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Ardesson v. Legion Insurance

Court of Workers Compensation of Montana

January 15, 1998

JETTA ARDESSON Petitioner
v.
LEGION INSURANCE Respondent/Insurer for MOUNTAIN VIEW CARE CENTER Employer.

          Submitted: October 22, 1997

          FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT

          MIKE McCARTER JUDGE.

         Summary: Cook working at nursing home demanded inclusion of value of meals in temporary total disability rate. Insurer's adjuster initially conducted no investigation in response to demand. After claimant's request for mediation, insurer determined other employees could purchase meals for $1.50, but made no further investigation regarding actual value of the meal. Even after it was clear claimant was entitled to an increase for at least the $1.50 value, the insurer failed to increase the benefit rate because claimant's attorney demanded more than the $1.50. Subsequently, the insurer discovered that visitors to nursing home could purchase a meal for $3.00. Claimant's anecdotal evidence suggested an average restaurant meal cost $6.00. Her attorney had originally demanded $8.00 as the meal's value.

         Held: Under section 39-71-123, MCA (1995), wages include the "actual value" of board constituting part of an employee's remuneration. "Actual value" is the equivalent of "market value." Based on common experience of the cost of meals generally and in institutional settings, the Court values the meals at $4.50. Penalty of $2.00 per week awarded on past and future benefits. Insurer unreasonably delayed payment of benefits corresponding to at least $3.00 valuation of meal. Unreasonable conduct included the insurer's failure to investigate the meal issue following claimant's demand, withholding of increase related to conceded $1.50 because claimant demanded more, and two-month delay in issuing check for conceded back benefits. Attorney fees also awarded.

         Topics:

Constitutions, Statutes, Regulations and Rules: Montana Code Annotated: section 39-71-123, MCA (1995). Under section 39-71-123, MCA (1995), wages include the "actual value" of board constituting part of an employee's remuneration. "Actual value" is the equivalent of "market value." Market value is the amount a willing buyer would pay and a wiling seller would accept where neither is acting under duress. Based on common experience of the cost of meals generally and in institutional settings, the Court values the meals received by a cook for a nursing home at $4.50 for purposes of setting the TTD rate.
Constitutions, Statutes, Regulations and Rules: Montana Code Annotated: section 39-71-612, MCA (1995).
Constitutions, Statutes, Regulations and Rules: Montana Code Annotated: section 39-71-2907, MCA (1995). Penalty awarded to claimant litigating inclusion of actual value of meals in wages for purposes of TTD benefit rate. Insurer unreasonably delayed payment of benefits corresponding to at least $3.00 valuation of meal. Unreasonable conduct included the insurer's failure to investigate the meal issue following claimant's demand, withholding of increase related to conceded $1.50 because claimant demanded more, and two-month delay in issuing check for conceded back benefits.
Constitutions, Statutes, Regulations and Rules: Montana Code Annotated: section 39-71-2907, MCA (1995). The lack of a reasonable investigation into a claimant's demand for inclusion of the actual value of meals into wage rate is itself sufficient to impose a penalty on the insurer.
Constitutions, Statutes, Regulations and Rules: Montana Code Annotated: section 39-71-2907, MCA (1995). The penalty provision is available to a claimant from the moment the insurer's delay in payment becomes unreasonable. See, Mintyala v. State Compensation Insurance Fund, 276 Mont. 521, 525, 917 P.2d 442, 445 (1996); Handlos v. Cyprus Indus. Minerals, 243 Mont. 314, 317, 794 P.2d 702, 704 (1990).
Attorney Fees: Cases Awarded. Attorneys fees awarded to claimant litigating inclusion of actual value of meals in wages for purposes of TTD benefit rate. While insurer had conceded liability for $3.00 per meal, a concession of liability is not an "offer" within section 39-71-612 cutting off liability for attorney's fees where the insurer did not pay the amount conceded and the concession was not implemented within 30 days as contemplated by section 39-71-612(2), MCA (1995). Insurer's delay and failure to pay conceded liability were unreasonable.
Attorney Fees: Unreasonable Denial or Delay of Payment. Attorneys fees awarded to claimant litigating inclusion of actual value of meals in wages for purposes of TTD benefit rate. While insurer had conceded liability for $3.00 per meal, a concession of liability is not an "offer" within section 39-71-612 cutting off liability for attorney's fees where the insurer did not pay the amount conceded and the concession was not implemented within 30 days as contemplated by section 39-71-612(2), MCA (1995). Insurer's delay and failure to pay conceded liability were unreasonable.
Penalties: Insurers. Penalty awarded to claimant litigating inclusion of actual value of meals in wages for purposes of TTD benefit rate. Insurer unreasonably delayed payment of benefits corresponding to at least $3.00 valuation of meal. Unreasonable conduct included the insurer's failure to investigate the meal issue following claimant's demand, withholding of increase related to conceded $1.50 because claimant demanded more, and two-month delay in issuing check for conceded back benefits.
Penalties: Insurers. The lack of a reasonable investigation into a claimant's demand for inclusion of the actual value of meals into wage rate is itself sufficient to impose a penalty on the insurer.
Penalties: Insurers. The penalty provision is available to a claimant from the moment the insurer's delay in payment becomes unreasonable. See, Mintyala v. State Compensation Insurance Fund, 276 Mont. 521, 525, 917 P.2d 442, 445 (1996); Handlos v. Cyprus Indus. Minerals, 243 Mont. 314, 317, 794 P.2d 702, 704 (1990).
Wages: Board. Under section 39-71-123, MCA (1995), wages include the "actual value" of board constituting part of an employee's remuneration. "Actual value" is the equivalent of "market value." Based on common experience of the cost of meals generally and in institutional settings, the Court values the meals received by a cook for a nursing home at $4.50 for purposes of setting the TTD rate.
Wages: Meals. Under section 39-71-123, MCA (1995), wages include the "actual value" of board constituting part of an employee's remuneration. "Actual value" is the equivalent of "market value." Based on common experience of the cost of meals generally and in institutional settings, the Court values the meals received by a cook for a nursing home at $4.50 for purposes of setting the TTD rate.

         1 The trial in this matter commenced on August 28, 1997, in Butte, Montana, and was recessed until October 22, 1997, when it resumed in Bozeman, Montana. Petitioner, Jetta Ardesson (claimant), was present and represented by Mr. Chris J. Ragar. Respondent, Legion Insurance (Legion), was represented by Mr. Steven S. Carey.

         2 Exhibits: Exhibits 1 through 10, 13, 18 and 24 were admitted over the objections of Mr. Carey for the limited purpose of the penalty issue. Exhibits 11, 12, 14 through 17, 19 and 20 were admitted without objection. Exhibits 21 through 23 were withdrawn as they were duplicates of other exhibits. The Court reserved ruling on Exhibit 25 and now sustains the foundation objection to the exhibit as no foundation was offered.

         3 Pages 6 through 11, 13 through 17, and 19 through 23 of Exhibit 26 were admitted. Page 12 of Exhibit 26 was refused. The Court reserved ruling on the remaining pages of Exhibit 26 and now admits pages 1, 2, 4 and 5 over objections of lack of foundation. Pages 1 and 2 are the response to a request for claimant's personnel file. The remaining pages of Exhibit 26 are part of the personnel file. Pages 4 and 5 are signed by claimant, and she did not deny her signature or that she signed them. (One is a copy of a driver's license.) Pages 3, 18, 24 and 25 are refused as they were not signed or written by claimant and no further foundation was offered. While the admitted pages provide some dates and background, none are relevant to the specific issues in this case.

         4 At the second phase of the trial, the Court refused Exhibit 27 and admitted Exhibits 28 and 29.

         5 Witnesses and Depositions: Claimant, Frank Herstein, Teri Bohnsack, Donald "Skip" Beadle and Anita McCorry were sworn and testified. No depositions were submitted.

         6 Issues: The final pretrial order sets forth the following issues:

1.What is the value, for purposes of computing Petitioner's temporary total disability rate, of the free meals that Petitioner received.
2.What is the value, if any, for the purposes of computing Petitioner's temporary total disability rate, of the yearly bonus which Petitioner would have received in her employment.
3.Whether Respondent unreasonably delayed or refused payment of any benefits to which Petitioner is or was entitled to under the Workers' Compensation Act, thereby subjecting Respondent to the 20% penalty under 39-71-2907, M.C.A.
4. Whether Claimant is entitled to an award of attorney's fees and costs and, if so, to what extent.

(Final Pretrial Order at 2.) Claimant withdrew the second issue (regarding the bonus) at the commencement of trial.

         7 Bench Ruling: At the close of trial, the Court ruled that Legion had unreasonably delayed benefits based on $1.50 a meal and that a 20% penalty shall attach to the benefits payable with respect to the $1.50. The Court indicated that the penalty will probably attach to the $3.00 rate which Legion ultimately used in paying benefits. The remaining issues were taken under advisement.

         8 Having considered the final pretrial order, the trial testimony, the demeanor and credibility of the witnesses, the exhibits, and the arguments of the parties, the Court makes the following:

         FINDINGS OF FACT

         9 Claimant was employed by Mountain View Care Center (Mountain View) on September 13, 1995. Mountain View is a nursing home, and claimant was hired as a cook to prepare the evening meal for home residents, visitors, staff and family members of residents. She also helped with lunch and the cleanup following lunch. She worked from 11:00 a.m. to 7:30 p.m.

         10 On November 23, 1995, claimant injured her left arm and wrist while operating a food processor. The injury occurred in the course and scope of her employment with Mountain View.

         11 At the time of the injury, Mountain View was insured by Legion.

         12 Claimant submitted a timely claim for compensation and Legion accepted liability for the accident.

         13 Since her injury, claimant has not returned to work and has continuously received temporary total disability (TTD) benefits on account of her injury.

         14 Legion originally calculated claimant's TTD rate without consideration of any meals she received from her employer.

         15 The claim in this case was adjusted by GAB Robins acting on behalf of Legion. The initial claims adjuster was Laurie Daigle (Daigle).

         16 On July 22, 1996, claimant's attorney, Mr. Chris J. Ragar (Ragar), wrote to Daigle informing her that as part of claimant's employment she was entitled to one free meal a day. (Ex. 1.) Citing Anderson v. State Compensation Ins. Fund, 252 Mont. 73, 826 P.2d 931 (1992), he demanded that the value of the meal be included in computing her benefits. He valued the meal at $8.00 and demanded that $40.00 ($8.00 x 5 days) be added to claimant's weekly wage for purposes of determining her benefits.

         17 Daigle did not reply.

         18On September 16, 1996, Teri Bohnsack (Bohnsack) succeeded Daigle as the adjuster in charge of the claim. At about that time, Mr. Steven S. Carey (Carey), the attorney representing Legion, became involved in the claim. At least by ...


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