JACK MURER, et al. Petitioner
MONTANA STATE COMPENSATION INSURANCE FUND, et al. Defendants BEVERLY HARDY, et al Intervenors.
v. State Compensation Ins. Fund, 283 Mont. 210, 942 P.2d 69
(1997) (No. 95-542)
FINAL DECISION AND JUDGMENT
Claimants receiving benefits challenged insurer's
interpretation of 1987 and 1989 statutes placing cap on
benefits. Claimants who settled their claims during pendency
of litigation argued that settlement did not bar receipt of
additional benefits. Claimants' attorneys sought common
fund fees. Additional issues raised regarding impairment
award and penalty.
Workers' Court interpreted statutes as noted in following
opinion, superceded by reversal of this issue in Murer v.
State Compensation Ins. Fund, 283 Mont. 210, 942 P.2d 69
(1997) (No. 95-542). Court's denial of common fund fees
also reversed in that decision. WCC held settlement
agreements barred additional benefits, affirmed on appeal.
Additional issues decided.
case was filed on June 25, 1992. Since that time it has twice
been to the Montana Supreme Court. Murer v. Montana State
Compensation Mut. Ins. Fund, 257 Mont. 434, 849 P.2d
1036 (1993) (Murer I) and Murer v. State
Compensation Mut. Ins. Fund, 267 Mont. 516, 885 P.2d 428
(1994) (Murer II). In the first appeal the Supreme
Court affirmed this Court's denial of petitioners'
request that their case be certified as a class action. In
the second appeal the Court held that the cap on benefits
which was imposed by the 1987 and 1989 legislatures was
temporary and does not apply to benefits payable after June
the second remittitur petitioners have renewed their request
for class certification. The request was denied. (Order
Denying Renewed Motion for Class Certification, April 5,
1995.) Petitioners' attorneys also moved for an award of
attorney fees against all benefits paid to claimants,
including claimants they do not represent, on account of the
precedent set in Murer II. The motion was denied.
(Order Denying Attorney Fees under Common Fund Doctrine,
August 7, 1995.) Now, and finally, pursuant to the Supreme
Court's directive in Murer II, the Court must
determine petitioners' entitlement to additional
benefits, attorney fees and costs against the insurer, and a
to 1987, the maximum amount of compensation benefits payable
to injured workers was tied to the average weekly wage of
Montana workers. Temporary total and permanent total
disability benefits were pegged at two-thirds of the injured
worker's actual wages, but could not exceed the average
weekly wage. § 39-71-701 and -702, MCA (1985). Permanent
partial disability benefits were similarly pegged at
two-thirds of the worker's actual wages, but could not
exceed one-half the State's average weekly wage. §
39-71-703, MCA (1985). As of July 1, 1986, Montana's
average weekly wage was $299.00. Thus, on that date the
maximum rate for temporary and permanent total disability
benefits was $299.00. For permanent partial disability it was
$149.50 (one-half of $299.00).
the legislature imposed an additional cap on benefits. For
temporary and permanent total disability benefits the
legislature provided that beginning July 1, 1987, through
June 30, 1989, the weekly compensation benefits for temporary
or permanent total disability may not exceed the State's
average weekly wage of $299.00 established July 1, 1986.
§ 39-71-701(5) and -702(6), MCA (1987) (enacted by 1987
Montana Laws, ch. 464, §§ 21 and 22). It similarly
capped permanent partial disability for the period July 1,
1987 through June 30, 1989, at "$149.50, which is
one-half the State's average weekly wage established July
1, 1986." § 39-71-703(3), MCA (1987) (enacted by
1987 Montana Laws, ch. 464, § 23). The 1989 legislature
extended the cap to June 30, 1991 by changing the June 30,
1989 expiration date specified in the sections to June 30,
1991. (1989 Montana Laws, Spec. Sess.1 ch. 9, §§
4-6). Both legislatures left intact the provisions setting
forth the traditional caps. §§ 39-71-701(3),
702(3), and 703(1), MCA (1987-89). Thus, the special caps
enacted by the 1987 and 1989 legislatures superseded the
traditional caps in the event the average weekly wage
increased after 1986.
average weekly wage indeed grew after 1986. For the fiscal
years (July 1 to June 30) 1987 through 1991, the applicable
average weekly wage was:
following chart shows the difference between the $299.00 cap
and the traditional caps:
differences for permanent partial disability are as follows:
on precedents which hold that the law in effect at the time
of the injury governs the benefits payable to the worker,
insurers interpreted the 1987-89 cap as applying to
all benefits payable for injuries occurring between
July 1, 1987 and June 30, 1991. Thus, they believed,
claimants injured between those dates were forever locked
into the $299.00 and $149.50 maximums. The petitioners, who
were injured between July 1, 1987 and June 30, 1991, and
earned more than the State's average weekly wage,
interpreted the 1987-89 cap as applying only to benefits
payable between July 1, 1987 and June 30, 1991, and not to
any benefits payable thereafter. As they interpreted the
freeze, the 1987-89 cap expired on July 1, 1991, thus their
benefits thereafter would be subject only to the traditional
Murer II the Supreme Court adopted the
petitioners' interpretation. The Court agreed that the
law in effect at the time of injury fixes benefits, but it
held that the 1987-89 cap was by its express terms a
temporary cap applicable only to benefits actually paid
between July 1, 1987 and June 30, 1991. It held that benefits
paid after July 1, 1991, were subject only to the traditional
cap. The Court remanded for a determination of additional
benefits due the petitioners.
original petition was commenced on behalf of nine named
petitioners and against two insurers. After remand,
petitioners Larry Mack and William Logan, as well as
respondent ASARCO, Incorporated, were dismissed pursuant to a
stipulation of parties. (Order Dismissing Asarco and Setting
Schedule, January 19, 1995.) The State Fund remains as the
remaining issues have been submitted upon stipulated facts
and documents. The parties filed an initial stipulation on
March 1, 1995, with attached documents designated A through
G. Stipulated Facts and Issues, Contentions and Contested
Issues (hereinafter "First Stipulation"). On July
13, 1995, they filed a Stipulation for Submission of Decision
(hereinafter "Second Stipulation") which contains
further stipulations of fact and issues. The Second
Stipulation also sets forth a list of additional agreed
exhibits. Some of the agreed exhibits were attached to
Claimants' Proposed Findings and Conclusions as Exhibits
P1 to P8 and SF16. The remaining exhibits were submitted
separately and designated as Defendant's Exhibits,
Exhibits SF1 through SF20. There is no overlap in the exhibit
numbers. Therefore, the original numbers will be used when
citing to the exhibits.
petitioners and the State Fund have agreed on some of the
issues which remain to be decided on remand, they disagree as
to others. Despite their quibbling, I have had no difficulty
in discerning what issues remain for determination. The
Supreme Court remanded the case "for a calculation of
benefits consistent with this opinion." 267 Mont. at
522, 885 P.2d at 432. My job is simply to determine what, if
any, additional benefits are due each of the petitioners as
the result of the Court's decision in Murer II.
Insofar as their entitlement to additional benefits is
affected by other unresolved issues, I must resolve those
additional issues as well.
reviewing the parties' stipulations, I have identified
two sub-issues. They are (1) whether settlement agreements
reached between some of the petitioners and the State Fund
during the pendency of this action bar the settling
petitioners from seeking additional benefits and (2) whether
the temporary cap for petitioners injured between July 1,
1987 and June 30, 1989, expired on July 1, 1989.
effect of the settlements.
the pendency of this action, four of the seven remaining
petitioners -- Brown, Prickett, Harbrige and Vernon --
entered into settlement agreements with the State Fund. All
of the agreements were negotiated by petitioners'
counsel. For the State Fund, either a claims adjuster or
in-house counsel was involved in the negotiations. Litigation
counsel for the State Fund were not involved.
settlement agreements executed by each of the four settling
petitioners are virtually identical. Each agreement was
executed on a form provided by the Department of Labor and
Industry. The caption reads:
PETITION FOR COMPROMISE AND RELEASE SETTLEMENT
(Permanent Partial Wage Supplement and/or Rehabilitation
Notwithstanding the parenthetical language to the caption,
the operative provisions of each of the agreements contains
the following language:
The parties to this matter have agreed to fully and finally
conclude all compensation and/or rehabilitation
payments due the claimant under the Workers' Compensation
Act, wherein the insurer shall pay to the claimant the sum of
. . . .
. . . .
The claimant hereby petitions the Division of Workers'
Compensation, with the concurrence of the above named
insurer, for approval of this petition and that the
claim be fully and finally closed on the basis
set forth above.
(Exs. B at 6, E at 5, F at 4 and G at 5; emphasis and
underlining added.) In each case, the Department of Labor and
Industry's order approving the settlement contained the
IT IS FURTHER ORDERED the claimant shall accept the above
amount as a compromise and release settlement and that, the
insurer is fully released and discharged from all further
obligations for compensation benefits for this injury
under the Workers' Compensation Act.
(Exs. B at 7, E at 6, F at 5 and G at 6; emphasis and
the settlement agreements were executed and approved after
this case was filed. Brown's settlement was negotiated in
August, 1992, and approved on October 5, 1992. (Ex. B at
5-7.) Prickett's settlement was executed on June 29, 1992
and approved on July 20, 1992. (Ex. E at 5-6.) Harbrige's
settlement was executed on June 29, 1992 and approved on July
21, 1992. (Ex. F at 4-5.) Vernon's settlement was
executed on December 7, 1993 and approved on January 3, 1994.
(Ex. G at 5-6.)
the agreements, the four settling petitioners claim
additional impairment benefits. Harbrige, in addition, seeks
additional temporary total disability benefits. The State
Fund contends that none of the four is entitled to additional
benefits because the agreements conclude its liability and
bar the petitioners from claiming any further benefits.
petitioners argue that the settlement agreements conclude
only their entitlement to wage loss and rehabilitation
benefits, and nothing else. Thus, they argue, the agreements
do not bar them from seeking additional impairment and
temporary total disability benefits.
concede that "some language in the body of the petition
standing alone could be construed as closing all
claims for all types of benefits . . . ."
(Claimants' Proposed Findings and Conclusions at 17;
underlining in original.) However, they argue that the
parenthetical statement below the title of the agreements,
along with section 39-71-741, MCA (1987-89), limit the scope
of the settlements to wage loss and rehabilitation benefits
compensation settlements are contracts and as such are
governed by the legal principles applicable to contracts.
Kienas v. Peterson, 191 Mont. 325, 328, 624 P.2d 1,
3 (1980). Thus, resolution of the opposing positions requires
an application of contract law.
general rule, contractual provisions which arguably conflict
with one another should be reconciled to the extent possible
in a manner which will give effect to the general intentions
of the parties. "Repugnant provisions should be
interpreted in a way to give them some effect, subordinate to
the general intent and purpose of the entire contract."
St. Paul Fire and Marine Ins. Co. v. Cumiskey, 204
Mont. 350, 363, 665 P.2d 223, 229 (1983). However, none of
the Montana cases which have stated this principle have
involved a conflict between the title or headings of a
contract and the operative provisions of the
contract. In each case the controversy was over alleged
conflicts between operative provisions in the contract.
St. Paul Fire, 204 Mont. at 360-61, 665 P.2d at
228-29, (ambiguity created by fixtures and
alterations clauses in a lease agreement); Riis v.
Day 188 Mont. 253, 257, 613 P.2d 696, 698 (1980) (Court
resolved apparently conflicting language in operative
provisions giving lessees an option to renew); Rumph v.
Dale Edwards, Inc., 183 Mont. 359, 369, 600 P.2d 163,
169 (1979) (provisions for the extension of a lease and
option to purchase were construed by looking at entire
agreement and without specific resort to the rule regarding
repugnant provisions); Montana-Dakota Utilities v. Lower
Yellowstone Rural Electric, 178 Mont. 427, 435, 585 P.2d
626, 630 (1978) (potentially ambiguous language in operative
provisions of utility contract were construed in manner
consistent with general intent of agreement); Brown v.
Griffin, 150 Mont. 498, 507, 436 P.2d 695, 699 (1968)
(operative provision regarding the furnishing of title
insurance was construed in context of a purchase and sale
not identified any Montana case which has addressed a
conflict between an operative provision of a contract and
non-operative language contained in the contract title,
contract headings, or contract recitals. However, we have
come upon other, albeit rather old, precedents which address
conflicts between contractual titles and operative
Sturm v. Boker, 150 U.S. 312 (1893), the United
State Supreme Court had to determine whether a particular
transaction was a bailment or a sale of goods. The agreement
of the parties was set out in an exchange of written
documents. Since the Court ultimately determined that the
contract was a bailment rather than sale, the parties will be
referred to as "bailor" and "bailee"
rather than seller and purchaser.
September 18, 1867, the bailor wrote a letter to the bailee
setting out its terms for the sale of certain weapons in
Mexico. An invoice listing the weapons for sale and the
dollar amounts upon which the sale was to be concluded
accompanied the letter. The terms provided for the bailee to
attempt to sell the weapons in Mexico and that any profit
exceeding the amounts specified in the invoice be split
between bailee and bailor. If unable to sell the weapons, the
bailee was to return them to the bailor. On September 26,
1867, the bailee sent a reply letter accepting "the
terms of said conditions of consignment." 150 U.S. at
316. In classical contract terms, the September 18, ...