Submitted: November 17, 2015
DECISION ON STIPULATED FACTS AND JUDGMENT
M. SANDLER JUDGE.
Petitioner suffered an industrial injury to his low back in
1977. His PTD rate for this injury is $174, which would be
payable for his lifetime under the 1977 WCA. Petitioner
subsequently worked in a "sheltered" position with
his time-of-injury employer and suffered an industrial injury
to his knee in 1983. His PTD rate for this injury is $277,
which would be payable until his receipt of Social Security
retirement under the 1983 WCA. He returned to work, but his
time-of-injury employer went out of business in 1996, and he
has not worked since. From 1997 to 2009, Petitioner: asserted
that the combination of his back and knee injuries rendered
him permanently totally disabled; demanded PTD benefits under
his 1983 claim at the rate of $277; acknowledged that such
benefits would terminate on his receipt of Social Security
retirement benefits; obtained PTD benefits at the $277 rate;
obtained attorney fees calculated on a percentage of the PTD
benefits he received; and then, after a dispute arose over
periods in which Respondent had not paid PTD benefits,
obtained a judgment from this Court pursuant to which
Respondent was legally obligated to pay PTD at the $277 rate
and attorney fees calculated on the amount of PTD benefits
awarded. Petitioner and Respondent stipulate that Respondent
"has not paid any benefit to which [Petitioner] is not
entitled." However, Petitioner now argues that his back
injury was the "actual cause" of his permanent
total disability and, therefore, that Respondent should have
paid him PTD benefits under his 1977 claim, and that he is
now entitled to PTD benefits under his 1977 claim. Respondent
argues that Petitioner is estopped from claiming, and waived
his asserted right to, PTD benefits for his 1977 claim.
Petitioner waived his claimed right to PTD benefits under his
1977 claim. Petitioner arguably had the right to PTD benefits
under his 1977 claim because he thereafter worked in a
sheltered job, which is not to be considered when determining
whether a claimant is PTD. However, by his express
declarations and his course of conduct, Petitioner
intentionally and voluntarily acted inconsistently with his
asserted right to PTD benefits under his 1977 claim. And,
although the parties have agreed that if Petitioner prevails,
Respondent would be entitled to a credit in the amount of
what would then be deemed an overpayment of PTD benefits,
prejudice to Respondent would result if Petitioner was now
allowed to obtain PTD benefits under his 1977 claim because
Petitioner has not agreed to reimburse Respondent for the
attorney fees calculated on the higher rate, nor to provide
any compensation to Respondent for the time-value-of money.
1 Issues Presented: The parties presented two
stipulated issues for determination, which the Court
restates as follows:
Issue One: Does McCrary satisfy the applicable criteria for
entitlement to PTD benefits after the age of retirement as
the result of his October 17, 1977, industrial injury to his
Issue Two: Do equitable doctrines of estoppel and/or waiver
bar McCrary from receiving PTD benefits after the age of
retirement for his October 17, 1977, industrial injury to his
2 Because this Court's resolution of Issue Two is
dispositive of McCrary's entitlement to permanent total
disability (PTD) benefits, Issue One is not addressed.
3 On October 17, 1977, Petitioner Robert McCrary sustained an
industrial injury to his back in the course and scope of his
employment at Missoula White Pine Sash Company (White Pine).
McCrary was working at the trim saw "pulling green
chain" when he was hit on the right side of his back
with a board. His position was a heavy duty position.
4 At the time of the 1977 back injury, White Pine was
enrolled in Compensation Plan Number II under the
Workers' Compensation Act (WCA) and its insurer was
Liberty Mutual Fire Insurance Company (Liberty).
5 Liberty accepted liability for McCrary's October 17,
1977, back injury.
6 At the time of his October 17, 1977, injury, McCrary earned
$7.02 per hour and his temporary total disability (TTD) and
PTD rate were $174 per week.
7 In 1977, Dr. N.S. Green diagnosed a lumbosacral strain
after x-rays of McCrary's lumbar spine were taken.
8 Following the 1977 injury, McCrary returned to work at
White Pine. However, as a result of the injury, he was unable
to perform his time-of-injury position, and as a consequence
suffered actual wage loss and actual loss of earning
capacity. Liberty ultimately paid McCrary the maximum
permanent partial disability (PPD) award for this injury.
9 White Pine provided McCrary with a "sheltered"
work environment. This employment did not reflect
McCrary's ability to hold a job in the normal open labor
market at any time after his back injury precluded him from
all but sedentary to light-lifting job duties.
10 McCrary alleges that because of physical limitations
caused by his back injury, he was unable to return to his job
of injury and had no prospect of finding regular employment
of any kind in the normal open labor market.
11 Since the 1977 back injury, no doctor has released McCrary
to return to work at regular employment in the normal open
12 Liberty has never identified regular employment of any
kind in the normal open labor market which McCrary could
perform after his 1977 back injury.
13 On November 29, 1983, McCrary suffered a work-related
injury when he slipped and fell on an icy road and sustained
a right patellar fracture. At that time, McCrary worked for
White Pine as a night driver.
14 Liberty accepted liability for the November 29, 1983,
right knee injury.
15 At the time of the 1983 injury, McCrary earned $10.43 per
hour. McCrary's 1983 TTD and PTD total rate were $277 per
16 After both the 1977 and 1983 industrial injuries, McCrary
continued his employment with White Pine.
17 At some point in the 1980s, Liberty began adjusting
McCrary's claim for his 1977 back injury and his 1983
knee injury out of the same file.
18 On May 11, 1984, Dr. Sterling noted that there was
"no evidence per permanent partial impairment"
concerning McCrary's knee.
19 By 1989, McCrary's patellar fracture had healed.
20 On November 12, 1996, McCrary's employment with White
Pine ended because White Pine ceased operations and
terminated all employees. This was McCrary's last day of
employment of any kind.
21 After White Pine ceased operation, McCrary stated in
response to discovery requests:
Missoula White Pine Sash terminated its operations in
Missoula on or about November 12, 1996. Irrespective of the
plant closure, Petitioner had (prior to closure) undertaken
treatment for his back and knee condition and could not have
continued this work in any event due to his back and knee
symptoms and limitations. Petitioner could not have continued
to tolerate the standing, walking, lifting, turning and other
physical requirements of his job.
those discovery responses, McCrary asserted that he
considered his back or knee symptoms and limitations a reason
for his permanent total disability.
22 McCrary has borderline intellectual functioning,
performing better than 4% of the general population on
standardized testing. He also suffers from an anxious
adjustment disorder and chronic avoidant personality disorder
together with stuttering and speech articulation problems
which profoundly interfere with his ability to interact with
23 McCrary is only able to read single words and short
phrases. He has difficulty: reading anything involving
sentences or paragraphs; performing arithmetic involving
fractions, decimals or percentages; following verbal
instructions; performing tasks with problem solving; and
learning a more complex task. He has a slow work speed; he is
slow to learn a new task and is anxious and fearful when
confronted with a new task.
24 McCrary also has difficulty hearing, and difficulty
tolerating sitting and standing. He can lift only in the
sedentary to light physical demand level with limited
endurance and stamina.
25 On July 22, 1997, McCrary requested that Liberty pay PTD
benefits retroactive to November 13, 1996. He alleged that he
had not worked since November 12, 1996, and that he was
unable to work. Specifically, McCrary's attorney wrote:
As you are aware, Mr. McCrary suffered knee and back injuries
while employed by White Pine Sash Company. Dr. Robins has
reported that knee symptoms aggravate Mr. McCrary's back.
Mr. McCrary has not worked since November 12, 1996, and is
currently unable to work. We believe he suffers permanent
total disability. In any event, he is entitled to permanent
partial disability benefits since the date of injury. We
believe this entitlement is the maximum permissible and that
it is presently past due and payable. Please acknowledge and
pay permanent total disability benefits retroactive to and
including November 13, 1996.
26 On July 28, 1997, McCrary filed a Petition for
regarding his October 17, 1977, back injury and November 29, 1983,
right knee injury. McCrary contended: "due to the above
described industrial injuries, he became permanently totally
disabled as of November 13, 1996." In his prayer for
relief, McCrary sought, "[a]n Order stating the nature
and extent of Petitioner's disability and entitlement
through the time of hearing on this petition, " and his
attorney fees and costs.
27 In its Response to the July 28, 1997, Petition for
Hearing, Liberty contended that McCrary was not permanently
totally disabled as a result of any work-related injuries,
and that he was not entitled to any PTD or PPD benefits.
Liberty also raised the affirmative defenses of laches and
28 In the fall of 1997, before any hearing on the Petition,
Liberty agreed to pay McCrary TTD benefits under a
reservation of rights while awaiting the result of
McCrary's claim for Social Security disability benefits.
Thereafter, on October 15, 1997, McCrary's attorney Rex
Palmer wrote to Liberty's attorney, Larry Jones, stating:
"[McCrary's] wages at the time of his injury were
$10.43 per hour, 40 hours per week. Sixty-six percent of this
exceeds the $277 per week total disability rate."
29 On December 12, 1997, Dr. Sterling assessed McCrary at his
attorney's request. Dr. Sterling restricted McCrary from
frequent kneeling, squatting, heavy lifting, and carrying. He
restricted lifting to 10 pounds infrequently and carrying to
20 pounds occasionally. Dr. Sterling also rated McCrary's
It is considered that the patient has 5% permanent partial
impairment of the lower extremity which is equivalent to 3%
permanent partial impairment of the whole person as regards
his patella fracture and his early patellofemoral arthritis.
Patient has had a documented lumbar strain as evidence by his
injury reports. There would not appear to be any impairment
related to such injury. It is felt that he has DRE impairment
category II as regards his multilevel degenerative disc
disease of the lumbar spine which qualifies for 5% permanent
partial impairment of the whole person. There is not a clear
cut connection in the clinical record to connect this to a
work injury per se. I have listed . . . additional
restrictions as regards climbing and jumping and repetitive
carrying as regards his work restrictions over and above the
functional capacities evaluation at the work center.
times since McCrary's 1977 back injury, Liberty has
accepted liability for and paid for all the medical care for
McCrary's back including his ongoing multilevel
degenerative disk disease and related chronic pain.
30 On December 19, 1997, Margot Hart, Rehabilitation
Consultant, asked Dr. Sterling whether McCrary was
permanently and totally disabled from gainful employment of
any kind due to his physical condition. Dr. Sterling wrote,
"No-[b]ut, considering all conditions, the answer would
be yes." Hart also asked Dr. Sterling whether
McCrary's back condition was related to his knee
condition. Dr. Sterling wrote, "Yes, insofar as knee
pain & resulting limp has the potential to aggravate a
31 On October 9, 1998, Dr. Sterling opined that McCrary was
32 On June 29, 1999, Psychologist Patricia L. Webber, PhD,
completed a psychological evaluation of McCrary. In her
Evaluation Summary, Dr. Webber stated:
Work activities will be limited to simple, routine tasks. He
would not be expected to comprehend and follow through on
complex, detailed, or abstract instructions. He would not be
expected to be able for [sic] understand complex social
situations and therefore be limited in his ability to
interact with co-workers and supervisors. He requires
simplified verbal instructions and longer than average amount
of time to process information.
33 On August 11, 1999, McCrary returned to Dr. Sterling for a
check-up. Dr. Sterling's impressions were: "healed
patella fracture right knee with patellofemoral arthritis;
34 McCrary filed for Social Security disability benefits and
alleged he was entitled to SSDI benefits as a result of both
his back and knee injuries. On September 20, 1999, McCrary
was found to be disabled pursuant to Social Security rules
retroactive to February 28, 1998. His benefit rate was $1,
079.50 per month.
35 Until October 12, 1999, Liberty paid McCrary's TTD
benefits under a reservation of rights. Effective October 13,
1999, Liberty withdrew its reservation of rights and
continued to pay McCrary TTD benefits.
36 On October 13, 1999, Liberty's attorney wrote to
McCrary's attorney concerning the Social Security
benefits awarded the previous month. The purpose was to
clarify whether McCrary disputed Liberty's entitlement to
an offset as the result of the Social Security award.
Specifically, Liberty would be entitled to an offset only if
the award was based on either McCrary's knee injury or
his back injury, or both. Liberty's letter references
McCrary's claim WC687-00704, which is the claim file
within which Liberty adjusted and continues to adjust
McCrary's claims for both his back and knee.
37 Effective September 27, 2000, Liberty began to pay McCrary
PTD benefits at the rate of $277 per week.
38 On September 19, 2001, McCrary began treatment with Dr.
James R. Burton, an orthopedic surgeon, for low-back
problems. On February 14, 2005, in response to written
questions by Liberty, Dr. Burton wrote that McCrary: suffers
from "[s]ignificant" degenerative disk disease at
multiple levels, spondylolisthesis and chronic pain; should
see his doctor every 6 months for life; may require surgery
although it is not expected; requires pain medication for his
back (Hydrocodone and Bextra), muscle spasm medication
(Flurazepan), and sleep medication (Dalmane) for life; TENS
Unit permanently; and a back brace for the rest of his life.
39 On July 10, 2006, McCrary filed a Petition for
McCrary contended that the parties resolved their dispute
over his PTD status and that he was now entitled to his
attorney fees on those benefits paid and to be paid in the
future pursuant to Madill v. State Comp. Ins.
Specifically, McCrary stated:
[T]he parties resolved that particular controversy (re:
Petitioner's status as PTD) and Respondent has paid
Petitioner total disability benefits continuously since that
time. As a result of settling this controversy, Petitioner is
entitled to his attorney fees on those benefits paid and to
be paid in the future.
prayer for relief, McCrary sought his attorney fees on his
benefits, and his attorney fees incurred in obtaining his
40 In its Response to the July 10, 2006, Petition for
Hearing, Liberty contended that McCrary was not entitled to
attorney fees on benefits paid to date nor in the future, and
that he was not entitled to attorney fees or costs for the
41 In early 2007, a question arose about various gaps during
which Liberty had not paid McCrary total disability benefits
while the evidence demonstrated that McCrary had been
unemployed and totally disabled. On February 8, 2007, Palmer
wrote Jones a letter identifying the gaps and applying the
weekly rate of $277 which Liberty had been paying to McCrary
since before it withdrew its reservation of rights effective
October 13, 1999. Concerning the first "gap, "
November 13, 1996, through October 5, 1997, Palmer's
letter states that the rate for PTD was $277 per week because
Social Security did not begin until August 1998. The total
amount of PTD requested was then $13, 333.70. The associated
attorney fees were said to be $3, 333.70 pursuant to
Madill, and associated costs with the underlying
claim were about $1, 500.
42 Liberty paid PTD benefits at the rate of $277 per week,
less SSDI offset, until McCrary reached his age of
43 On March 23, 2007, Palmer wrote to Debbie Daniels at
Liberty regarding the PTD payments. The letter provides, in
part, as follows:
I am writing to follow up on your recent discussions. Since
we spoke, I have received your payment of $13, 334 to Mr.
McCrary and $3, 333 to myself. As you know, this covers
permanent total disability benefits between November 12,
1996, and October 15, 1997, a total of 48 weeks. Thank you
for your assistance on this portion of the adjustments
required by Madill (1997).
. . . .
Next, Liberty has not paid fees on the benefits which it paid
(and will pay) on total disability benefits from October 15,
1997, through retirement age of age 66 which is June 17,
2009. This can be broken down into two time frames:
I. $11, 476.11 From 10/15/97 until 8/1/98 @ $277/week when
the social security offset began (a total of 41.43 weeks).
[Referring to the weekly rate of $277 which Liberty had ...