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S.L.H. v. State Compensation Insurance Fund

Court of Workers Compensation of Montana

January 14, 1999

S.L.H. Petitioner
v.
STATE COMPENSATION INSURANCE FUND Respondent/Insurer for THIRSTY'S BAR Employer

          Submitted: September 30, 1998

          FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT

          Mike McCarter Judge

         Summary of Case:

         Bartender was kidnaped from workplace, beaten, raped, and severely injured physically and emotionally. Following a slow recovery, she returned to part-time work. She claimed additional permanent partial disability benefits for labor restriction, lost wages, and mental impairment. She also claimed the insurer had been unreasonable in its position on certain medical testing and medications and in denying PPD benefits for physical restrictions and wage loss. Finally, she argued that section 39-71-703(3) and -711, MCA (1991) were unconstitutional if read to deny her an impairment award for a mental impairment

         Held:

         Claimant is entitled to additional PPD benefits in the form of 10% for physical restrictions and 20% for wage loss. As the insurer conceded, 10% was appropriate where claimant's time of injury job was medium duty and she could work only light-duty post-injury. The 20% for wage loss was based on the WCC's finding claimant suffered over a $2.00 an hour wage loss, a finding based on taking into account claimant's post-injury inability to work her pre-injury number of hours. The WCC refused to award benefits for mental impairment where the psychiatrist testifying refused to assign a percentage for mental impairment in light of the recommendation against making such determinations for mental impairments stated in the 4th Edition of the AMA Guides to Impairment. Penalty was awarded with respect to (1) the 10% award for physical restrictions, (2) one half of the 20% wage loss award; and (3) the amounts due for an MRI and EMG the insurer had refused to cover. Penalty was not awarded with regard to (1) State Fund's assertion of a subrogation interest in a third-party recovery, which assertion was dropped; (2) claimant's request for further impairment award; and (3) a prescription the insurer had denied. Attorneys fees were denied because the insurer had conceded liability pre-hearing on relevant matters.

         Note: See S.L.H. v. State Comp. Ins. Fund, 2000 MTWCC 362, 303 Mont. 364, 15 P.2d 948, reversing this decision in part, and S.L.H. v. State Comp. Ins. Fund, 1999 MTWCC 6A, on remand from Supreme Court.

         Topics:

Constitutions, Statutes, Regulations and Rules: Montana Code: section 39-71-2907, MCA (1991). Penalty was awarded with respect to (1) a 10% award for physical restrictions, (2) one half of a 20% wage loss award; and (3) the amounts due for an MRI and EMG the insurer had refused to cover. Penalty was not awarded with regard to (1) insurer's assertion of a subrogation interest in a third-party recovery, which assertion was dropped and was not, in any event, relating to benefits due; (2) claimant's request for further impairment award; and (3) a prescription the insurer had denied.
Benefits: Impairment Awards: Mental Impairment. WCC held claimant not entitled to mental impairment award where the psychiatrist testifying refused to assign a percentage for mental impairment in light of the recommendation against making such determinations for mental impairments stated in the 4th Edition of the AMA Guides to Impairment. See S.L.H. v. State Compensation Insurance Fund, 2000 MTWCC 362, 303 Mont. 364, 15 P.2d 948, reversing on this ground, and S.L.H. v. State Compensation Fund, 1999 MTWCC 6A, on remand from Supreme Court.
Benefits: Permanent Partial Disability: Labor Capacity. Claimant who was kidnaped from work and received severe physical and emotional injuries was entitled to additional PPD benefits in the form of 10% for physical restrictions. As the insurer conceded, 10% was appropriate where claimant's time of injury job was medium duty and she could work only light-duty post-injury.
Benefits: Permanent Partial Disability: Lost Earning Capacity. Claimant is entitled to additional PPD benefits in the form of 20% for wage loss. The 20% for wage loss was based on the WCC's finding claimant suffered over a $2.00 an hour wage loss, a finding based on taking into account claimant's post-injury inability to work her pre-injury number of hours. An absurd result would be produced if the Court were to construe section 39-71-303(3)(c), MCA (1991) as requiring comparison of pre-injury and post-injury wage rates without taking into account claimant's inability to work the number of hours she worked pre-injury as the result of the injury.
Penalties: Insurers. Penalty was awarded with respect to (1) a 10% award for physical restrictions, (2) one half of a 20% wage loss award; and (3) the amounts due for an MRI and EMG the insurer had refused to cover. Penalty was not awarded with regard to (1) insurer's assertion of a subrogation interest in a third-party recovery, which assertion was dropped and was not, in any event, relating to benefits due; (2) claimant's request for further impairment award; and (3) a prescription the insurer had denied.

         ¶1 The trial in this matter convened on September 15, 1998, in Great Falls, Montana and recessed at 5:00 p.m. The trial reconvened on September 30, 1998, in Great Falls. Petitioner, S.L.H. (claimant), was present and represented by Ms. Sara R. Sexe. Respondent, State Compensation Insurance Fund (State Fund), was represented by Mr. William O. Bronson. The testimony of Dr. Mary Ann Evans has been transcribed. No other parts of the trial have been transcribed.

         ¶2 Exhibits: Exhibits 1 through 45 were admitted without objection.

         ¶3 Witnesses and Depositions: Claimant, Dr. Mary Ann Evans, Micki Marion Breedlove, Patricia Lubick, and Patricia Hunt were sworn and testified. In addition, the parties submitted the deposition of Dr. Dennis Dietrich for the Court's consideration.

         ¶4 Issues Presented in Pretrial Order: As set forth in the pretrial order, the following issues were presented for decision:

1.Whether Petitioner is entitled to permanent partial disability [PPD] benefits in addition to the 11% impairment rating.
2.Whether the State Fund unreasonably refused or delayed the authorization for the medical care requested by Dr. Dietrich, including an EMG, MRI, and gastrointestinal medications, thereby entitling Petitioner to attorneys' fees, costs and a penalty.
3.Whether Petitioner has not been made whole by the third-party settlement of her negligence claim against the alarm installer, thereby precluding the State Fund from exercising its subrogation interest?
4.Whether the State Fund's actions in denying, delaying, or refusing authorization for, [sic] benefits was unreasonable, thereby entitling Petitioner to her attorney's fees, costs, and a penalty?
5.Whether the State Fund's [position] forcing Petitioner to litigate the subrogation issue, given the facts of the case, subjects the State Fund to the payment of attorney's fees, costs and a penalty.

         ¶5 Waiver of Subrogation Claim: At trial the State Fund expressly waived any claim to subrogation. Therefore, that issue is not addressed.

         ¶6 Additional Issue Not Raised in Pretrial Order: At trial the parties agreed that petitioner may submit a post-trial challenge to the constitutionality of sections 39-71-703(3) and -711, MCA (1991), insofar as those sections preclude an impairment award for mental or psychological injuries. That issue was the subject of post-trial briefing and finally submitted for decision on December 22, 1998.

         ¶7 Bench Rulings: At the time of trial, the Court made the following bench rulings:

1. Claimant is not entitled to an impairment award with respect to her psychological injuries since she could not establish a percentage rating under the AMA Guides to Impairment.
2. Based on the evidence presented at trial, claimant is entitled to a 20% award for lost wages based on an actual wage loss of more than $2.00.
3. The claimant is not entitled to attorney's fees or a penalty with respect to the State Fund's subrogation claim. O'Brien v. State Compensation Insurance Fund, WCC No. 9710-7854, findings of fact, conclusions of law and judgment (February 10, 1998) (holding that the waiver of a subrogation claim is not a benefit within the meaning of the Workers' Compensation Act and therefore not something to which a penalty may attach).
4. At trial the State Fund conceded liability for a 10% award for physical restrictions. Claimant is further entitled to a penalty and attorney's fees with respect to that 10% award since Dr. Patrick Galvas had restricted claimant to light duty in March 1998 (Ex. 41 at 2) and the State Fund was aware of the restriction and of the fact that claimant was performing at least medium-duty work in her time-of-injury job. [Upon further consideration, for the reasons set forth in the Conclusions of Law the Court has voided the attorney fee award.]
5. The claimant is entitled to a penalty and attorney's fees with respect to its denial of an EMG and MRI ordered by Dr. Dietrich. At trial the State Fund agreed to pay for the procedures.

         ¶8 Issues Remaining: The following issues remain for the Court's decision:

1.Whether the State Fund unreasonably refused or delayed authorization for gastrointestinal medications requested by Dr. Dietrich, thereby entitling claimant to attorney's fees and a penalty.
2.Whether claimant is entitled to attorney's fees and a penalty with respect to the remaining 10% award for wage loss.
3.Whether sections 39-71-703(3) and -711, MCA (1991), are unconstitutional insofar as they preclude the Court from awarding claimant an impairment award for her psychological injuries, and if so what is the amount that should be awarded claimant with respect to her psychological impairment?

         ¶9 Having considered the pretrial order, the testimony presented at trial, the demeanor and credibility of the witnesses, the deposition and exhibits, and the arguments of the parties, the Court makes the following:

         FINDINGS OF FACT

         ¶10 Claimant is 34 years old. She is a high school graduate and has also completed some vocational technical school courses.

         ¶11 Claimant has worked as a cook, food waitress, cocktail waitress, bartender, keno caller and grocery checker.

         ¶12 In 1991 she was hired by Thirsty's Bar (Thirsty's) as a bartender. She worked approximately 32 hours a week and was paid $7.00 an hour. In addition to serving drinks to customers, she was responsible for the cash drawers and for stocking beer, soft drinks and wine coolers. She worked evenings.

         Industrial Injury

         ¶13 On November 13, 1991, the claimant was kidnaped from her place of employment. Her kidnaper forced her into her vehicle and ordered her to drive away from her employment. After she drove away, he made her stop the car. He then brutally beat and repeatedly raped her. He threatened her life with a knife and a gun and slit her throat.

         ¶14 The assault and rape resulted in severe physical and psychological injuries to the claimant.

         ¶15 At the time of the kidnaping, assault and rape, Thirsty's was insured by the State Fund. Claimant submitted a claim for compensation to the State Fund, which accepted liability and commenced paying medical and temporary total disability benefits.

         Recovery

         ¶16 Claimant's recovery has been slow and difficult. She was not declared at maximum healing until October 1997, and has been released by her psychiatrist to part-time work only. She was out of work until May 1998, when, with rehabilitation assistance, she took a part-time job at Pizza Hut paying $5.15 an hour. Her temporary total disability benefits were discontinued on March 15, 1998, when she was placed on rehabilitation benefits.

         Permanent Partial Disability

         I. Labor Restriction

         ¶17 A Functional Capacity Evaluation (FCE) of claimant was done by Dr. Patrick Galvas (Dr. Galvas) in January 1998. Based on the FCE, claimant is physically able to perform only light-labor. (Ex. 41 at 2.)

         ¶18 Claimant testified that her job at Thirsty's required her to lift in excess of 50 pounds. She was required to move beer kegs and garbage cans, and also testified that she acted as a bouncer of sorts.

         ¶19 In September 1998, the claimant's job at Thirsty's was evaluated by Micki Marion Breedlove (Marion), a vocational consultant working for Crawford & Company (Crawford). Marion testified that claimant's job required only medium labor. She was not required to lift kegs, only to tip and shove them, efforts requiring 35 to 37 pounds of force. Full garbage cans weighed 25 to 30 pounds. A case of beer weighed 31 pounds. Acting as a bouncer was not part of her duties.

         ¶20 Marion's testimony was persuasive. I therefore find that claimant's time-of-injury job was medium duty.

         ¶21 At trial the State Fund conceded that claimant is entitled to a 10% award based on a restriction to light-labor activity. § 39-71-703(3)(d), MCA (1991). In light of the previous finding, claimant is entitled to no further award for physical restrictions.

         II. Lost Wages

         ¶22 At the time of her injury, claimant was earning $7 an hour and she was working 32 hours a week. (Trial Test.)

         ¶23 In May 1997 Marion was assigned to address claimant's employment potential and to provide a rehabilitation recommendation. Ultimately, she developed a rehabilitation plan calling for job placement services from March 16, 1998 until June 7, 1998. (Ex. 1 at 28.)

         ¶24 Dr. Mary Ann Evans (Dr. Evans), a psychiatrist who has treated claimant for post-traumatic stress syndrome, major depression, and cognitive deficits arising from the physical and mental trauma she suffered on November 13, 1991, testified that claimant is not yet ready and able to return to work full time. She noted that claimant had spent seven years out of the work force. While she is hopeful that claimant may return to full-time work in the future, she is unable to predict when that will occur. (Trial Test.; Ex. 30 at 5.)

         ¶25 Marion was aware of Dr. Evans' opinion that claimant is able to work only part-time and assisted claimant in finding a part-time, temporary job at Pizza Hut. Claimant began working at Pizza Hut in Great Falls on May 1, 1998. However, at the time of trial she was no longer employed. (Trial Test.; Ex. 1.)

         ¶26 While working part-time for Pizza Hut, claimant earned $5.15 an hour. (Id.) The job at Pizza Hut is her only employment since 1991.

         ¶27 Marion acknowledged that claimant's attention, concentration and memory problems present ...


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