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Peterson v. Liberty N.W. Ins. Corp.

Court of Workers Compensation of Montana

December 31, 2013

LIBERTY N.W. INS. CORP. Respondent/Insurer.

Submitted: June 12, 2013




Petitioner alleges he suffers from asbestos-related disease as a result of his 26-year history working at the Libby lumber mill. Respondent counters that Petitioner filed his claim long after the statute of limitations had run pursuant to § 39-72-403, MCA, and therefore, Petitioner's claim is time-barred.


Given Petitioner's knowledge of asbestos contamination at the Libby mill and the number of occupational disease claims filed over the years by employees at the mill alleging asbestos-related disease due to their employment, Petitioner knew or should have known that his occupation contributed to his asbestos-related disease for years prior to filing a claim for benefits. Petitioner's claim for occupational disease benefits is time-barred under the statute of limitations, § 39-72-403, MCA.

¶ 1 Trial in this matter was held May 9 and 10, 2013, in the Flathead County Justice Center, 920 South Main, Kalispell, Montana. Petitioner Steve Peterson was present and represented by Laurie Wallace, Jon Heberling, and Ethan Welder. Respondent Liberty N.W. Ins. Corp. (Liberty) was represented by Michael P. Heringer. On June 12, 2013, trial was concluded via teleconference. The Court participated from the offices of Fisher Court Reporting in Helena. Peterson was present and represented by Laurie Wallace and Ethan Welder from the offices of Fisher Court Reporting in Kalispell. Liberty was represented by Michael P. Heringer from the offices of Fisher Court Reporting in Billings.

¶ 2 Exhibits: I admitted Exhibits 2, 3, 7 through 21, and 26 through 42 without objection. I sustained hearsay objections to Exhibits 1, 4, 5, 6, 22, and 23, and did not admit those exhibits. I overruled the hearsay objections to Exhibits 24 and 25 and they were admitted.

¶ 3 Stipulations: There were no stipulations.

¶ 4 Witnesses and Depositions: The depositions of Dana Headapohl, M.D., Brad Black, M.D. and Glenn Garrison were admitted without objection and are considered part of the record. Petitioner Steve Peterson, Terry Spear, Ph.D., Alan C. Whitehouse, M.D., and Don Agan, CRC, were sworn and testified.

¶ 5 Issues Presented: The Pretrial Order sets forth the following issues:[1]

Issue One: Did Petitioner suffer an occupational disease as a result of his work at Stimson Lumber?
Issue Two: Is Petitioner's claim barred by § 39-72-403(1), MCA (2001)?
Issue Three: If Petitioner's claim is compensable, what is his impairment rating related to his occupational disease?
Issue Four: If Petitioner's claim is compensable, whether Petitioner is entitled to PTD benefits and medical benefits related to the treatment of the occupational disease.
Issue Five: Whether Respondent has unreasonably refused to accept liability for the Petitioner's occupational disease and pay PTD, impairment, and medical benefits in accordance with § 39-71-407, MCA (2001).
Issue Six: Whether Petitioner is entitled to an increased award of 20% of all compensation benefits awarded pursuant to § 39-71-2907, MCA.
Issue Seven: Whether Petitioner is entitled to reasonable costs and attorney fees.


¶ 6 On June 25, 2010, Peterson signed a First Report of Injury and Occupational Disease, alleging lung disease caused by years of exposure to asbestos dust while employed with the "Stimson Lumber Facility" (Stimson) in Libby, Montana. The report reflects a date of injury of "76-02."[2] Peterson also signed a similar claim on the same day for the same date of injury against "Champion Lumber Facility" (Champion).[3]

¶ 7 Champion denied the claim by letter dated July 6, 2010, from its third-party administrator, Brentwood Services Administrators, Inc.[4] Liberty denied the claim on behalf of Stimson by letter dated July 27, 2010.[5] Liberty issued a second denial letter on September 27, 2012, following an occupational disease (OD) panel evaluation.[6]

Industrial Hygiene

¶ 8 Terry Spear, Ph.D., testified at trial. I found Spear to be a credible witness. Spear holds a Ph.D. in industrial hygiene and headed the Industrial Hygiene Department at Montana Tech (Tech) for ten years before he retired. Spear is currently employed part-time for Tech.[7] Spear has authored or co-authored seven studies on Libby asbestos, has testified in several asbestos-related cases, and has reviewed hundreds of Libby lumber mill documents. Spear has visited the Stimson mill, reviewed maps and photos of the mill, interviewed former mill workers including Peterson, reviewed Environmental Protection Agency (EPA) documents regarding the mill, and previously testified before this Court as an expert witness in the Raymond Johnson OD case, which involved a former employee of the mill who developed asbestos-related disease (ARD).[8]

¶ 9 Spear testified that industrial hygiene is the science devoted to the recognition, anticipation, and control of workplace health hazards that could cause disease among workers. According to Spear, by the 1950s, asbestosis, lung cancer, and mesothelioma were all associated with asbestos exposure.[9]

¶ 10 Spear testified that Libby asbestos is an amphibole asbestos made up of three different minerals: 84% winchite, 11% richterite, and 6% tremolite.[10] According to Spear, the source of Libby asbestos is Vermiculite Mountain, the site of the W.R. Grace vermiculite mine. Spear explained that Libby asbestos is extremely toxic, much more so than chrysotile asbestos, which is more often found in building products throughout the country.[11] Spear testified that the toxicity of asbestos is measured in terms of fibers/cc years. Spear stated that the toxicity of chrysotile asbestos has been measured at 25 fibers/cc years. Amphibole asbestos has been measured at 2 fibers/cc years or less. [12]

¶ 11 Spear explained that because asbestos fibers are needle-shaped and microscopic in size, they tend to stay airborne for long periods. They also easily re-enter the atmosphere and can travel long distances. The longer the fibers stay in the air, the greater the risk of inhalation by workers.[13]

¶ 12 Spear testified that the Stimson mill was contaminated with asbestos from different sources: 1) the mill was built on the former site of the popping plant for the mine, which contaminated the ground with asbestos fibers; 2) vermiculite contaminated with Libby amphibole was added as a soil conditioner to the area on the mill grounds known as the nursery; 3) bark from trees harvested near the W.R. Grace mine and processed at the mill was contaminated with Libby amphibole asbestos; and 4) railroad cars previously containing vermiculite were cleaned out on a spur line on the mill property, contaminating the soil around the tracks. Spear stated that as of 1994 when the mill was tested, every building except the shipping building was contaminated with asbestos-containing material (ACM).[14]

¶ 13 Spear interviewed Peterson to determine the various places where Peterson worked at the mill and the jobs he performed. Spear learned that both Peterson and Raymond Johnson[15] worked at some of the same areas in the plywood plant. Johnson was a dryer tender and helped train Peterson for the dryer tender job, and consequently both men would have had similar exposure to asbestos at work.[16]

¶ 14 Spear learned that Peterson had to climb up on the big dryer once a week and clean the top of it with a broom and an air hose to remove dust from the top and around the motors. Spear testified that sometime in the late 1980s, vermiculite and cement were mixed together as insulation for the top of the big dryer and for the dryer floor, but the mixture quickly dried out and broke up easily. Spear testified that any activity around the big dryer - vibration, heavy equipment, use of air hoses - resulted in dispersal of asbestos fibers throughout the plywood plant from the dried cement-vermiculite mixture.[17]

¶ 15 Spear testified there was a lot of dust in the air in the finger-jointer building where Peterson worked about 40% of his time for Stimson. Spear testified that activity by workers and machinery stirred up dust. Spear reviewed mill documents and determined that as early as 1987, the mill documented ACM in the insulation in the finger-jointer building. Spear learned that asbestos-containing pipe insulation in the finger-jointer building had been deteriorating, which meant it had a tendency to release fibers into the air.[18] Other mill documents reviewed by Spear verified that during the time Peterson worked at the mill, asbestos existed in the finger-jointer roofing material, in the bathroom and lunch room, and in the finger-jointer parking lot.[19] These findings were significant to Spear in that they evidenced the likelihood of asbestos fiber dispersal into the breathing zone of workers while Peterson worked in the finger-jointer building.[20]

¶ 16 Spear determined from Peterson that he had worked in and near the planer building, operating a forklift while the mill was still owned by Champion. According to Peterson, the air in and around the planer building was particularly dusty. Spear opined that the greatest source of asbestos contamination in Libby is soil disturbance, and there was a lot of soil disturbance in the mill area, mostly from operation of heavy equipment. In Spear's opinion, dust from the disturbed soil at the mill more probably than not contained asbestos. Spear testified he was unaware of any respirators or other airway protectors that were supplied to workers at the mill.[21]

¶ 17 From a review of EPA documents, Spear learned there had been ACM in the planer building and in the building's vermiculite insulation that contained Libby amphibole. An EPA letter dated May 10, 2001, indicated that a W.R. Grace contractor had remediated the contamination in the planer building once, but that the building became re-contaminated from an undetermined source.[22]

¶ 18 According to Spear, asbestos associated with Libby vermiculite was assumed to contain only tremolite until a study in the early 2000s showed the Libby amphibole also contained richterite and winchite. Spear testified that labs were not set up to look for and quantify richterite and winchite. This resulted in the underreporting of asbestos in testing samples taken from the Libby area.[23]

¶ 19 Spear testified that regulatory agencies only report asbestos fibers of greater than 5 micrometers in length. Since over 50% of Libby asbestos fibers are less than 5 micrometers in length, Spear concluded that sampling reports underreported the asbestos present in Libby by more than 50%.[24]

¶ 20 Spear participated in tree-bark studies and learned that tree bark served as a reservoir for asbestos. When these trees were disturbed, i.e., harvested, transported to the mill, and debarked, the asbestos was released into the air and soil around the mill. In interviewing former mill employees, Spear learned that bark and debris would fall off the logs in the log yard, and about once a month a loader would come in and haul the bark away. Spear testified that this activity would disturb the bark and surrounding soil, causing asbestos fibers to be reintroduced (re-entrained) into the air.[25]

¶ 21 Spear testified that inside the plywood plant there were issues with negative air pressure. Spear explained that the heat generated inside the building, combined with the operation of the ceiling fans, created a siphon effect that drew in outside air to replace inside displaced air. Spear testified that this moving air carried asbestos particles.[26]

¶ 22 Based on the number of years Peterson worked at the lumber mill, from 1976 until 2002, Spear opined that Peterson's exposure to asbestos at the mill was severe, and far exceeded his exposure to asbestos growing up and living in the Libby community.[27]

¶ 23 Peterson testified at trial. Because of some key inconsistencies in Peterson's testimony, I cannot find Peterson to be an entirely credible witness. Specifically, I find Peterson's testimony that he learned he was exposed to asbestos at the Libby lumber mill only after he hired an attorney – shortly before filing his OD claim in 2010 – inconsistent with his sworn statement[28] and the written exposure history he provided to the Center for Asbestos Related Disease (CARD) clinic in 2005.[29] Moreover, I do not find it credible that Peterson was completely unaware of the asbestos contamination at the mill, the asbestos cleanup at the mill, and his numerous co-workers at the mill who filed OD claims for ARD years before Peterson filed his claim.[30]

¶ 24 Peterson started working at the mill when he was 18 years old. He was placed in the planer department after 90 days.[31] Peterson explained that most of the time he worked at the mill for Champion he spent in the planer department. He testified that there was pipe wrap around the pipes in the planer department; some of the wrap was in good shape and some of it was deteriorated.[32] There were no doors on the planer sheds so there was usually a breeze blowing through them, and on some days the dust was thick, especially with the heavy equipment moving in and out. Peterson testified that vermiculite was visible on the ground in the planer sheds.[33]

¶ 25 Peterson explained that it was extremely dusty in the summertime in the planer department, to the point where he would use an air hose to blow the dust off his clothes every couple of hours during his break. He also used the air hoses to blow the dust off the equipment and machinery he operated. Peterson testified that he performed every job in the planer department, including operating a lift truck and a carrier. The dust got so bad with all the equipment moving around, Peterson explained, that he would spit black sputum and blow black material out of his nose.[34]

¶ 26 When Champion shut the mill down in the early 1990s, Peterson took a nine-month welding course in Missoula. Peterson testified that he returned to Libby and tried to find work as a welder. Instead, he was called for an interview with Stimson, and he was rehired in 1993.[35] After he returned to work at the mill for Stimson, Peterson testified that he spent about 60% of his time in the plywood plant and 40% in the finger-jointer building.[36]

¶ 27 According to Peterson, it was always dusty in the finger-jointer building. The doors were open in the summertime, and equipment was always coming and going, blowing dust around. Peterson would use an air hose to blow dust off his working area. Peterson explained that the fans, supplied to keep things cool in the summer, kept the air moving.[37] In the plywood building, Peterson testified that among other duties he drove a lift truck, was a dryer tender, and he also worked ...

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