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1999 MTWCC 78
WCC No. 9809-8064
STATE COMPENSATION INSURANCE FUND
PROFESSIONAL FARM SYSTEMS
ORDER DENYING MOTION FOR SUMMARY JUDGMENT
Summary: Claimant sought summary judgment awarding him retroactive TTD benefits on argument that insurer terminated benefits without giving him fourteen days notice or complying with the requirements attributed to Coles v. Seven Eleven Stores, 217 Mont. 343, 704 P.2d 1048 (1985). Undisputed facts demonstrated that benefits were terminated after claimant reached MMI and had completed training in real estate, began work as a real estate salesman, and received his first commission.
Held: Under 39-71-609, MCA (1981), and Larsen v. CIGNA Ins. Co., 276 Mont. 283, 915 P.2d 863 (1996), the insurer was not required to give 14-days notice or meet other requirements attributed to Coles because claimant had returned to work and was no longer experiencing a total loss of wages. WCC rejected claimant's distinction between wages for hours worked or salary and commissions, noting that for purposes of return to work in these circumstances "wages" simply means gross earnings, or anything of value received as consideration for work constituting economic gain to the worker.
¶1 Based upon an industrial injury occurring May 21, 1982, claimant, Carl Wallace, seeks summary judgment awarding him total disability benefits retroactive to July 28, 1987, and 500 weeks of permanent partial disability benefits commencing when he reaches age 65. He further seeks a 20% penalty, attorney's fees, and costs. The motion is denied.
¶2 Claimant's Motion for Summary Judgment sets forth 18 numbered factual allegations, most of which are not disputed by respondent. (See Response to Petitioner's Motion for Summary Judgment at 2.) The relevant undisputed facts taken from the Motion for Summary Judgment are as follows:
¶3 Although the State Fund does not agree with claimant's characterization of his pre-injury work as agricultural, there appears to be no dispute as to his actual employment history. Claimant testified he worked for a seismograph crew after high school, then worked for the United States Department of Agriculture (USDA) for approximately twenty-six years. (Wallace Dep. at 7, 10.) He began with the USDA as a clerk and field supervisor, then moved into "office manager trainee; [and then] office manager, which eventually they changed the name to account executive director." (Id. at 8.) As an account executive director, claimant supervised other employees (as many as fifteen to seventeen at times) and operated the office. (Id. at 9.) Claimant retired from that position and draws a federal pension. (Id. at 9-10.)
¶4 After retiring from the USDA, claimant went to work for Professional Farm Systems, where he worked at the time of his injury in 1982. (Id. at 11.) His work "involved a number of things, but the majority of it was selling grain handling equipment and storage." (Id. at 10.) Claimant testified that sometimes prospective customers were provided to him, and sometimes he sought them out. (Id. at 12.) Claimant was paid "wages plus commission." (Id. at 11.)
¶5 At various points after his injury, claimant performed some work other than in real estate. The parties apparently agree claimant worked for a time in a candle-making business operated by his family and did "spot jobs" for the USDA. The insurer, however, disputes the length of time claimant worked in the candle business and the amounts he earned from the USDA. (Claimant's alleged undisputed facts ¶ 11, 12; Response to Petitioner's Motion for Summary Judgment at 2.) At minimum, however, claimant concedes that he was employed by the USDA for the following number of weeks:
(Motion for Summary Judgment at 8.)
Summary Judgment Standard
¶6 Summary judgment may be granted where the uncontroverted, material facts require judgment as a matter of law. ARM 24.5.329; Schelske v. Creative Nail Design, Inc., 280 Mont. 476, 482, 933 P.2d 799, 802 (1997).
¶7 Claimant was injured in 1982, hence his entitlement to benefits is governed by the 1981 version of the Workers' Compensation Act. Buckman v. Montana Deaconess Hospital, 226 Mont. 318, 321, 720 P.2d 380, 382 (1986). Section 39-71-701, MCA (1981), sets out the criteria for temporary total disability benefits, providing in relevant part:
¶9 At issue is the applicability of section 39-71-609, MCA (1981), which provides:
Respondent contends that neither the 14-day notice requirement nor the Coles criteria apply since claimant had returned to work and the insurer had knowledge of the return to work.
¶10 The Coles requirements were engrafted(1) upon section 39-71-609, MCA (1981), by this Court in Coles v. Seven Eleven Stores, Docket No.2000, decided November 20, 1984, affirmed 217 Mont. 343, 704 P.2d 1048 (1985), and formally embraced by the Supreme Court in Wood v. Consolidated Freightways, Inc., 248 Mont. 26, 30, 808 P.2d 502, 505 (1991); accord Ness v. Anaconda Minerals, 257 Mont. 335, 339-40, 849 P.2d 1021, 1023-24 (1993). As set forth in Wood, in addition to giving 14-days notice of termination of benefits, prior to any termination of benefits the following requirements must be met:
Id. at 30, 808 P.2d at 505.
¶11 On its face, section 39-71-609, MCA (1981), does not require a 14-day notice where a worker has "returned to work." Moreover, post-Coles decisions hold that the Coles requirements do not apply where a worker has returned to work.
¶12 In Larson v. CIGNA Ins. Co., 276 Mont. 283, 915 P.2d 863 (1996), the Montana Supreme Court distinguished cases in which the claimant had returned to work. "When a claimant returns to work, he or she is no longer experiencing a loss in wages and, therefore, the insurer can rightfully terminate temporary total disability benefits without proceeding with an investigation under § 39-71-609 . . . the Coles criteria do not apply in this case." Id. 276 Mont. at 294, 915 P.2d at 870 (emphasis added).
¶13 In Weaver v. Buttrey Food and Drug, 255 Mont. 90, 841 P.2d 476 (1992), claimant asserted she had not been "gainfully employed" since the termination of her temporary disability benefits, even though she earned income from work in a tavern she and her husband owned. Claimant had argued that "[s]he is paid no money as a direct wage for her work at the tavern...and receives no benefits." 255 Mont. at 97, 841 P.2d at 481. The Court rejected the argument, noting as follows:
¶14 In Ware v. State Compensation Insurance Fund, WCC No. 9508-7361 (1996), this Court followed Weaver, finding the claimant ineligible for total disability benefits during a period of self-employment. Claimant had been injured while working as a carpenter and had returned to work in a modified capacity. He then moved to Missouri to be closer to his children, which he had planned to do prior to his injury. In Missouri he performed a series of jobs involving construction, electrical work, patching fences, and various other odd jobs. Contending he did not reach maximum medical improvement until he had surgery, claimant sought retroactive temporary total disability benefits for the period prior to surgery which was performed after his Missouri jobs. His request for benefits encompassed periods during which he was working, albeit while self-employed. Citing Weaver, this Court concluded claimant was not entitled to temporary total disability benefits during a period of self-employment:
Ware at 11 (emphasis in original).
¶15 The Ware decision further noted that in Weaver the claimant was determined to be ineligible for total disability benefits "even though part of the time for which she sought benefits she was only working part-time." Id.
¶16 In this case, the claimant concedes he was working as "an independent contractor under a broker at Bison Realty in Great Falls" prior to the termination of temporary total disability benefits. (Claimant's undisputed fact ¶ 8). He contends, however, this was not "return to work" under section 39-71-609, MCA, because he was an independent contractor and received income in the form of commissions. This argument is without merit.
¶17 Claimant has presented no evidence that he was physically unable to actively pursue real estate sales or earn commissions. Under Weaver and Ware, at the time he associated himself with Bison Realty and announced he was engaged in real estate sales, he "returned to work." The fact that claimant worked as an independent contractor does not distinguish his case from Weaver and Ware, which specifically considered the application of section 39-71-609, MCA, where the claimant returns to work as an independent contractor. Thus, the 14-day notice requirement of section 39-71-609, MCA (1981), and the Coles requirements were inapplicable.
¶18 Claimant's argument that earnings as an independent contractor do not constitute "wages" from employment is specious. If correct it would mean that a worker injured in an industrial accident could earn as much as, or even 100 times more than, he or she was earning at the time of the injury and still be entitled to total disability benefits so long as post-injury earnings are attributable to work as an independent contractor. Section 39-71-609, MCA, does not refer to wages or employment, only to a "return to work."
¶19 Claimant's reliance upon statutory definitions of employment and wages is misplaced. While section 39-71-118(1)(a), MCA (1981), defines employment as excluding independent contractors,(2) the section is concerned with insurance coverage requirements, as evidenced by the further exclusion of household and domestic service. The section has nothing to do with whether a worker returning to work in an independent contractor capacity is entitled to continued temporary total disability benefits. Moreover, the argument ignores other provisions of the Workers' Compensation Act which consider independent contractors as both employers and employees. Subsection (2) of section 39-71-118, MCA (1981), expressly refers to partnerships and sole proprietorships as employers and their members as employees, providing in relevant part:
Under these provisions, sole proprietors performing work for others as independent contractors are in essence their own employees.
¶20 Claimant's argument that commissions cannot be considered wages, is similarly misguided. Again, section 39-71-609, MCA, refers to a "return to work", not to wages. Moreover, the definition of wages at the time of his injury was a broad one, encompassing "average gross earnings received by the employee at the time of the injury for the usual hours of employment in a week." § 39-71-116(20), MCA (1981). The definition is obviously pertinent to determination of wages for the purpose of determining benefits and does not exclude consideration of earnings from work as an independent contractor in determining whether a claimant has returned to work. The specific inclusion of commissions in a 1987 law adopting a new section regarding wages, § 39-71-123, MCA, does not change the law in effect in 1981 and does not exclude consideration of commissions for purposes of determining whether a claimant has returned to work.
¶21 The cases relied upon by claimant with regard to wages are similarly inapplicable. Claimant cites decisions holding that post-injury income in the form of capital profits does not affect a claimant's entitlement to total disability benefits. In Tehle v. Alpine Plumbing, 254 Mont. 25, 835 P.2d 1 (1992), the injured worker's family continued his plumbing business after his disabling injury. According to the Court:
Id. at 27, 835 P.2d at 2. Similarly, in Chatfield v. Industrial Accident Board, 140 Mont. 516, 374 P.2d 226 (1962), the Court distinguished between income from work and profits from investments:
Id. at 520, 374 P.2d at 228. These cases recognize that disability may continue even while an individual passively earns profits from investments. They have no application
¶22 In the present case, the undisputed factual record shows claimant began working as a realtor prior to termination of temporary total disability benefits. It is undisputed that he had earnings after returning to work as a realtor. Trial Exhibit 16, which includes reports of a rehabilitation provider and which is part of the record in this case, indicates that claimant had in fact earned a commission prior to the July 28, 1987 termination of his benefits. (Ex. 16 at 1.)
¶23 The motion for summary judgment is denied.
¶24 SO ORDERED.
DATED in Helena, Montana, this 7th day of December, 1999.
c: Mr. Randall
1. The requirements are not set forth in the section, which only requires 14-days notice, nothing more. This Court has refused to expand the requirements in light of the prohibition against courts inserting requirements omitted by the legislature. In Sears v. Traveler's Insurance, WCC No. 9608-7594, Order Denying Summary Judgment (April 8, 1987), I noted:
Id. at page 6. While this Court must apply Coles, I wonder whether insertion of the additional requirements would withstand scrutiny in light of the Supreme Court's more recent pronouncements regarding the rule "prohibiting Courts from inserting additional requirements into a statute, § 1-2-101, MCA."
2. Subsection 118(1)(a) provides:
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