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Kunz v. Electric Insurance Co.

Court of Workers Compensation of Montana

February 9, 2018

RICHARD A. KUNZ Petitioner



         Summary: 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 bind it.

         Held: 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 claim.
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 benefits.
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 moot.


         ¶ 6 The following facts are established by a preponderance of the evidence.

         ¶ 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).[1] 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 insurance benefits.

         ¶ 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 diem pay.

         ¶ 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 cervical condition.

         ¶ 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 claims.

         ¶ 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 & Industry.

         ¶ 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 so.

         ¶ 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 mechanic.


         ¶ 34 This case is governed by the 2013 version of the WCA since that was the law in effect at the time of ...

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