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Miller v. Western Guaranty Fund Services

Court of Workers Compensation of Montana

July 29, 1996

LINDA MILLER Petitioner
v.
WESTERN GUARANTY FUND SERVICES Respondent/Insurer for MAURINE FRASURE d/b/a O'HAIRE MOTOR INN RESTAURANT Employer.

          Submitted: June 17, 1996

          FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT ON REMAND

          Mike McCarter JUDGE

         Summary: On remand from the Supreme Court (Miller v. Frasure, 264 Mont. 354, 871 P.2d 1302 (1994)), the WCC was required to calculate claimant's permanent partial disability rate and to address issues of attorneys fees and costs. Claimant elected to seek PPD benefits pursuant to section 39-71-703, MCA (1983), which provides lost earning capacity benefits. The parties agreed to assess earning capacity based on 1996 wages.

         Held: Claimant was released to work in several clerical positions, with the most reasonable prospect for her employment being as a receptionist. Based on the more persuasive vocational evidence and in light of claimant's actual experience as a waitress, the court finds claimant's time of injury wages translate into $10.00 an hour in 1996 dollars, while her post-injury earning capacity is $6.15 in 1996 dollars. Under section 39-71-703, MCA (1983), on a forty hour per week basis, claimant's weekly loss of earning capacity was $154.00, yielding a PPD rate of $102.67 ($154.00 x 2/3 = $102.67). Where this is less than one-half the state's average weekly wage at the time of injury, this is the applicable rate. Claimant's rate is higher during the first four weeks post MMI, because the prior decision found her not able to reach full-time employment until the fifth week. Costs and attorneys fees were found for the reasons stated in a separate order.

         Topics:

Constitutions, Statutes, Regulations and Rules: Montana Code Annotated: section 39-71-703, MCA (1983). Where claimant elected to seek PPD benefits pursuant to section 39-71-703, MCA (1983), which provides lost earning capacity benefits, and the parties agreed to assess earning capacity based on 1996 wages, the Court set the PPD rate by finding claimant's likely wage as a waitress in 1996 if not injured and subtracting her probable 1996 wage as a receptionist, the position the Court deemed most likely claimant could obtain and perform.
Benefits: Permanent Partial Benefits: Lost Earning Capacity. Where claimant elected to seek PPD benefits pursuant to section 39-71-703, MCA (1983), which provides lost earning capacity benefits, and the parties agreed to assess earning capacity based on 1996 wages, the Court set the PPD rate by finding claimant's likely wage as a waitress in 1996 if not injured and subtracting her probable 1996 wage as a receptionist, the position the Court deemed most likely claimant could obtain and perform.
Wages: Wage Loss. Where claimant elected to seek PPD benefits pursuant to section 39-71-703, MCA (1983), which provides lost earning capacity benefits, and the parties agreed to assess earning capacity based on 1996 wages, the Court set the PPD rate by finding claimant's likely wage as a waitress in 1996 if not injured and subtracting her probable 1996 wage as a receptionist, the position the Court deemed most likely claimant could obtain and perform.

         The trial in this matter was held on April 30, 1996, in Great Falls, Montana. Petitioner, Linda Miller (claimant), was present and represented by Mr. William O. Bronson. Respondent, Western Guaranty Fund Services (Western), was represented by Mr. K. Dale Schwanke.

         Exhibits: Exhibits 56, 65 and 66 were admitted by stipulation. Exhibit 60 was admitted over the objection of Mr. Bronson. Exhibits 53 through 55, 57 and 58, and 61 through 64 were refused. Exhibit 59 was taken under advisement. Exhibit 59 concerns attorney fees and prior offers of settlement. The exhibit is refused since the prior decision of this case determined that attorney fees are to be awarded pursuant to section 39-71-611, MCA (1983), and settlement offers are irrelevant under that section. (See further discussion in Conclusion 6.)

         Witnesses and Depositions: Petitioner, Peter F. Sesselman and Gerry B. Blackman testified at hearing. The parties also submitted various post-trial motions and briefs.

         Issues presented: This case is on remand from the Supreme Court (Miller v. Frasure, 264 Mont. 354, 871 P.2d 1302 (1994)) following its decision in Miller v. Frasure, WCC No. 9110-6271 (decided March 19, 1993). The case was "remanded for calculation of the permanent partial disability rate." Attorney fees and costs must also be determined since they were not part of the appeal and are matters reserved by this Court for determination following appeal. On remand this Court is limited to these issues and declines to reopen other matters already resolved by the prior decisions or to consider new issues.

         Having considered the Pre-trial Order, the testimony presented at trial, the demeanor and credibility of the witnesses, the exhibits, and the arguments of the parties, the Court makes the following:

         FINDINGS OF FACT

         1. This is a continuation of the proceeding in which my predecessor, Judge Timothy W. Reardon, entered Findings of Fact and Conclusions of Law and Judgment on March 19, 1993 ("1993 Findings") following a trial on February 26-27, 1992. The 1993 findings determined that claimant was not permanently totally disabled but was permanently partially disabled. However, the amount of claimant's permanent partial disability benefits was reserved for later determination because claimant had not elected whether to proceed under section 39-71-703 or 39-71-705 through 708, MCA (1983). The amount of attorney fees and costs was also reserved. Otherwise the 1993 Findings were certified as final for purposes of appeal. On appeal the Supreme Court reversed this Court's refusal to compel Western's adjuster to appear in Montana for his deposition but otherwise affirmed the 1993 Findings and remanded for a determination as to claimant's permanent partial disability rate. Therefore, the 1993 Findings are still applicable. A copy of the 1993 Findings is attached and will not be repeated here except for facts which specifically pertain to the remaining issues.

          2.Prior to her injury, claimant was earning $207.44 per week working full time. Her maximum possible permanent partial disability rate is $138.30 per week ($207.44 x = $138.30). §§ 39-71-703(1), -705(1), MCA (1983).

         3.Claimant has previously received an advance on permanent partial disability benefits in the amount of $750.

         4.Claimant was medically approved by Dr. Hinde in 1992 to return to work in several clerical positions available in the Great Falls area, including the positions of receptionist, nursing secretary, civil clerk, office clerk, and patient billing clerk. (1993 Findings at 11.) He recommended that she initially work four hours a day, increasing her hours of work to eight hours a day in two-hour increments every two weeks. (Id.) Under his recommendation claimant would have reached full-time employment in four weeks.[1]

         5.Vocational testimony at the 1992 trial established that the jobs approved by Dr. Hinde were readily available in Great Falls, where claimant lives, at starting wages between $5.00 and $6.89 per hour. (Id.) The testimony further established that claimant had a reasonable prospect of employment in those jobs. (Id.)

         6.However, claimant has never returned to remunerative employment since her injury.

         7.Claimant has elected permanent partial disability benefits under section 39-71-703, MCA (1984). (April 30, 1996 Pre-trial Order, Petitioner's Contention 2 at 4.) The parties have agreed to use 1996 comparative wage information for purposes of determining claimant's loss of earning capacity.

         8.Peter F. Sesselman, a certified rehabilitation counselor hired by the claimant to gather wage information for purposes of this case, surveyed several Great Falls restaurants and consulted a professional journal to determine the average wage earned by waitresses in 1996. Five of the six restaurants he contacted reported paying their waitresses $4.25 per hour plus tips. Waitresses at the sixth restaurant, Eddie's, were unionized and earned $4.70 per hour plus tips.

a. Bert & Ernie's employs its waitresses on a 25 to 30 hour a week basis. That establishment reported that with tips its waitresses earn $10 to $15 per hour in wages and tips.
b. El Commodore employs its waitresses on a 40-hour a week basis. It estimated that with tips its waitresses earn $10 per hour on average.
c. Yellowstone Truck Stop employs its waitresses on an eight-hour day shift. It reported that with tips its waitresses earn between $8.00 and $10.50 an hour.
d. Lobby Cafe employs waitresses on four-hour shifts and Sesselman did not determine whether they could work a sufficient number of four-hour shifts to achieve a 40-hour work week. On an hourly basis, with tips, their waitresses earn between $5.25 to $9.25.
e. Eddie's Supper Club reported a base wage of $4.70 per hour but could not provide any information concerning tip income.
f. Borries reported a base wage of $4.25 per hour wages but also could not provide information concerning tips.

         9.The information provided by the first four restaurants, which reported or estimated tips, shows an hourly wage range of $5.25 (Lobby Cafe) to $15.00 (Bert & Ernie's). I take specific note, however, that, $10.00 an hour was within the range of wages at three of those restaurants. Only the Lobby Cafe reported a high end ($9.25) of less than that. I also note that the average of the low and high ends is $10.63.

         10.Sesselman further testified that he had reviewed the jobs approved by Dr. Hinde. Of those jobs, he felt the receptionist position was most appropriate given claimant's condition in 1992, her past experience, and job availability. (Claimant has actual experience working as a receptionist.)

         11.Sesselman contacted ten Great Falls area employers and requested information about the wages paid to receptionists. He received information from four employers indicating an average hourly wage of $6.15 per hour. On a forty-hour a week basis that amounts to $246.00 per week.

         12.Gerry B. Blackman is a certified rehabilitation counselor hired by Western to assess claimant's wage loss. Using an October 1995 Montana Department of Labor publication entitled Montana Informational Wage Rates, she determined that the average wage for each of the approved jobs was as follows:

Nursing secretary

$8.38

Civil clerk

$7.77

General office clerk

$7.02

Billing clerk

$8.54

Receptionist

$6.44

AVERAGE OF ALL FIVE

$7.63

         hese figures represent the averages for all such positions in the state. Thus, they are not representative of entry-level wages and do not necessarily reflect even the averages of jobs in Great Falls.

         13.Blackman also conducted a wage survey of 33 employers in the Great Falls area who employed persons in sedentary to light-duty jobs. She testified that these positions were chosen as appropriate based on Dr. Hinde's medical release of the claimant in 1992. She received 16 responses to her survey. The responses included jobs for receptionists, keno callers, casino cashiers, telephone solicitors, ticket sellers, switch board operators, general office clerks, and bookkeepers. The wages for the jobs ranged between $4.25 and $7.11 per hour. Three of the positions - receptionist, general office clerk, and arguably, bookkeeper - were actually approved by Dr. Hinde. Blackman was unable to provide wage information specific to only these three positions.

         14.Blackman testified that wages in Great Falls were competitive with the rest of the state, except that jobs in the public sector paid perhaps $0.20 per hour more than those in the private sector. Based on the number of positions existing in the Great Falls area as reported in the Montana Department of Labor publication Residual Access to Employability in Cascade County, Blackman testified that claimant could most realistically find employment as a general office clerk or receptionist.

         15.Blackman also conducted a survey of restaurants in the Great Falls area asking for the average wages and tips earned by waitresses. She surveyed Elmer's, the Iron Kettle, 4-B's, Catkin's, the Town House Coffee Shop, Perkins, the Hill Top Cafe, Candie's Soup Dejour, Country Kitchen, O'Haire Coffee Shop, Pam's Diner, and the Lobby Cafe. She testified that most restaurants typically pay waitresses $4.25 per hour and waitresses average between $10.00 to $35.00 in tips per shift. However, she did not provide specific information regarding the tip income reported by each of the establishments she surveyed and her testimony further indicated that shifts may vary in length. For instance the shifts at O'Haire ranged from four to seven hours. She also focused on coffee shops and family restaurants and excluded restaurants serving acholic beverages, such as Bert & Ernie's, because claimant was working at a coffee shop type establishment at the time of her injury.

         16.Claimant has previously worked as a waitress at establishments serving alcoholic beverages and her preinjury labor market therefore includes more than coffee shop and family dining type restaurants where tips appear to be more limited.

         17.Having considered the vocational testimony in this case and claimant's work experience, I find that claimant's preinjury earning capacity in 1996 dollars was $10 an hour. I found Sesselman's testimony concerning current wages and tips of waitresses the more persuasive since he provided specifics as to his survey and also included full-service restaurants within his survey whereas Blackman concentrated on coffee shops likely to have lower tips. While Bert & Ernie's waitresses earned up to $15, they also earned as low as $10 an hour and the $10 an hour figure is supported by reported wages and tips from the other restaurants which provided tip information.

         18.I was also persuaded that following her injury the claimant's most reasonable prospect for employment is as a receptionist. Claimant has prior experience as a receptionist. Sesselman opined that receptionist is the most appropriate position and Blackman included receptionist as one of two most appropriate positions. I adopt Sesselman's testimony pegging average receptionist wages at $6.15 an hour since he based his testimony on an actual survey, albeit a limited survey, of receptionists employed in Great Falls.

         19.Simple subtraction of the pre and post-injury earning capacities specified in Findings 17 and 18 yields an hourly loss of $3.85. Since claimant was working full time at the time of her injury her weekly loss is $154.00, yielding a permanent partial disability benefit rate of $102.67 ($154.00 x = $102.67).

         20.However, since Dr. Hinde prescribed 20 hours of employment during the first two weeks, 30 hours during the second two weeks, and full-time employment only thereafter, the claimant has a greater loss of earning capacity for the first four weeks of any return to employment and is therefore entitled to $138.30 for four weeks. The remaining 496 weeks are payable at $102.67.

         CONCLUSIONS OF LAW

         1.Claimant was injured in 1984 and the 1983 version of the Workers' Compensation Act therefore governs her permanent partial disability benefits. Buckman v. Montana Deaconess Hospital, 224 Mont. 318, 321, 730 P.2d 380, 382 (1986).

         2.The claimant has the burden of proving her entitlement to compensation. Ricks v. Teslow Consolidated, 162 Mont. 469, 512 P.2d 1304 (1973); Dumont v. Wicken Bros. Construction Co., 183 Mont. 190, 598 P.2d 1099 (1979).

         3.Claimant has previously been found to be permanently partially disabled. This Court, in its 1993 decision, also determined that claimant is employable and able to perform the five jobs approved by Dr. Hinde. Finding 44 recites the evidence of vocational consultant Gerry Loch (now Gerry Blackman) that claimant had a reasonable prospect of employment in the five jobs and that the wage range for those jobs was $5.00 to $6.89 per hour. While Finding 44 is written in the form of a recitation of evidence, Judge Reardon's conclusions of law show that he intended the recitation to constitute a finding of fact. He also rejected claimant's argument that she was permanently totally disabled and indicated his acceptance of Dr. Hinde's opinion that claimant could initially return to work part time and work back to full-time work. In Conclusion 3 at page 16 he wrote:

In the present case, the claimant reached maximum medical healing by October 8, 1988. It is apparent that the claimant suffers from some loss of earnings or earning capacity due to her injury. Prior to her injury the claimant earned $207.44 per week working full-time. Post-injury the claimant has the capacity to earn from $5.00 to $6.89 per hour to start. It is not contemplated that the claimant will be able to immediately work full-time. Rather, a work hardening program such as that advocated by Dr. Hinde, where the claimant will begin by working part-time and increase to full-time employment over the course of one month or longer appears to be warranted. Based on the foregoing, it is apparent that the claimant satisfies the definition of permanent partial disability.

         4. Judge Reardon did not compute actual benefits for two reasons. First, claimant had not elected between lost earning capacity benefits (§ 39-71-703, MCA (1983)) and indemnity benefits (§§ 39-71-705 to 708, MCA (1983)). Second, the parties had not submitted information translating claimant's 1984 wages into 1992 dollars so that they could properly compare the 1992 wages submitted for the five post-injury jobs. (Conclusion 3 at 16.) On appeal the Supreme Court noted that determination of claimant's permanent partial disability rate "is a strictly formulaic procedure which can be easily and quickly accomplished with the admission of numerical evidence." Miller v. Frasure, 264 Mont. 354, 370, 871 P.2d 1302, 1312 (1994). It remanded the case with specific instructions directing this Court to make the calculation. Id.

         5.Judge Reardon's determinations regarding permanent partial disability were affirmed on appeal. Id. Those determinations are binding on remand. Therefore, at trial I limited the evidence to a comparison of claimant's time-of-injury wages to the wages for the five jobs identified in the 1993 decision. The parties agreed to use 1996 wages rather than 1992 wages, so the comparison was between claimant's time-of-injury wages in 1996 dollars and current, 1996 wages for the five jobs.

         6.Based on the vocational evidence presented at trial, I have determined that claimant's time-of-injury wages translate into $10.00 an hour in 1996 dollars, while her post-injury earning capacity is $6.15, also in 1996 dollars.

         As the Supreme Court indicated, the amount of benefits due her are easily computed. Section 39-71-703, MCA (1983), provides:

(1)Weekly compensation benefits for injury producing partial disability shall be 66 2/3% of the actual diminution in the worker's earning capacity measured in dollars, subject to a maximum weekly compensation of one-half the state's average weekly wage.
(2)The compensation shall be paid during the period of disability, not exceeding, however, 500 weeks in cases of partial disability. However, compensation for partial disability resulting from the loss of or injury to any member shall not be payable for a greater number of weeks than is specified in 39-71-705 for the loss of the member. [Emphasis added.]

         On a 40-hour a week basis, claimant's weekly loss of earning capacity was $154.00, yielding a permanent partial disability benefit rate of $102.67 ($154.00 x = $102.67). This is less than one-half the state's average weekly wage at the time of claimant's injury and is therefore the applicable rate of claimant's permanent partial disability benefits which are payable for 500 weeks, with the exception of the first four weeks. Since Judge Reardon determined that claimant would not reach full-time employment until the fifth week, claimant's maximum permanent partial disability rate of $138.30 applies to the first four weeks.

         7.In the 1993 Findings, Judge Reardon also specified that all payments made by Western from the date the claimant reached maximum medical improvement to the date of trial are to be converted to permanent partial disability benefits. Again at page 16, he said:

From the date of maximum healing, the claimant is to be classified as permanently totally disabled or permanently partially disabled. Wood, 248 Mont. at 28. The claimant's workers' compensation benefits from that date forward, to the time of trial, are to be converted to permanent partial benefits. [Emphasis added.]

         That determination is binding in this proceeding and can only be construed as meaning that all benefits paid by Western to claimant between the time she reached maximum medical improvement and the date of the first trial (February 26-27, 1992) must be credited against Western's liability for permanent partial disability benefits. Since Judge Reardon also determined as of the date of trial that claimant was permanently partially disabled, any payments subsequent to the date of trial must also be credited to Western's liability for permanent partial disability benefits.

         8.In the 1993 Findings, Judge Reardon referred to two different dates on which claimant reached maximum healing. In Finding 47 at page 11, he said:

         47. Dr. Dietrich's letter dated October 6, 1989, indicated that he felt that the claimant had achieved maximum medical healing by that date. (Ex. No. 3 at 107.)

         This is the only finding which addresses maximum healing.

         However, maximum healing is then mentioned twice in the conclusions of law. In Conclusion 2 at page 13 Judge Reardon said:

The third element is also satisfied. The medical records of Dr. Dietrich reveal that he assessed October 6, 1989, as the date of maximum medical improvement. [Emphasis added.]

         The "third element" to which he referred is the third of four elements which must be proved to establish permanent total disability. That element is "(3) the condition exists after maximum healing." (Conclusion 2 at 12, emphasis added.) So far, so good. But in Conclusion 3 at page 16, Judge Reardon then wrote, "In the present case, the claimant reached maximum medical healing by October 8, 1988."

         Clearly, Judge Reardon found that claimant had reached maximum medical healing on either October 6, 1989 or October 8, 1988; the question the Court must resolve is which date did he intend. In light of Finding 47 and the further mention of Dr. Dietrich's report of maximum healing which is found at page 13, I can only conclude that the October 6, 1989 date is correct and the October 8, 1988 date ...


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