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Davis v. Liberty Northwest Insurance Corp.

Court of Workers Compensation of Montana

September 6, 1994

THOMAS J. DAVIS Petitioner
v.
LIBERTY NORTHWEST INSURANCE CORPORATION Respondent/Insurer for PACK RIVER LUMBER COMPANY Employer.

          DECISION AND JUDGMENT

          MIKE McCARTER, JUDGE

         This controversy arises under the Occupational Disease Act, Title 39, ch. 72, MCA (OD Act). At issue is whether the apportionment requirement specified by section 39-72-706, MCA, applies to the payment of medical benefits under section 39-72-704, MCA. The petitioner herein, Thomas J. Davis (Davis), has been determined by the Department of Labor and Industry (DLI) to suffer from a disease which is fifteen percent (15%) occupationally related. The respondent and insurer, Liberty Northwest Insurance Corp. (Liberty), contends that it is therefore liable for only fifteen percent (15%) of Davis' medical expenses, and has refused to pay the other eighty-five percent (85%). Davis petitioned the Court for a determination that Liberty is liable for one hundred percent (100%) of medical expenses incurred with respect to his disease. He also seeks a penalty and attorney fees.

         The primary issue involves a matter of statutory interpretation. The factual predicate to the controversy has been provided by way of stipulated facts. Specifically, the parties have stipulated that the following facts may be considered true for the purposes of this case:

1. The Employment Relations Division ORDER dated May 19, 1993, found "the Department concludes FIFTEEN PERCENT (15%) of the claimant's DEGENERATIVE DISEASE arose out of and was contracted from their [sic] employment. Therefore, the claimant would be entitled to FIFTEEN PERCENT (15%) of their [sic] total disability benefits if they [sic] suffer a total wage loss as a direct result of the occupational disease. The claimant would also be entitled to medical and hospital expenses directly related to their [sic] occupational disease."
2. The Employment Relations Division ORDER OF DETERMINATION dated June 14, 1992 stated: "IT IS THEREFORE ORDERED the claimant is entitled to FIFTEEN PERCENT (15%) of their [sic] total disability benefits if they [sic] suffer a total wage loss as a result of the occupational disease. The claimant is also entitled to medical and hospital expenses directly related to their [sic] occupational disease . . . ."
3. At the time petitioner's occupational disease developed, the employer was enrolled under Compensation Plan No. 2 of the Workers' Compensation Act, and its insurer is Liberty Northwest Insurance Corporation.
4. The respondent agreed to pay 15% of the claimant's medical expenses directly related to his occupational disease and has refused to pay 100% of those same expenses.
5. The Department of Labor & Industry as interpreted MCA § 39-72-706 to apply only to the apportionment of wage loss benefits. While the respondent has agreed to submit this as an agreed fact, it believes the Department's interpretation is irrelevant.

(Stipulation filed January 20, 1994.) In addition the parties have supplied the Court with an exhibit containing the legislative history of the OD Act.

         In his proposed findings Mr. Davis refers to the date of injury as April 7, 1991, which would make the 1989 version of the OD Act applicable to his claim, Buckman v. Montana Deaconess Hospital, 224 Mont. 318, 730 P.2d 380 (1986). However, the date the claim arose is not a stipulated fact. Nonetheless, the failure to identify specific dates associated with the claim does not appear significant since the key sections at issue in this case -- sections 39-72-704 and 706, MCA -- have not been amended since 1989, and both parties are invoking the 1989 versions of the sections. Moreover, the 1989 amendments would not affect the result in this case. The 1989 amendment to section 39-72-704, MCA, merely substituted "the department" for "the division." 1989 Montana Laws, ch. 613, § 64. The amendment to section 39-72-706, MCA, added a new subsection (2), which pertains to apportionment in cases where a claimant is receiving social security disability benefits. 1989 Montana Laws, ch. 162, § 4. The last previous amendments to these sections were in 1981 and 1979. 1981 Montana Laws, ch. 21, § 9 (amending § 39-72-706, MCA) and 1979 Montana Laws, ch. 104, § 16 (amending § 39-72-704, MCA). Sections 39-72-701 and 703, MCA, which are also discussed by the parties, were last amended in 1981 and 1979 respectively. 1981 Montana Laws, ch. 21, § 8) and 1979 Montana Laws, ch. 104, §15. The current version of the OD Act is therefore used in this decision.

         Section 39-72-704, MCA provides:

Medical and hospital expenses. In addition to the compensation provided by this chapter, an employee who becomes either totally or partially disabled from an occupational disease is entitled to receive for treatment of the occupational disease, without limitation as to length of time or dollar amount, reasonable medical services, hospitalization, medicines, and other treatment approved by the department.

         On its face it does not require that medical expenses be apportioned based on any contribution to the disease by non-occupational factors.

         However, Liberty strenuously argues that a separate section of the Act, specifically section 39-72-706, MCA, requires such ...


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