Submitted: November 16, 1993
MICHAEL G. EISELEIN ATTORNEY AT LAW
BEHALF OF THE PETITIONER MR. MICHAEL P. HERINGER ATTORNEY AT
LAW MS. SUSAN C. WITTE ATTORNEY AT LAW
BEHALF OF THE DEFENDANT MR. IRA D. EAKIN ATTORNEY AT LAW ON
BEHALF OF THE EMPLOYER
ORDER ADOPTING FINDINGS OF FACT AND CONCLUSIONS OF
LAW OF HEARING EXAMINER AND ENTERING JUDGMENT
J. CAMPBELL Presiding Hearing Examiner
above-entitled matter was duly heard by Court-appointed
Hearing Examiner, ROBERT J. CAMPBELL who conducted the
hearing, considered the evidence and prepared and submitted
Findings of Fact and Conclusions of Law and Proposed Judgment
for consideration by the Court.
Court has reviewed the record of the proceedings. The record
clearly supports the conclusion of the hearing examiner that
petitioner is entitled to benefits and was not guilty of
fraud. Carolyn Becker's inconsistent stories, bias, and
fabricated story of a conversation with a deceased individual
were fatal to the fraud allegations against petitioner.
Court also agrees with the hearing examiner's conclusion
that petitioner is not entitled to a penalty or attorney
fees. However, additional discussion of that matter is
petitioner's industrial accident occurred on October 25,
1990. Thus, the 1989 workers' compensation laws apply to
his request for a penalty and attorney fees. Section
39-71-2907(1), MCA (1989) provided in relevant part:
payment of compensation has been unreasonably
delayed or refused by an insurer . . . the order granting a
claimant compensation benefits may be increased by the
workers' compensation judge by 20%. [Emphasis added.]
39-71-611, MCA (1989) governs the award of any attorney fee,
and provided in relevant part:
(1) The insurer shall pay reasonable costs and attorney fees
as established by the workers' compensation court if:
(a) the insurer denies liability for a claim for compensation
or terminates compensation benefits;
(b) the claim is later adjudged compensable by the
workers' compensation court; and
(c) in the case of attorneys' fees, the
workers' compensation court determines that the
insurer's actions in denying liability or
terminating benefits were unreasonable. [Emphasis
neither a penalty nor attorney fees are automatically awarded
merely because a claimant prevails at trial. They are to be
awarded only where the actions of the insurer were
imposition of a penalty is inappropriate where there is a
legitimate factual or legal dispute concerning benefits under
the Workers' Compensation Act. See Garmann v. E.R.
Fegert Co., 226 Mont. 432, 437, 736 P.2d 123 (1987);
Hengel v. Pacific Hide & Fur Depot, 224 Mont.
525, 530, 730 P.2d 1163 (1986). The penalty provided by the
Act was not "intended to eliminate the right of the
insurer to assert a legitimate defense." Van Daveer
v. Stauffer Chemical Co., 200 Mont. 218, 225,
657 P.2d 1142 (1982). Since the attorney fee statute adopts a
similar "unreasonableness" standard, these
principles apply as well to any award of attorney fees.
reasonableness of the State Fund's termination of
petitioner's benefits must be judged in light of what it
knew at the time of the termination and during the period
leading up to trial. The first fact of consequence was the
report of petitioner's ex-wife that petitioner was not
injured at work, and her willingness to testify under oath at
any trial. Her possible bias against her ex-husband did not
render her either incompetent to testify or incredible. As a
general matter, a witness is competent to testify unless
"he is incapable of expressing himself or is incapable
of understanding the duty to tell the truth." State
v. Van Dyken, 242 Mont. 415, 435, 791 P.2d 1350 (1990).
Even a convicted perjurer is a competent witness. State
v. Barick, 143 Mont. 273, 284, 389 P.2d 170 (1964).
Finally, the testimony of a single witness, if believed by
the fact finder, is sufficient to sustain a verdict,
State v. Azure, 181 Mont. 47, 55, 591 P.2d 1125
(1979), irrespective of the witness' bias, Anas v.
State, 726 P.2d 552 (Alaska Ct. App. 1986). Prosecutors
in criminal cases often rely on individuals with checkered
backgrounds and obvious bias. Lacking some obvious and
overwhelming flaw in the evidence provided by Carolyn Becker
(petitioner's ex-wife) it was not unreasonable for the
State Fund to rely on her information.
other information known by the State Fund provided some
corroboration for Mrs. Becker's claim that her ex-husband
did not suffer a job-related injury. The workers'
insurance policy covering the accident became effective the
same day as the injury. The employer was the petitioner's
father and previously was without workers' compensation
insurance coverage. The State Fund was aware of these
circumstance at the time it accepted petitioner's claim,
and it apparently raised some suspicion about the claim.
However, it does not appear that the State Fund at that time
had additional information which would support anything more
than a suspicion. Carolyn Becker's coming forward,
however, changed that.
State Fund was also aware that a professional criminal
investigator from the Montana Department of Justice had
conducted an investigation. Bill Visser, who made the
decision to cut off benefits, had discussed the case with one
of the investigators, who confirmed Carolyn Becker's
willingness to testify. There is nothing to indicate that
Visser was told by the investigators that Becker was not
credible. In summary, the State Fund had a reasonable albeit
imperfect basis for believing that petitioner was not injured
on-the-job and was therefore not entitled to benefits. While
it might be criticized for not seeking Court permission to
cut off benefits, there is nothing in the statutes which
required it to do so. The statutes make no distinction
between a denial of benefits in the first instance or a later
termination. The same "reasonableness"
considerations applicable to an initial denial of benefits
therefore apply to an insurer's unilateral decision to
case, however, should serve as a caution to the State Fund
and other insurers. Not every accusation of fraud is true,
and some accusations, while true, may not be provable. Care
should be exercised in evaluating all such accusations and,
like prosecutors, insurers should evaluate all evidence
available to them, conduct further investigation where needed
and use good judgment in determining which cases warrant
action. While the evidence in this case did not show that the
State Fund acted unreasonably, requests for penalties and
attorney fees in future failed cases will have to be
evaluated according to their own facts. There may even be
circumstances where the existence of an accuser willing to
testify against the claimant may not be a sufficient basis to
either deny benefits or avoid imposition of a penalty and
considered the record in the above-captioned matter,
considered the Findings of Fact and Conclusions of Law and
Proposed Judgment of the Hearing Examiner, the Court hereby
makes and enters the following Order and Judgment.
HEREBY ORDERED the Findings of Fact and Conclusions of Law
and Proposed Judgment of the Hearing Examiner are adopted.
FURTHER ORDERED the Judgment is to be entered as follows:
Court has jurisdiction over this matter pursuant to section
preponderance of the credible evidence supports the
conclusion that claimant suffered an industrial injury on
October 25, 1990, arising out of the course and scope of his
employment with Stanford K. Stevens.
Court cannot decide the issue of whether claimant has been
working at his "job of injury" since his injury.
evidence presented does not justify the termination of
claimant's compensation benefits on April 22, 1993 and he
is entitled to such benefits retroactive to the date of
Claimant is not entitled to a 20 percent penalty for
unreasonable refusal to provide benefits pursuant to section
Claimant is not entitled to attorney fees pursuant to section
39-71-611, MCA, in accordance with ARM 24.5.343, but is
entitled to reasonable costs.
Defendant made reasonable inquiry into allegations contained
in defendants pleadings.
Defendant is not entitled to reimbursements for benefits paid
or attorney fees and costs from either the claimant or the
JUDGMENT herein is certified as final for purposes of appeal
pursuant to ARM 24.5.348.
party to this dispute may have 20 days in which to request a
rehearing from this Order Adopting Findings of Fact and
Conclusions of Law and Proposed ...