRIEWEILER, HUNT and WEBER concur.


text:
    JAMES GREG HIGGINBOTHAM, Claimant and Appellant, v. STOLTZE-CONNOR LUMBER CO., Employer/Insurer and Respondent.
    No. 90-077.
    Submitted Feb. 7, 1991.
    Decided Apr. 23, 1991.
    248 Mont. 161.
    810 P.2d 295.
    Janice S. VanRiper, Helena, for claimant and appellant.
    Bradley J. Luck, Missoula and Todd A. Hammer, Kalispell, for employer/insurer and respondent.
    Monte Beck, Bozeman, for amicus curiae.
   JUSTICE WEBER

delivered the Opinion of the court.

The Workers’ Compensation Court denied rehabilitation benefits under § 39-71-1023, MCA (1987), to James Greg Higginbotham, claimant. Claimant appeals, contending that he was entitled to rehabilitation benefits during the course of the review procedure provided by statute. We reverse.

The principal issue is whether, under § 39-71-1023, MCA (1987), an insurer must pay total rehabilitation benefits to a worker during the review by the rehabilitation panel and the Department.

On September 14, 1987, claimant injured his back in a compensable work-related injury. Liability was accepted by Stoltze-Connor Lumber Co., his self-insured employer, herein referred to as insurer. In December 1987, claimant underwent a laminectomy and required subsequent surgical intervention. Claimant’s physician concluded that claimant had reached maximum healing on September 16,1988, and gave him a permanent impairment rating of 10 percent of the whole man.

The Insurer notified the Division of Workers’ Compensation that it had chosen Crawford Rehabilitation Services (Crawford) as its designated rehabilitation provider on March 17,1989. The rehabilitation counselor selected by Crawford prepared a rehabilitation evaluation report in which he determined that claimant could not return to the j ob he held at the time of injury, but that claimant’s age, education, work experience, and physical condition made him vocationally capable of entering the job market without retraining as a surveyor’s assistant or electronics technician. Claimant did not return to work in any capacity.

As a result of the determination that claimant had reached medical stability and was released to return to the open labor market by his treating physician, the insurer reduced his benefits from temporary total disability benefits to permanent partial disability benefits. Claimant’s permanent partial disability benefits were equal to one-half of his temporary total disability benefits.

Claimant wrote the Division stating that he thought the reduced benefits were inadequate, that he was not qualified for return to work in the options designated by the rehabilitation counselor, that he was not guaranteed future gainful employment, and that he desired to be retrained. Claimant argued that he was entitled to have a rehabilitation panel review the determination and requested a contested case hearing.

In the contested case hearing, the hearing examiner for the Department of Labor and Industry described the issue as:

“The issue to be determined is whether the return to work options identified by Claimant’s rehabilitation counselor are appropriate, and whether he is entitled to total compensation benefits.”

The hearing examiner concluded that the mandatory rehabilitation process had not been followed, that the statutes mandated a rehabilitation panel review and a Department determination prior to termination of total rehabilitation benefits, and, ordered the payment of total rehabilitation benefits to the claimant pending the completion of that review.

Upon appeal, the Workers’ Compensation Court affirmed the determination that the review procedure by the rehabilitation panel and the Department was required under § 39-71-1015(3), MCA (1987). The court reversed the order which required payment of total rehabilitation benefits, and in part stated:

‘We find nothing in any section of the rehabilitation provisions which imposes on an insurer any total disability or total rehabilitation benefit liability once maximum healing is reached and a job market is identified for a claimant by a designated rehabilitation provider. The only risk to an insurer under these circumstances is that, on appeal or at a hearing, the labor market or jobs identified by the rehabilitation provider are found to be in error. Unfortunately for a disabled worker, that requires proof which can only be obtained at additional expense, which if claimant is receiving no benefits will be difficult to obtain.

“Unfortunately, the result is that the Hearing Examiner abused his discretion, and indeed established a nonexistent standard to transform ‘eligibility’ to ‘entitlement’ for purposes of benefit payments... We reverse that portion of the Order directing the payment of total rehabilitation benefits because the Hearing Examiner abused his discretion and erred as a matter of law, given the evidence presented at the hearing.”

The claimant appeals from that order.

I.

The Vocational Rehabilitation Provisions of the Workers’ Compensation Act were substantially revised in 1987. A review of those sections pertinent to this case follows.

Under § 39-71-1011, MCA (1987), a disabled worker is defined as follows:

“(2) ‘Disabled worker’ means one who has a medically determined restriction resulting from a work-related injury that precludes the worker from returning to the work the worker held at the time of the injury.”

Both parties agree that claimant meets this statutory definition of a “disabled worker.”

Section 39-71-1012, MCA, sets forth the rehabilitation goal and options:

“(1) The goal of rehabilitation services is to return a disabled worker to work, with a minimum of retraining, as soon as possible after an injury occurs.
“(2) The first appropriate option among the following must be chosen for the worker:
“(a) return to the same position;
“(b) return to a modified position;
“(c) return to a related occupation suited to the claimant’s education and marketable skills;
“(d) on-the-job training;
“(e) short-term retraining program (less than 24 months);
“(f) long-term retraining program (48 months maximum); or “(g) self-employment.
“(3) Whenever possible, employment in a worker’s local job pool must be considered and selected prior to consideration of employment in a worker’s statewide job pool.”

This section emphasizes that a minimum of retraining is desired, with the primary aim being the return of the disabled worker to work as soon as possible. It also allows consideration of employment in a statewide pool as well as a local job pool.

Section 39-71-1014, MCA, in pertinent part states:

“(1) Rehabilitation services are required for disabled workers and may be initiated by:
“(a) an insurer by designating a rehabilitation provider and notifying the division;

In this case, the insurer notified the Division of its choice of a rehabilitation provider on March 17, 1989, 6 months after claimant reached maximum healing.

Section 39-71-1015, MCA, with regard to evaluation and return to work provides:

“(1) If a disabled worker is capable of returning to work, the designated rehabilitation provider shall evaluate and determine the retum-to-work capabilities of the disabled worker pursuant to 39-71-1012(2)(a) through (2)(d).
“(3) If the worker has not returned to work as provided in subsection (2), the insurer shall notify the division. The division shall then designate a rehabilitation panel as provided in 39-71-1016 and refer the worker to the panel.”

Here, the insurer concluded that the claimant was capable of returning to work. However, claimant did not return to work and the insurer was required to notify the Department.

Section 39-71-1016, MCA, provides the following with regard to rehabilitation panels:

“(1) The division shall designate and administer rehabilitation panels. The pin-pose of a panel is to advise the division on a worker’s eligibility for rehabilitation services. Each panel shall issue to the division a report as provided in 39-71-1017.”

Section 39-71-1017 requires panel review and a report, stating:

“(1) The rehabilitation panel shall:
“(a) review all records, statements, and other pertinent information; and
“(b) prepare a report to the division with copies to the insurer and worker.
“(2) The report must:
“(a) identify the first appropriate rehabilitation option by following the priorities set forth in 39-71-1012; ...

The procedure required under § 1017 was not followed in the present case. The rehabilitation panel did not complete its report to the Department.

Section 39-71-1018 requires the Department to make its order of determination, stating:

“(1) The division shall issue an initial order of determination within 10 working days of receipt of a report from a rehabilitation panel.
“(2) Within 10 working days from the date the initial order of determination is mailed, a party may submit a written exception to the order. On its own motion or at the request of any party, the division shall conduct a hearing. The division shall issue a final order of determination within 20 working days of the hearing.
“(4) Within 10 working days after the date of mailing of the division’s final order of determination, an appeal may be taken to the workers’ compensation court.”

None of the foregoing was followed. The Department did not conduct a hearing or issue its order of determination based upon the rehabilitation panel report.

Akey provision on the issue before us is § 39-71-1023, MCA, which provides for total rehabilitation benefits during various periods and states:

“(1) A worker who no longer is temporarily totally disabled but meets the definition of a disabled worker may be eligible for total rehabilitation benefits.
“(2) Eligibility for total rehabilitation benefits begins on the date of maximum healing or the date notice is given to the division by the insurer that a rehabilitation provider has been designated, whichever is later.
“(3) Benefits must be paid at the disabled worker’s temporary total disability rate for a period not exceeding 26 weeks from the date of eligibility, except that the division may extend the period for good cause...
“(4) Total rehabilitation benefits under this section terminate when:
“(a) a worker returns to work;
“(b) a worker is qualified to return to work under the priorities in 39-71-1012 pursuant to a division order; or
“(c) an I.W.R.P. is submitted to the department by the department of social and rehabilitation services.”

II.

Under § 39-71-1023, MCA (1987), must an insurer pay total rehabilitation benefits to a worker during the review by the rehabilitation panel and the Department?

Claimant contends that as he was a disabled worker who had not returned to work, the insurer was required to notify the Department, the Department was required to designate a rehabilitation panel, the panel was required to meet and make its report, and ultimately the Department was required to issue its final order of determination.

Claimant contends that under § 39-71-1023, MCA (1987), he should have received total rehabilitation benefits (equal in amount to his temporary total disability benefits) from the date of his maximum healing until the completion of the rehabilitation review procedure. He therefore contends it was improper to give him permanent partial disability benefits from the date of maximum healing.

The insurer contends that under Coles v. Seven Eleven Stores (1985), 217 Mont. 343, 704 P.2d 1048, an insurer is allowed to terminate benefits prior to completion of the mandatory rehabilitation procedure. The insurer contends that not all workers are entitled to receive total rehabilitation benefits under § 39-71-1023, MCA (1987).

The amicus curiae points out that it takes several months for the rehabilitation provider to complete an assessment and several more months to complete the rehabilitation review. Amicus contends that instead of receiving his permanent disability award of $149.50 per week from the date of maximum healing, claimant was entitled to total rehabilitation benefits of $299 per week under § 39-71-1023, MCA (1987).

On September 16,1988, claimant was no longer temporarily totally disabled and was therefore ineligible for temporary total disability benefits. However, claimant then did meet the definition of a disabled worker and became eligible for total rehabilitation benefits. We conclude that under § 39-71-1023, MCA (1987), claimant became eligible for total rehabilitation benefits on September 16,1988, as he had not returned to work. Under the provisions of that statute claimant was entitled to a continuation of total rehabilitation benefits until he received a decision from the Department regarding his potential for rehabilitation. No such decision was ever rendered. Under the statutory provisions, after the insurer gave notice to the Department that Crawford had been designated as its rehabilitation provider, claimant was entitled to total rehabilitation benefits for a period not to exceed 26 weeks, unless extended by the Department. All of the foregoing is required under § 39-71-1023, MCA (1987), which also provides that the total rehabilitation benefits must be paid at the disabled worker’s temporary total disability rate.

We conclude that claimant was denied the rehabilitation procedure required under the foregoing statutes. He did not receive a rehabilitation panel report or a Department order of determination. He did not receive the opportunity to have a hearing before the Department’s final order of determination on the issue of rehabilitation. We hold that claimant is entitled to total rehabilitation benefits at the rate of $299 per week from September 16,1988, to the date of remand of this opinion. We further hold that the permanent partial disability benefits which have been paid to claimant since September 16,1988, shall be reclassified as a partial payment of his total rehabilitation benefits, so that the insurer will be required to pay $149.50 from September 16,1988, to the date of remand, to the claimant in a lump sum as the balance due of total rehabilitation benefits.

We further hold that the date of remand shall constitute the date notice is given to the Department by the insurer that a rehabilitation provider has been designated under the foregoing statutes, so that additional total rehabilitation benefits shall be paid from that date as provided under the statutes for a period not to exceed 26 weeks unless otherwise extended by the Department under the statutory provisions. From the date of remand the statutory procedures in the rehabilitation sections shall be followed.

We reverse the Workers’ Compensation Court’s order with regard to total rehabilitation benefits, and hold that claimant is entitled to total rehabilitation benefits as previously described and that claimant also is entitled to the rehabilitation panel review and Departmental review provided in the statutes.

Because of our holdings with regard to total rehabilitation benefits, we do not find it necessary to address the issue of unconstitutionality raised by the claimant.

CHIEF JUSTICE TURNAGE and JUSTICES BARZ, HUNT, TRIEWEILER, McDONOUGH and HARRISON concur.