RICHARD A. KUNZ Petitioner
ELECTRIC INSURANCE COMPANY Respondent/Insurer.
FINDINGS OF FACT, CONCLUSIONS OF LAW, AND
M. SANDLER JUDGE
Petitioner, a Montana resident, was hired in Montana, but
traveled to work at power plants throughout the United
States, and one in Europe, for four to six months out of each
year. Petitioner's employer had not assigned him to any
of its Montana jobs. After Petitioner was injured on a job in
Texas, the person who handled claims for his employer
reported his claim to its insurer as a Montana claim, filled
out a Montana First Report of Injury and Occupational Disease
and put it in his claims file, and told Petitioner he did not
need to file a claim in Texas. Notwithstanding, Respondent
denied liability on the grounds that Petitioner's
employment was not covered by the Montana Workers'
Compensation Act's extraterritorial statute, §
39-71-402(1)(a), MCA, and on the grounds that it was not
estopped from denying Petitioner's claim because it is a
Plan No. 2 insurer and the employer's employees could not
Petitioner's claim falls under the Montana Workers'
Compensation Act's extraterritorial statute, §
39-71-402(1)(a), MCA. Petitioner was a Montana employee who
temporarily left Montana incidental to his employment and was
injured in the course of his employment. Respondent is
therefore liable for his claim.
1 The trial in this matter was held on May 23, 2017, in
Kalispell. Kenneth S. Thomas represented Petitioner Richard
A. Kunz. Charles G. Adams represented Respondent Electric
Insurance Company (Electric).
2 Exhibits: This Court admitted Exhibits 1 through
20 without objection.
3 Witnesses and Depositions: This Court admitted the
depositions of Kunz, Lisa Block, and Shannon Calderwood into
evidence. Kunz was sworn and testified at trial.
4 Issues Presented: This Court restates the issues
in the Pretrial Order as follows:
Issue One: Whether Kunz has a compensable Montana
workers' compensation claim.
Issue Two: Whether Electric is estopped from denying that
Kunz has a compensable Montana workers' compensation
Issue Three: Whether Kunz is entitled to acceptance of
liability for his claim by Electric and payment of
appropriate past, ongoing, and future indemnity and medical
Issue Four: Whether Kunz is entitled to recover his costs.
Issue Five: Whether Electric has unreasonably refused to
accept liability for Kunz's industrial injuries, thereby
entitling Kunz to his attorney fees and a penalty.
5 This Court's resolution of Issue One renders Issue Two
6 The following facts are established by a preponderance of
7 Kunz's permanent residence is in the Kalispell area.
8 In 2000, Kunz suffered an industrial injury to his neck
while working for a sign company in Kalispell. Montana State
Fund (State Fund) accepted liability. Kunz underwent a fusion
at C6-7. Kunz settled this claim, leaving medicals open.
Eventually, Kunz began seeing Greg Vanichkachorn, MD, at
Occupational Health Services in Kalispell for treatment of
his ongoing neck pain, which was an arthritic ache and pain.
9 In early 2008, Kunz learned of an opportunity to work as a
turbine mechanic for General Electric d/b/a Granite Manpower
(Granite). Kunz was qualified for this job as a
result of his prior experience as a millwright.
10 Granite is enrolled under Compensation Plan No. 2 of the
Montana Workers' Compensation Act (WCA) and is insured by
Electric, another subsidiary of General Electric. Sedgwick
Claims Management Services, Inc. (Sedgwick) serves as
Third-Party Administrator for Electric's Montana claims.
11 Kunz contacted Mick Tucker, one of Granite's
supervisors, who lives south of Kalispell. At the time,
Granite had at least ten employees who lived in Montana,
including several supervisors. They traveled throughout the
United States for their work. Tucker had Kunz fill out an
application, which Kunz completed in Montana and gave to
Tucker, who forwarded it on to Granite's human resources
department. Kunz had a phone interview with one of
Granite's managers who worked in its office in Vancouver,
Washington. On February 24, 2008, Granite hired Kunz as a
turbine mechanic. Kunz's job was to disassemble and
reassemble turbines and generators at power plants at
locations throughout the United States.
12 From 2008 to 2015, Kunz worked jobs in Arkansas,
Louisiana, New Mexico, Oregon, Nevada, Idaho, and Texas. Kunz
also worked in Romania four times. Kunz worked for and with
other employees from Montana, including Tucker. Although
Granite has had jobs in Montana, it never assigned Kunz to a
Montana job. At the job locations, Kunz stayed in motels.
13 Kunz did not travel to jobs for Granite year-round; he
worked only the spring outage, which is one of the times each
year that power plants are taken offline for maintenance and
repairs. Kunz worked between four and six months each year.
Sometimes, Kunz returned to his home in Montana for a few
days between jobs. He always returned to Montana when his
work for the year was done. Kunz then collected unemployment
14 When Granite called Kunz out to jobs, one of Granite's
resource managers would call him at his home in Montana. The
calls originated from Texas, Florida, North Carolina, and
Washington. Oftentimes, before Kunz received his official
calls notifying him of his job assignments, Tucker or another
supervisor who lived south of Kalispell would give Kunz a
"heads-up" that he was about to be called.
15 Kunz either drove his personal vehicle to the job
locations or flew. When Kunz flew, Granite made the
arrangements for his flights, paid for his airline tickets,
and provided him with a rental car. After calling him out to
jobs, Granite sent Kunz emails with his airline tickets,
rental car reservations, motel reservations, and itinerary.
Granite paid Kunz to travel, and also provided him with per
16 When Kunz started at Granite, the company withheld state
income taxes in every state in which he worked. However,
starting in 2014, Granite changed the way it handled state
tax withholdings, and withheld only Montana income tax.
17 On March 8, 2014, Kunz sustained an accident, in which he
injured his neck and back, while working in Texas. His direct
supervisor witnessed the accident. Kunz kept working but,
within a few hours of the accident, he was "locked
up" and unable to move. He was transported to the ER at
the local hospital via ambulance.
18 Granite's supervisors and its safety manager
investigated the accident by taking statements, having Kunz
fill out a written report, and giving Kunz a drug test. They
determined that Kunz did not do anything wrong.
19 Despite his injuries, Kunz worked into June 2014. At that
time, as he had done every year he worked for Granite, Kunz
returned to Montana. Over the summer, he suffered from acute
neck and left-arm pain, with pain radiating to the back of
his hand, right-arm pain, and low-back pain. His symptoms
worsened over the summer and into the fall.
20 In the fall of 2014, Kunz collected unemployment benefits
from the Montana Unemployment Insurance program.
21 On November 11, 2014, Kunz saw Joshua Krass, DO, who works
at the Department of Neurological Surgery at Kalispell
Regional Medical Center. An MRI showed nerve compression at
C5-6. Dr. Krass recommended a fusion at C5-6, on the
condition that Kunz quit smoking.
22 On November 24, 2014, Dr. Vanichkachorn reviewed Dr.
Krass's record and, in reply to a letter from State Fund,
opined that the March 8, 2014, accident in Texas
substantially and materially worsened Kunz's preexisting
23 Shortly thereafter, State Fund denied further liability
for Kunz's cervical condition. Kunz and State Fund
settled the dispute over State Fund's liability for
medical benefits under his 2000 claim.
24 In January 2015, Kunz contacted Granite's human
resource department regarding his injuries. The first person
with whom Kunz spoke told him he needed to speak with Lisa
Block because she was the person at Granite who handled its
workers' compensation claims. At the time, Block's
office was in Florida. Her job title was "Environmental,
Health, and Safety global analyst." Block's job
duties included reporting injury claims for Granite's
employees and working as a "liaison" between
Granite and Electric. However, Block did not participate in
the decision-making process as to whether to accept or deny
25 Kunz called Block on January 22, 2015. Kunz told her that
his pain had worsened, that an MRI showed he had a
"crushed" disk, and that Dr. Krass recommended
surgery. Kunz told her he could not work and that he could no
longer afford to pay for his own treatment. Block told Kunz
that she would "take care of it." Block did not ask
Kunz where he wanted to file his claim. She decided that Kunz
had a Montana claim and indicated she would report his claim
to Montana. Block told Kunz that he did not need to file a
claim in Texas.
26 Block reported Kunz's claim to Sedgwick through an
online system called "ClaimCapture." She knew that
Kunz was injured in Texas. But she reported his injuries as a
Montana claim because Kunz resided in Montana and had been
treating with Montana physicians. Block filled out a First
Report of Injury or Occupational Disease, on the form
published by the Montana Department of Labor & Industry,
and added it to his claim file at Sedgwick.
27 In January 2015, Granite had Kunz undergo a physical at a
clinic in Kalispell. The physician determined that Kunz was
physically unable to work as a turbine mechanic.
28 Block called Kunz back in the first part of February 2015
and told him that she had reported his claim. Block told him
that Shannon Calderwood of Sedgwick would contact him because
Calderwood handled Electric's claims in Montana. Block
also told Kunz that Calderwood had an office in Montana and
gave Kunz her telephone number.
29 On March 5, 2015, Kunz filed a First Report of Injury and
Occupational Disease with the Montana Department of Labor
30 Calderwood adjusted Kunz's claim. However, because she
was an inexperienced adjuster, she ran her decisions by her
supervisor. Sedgwick's adjustment of Kunz's claim was
less than exemplary; e.g., Sedgwick sent a form letter under
Calderwood's name to Kunz confusingly stating that
Virginia has a 7-day waiting period for temporary total
disability (TTD) benefits and, more confusingly, that
Texas's maximum TTD rate is $1, 143 per week. And, it did
not pay Kunz some of the TTD it agreed to pay under §
39-71-608, MCA, in a timely manner.
31 Block told Calderwood that she reported Kunz's claim
as a Montana claim because he was a Montana resident and was
receiving treatment in Montana. However, because Kunz's
injury occurred in Texas, Calderwood concluded that it was
most likely not a Montana claim. Although Calderwood could
have transferred Kunz's claim to Texas, she did not do
32 Electric retained counsel to advise it on Kunz's
claim. On June 1, 2015, Electric's attorney notified
Kunz's attorney that Electric was denying liability. The
letter states: "It appears that this is not a Montana
Workers' Compensation claim as the work was not
controlled within Montana, it was performed in Texas, and the
payroll is made out of Connecticut. As a consequence, this is
not an injury that arose out of Montana employment."
33 On April 14, 2016, Granite terminated Kunz's
employment on the grounds that he had not provided any
medical documentation stating that he could work as a turbine
34 This case is governed by the 2013 version of the WCA since
that was the law in effect at the time of ...