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Smith v. Old Republic Insurance Co.

Court of Workers Compensation of Montana

March 4, 1998

KEITH WARREN SMITH Petitioner
v.
OLD REPUBLIC INSURANCE COMPANY Respondent/Insurer for BOISE CASCADE CORPORATION Employer.,

          Submitted: February 2, 1998

          FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT

          MIKE MCCARTER JUDGE.

         Summary: The insurer accepted liability for injuries sustained by claimant and paid benefits. Believing he may have thoracic outlet syndrome, claimant asked his treating physician whom he might visit for that problem. The treating physician, who himself had no reason to believe claimant in fact had thoracic outlet syndrome, mentioned to local physicians expert in that problem. Not satisfied with those names, the claimant asked for another name. He and the physician then discussed a doctor in Seattle whom claimant had seen for other problems. After learning claimant desired to travel to Seattle to see this physician for this problem, the insurer notified him it would not cover that visit. Claimant petitioned the Court to compel covering of expenses associated with the out-of-state evaluation he obtained.

         Held: Petition denied. Claimant is not entitled to reimbursement for out of state assessment for thoracic outlet syndrome where no doctor had diagnosed claimant with the syndrome and his treating physician had only referred claimant to the Seattle physician to accommodate claimant's request that he be evaluated for the condition and only after claimant had rejected the doctor's recommendation that he consult one of two in-town physicians with expertise in the area.

         Topics:

Benefits: Medical Benefits: Out-of-state Treatment. Claimant is not entitled to reimbursement for out of state assessment for thoracic outlet syndrome where no doctor had diagnosed claimant with the syndrome and his treating physician had only referred claimant to the Seattle physician to accommodate claimant's request that he be evaluated for the condition and only after claimant had rejected the doctor's recommendation that he consult one of two in-town physicians with expertise in the area.
Estoppel and Waiver: Equitable Estoppel. Although insurer paid for claimant's prior out-of-state consultations with a particular physician, it was not estopped from refusing to cover claimant's desired return to the physician for a consultation on thoracic outlet syndrome where no physician had diagnosed him with that condition and his treating physician had recommended he consult with one of two local experts in the condition. Claimant had been promptly informed the insurer would not cover claimant's desired consultation.

         ¶1 The trial in this matter was held in Billings, Montana on February 2, 1998. The petitioner, Keith Warren Smith (claimant), was present and represented himself. The respondent, Old Republic Insurance Company (Old Republic), was represented by Mr. Robert E. Sheridan.

         ¶2 Witnesses: Keith Warren Smith and Gary Doerr were sworn and testified.

         ¶3 Exhibits: Exhibits 1 was admitted over objection. Exhibits 2 through 5, 18 and 19, 21 through 31 and 33 were admitted without objection. Exhibits 7 through 9, 11 through 15, 17 and 32 were withdrawn. Exhibit 10 was not admitted. There were no Exhibits 6, 16, or 20.

         ¶4 Depositions: The parties agreed that the deposition of Dr. Thomas R. Johnson can be considered part of the record.

         ¶5 Issues: The controversy in this case arises out of the refusal of Old Republic to pay for a July 25, 1997 medical examination of claimant by Dr. Frederick A. Matsen, III and for claimant's travel expenses to Seattle, Washington, where the examination was conducted. The issues, as phrased in the Pretrial Order, are as follows:

A. Whether authorization of the insurer is required before a claimant may consult with a medical specialist except in cases of medical emergencies or necessities.
B. Whether the Petitioner was entitled to consult with Frederick Matsen, III in Seattle without obtaining authorization from Respondent pursuant to the provisions of A.R.M. § 24.29.1403.
C. Whether Respondent is precluded by virtue of the application of laches or estoppel from asserting its right to require authorization before Petitioner may consult with a medical specialist.

(Pretrial Order at 2-3.)

         ¶6 At the close of trial, the Court questioned the phrasing of the issues in light of the evidence presented. The second issue is nothing more than a restatement of the first. If that issue is construed literally, the Court need only determine whether ARM 24.29.1403 (1991), which requires the insurer's prior approval of a consultation by a specialist, is applicable to this case and, if so, whether the doctrine of either estoppel or laches precludes Old Republic from invoking the regulation. Answers to those questions do not resolve the merits of the dispute. Old Republic is not automatically liable for Dr. Matsen's examination. It is responsible for the examination only if the referral to and examination by Dr. Matsen were medically reasonable. On the other hand, Old Republic is not automatically relieved of liability even if the prior approval requirement applies; its decision is reviewable on its merits by this Court, Ingraham v. Champion International, 243 Mont. 42, 793 P.2d 769 (1990).

         ¶7 Much of the evidence presented at hearing concerned the merits of Old Republic's determination disapproving Dr. Matsen's examination. In response to the Court's questions concerning the phrasing of the issues, Old Republic moved to conform the issues to the evidence. The motion is granted. It is evident that the parties did not intend that the Court answer abstract questions of law, rather they intended that the Court decide whether the claimant is entitled to payment of Dr. Matsen's bill and for travel reimbursement. Therefore, the following issue is added:

D. Whether Old Republic is liable for Dr. Matsen's July 25, 1997, examination of claimant and for claimant's travel expenses in connection with that examination.

         ¶8 Having considered the Pretrial Order, the trial testimony, the demeanor and credibility of the witnesses, the exhibits, the deposition, and the arguments of the parties, the Court makes the following:

         FINDINGS OF FACT

         ¶9 Claimant resides in Roundup, Montana.

         ¶10 On June 14, 1990, the claimant injured his shoulder and low back while in the course and scope of his employment for Boise Cascade Corporation.

         ¶11 At the time of the industrial injury, Boise Cascade was insured by Old Republic. Old Republic accepted liability for claimant's injury and paid compensation and medical benefits.

         ¶12 On December 15, 1992, claimant and Old Republic entered into a written settlement agreement with respect to claimant's future entitlement to benefits. The agreement, which was approved by the Department of Labor and Industry, reserved future hospital and medical benefits to claimant.

         ¶13 Claimant's primary injury was to his left shoulder. He was initially treated by Dr. Willard J. Hull, who performed a rotator cuff repair in October 1990. Claimant thereafter sued Dr. Hull.

         ¶14 Claimant returned to work in March 1991 but continued to have shoulder pain. He discontinued work on June 17, 1991, and thereafter, on September 19, 1991 sought further medical advice from Dr. Thomas R. Johnson. (Ex. 4 at 15.) Dr. Johnson diagnosed a "recurrent tear of [the] rotator cuff." (Id.)

         ¶15 Since September 1991, Dr. Johnson has been claimant's primary treating ...


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