FINDINGS OF FACT, CONCLUSIONS OF LAW AND
trial in this matter was held on February 15, 1994, in
Helena, Montana, the Honorable Mike McCarter, Judge of the
Workers' Compensation Court, presiding. Petitioner,
Jerrold Lundberg (claimant), was present and represented by
Mr. Norman H. Grosfield. Respondent, Liberty Northwest
Insurance Co. (Liberty), was represented by Mr. Michael C.
Prezeau. Claimant, Gerald Parker, Todd Johnson and Burt
Lillis testified at trial. The depositions of Jerrold
Lundberg and Gerald Parker were accepted for consideration by
the Court. Claimant's objection to the depositions was
overruled. ARM 24.5.322. Exhibits 1 through 6 were admitted
into evidence by stipulation.
considered the Pretrial Order, the testimony presented at
trial, the demeanor and credibility of the witnesses, the
depositions and exhibits, and the arguments of the parties,
the Court makes the following:
Claimant is 60 years old and married. He has lived in
Lincoln, Montana for many years.
Claimant worked for the United States Forest Service (Forest
Service) from April 1968 until he retired in December of
1985, which is approximately 18 years. He worked in a number
of positions, including tree planter, timber cruiser, log
scaler, and, finally, sales administrator for the Lincoln
District of the Helena National Forest.
district sales administrator, claimant was responsible for
laying out timber sales, mapping out roads and timber sale
boundaries, and enforcing timber sale contracts for the
Forest Service. As a result of his Forest Service experience,
claimant is familiar with nearly every aspect of the logging
Within a year of his 1985 retirement, claimant and his son
formed a logging business called "Lundberg
Logging." Lundberg Logging contracted with private
landowners to cut timber, skid it out, and haul it to a mill.
Most of its work was for two ranches. Claimant also had a few
small contracts with Pyramid Mountain Lumber Co. (Pyramid),
and on one occasion he made a small timber purchase from the
Forest Service. Lundberg Logging also performed jobs piling
slash and constructing a road. It owned logging equipment
including a backhoe, logging truck, cat, and grader. It was a
dues paying member of the Montana Logging Association. It
maintained its own checking account, employer identification
number, and liability insurance. Finally, it maintained
workers' compensation insurance on its employees but
claimant elected not to cover himself.
1991 claimant bought out his son's interest in Lundberg
Logging. Thus, the business became a sole
proprietorship at that time.
Pyramid is in the business of buying and logging timber.
Pyramid contracts with others for the actual logging of the
timber it purchases.
Prior to July 1992 Lundberg Logging contracted with Pyramid
on several small slash piling and logging jobs.
July 6, 1992, Gerald Parker, Pyramid's timber resource
manager, contacted claimant and asked him if he was
interested in purchasing timber for Pyramid in the Lewistown
area. Parker knew claimant from claimant's work as sales
administrator in the Forest Service.
Pyramid utilizes both employees and contractual consultants
in locating and purchasing timber.
Parker gave claimant the option of working for Pyramid as a
company employee, but claimant said, "[N]o, I would
rather work by the day." Claimant denied that he was
given the option but the Court finds Parker more credible
regarding this conversation.
Claimant suggested, and Parker agreed, on a rate of $100.00
per day for claimant's work.
Claimant and Pyramid thereafter entered into a
"CONSULTATION AGREEMENT" (Ex. 3) on July 27, 1992.
Mr. Parker prepared the consultation agreement, which is set
forth as follows:
Agreement is made and entered into this 27th day of July,
1992, by and between Jerrold Lundberg (hereafter referred to
as consultant), whose address is P.O. Box 354, Lincoln,
Montana 59639, and Pyramid Mountain Lumber, Inc., whose
address is P.O. Box 549, Seeley Lake, Montana 59868.
1. Pyramid Mountain Lumber, Inc. hereby employs consultant on
an independent basis to perform consultation services as
follows: Procurement of timber stumpage and purchase logs for
Pyramid. Also some timber sale layout and administration.
Most work is expected to be in the Lewistown area and other
parts of Eastern Montana.
2. The term of this agreement shall commence on July 27, 1992
and shall terminate at any time, without cause, after first
giving two months written notice to the other party.
3. The agreed upon price for these consultation services
shall be as follows: Pyramid agrees to pay consultant at the
rate of $100.00 per day with a mileage allowance of
$.30/mile. Pyramid will furnish living quarters and phone in
Lewistown, Montana. Consultant will furnish all other
personal expenses. Business expenses such as motels, food and
phone calls will be paid by Pyramid when consultant is
working in areas over 100 miles from Lewistown. Itemized
expense records will be submitted to Pyramid at the end of
each month for these special expenses.
4. It is hereby understood that Consultant is an independent
consultant and not an agent or employee of Pyramid Mountain
5. Consultant shall conduct these consultation services
hereunder in an expedient, economical and workmanlike manner.
The special written products involved in this consultation
service shall remain the exclusive ownership of Pyramid
Mountain Lumber, Inc., and specific products involving verbal
consultation which are unique to this firm and not standard
in most of the local industry shall remain in confidentiality
between the parties.
6. In the event of any suit, action or proceedings leading to
any rights, duties or liabilities arising hereunder, the
prevailing party shall be entitled to recover reasonable
attorney's fees and costs, including fees and costs
resulting from an appeal decision of a lower court.
7. The goal of this agreement is to purchase 5 MMBF of
stumpage a year for Pyramid. Consultant will report to
Pyramid's Resource Forester in Great Falls, Montana, who
will furnish him with maps, leads and other back-up
information necessary to meet the goal. Consultant will work
full time for the first 4 months out of Lewistown to get
established and then spend whatever time is necessary to
achieve or exceed the goal.
8. The provisions one (1) through eight (8) constitute the
entire agreement of the parties hereto, any modifications to
this agreement shall be in writing and signed by both
WITNESS WHEREOF, the parties hereto have executed this
consultation agreement as of the date first written above.
MOUNTAIN LUMBER, INC.
By: /s/ Gerald V. Parker
Title: Timber Manager
/s/ Jerrold Lundberg
(Ex. 3 at 4-5.)
Pyramid interpreted the contract as permitting it to
designate and change the area of claimant's work. Mr.
Q. [by Mr. Grosfield] Do you admit that you could have
changed that area or Pyramid could have changed the area
where it wanted Mr. Parker [sic] to work if it had wished to
A. [by Mr. Parker] Well, we would have asked him if he would
go somewhere else if we wished him to go and we had ...