IN THE SUPREME COURT
OF THE STATE OF MONTANA
Petitioner and Appellant,
Insurer and Respondent,
APPEAL FROM: Workers'
Compensation Court, State of Montana
Honorable Mike McCarter, Judge Presiding.
COUNSEL OF RECORD:
Lawrence A. Anderson,
Howard F. Strause, Attorneys at Law,
Great Falls, Montana
Sara R. Sexe; Marra,
Wenz, Johnson & Hopkins,
Great Falls, Montana
Submitted on Briefs: November 13, 1997
Justice W. William
Lepahart delivered the Opinion of the Court.
Polk (Polk) appeals from the February 26, 1997, Judgment and
Order of the Montana Workers' Compensation Court, affirming the findings
conclusions of law, and final order of the hearings examiner of the
Department of Labor.
the following issues on appeal:
1. Did the Workers' Compensation Court err in holding that Polk had
failed to prove causation?
2. Did the Workers' Compensation Court err in holding that the unlawful
medical panel procedure was not reversible error?
3. Did the Workers' Compensation Court err in reviewing the decision
of the hearings examiner under the clearly erroneous standard of review?
Because we find
issues one and three dispositive, we will not address issue two.
Factual and Procedural Background Koch Agriculture, Inc. (Koch) owns
a Great Falls factory which processes seeds, such as flax, rape, linseed,
and mustard, into oil and meal sold for cattle feed. Appellant William
Polk (Polk) worked in the factory owned by Koch and its predecessors
from 1985 to 1993. Polk performed physical labor at the factory, including
carrying and stacking meal sacks, shoveling seed, sacking and unsacking
meal, blowing dust residue off of the walls, and cleaning the machinery.
Polk also scraped moldy grain from the inside of elevator and machine
pits. Koch's factory is housed in one building, which is 150 feet long
and 70 feet wide. The building has one two-foot ventilation fan on the
ceiling. Because the process of transporting, cleaning, and milling
the seeds generates dust, additional fans were occasionally brought
in to blow the airborne dust away from workers. Though Polk's job subjected
him to dust, fumes, and airborne mold, Koch did not provide him with
a dust mask until 1992. After 1992, Polk was given a paper mask, which
often became clogged with dust and sweat after a few hours.
In April 1991, Polk began experiencing health problems. He suffered
fever, and persistent diarrhea. In February 1992, Polk was hospitalized
for fever and
chills. He testified that thereafter he "never felt good."
He tired easily, had trouble
breathing, and lost nearly 40 pounds. In November 1993, Polk was again
hospitalized for ten days for fever, chills, and a cough. Shortly after,
Polk's doctor ordered him to leave work. Polk continues to suffer severe
shortages of breath and lightheadedness. He has lost nearly half of
his lung function, and his low blood oxygen level frequently requires
him to use supplemental oxygen. For about 30 years, Polk smoked one
and a half packs of cigarettes a day. He attempted to quit smoking in
December 1993, but still smokes occassionally. In January 1994, Polk
filed a claim for occupational disease benefits against Koch
and its insurer, Respondent Planet Insurance Company (Planet). Pursuant
to õõ 39-72-601 through -613, MCA, the Department of Labor
and Industry appointed a panel of three doctors to evaluate Polk's claim.
Polk was examined by Drs. David Anderson and J. Michael Sadaj. Dr. Anderson
concluded that Polk suffered from an occupational disease, while Dr.
Sadaj concluded he did not. A third physician, Dr. Thomas Thigpen, reviewed
the records and reports of Drs. Anderson and Sadaj. Dr. Thigpen did
not meet with the other two doctors, but issued a report to the Department
of Labor on behalf of the panel concluding that Polk's condition was
not the result of an occupational disease. Polk appealed this determination
to the hearings unit of the Department of Labor and Industry. The eight
medical experts whose testimony was presented at the hearing had either
examined Polk or reviewed his medical records. Each came to a different
to the cause of Polk's pulmonary condition. Dr. Anderson, a panel doctor,
that Polk's condition was caused primarily by asthmatic bronchitis,
pneumonitis, and some emphysema. Hypersensitivity pneumonitis, or "farmer's
lung," can be caused by exposing the lungs to grain, molds, and
other airborne irritants. Emphysema is typically caused by smoking.
Dr. Anderson stated that the asthmatic component of Polk's condition
was "likely related to his exposure to toxic organic dusts."
Drs. Sadaj and Thigpen, the other panel doctors, concluded that Polk
suffers from "chronic obstructive pulmonary disease and chronic
respiratory insufficiency as a result of long term heavy smoking."
Polk's treating physician, Dr. Holly Strong, concluded that Polk suffers
fromhypersensitivity pneumonitis, occupational asthma, and slight emphysema.
She also diagnosed Polk with bronchiectasis, which can be caused by
fungus associated with organic dust and by hypersensitivity pneumonitis.
Dr. Jeffrey Kessler, a radiologist, performed a high-resolution CT scan
on Polk's lungs and determined that Polk suffers from hypersensitivity
pneumonitis, severe bronchiectasis, and minimal emphysema. Dr. Stephen
Demeter, an expert retained by Planet, testified that he found no evidence
that Polk suffers from hypersensitivity pneumonitis, or of any occupational
disease. He concluded that Polk has emphysema caused by smoking and
some bronchiectasis, possibly caused by a past episode of pneumonia.
Planet also offered the expert deposition testimony of Dr. Robert Merchant,
who concluded that Polk suffers from emphysema and some bronchiectasis.
Polk's expert, Dr. Dana Headapohl, concluded that Polk suffers from
hypersensitivity pneumonitis caused by his exposure to mold and organic
dust while working at Koch.
After a hearing,
the hearings examiner found that Polk is not suffering from an
occupational disease. In March 1996, Polk appealed to the Workers' Compensation
Court, arguing that the procedure used by the three-member medical panel
was unlawful and that the hearings examiner had failed to apply the
appropriate standard of causation. The Workers' Compensation Court held
that the medical panel had acted improperly by failing to meet to discuss
Polk's case, but that this was not reversible error. It further found
that the hearings examiner's finding that Polk does not suffer from
an occupational disease is not clearly erroneous and is supported by
substantial evidence. Polk appeals from this decision.
Standard of Review
We review the
Workers' Compensation Court's findings of fact to determine
whether the findings are supported by substantial credible evidence.
This Court reviews conclusions of law to determine whether the lower
court's interpretation of the law is correct. Kloepfer v. Lumbermen's
Mut. Cas. Co. (1996), 276 Mont. 495, 916 P.2d 1310.
Did the Workers'
Compensation Court err in holding that Polk had failed to prove
causation and in reviewing the decision of the Department of Labor under
the clearly erroneous standard?
A. Appropriate Standard
Disease Act of Montana (the Act) is codified at Title 39, Ch. 72,
MCA. To qualify for benefits under the Act, the claimant must prove
that his or her
employment is a proximate cause of the claimant's condition. Under õ
diseases shall be deemed to arise out of the employment only if:
(1) there is a direct causal connection between the conditions under
which the work is performed and the occupational disease;
(2) the disease can be seen to have followed as a natural incident of
the work as a result of the exposure occasioned by the nature of the
(3) the disease can be fairly traced to the employment as the
(4) the disease does not come from a hazard to which workmen
would have been equally exposed outside of the employment;
(5) the disease is incidental to the character of the business and not
independent of the relation of employer and employee.
that to prevail, he must prove that his lung condition was proximately
caused by his exposure to dust and other irritants at Koch. However,
he asserts that the hearings examiner and the four doctors who concluded
that he did not suffer from an occupational disease applied the wrong
standard of causation.
Under Montana law, a worker may receive pro rata compensation "[i]f
occupational disease is aggravated by any other disease or infirmity
not itself compensable or if disability or death from any other cause
not itself compensable is aggravated, prolonged, accelerated, or in
any way contributed to by an occupational disease." Section 39-72-706(1),
MCA (emphasis added). " 'Occupational disease' means harm, damage,
or death . . . arising out of or contracted in the course and scope
of employment and caused by events occurring on more than a single day
or work shift." Section 39-72-102(10), MCA (emphasis added). Polk
argues that in light of these statutes and our case law construing them,
he must only show that a work-related exposure aggravated or contributed
to his illness. He asserts that the testimony of several of the doctors,
and in turn the conclusion of the hearings examiner, was based on the
misconception that to satisfy causation, Polk had to prove that the
occupational exposures were the major factor causing his health problems.
Court has held that "an employer accepts his employee with all
injuries and diseases" and, thus, that the test for compensability
is whether the job-related incident significantly aggravated the preexisting
condition. Ridenour v. Equity Supply Co. (1983), 204 Mont. 473, 665
P.2d 783; see also Eastman v. Atlantic Richfield Co. (1989), 237 Mont.
332, 777 P.2d 862. For example, in Ridenour, 665 P.2d at 784, the claimant
was a long-term smoker who worked in a dusty grain-processing plant.
After an incident
of grain inhalation, the claimant developed a cardiopulmonary disease.
Ridenour, 665 P.2d at 784. This Court held that "diseases are subject
to aggravation and acceleration" and that the grain inhalation
had aggravated the claimant's preexisting lung disease. Ridenour, 665
P.2d at 788. Thus, we found that he was entitled to pro rata compensation.
Ridenour, 665 P.2d at 788.
Planet argues that the aggravation statute does not relieve the claimant
burden of proving proximate cause, but that Polk is still required to
prove a direct causal connection between the work-related factors and
his resulting condition. We agree with Planet that the aggravation statute,
õ 39-72-706, MCA, does not circumvent the proximate cause requirement
of õ 39-72-408, MCA. However, Planet contends that to prove proximate
cause, Polk must show that occupational exposures were a substantial
contributing factor to his health problem.
In light of the proximate cause statute and the aggravation statute,
we agree with
the Workers' Compensation Court that "occupational aggravations
of preexisting non-occupational diseases are compensable, as are occupational
diseases which are aggravated by non-occupational factors." As
we held in Ridenour, the test for compensability under the Act is whether
occupational factors significantly aggravated a preexisting condition,
not whether occupational factors played the major or most significant
role in causing the claimant's resulting disease.
Other jurisdictions, such as New Mexico, have come to the same conclusion
considering the effect of numerous factors, occupational and non-occupational,
have dealt specifically with the analytical and testimonial
difficulties inherent in determining compensability of diseases caused
by thecombined effect of smoking and work-related exposures to dust,
radiation, and various toxic fumes. . . . The majority rule in states
statutory scheme similar to New Mexico's allows compensation without
showing that work-related exposures were the predominant cause of the
disease or death.
Kerr-McGee Corp. (N.M. App. 1995), 908 P.2d 242, 249. That court
noted that "[t]he work-related cause may, in fact, be a minor factor
so long as the
worker establishes that, as a matter of medical probability, it was
a cause of the
disability." Buchanan, 908 P.2d at 249.
hold that Polk need not prove that occupational exposures were the
major or substantial factor causing his chronic pulmonary condition.
Rather, Polk must prove that he is suffering from a disease that is
proximately caused by his employment or that exposure to dust and other
irritants while in the course of his employment at Koch contributed
to or aggravated a preexisting condition. Having stated the appropriate
test for causation, we proceed to apply it to this case.
B. Workers' Compensation
Court's Standard of Review
Compensation Court agreed that õ 39-72-408, MCA (proximate
cause) "must be read together with õ 39-27-706, MCA, which
provides for apportionment between occupational and non-occupational
causes." Nonetheless, the Workers' Compensation Court went on to
hold that the findings of the Department of Labor's hearings examiner
were not clearly erroneous.
Under õ 39-72-612, MCA, the judge of the Workers' Compensation
overrule the decision of the Department of Labor when it is:
(a) in violation
of constitutional or statutory provisions;
(b) in excess of the statutory authority of the agency;
(c) made upon unlawful procedure;
(d) affected by other error of law;
(e) clearly erroneous in view of the reliable, probative, and substantial
evidence on the whole record; or
(f) arbitrary or capricious or characterized by abuse of discretion
unwarranted exercise of discretion.
Compensation Court erred in reviewing only for clearly erroneous findings
of fact. Whether the hearings examiner applied the appropriate test
for proximate causation is a question of law. Thus, pursuant to õ
39-72-612, MCA, the Workers' Compensation Court should have reviewed
the Department of Labor's decision not only for clearly erroneous findings
of fact, but also to determine whether the decision was affected by
an error of law.C. Application of Appropriate Standard of Causationin
As noted by
the hearings examiner, "[e]xamination and analysis of [Polk]'s
condition as well as the cause of that condition by numerous doctors
resulted in one group of doctors concluding [Polk] suffers from an occupational
disease and another group of doctors concluding [Polk] does not suffer
from an occupational disease." Based on the presumption of correctness
given to the medical panel's adverse decision and on the hearings examiner's
determination that the doctors who found no occupational disease were
more qualified and presented better-reasoned conclusions, the examiner
concluded that Polk did not suffer from an occupational disease. Polk
argues that had the hearings examiner reviewed the evidence under the
appropriate standard, to determine whether an occupational exposure
contributed to or aggravated Polk's condition, rather than simply
adopted these doctors' conclusion that Polk does not suffer from an
occupational disease, the balance of evidence would have been tipped
in his favor.
As stated above,
each doctor came to different conclusions as to the cause of
Polk's pulmonary disease. As noted by Dr. Merchant, placing a name on
the myriad of symptoms Polk suffers is difficult: "[O]ne of the
reasons that we term it 'COPD'
[chronic obstructive pulmonary disease] rather than . . . going past
that and actually
saying, 'You have chronic bronchitis versus emphysema,' is that very
often you have a mixture of the various conditions, because some of
the things that cause one of them can also cause the others."
Four of the
eight doctors involved in this case, Drs. Sadaj, Thigpen, Demeter, and
Merchant, concluded that Polk did not suffer from hypersensitivity pneumonitis,
or any other occupational disease. Based on their testimony, the hearings
examiner concluded that Polk was not entitled to compensation. However,
the testimony of three of these four doctors could support a finding
that the conditions to which Polk was exposed at Koch aggravated or
contributed to his pulmonary condition.
Dr. Merchant concluded that Polk suffers from emphysema and some
bronchiectasis. However, Dr. Merchant also testified that occupational
exposures "would be very likely to play a significant role in exacerbating
[Polk's] emphysema." Dr. Thigpen, the doctor who reported to the
Department of Labor on behalf of the medical panel, concluded that hypersensitivity
pneumonitis was not the most likely cause of Polk's pulmonary condition,
but did not exclude it as a possibility. Further, Dr. Thigpen stated
that "if one does have any type of underlying lung disease (and
that includes emphysema and chronic bronchitis) exposure to various
types of dust and other irritants will aggravate claimant's condition."
[Emphasis added]. Dr. Sadaj, another panel doctor, concluded that Polk
suffers from chronic obstructive pulmonary disease and chronic respiratory
insufficiency as a result of long-term heavy smoking. However, in support
of this conclusion, Dr. Sadaj testified: "The only way that I could
say the occupation was a major part in his problem was if he has hypersensitivity
As stated above,
Polk need not prove that the occupational exposures, as compared to
smoking or other contributing factors, were the "major" or
primary factor causing his present condition. Rather, as long as occupational
exposures substantially aggravated Polk's pulmonary condition, he is
entitled to pro rata compensation for his injuries. However, in concluding
that he did not suffer from an occupational disease, Drs. Merchant,
Sadaj, and Thigpen were operating under the mistaken assumption that,
to qualify him for occupational disease benefits, Polk's exposure to
dust and other irritants at Koch had to be the major factor causing
his pulmonary condition. When the testimony of Drs. Merchant, Sadaj,
and Thigpen is reviewed under the correct standard of causation and
added to the testimony of the four doctors who concluded that Polk indeed
suffers from an occupational disease, it could support a finding that
occupational factors contributed to or aggravated Polk's pulmonary disease.
the doctors' threshhold requirement that Polk's occupational exposures
be the major or primary factor causing his medical condition rather
than reviewing their testimony to determine whether it supports a finding
that an occupational exposure contributed to or aggravated Polk's condition,
the hearings examiner applied the wrong standard of causation. We hold
that the Workers' Compensation Court erred in not overruling the Department
of Labor's decision based on this error of law. Based on the foregoing,
we reverse the decision of the Worker's Compensation Court and remand
to that court for further proceedings consistent with this opinion.
/S/ W. WILLIAM LEAPHART
/S/ J. A. TURNAGE
/S/ TERRY N. TRIEWEILER
/S/ JAMES C. NELSON
/S/ JIM REGNIER