Mintyala v. State Compensation Insurance Fund , 53 State Rptr. 503 ( 1996 )

NO. 95-390
IN THE SUPREME COURT OF THE STATE OF MONTANA
1996
CINDY MINTYALA,
Claimant and Appellant,
v.
STATE COMPENSATION INSURANCE FUND,
Defendant and Respondent,
and
CENTRAL MONTANA MEDICAL CENTER,
Employer.
APPEAL FROM: Workers' Compensation Court, State of Montana
The Honorable Mike McCarter, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Andrew J. Utick, Utick & Grosfield, Helena, Montana
For Respondent:
Daniel J. Whyte, State Compensation Insurance Fund,
Helena, Montana
Submitted on Briefs: March 14, 1996
Decided: May 10, 1996
Filed:
Justice William E. Hunt, Sr., delivered the Opinion of the Court.
Cindy Mintyala petitioned the Workers' Compensation Court for
a hearing after the State Compensation Insurance Fund terminated
her temporary total disability benefits. Prior to trial, the Fund
filed a motion to dismiss, which the Workers' Compensation Court
granted. Mintyala appeals.
We reverse and remand.
Appellant raises the following issue: Did the Workers'
Compensation Court err in granting the State Fund's motion to
dismiss Mintyala's petition for a hearing?
FACTS
In Mintyala's petition for hearing, she alleges that in August
1991 she injured her back and neck in the course and scope of her
employment as a certified nurses assistant while employed with the
Central Montana Medical Center. At the time of injury, her
employer was insured by the State Compensation Insurance Fund (the
Fund). Initially, the Fund accepted liability and paid out
temporary total disability and various medical benefits.
Three years later, the Fund notified Mintyala that it would be
terminating her benefits as of September 21, 1994. Mintyala filed
a petition for mediation pursuant to § 39-71-2401, MCA, but the
matter was not resolved. Following surgery on her back, Mintyala
submitted a petition for a hearing to the Workers' Compensation
Court in February 1995.
The petition alleges; (1) the Fund had unreasonably terminated
Mintyala's temporary total disability benefits based upon illegally
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obtained medical reports; (2) the Fund had unreasonably refused to
reinstate Mintyala's temporary total disability benefits, even
though she had undergone surgery on her back January 31, 1995, and
the Fund had accepted liability for the surgery; and (3) the Fund's
conduct had been unreasonable in that when the Fund terminated
Mintyala's benefits, it did not pay out permanent partial
disability that the "illegally obtained medical reports indicated
she was entitled to." The petition then requested an award of
temporary total disability benefits, (retroactive to the date of
termination), a penalty and reasonable costs and attorney fees.
Following discovery, the Fund notified Mintyala that she would
be placed back on temporary total disability benefits retroactive
to the date such benefits were terminated. On April 12, 1995, the
Fund made payment for the period between September 23, 1994 through
April 17, 1995. The Fund then filed a motion to dismiss Mintyala's
petition because it had accepted liability.
The Workers' Compensation Court held a hearing on the Fund's
motion to dismiss in June 1995. At that hearing, the Fund
acknowledged liability for medical benefits and temporary total
disability, and represented that it was current in the payment of
benefits and that benefits would continue to be paid. At that
point claimant's counsel, Andrew Utick, stated his belief that
attorney fees and penalty were still at issue.
The court disagreed and ruled that a recent decision from the
Workers' Compensation Court controlled, thus precluding attorney
fees or a penalty. Paulsen v. Entech Inc. WCC. No. 9209-6591
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(February 22, 1994). That decision was later appealed and affirmed
by this Court but Paulsen had been decided pursuant to Section I,
Paragraph 3 (c), of the Montana Supreme Court 1988 Internal
Operating rules, meaning the case is not available for future
precedent. Paulsen V. Entech Inc. (1994), 888 P.2d 432.
After the hearing on the Fund's motion to dismiss, the
Workers' Compensation Court issued a written order reflecting it's
decision. According to the written order, the court decided
Mintyala's entitlement to temporary total benefits and medicals was
moot because of the representations of the Fund, leaving only
Mintyala's claims for attorney fees and a penalty. The court then
decided "as a matter of law" Mintyala was not entitled to either
attorney fees or a penalty based on the Fund's acceptance of
liability for benefits prior to trial or judgments.
Mintyala appeals the Workers' Compensation Court's order
dismissing her petition.
STANDARD OF REVIEW
The procedural history of this case presents a threshold issue
regarding the appropriate standard of review.
The Fund contends that its motion to dismiss was filed
pursuant to the administrative rules that govern the Workers'
Compensation Court and therefore the correct standard of review is
whether the court abused its discretion in deciding to dismiss the
petition citing Doug John's Real Estate V. Banta (1990), 246 Mont.
295, 298, 805 P.2d 1301, 1303.
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The Fund contends that Rule 24.5.316, ARM, controls motions to
dismiss. The portion of that rule that specifically mentions
"motion to dismiss" reads as follows:
Unless a different time is specified in these rules, the
time for filing any motion to amend a pleading, to
dismiss, to quash, for summary ruling, to compel, for a
protective order, in limine, or for other relief shall be
fixed by the court in a scheduling or other order.
Rule 24.5.316(l), ARM. Read in its entirety, the rule deals with
motions in general. The rule does not mention a standard of
review, discretionary or otherwise, to be used by the court in the
disposition of motions to dismiss. Furthermore, the case cited by
the Fund, Douq John's Real Estate, deals with Rule 41(b),
M.R.Civ.P. That case involves a cause of action that was
involuntarily dismissed for failure to prosecute or comply with a
court order. The issue presented in this case does not involve
Rule 41(b), M.R.Civ.P., therefore the Doug John's Real Estate case
is not applicable.
The administrative rules do provide the Workers' Compensation
Court with the discretionary power to dismiss petitions. The
relevant regulation reads as follows:
(I) In the discretion of the court, informal disposition
may be made of a dispute or controversy by stipulation,
agreed settlement, consent order, or default.
Rule 24.5.333, ARM. The question of informal disposition was
raised in this matter but, counsel argued that under the
circumstances of this case, informal deposition was not applicable:
MR. UTICK: My argument, I said I had an argument in the
brief with respect to the rules. Under your rules it
provides the methods by which you can make an informal
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disposition of the case and it doesn't provide for
unilateral concession barring the other party from
proceeding. . . For example, in the district court, in
order to dismiss, you can dismiss the case unilaterally
until a Response of Pleading is filed....
THE COURT: . . . The informal disposition as I see it is
where there's still something in controversy; but if - -
MR. UTICK: Well, there is
THE COURT: What?
MR.UTICK: Penalty and attorneys' fees.
THE COURT: Okay, as a matter of law you're not entitled
to it under the Paulsen ruling, and I'm not going to
reverse myself on Paulsen. That's an appealable order.
MR. UTICK: Well, then you've ruled.
THE COURT: Right, I'm ruling on that. I'll rule on that
as a matter of law; and that can be appealable.
Pursuant to the language of the rule, an informal disposition of a
motion would be reviewed under an abuse of discretion standard. In
this case, however, the parties did not stipulate to the motion,
nor was there an agreed settlement, consent order or default as
required under the regulation. Therefore, the motion could not be
dismissed informally.
The Workers' Compensation Court order in this matter expressly
concluded that a previous case controlled and that as a “matter of
law" the court was dismissing the petition. Because this was not
an informal disposition, we will not review this matter for an
abuse of discretion. Rather, this Court will review the Workers'
Compensation Court's conclusions of law to determine if the court's
determination of the law is correct. Glaude v. State Comp. Ins.
Fund (1995), 271 Mont. 136, 137, 894 P.2d 940, 941.
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DISCUSSION
In the Workers' Compensation Court order dismissing Mintyala's
petition, the court found that based on the representation of the
attorney for the Fund that the claimant's claim for temporary total
disability benefits was moot. Leaving only the remaining claims
for attorney fees and a penalty, the court then decided "as a
matter of law," the claimant was not entitled to either since the
Fund had accepted liability for benefits prior to trial or
judgment, again citing Paulsen v. Entech. However, because that
decision was classified as non-citable, that case is not binding on
this Court.
We must therefore look to other cases for guidance in deciding
whether the Workers' Compensation Court improperly granted the
Fund's motion to dismiss, thereby dismissing the additional issues
of attorney fees and a penalty.
First we turn our attention to the issue of a penalty. It has
long been held that the statutes in effect on the date of the
claimant's injury must be applied when determining benefits.
Buckman v. Montana Deaconess Hosp. (1986), 224 Mont. 318, 321, 730
P.2d 380, 382. In this case, Mintyala was injured in August 1991,
therefore the 1989 penalty applies. The applicable statute reads
as follows:
increase in award for unreasonable delay or refusal to
pay. (1) When payment of compensation has been
unreasonably delayed or refused by an insurer, either
prior or subsequent to the issuance of an order by the
workers' compensation judge granting a claimant
compensation benefits, the full amount of the
compensation benefits due a claimant between the time of
compensation benefits were delayed or refused and the
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date of the order granting a claimant compensation
benefits may be increased by the workers' compensation
judge by 20%. The question of unreasonable delay or
refusal shall be determined by the workers' compensation
judge , and such a finding constitutes good cause to
rescind, alter, or amend any order, decision or award
previously made in the cause for the purpose of making
the increase provided herein.
Section 39-71-2907, MCA (1989).
On appeal, Mintyala argues that the rule of law in Handlos v.
Cyprus Industrial Minerals (1990), 243 Mont. 314, 794 P.2d 702
applies. In Handlos, the claimant appealed an order of the
Workers' Compensation Court declining the imposition of a penalty.
The insurer initially denied liability for claimant's 1987 injury,
but then accepted liability five months later. Insurer attributed
the delay to concerns that the claimant’s injury was not work-
related. A trial was held to dispose of the issue of payment of
certain medical bills for treatment, as well as the issue of
whether the delays in payment were unreasonable. The Workers'
Compensation Court concluded that because the insurer had accepted
liability for treatment before any court order was issued, the
court was barred from awarding a penalty.
On appeal, this Court disagreed. We held that the lower
court's interpretation of § 39-71-2907, MCA, rendered the statutory
reference to "unreasonable delay" as mere surplusage. Handlos, 794
P.2d at 703. This Court then stated that such an interpretation
would create a situation where an insurer was capable of avoiding
a penalty if it accepted liability at any time prior to the
issuance of an order by the court because "there would be no order
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for benefits making possible consideration of a penalty."
Consequently, the words "unreasonably delayed" would become
meaningless in the statute.
This Court then looked to other provisions in the Workers'
Compensation Act regarding the purpose of the Workers' Compensation
Court system. The system was designed to enable claimants to
"speedily obtain benefits" and to "minimize the reliance on
lawyers." Section 39-71-105(3), MCA (1989). The Court then held
that "[iln light of that purpose and in order to give effect to all
provisions of the statute, we conclude that the penalty is
available where an insurer unreasonably delays payment until the
claimant takes the case to trial." Handlos, 794 P.2d at 703. In
other words, the penalty provision is available to the claimant
from the moment the insurer's delay in payment becomes
unreasonable.
The Fund also refers to the Handlos case. However, the Fund
relies on this case as authority for the proposition that the
Workers' Compensation Court has limited authority to award a
penalty. In Handlos, this Court stated that a penalty could be
awarded when payment of benefits has been "unreasonably delayed
until mid-trial." Handlos, 794 P.2d at 704. The Fund argues that
since it paid out benefits before "mid-trial," the court could not
award a penalty. This may be the language of the opinion, but to
literally limit the Workers' Compensation Court's authority to
award a penalty, would ignore the intent of the Handles opinion.
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The wording "mid-trial" is to be used as a guide not as a
prerequisite.
Moreover, subsequent to the Handlos decision, this Court has
stated that "[playment of unreasonably withheld benefits 'on the
courthouse steps' does not negate the insurer's potential liability
for a penalty for unreasonable delay of benefits. To conclude
otherwise would render the penalty statute moot." Love11 v. State
Comp. Mut. Ins. Fund (1993), 260 Mont. 279, 289, 860 P.2d 95, 102.
The Fund asserts that this Court has held that the Workers'
Compensation Court cannot award a penalty if the insurer concedes
liability prior to trial, citing to Field v. Sears Roebuck (1993),
257 Mont. 81, 847 P.2d 306. In that case, the court did not award
a penalty because no award of permanent total disability was
ordered "that would serve as a basis for a penalty under Section
39-71-2907, MCA." FieldI
- 847 P.2d at 310. The Field case,
however, is factually distinguishable. There, the court held a
trial in which it was given the opportunity to decide if
unreasonable delay occurred. In Field this Court concluded that
"[ulnreasonable delay is a question of fact to be determined by the
trier of fact; we will not reverse the Workers' Compensation
Court's decision on awarding a penalty if the decision is supported
by substantial credible evidence." Field, 047 P.2d at 310.
Throughout the many revisions to the penalty statute, the
language regarding "unreasonable delay II has remained basically the
same. Regardless of what version of the statute this Court has
interpreted we have concluded that the penalty statute should be
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made available "where an insurer acts unreasonably to deny benefits
to which a claimant is legally entitled the statutory penalty
should be imposed." Plooster v. Pierce Packing Co. (1993), 256
Mont. 287, 291, 846 P.2d 976, 978 (citing Holton v. F.H. Stoltze
Land & Lumber Co. (1981), 195 Mont. 263, 267-68, 637 P.2d 10, 13).
Furthermore, this Court consistently held that the determination of
whether there was an unreasonable delay in payments of benefits by
the insurer is a factual question. Handlos, 794 P.2d at 704;
Lovell, 860 P.2d 95.
As a factual question, we conclude that the question of a
penalty in this matter is not amenable to dismissal by conclusion
of law, and remand the matter for a factual determination of
reasonableness. On remand, the court should also reconsider
whether an award of attorney fees and costs is warranted under 5
39-71-611, MCA.
Remanded for further proceedings consistent with this opinion.
We Concur: /Y-
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