David v. State Compensation Mutual Insurance Fund , 51 State Rptr. 1105 ( 1994 )

NO. 94-129
IN THE SUPREME COURT OF THE STATE OF MONTANA
1994
CURT DAVID,
Petitioner and Appellant,
-v-
STATE COMPENSATION MUTUAL INSURANCE FUND,
Respondent and Insurer for,
MIKE MCCOY,
Employer.
APPEAL FROM: Workers' Compensation Court
State of Montana
The Honorable Michael McCarter, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Patrick R. Sheehy, Halverson, Sheehy & Plath,
Billings, Montana
For Respondent:
Dan Whyte, Legal Counsel, State Compensation Mutual
Insurance Fund, Helena, Montana
Submitted on Briefs: September 1, 1994
Decided: November 14, 1994
Filed:
Cle&k
Justice Fred J. Weber delivered the Opinion of the Court.
This is an appeal from a Workers' Compensation Court decision
in favor of the State Fund's method of calculating benefits for
claimant David. We affirm.
We consider the following issues on appeal:
I. Did the Workers' Compensation Court err in determining
the temporary total disability rate to be paid to claimant David?
II. Did the Workers' Compensation Court properly deny
attorney fees?
III. Did the Workers' Compensation Court properly deny an
award of a 20% penalty pursuant to 5 39-71-2907, MCA (1991)?
Claimant Curt David (David) was hired by Mike McCoy to do
ranch work for a period of one day with compensation of $50.00 for
that day's work. At the time of this employment, David was also
self-employed as a massage therapist for the YMCA in Billings,
Montana, and anticipated future work on the rodeo circuit as a
rodeo clown. David testified that he had oral contracts to work
twelve rodeos as a rodeo clown throughout the season.
During the one day David worked for Mike McCoy, his horse
bucked, forcing him to slam into his saddle and breaking a fusion
rod that had been inserted in his spine during a 1986 surgery. In
1986, David was thrown from his horse, fracturing several parts of
his spine. The injuries required the insertion of fusion rods in
the spine for support. These rods we.re never removed.
David filed a workers' compensation claim. State Fund
calculated DavidUs compensation by interpreting § 39-71-123, MCA
2
(1991), to mean that a person who is hired to work only one day has
an average weekly wage equalling that one day's wages. Here, the
State Fund found that David had earned $50 and that his benefits
would amount to two-thirds of that, or $33.33 per week. David
received temporary total disability benefits for a period of
eighteen weeks and four days.
As a result of this calculation, David appealed to the
Workers' Compensation Court. The Workers' Compensation Court
entered its Findings of Fact, Conclusions of Law and Judgment on
March 18, 1994, concluding that, based upon 5 39-71-123, MCA
(1991), the State Fund properly determined David's temporary total
disability wage rate for his employment with Mike McCoy.
From these findings and conclusions, David appeals to this
Court.
I
Did the Workers' Compensation Court err in determining the
temporary total disability rate to be paid to claimant David?
David argues that the State Fund should have calculated his
benefits on a total of what he would have earned had he worked for
Mike McCoy for a week, or $250. This is because he was employed
full time in other jobs and the award of $33.33 per week does not
represent an accurate picture of his wages. However, David
contends that his argument does not mean that he feels the State
Fund should have aggregated his actual wages from all his jobs.
The State Fund argues that the Workers' Compensation Court was
3
correct in interpreting the entire statute instead of only one
subsection of 5 39-71-123, MCA (1991). The State Fund argues that
the statute clearly dictates that when a sole proprietor has not
provided workers' compensation coverage for his business, he cannot
include money made from the business in the total from which award
benefits are calculated. The State Fund contends that because
David had his own massage business he was a sole proprietor.
Further, David's alleged contracts with the rodeos were not in
force yet and could not be included in the award either.
At issue 'here is the Worker's Compensation Court's
interpretation of 5 39-71-123, MCA (1991). A conclusion of law
made by a Workers' Compensation Court is reviewed to determine
whether the conclusion is correct. Gibson v. State Compensation
Mut. Ins. Fund (1992), 255 Mont. 393, 842 P.2d 338.
The court concluded that the State Fund had calculated David's
award correctly. That award came to $33.33 based upon the figure
of $50 that he made while working for Mike McCoy. David argues
that only § 39-71-123(3)(a), MCA (1991), applies. State Fund
argues that the entire statute must be used to determine the
benefit rate for David, including the limitations placed on an
award by subsection 4(c) of the statute.
The pertinent statute in its entirety reads:
Wages defined. (1) "Wages" means the gross remuneration
paid in money, or in a substitute for money, for services
rendered by an employee. Wages include but are not
limited to:
(a) commissions, bonuses, and remuneration at the regular
hourly rate for overtime work, holidays, vacations, and
4
sickness periods;
(b) board, lodging, rent, or housing if it constitutes a
part of the employee's remuneration and is based on its
actual value: and
(c) payments made to an employee on any basis other than
time worked, including but not limited to piecework, an
incentive plan, or profit-sharing arrangement.
(2) Wages do not include:
(a) employee expense reimbursements or allowances for
meals, lodging, travel, subsistence, and other expenses,
as set forth in department rules:
(b) special rewards for individual invention or
discovery:
(c) tips and other gratuities received by the employee in
excess of those documented to the employer for tax
purposes;
Cd) contributions made by the employer to a group
insurance or pension plan; or
(e) vacation or sick leave benefits accrued but not paid.
(3) For comoensation benefit purposes, the averaqe actual
earninqs for the four nay periods immediately nrecedinq
the iniurv are the employee's waqes, except if:
(a) the term of employment for the same emplover is less
than four pay periods, in which case the employee's waqes
are the hourly rate times the number of hours in a week
for which the employee was hired to work; or
(b) for good cause shown by the claimant, the use of the
four pay periods does not accurately reflect the
claimant's employment history with the employer, in which
case the insurer may use additional pay periods.
(4) (a) For the purpose of calculating compensation
benefits for an employee working concurrent employments,
the average actual wages must be calculated as provided
in subsection (3).
(b) The compensation benefits for a covered volunteer
must be based on the average actual wages in his regular
employment, except self-employment as a sole proprietor
or partner who elected not to be covered, from which he
is disabled by the injury incurred.
(c) The compensation benefits for an employee workinq at
two or more concurrent remunerated employments must be
based on the aqqreqate of average actual wages of all
emplovments, except self-employment as a sole proprietor
or partner who elected not to be covered, from which the
emnlovee is disabled by the injury incurred.
(5) The compensation benefits and the payroll, for
premium purposes, for a volunteer firefighter covered
pursuant to 39-71-118(4) must be based upon a wage of not
less than $900 a month and not more than 1 and l/2 times
the average weekly wage as defined in this chapter.
5
Section 39-71-123, MCA (1991); relevant parts of this statute have
been highlighted.
The Workers" Compensation Court relied on both g 39-71-
123(3)(a) and § 39-71-123(4)(c), MCA. According to the court,
David worked less than four pay periods for McCoy; therefore, the
court found that the State Fund was correct in using the exact
number of hours worked and the exact pay received as stated in
subsections 3(a) and 4(a). This amounted to eight hours at $6.25
or $50.00. The court also looked at the fact that David had other
employment. The other employments, however, were not employer-
employee situations.
David was self-employed as a massage therapist: he was not an
l'employee.'V Thus, the court found him to be a sole proprietor who
had elected not to be covered by workers' compensation insurance
and pursuant to subsection 4(c) he could, therefore, not include
any of the money made from this work. The court further denied
inclusions of potential amounts provided by future contracts for
work as a rodeo clown. The .court determined that the future
contracts were also obtained by David in a capacity as sole
proprietor.
The Workers' Compensation Court was correct in considering 5
39-71-123, MCA (1991) in its entirety; a statute must be read as a
whole. Dover Ranch v. YellOWStOne COUnty (1980), 187 Mont. 276,
609 P.2d 711. While David chooses only subsection 3, that
subsection cannot be interpreted in isolation. The entire statute
6
provides more than the rote "four-previous-pay-periods" formula for
which David argues. The statute anticipates a situation like
David's by stating that if the work was not equal to four-pay-
periods for the same employer, then the "actual" hours worked and
the "actual" pay obtained must be used. This is the exact
calculation used by the State Fund and the Workers' Compensation
Court.
David was hired for one day of work. He did not work for
McCoy before this one day nor did he work for him after. David
argues that the State Fund should have projected his weekly salary
to $250 which is what he would have earned had he worked for McCoy
for a week. However, this total does not resemble at all the
"actual average wages" received from McCoy. Section 39-71-123(3),
MCA (1991). The "actual" wages were only $50.
Yet, David cites us to Love11 v. State Compensation Insurance
(1993) 0 260 Mont. 279, 860 P.2d 95, for the proposition that his
method of calculation is appropriate. David claims that Love11
permits him to project his one day's wages to that of what a full
week would have been. David believes that because he was employed
full-time, albeit at other work, he is entitled to make this
projection.
Love11 does not support David' reasoning. The Workers'
Compensation Court in Love11 determined that g 39-71-123(3)(a), MCA
(1987), precluded aggregation of wages from other sources when
determining an employee's award benefit. On appeal, we concluded
7
that this was not a correct interpretation of the law. We then
considered the correct interpretation of "wages" and the changes
made to the workers' compensation law in 1987.
We concluded that the 1987 changes did not affect the long-
standing rule permitting aggregation of concurrent employment.
However, we were cognizant that because of the Workers'
Compensation Court's stance on non-aggregation, the court had not
considered whether Love11 met the definition of "employee" with
regard to other work he may have been performing or whether other
income constituted wages from concurrent employment. We,
therefore, remanded the action back to the court for this
determination.
Here, the Workers' Compensation Court did make a determination
that David was not an "employee" but was a "sole proprietor" who
had made no workers' compensation provisions for his business.
Such a designation means that the benefit calculations must be made
without consideration of any money earned from the business.
David had the burden of proving he was an "employee" in order
that his other full-time employment could be considered for his
benefit award. Our statutes provide very long and detailed
definitions of what constitutes an "employee" and an "employer."
Sections 39-71-117 and 39-71-118, MCA (1991). An employee is not
a "sole proprietor." Section 39-71-118(3)(d), MCA (1991). Thus,
"persons who are truly independent in their operations according to
the standards established for determining that issue should not be
8
held to be employees." St. John's Lutheran v. State Comp. Ins.
Fund (1992), 252 Mont. 516, 523, 830 P.2d 1271, 1276.
Whether a person is an "employee" is important because both
subsections 3(a) and 4(a) calculate the award benefits for
"employees." However, subsection 4(c) contains an exclusion for
sole proprietors. Subsection 4(c) states that when a sole
proprietor elects not to provide workers' compensation coverage he
cannot include money derived from his business for the purpose of
determining his benefit.
David admits the YMCA merely supplied him with a room in the
YMCA facility. The record indicates that the YMCA did not control
his business as a massage therapist. The record clearly shows that
within his role as massage therapist, he was "free from control."
David independently established his business and ran it himself; he
was not an employee. Therefore, we conclude that the State Fund
had to consider the statutory limitations put on sole proprietors
by subsection 4(c) of 5 39-71-123, MCA (1991). Because David has
not supplied evidence that he paid workers' compensation premiums,
the exclusions in 4(c) require that any money David received from
his massage business must not be counted toward his award benefit.
Without "employee" status for David's alleged full-time work,
the State Fund and the Workers' Compensation Court had to rely on
the specific calculations called for in subsection 3(a) and 4(a),
plus the exclusions found in 4(c). These calculations call for
inclusion of "actual" hours worked per week for "actual" wages
9
received. This total is then multiplied by 66 and 2/3% to get the
benefit amount for temporary total disability. Section 39-71-701,
MCA (1991). State Fund calculated David's benefits accordingly as
did the Workers' Compensation Court.
We hold that the Workers' Compensation Court did not err in
determining the temporary total disability rate to be paid to
claimant David.
II
Did the Workers' Compensation Court properly deny attorney
fees?
The statute governing payment of attorney's fees states:
[if] the case is brought before the workers' compensation
judge for adjudication of the controversy, and the award
granted by the judge is greater than the amount paid or
offered by the insurer, a reasonable attorney's fee and
costs . . . may be awarded by the judge in addition to
the amount of compensation.
Section 39-71-612(l), MCA (1991).
Here, the Workers' Compensation Court agreed with the award
calculated by the State Fund. Therefore, because the award by the
court was the same, attorney fees would be inappropriately awarded
to David.
We hold that the Workers' Compensation Court properly denied
attorney fees.
III.
Did the Workers' Compensation Court properly deny an award of
a 20% penalty pursuant to § 39-71-2907, MCA (1991)?
The workers' compensation judge may increase by 20% the
10
full amount of benefits due a claimant during the period
of delay or :refusal to pay . . .
Section 39-71-2907(l), MCA (1991).
The insurer here did not deny the full amount of benefits, but
calculated the benefits correctly. Therefore, there exists no
basis for a 20% penalty.
The Workers' Compensation Court properly denied an award of a
20% penalty pursuant to 5 39-71-2907, MCA (1991).
Affirmed.
We Concur:
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November 14, 1994
CERTIFICATE OF SERVICE
I hereby certify that the following certified order was sent by United States mail, prepaid,
to the following named:
Patrick R. Sheehy
HALVERSON, SHEEHY & PLATH, P.C.
P.O. Box 1817
Billings, MT 59103-181’7
Dan Whyte, Legal Counsel
State Compensation Mutual Insurance Fund
P.O. Box 4759
Helena, MT 59604-4759
ED SMITH
CLERK OF THE, SUPREME COURT
STATE OF MONTANA
BY: :’
Deputy