Was the MT Supreme Court's Decision Correct In Liberty vs. MSF?

Helena, MT (CompNewsNetwork) - In the Supreme Court of Montana, Liberty Northwest Insurance Corporation (Liberty) appeals from a decision of the Montana Workers’ Compensation Court (WCC) finding it liable for the low-back condition of Gary Mitchell (Mitchell). The Montana Supreme Court affirm.

The case is as followed:

On September 2, 1994, Mitchell suffered an injury to his low back while working for Washington Construction Company in Missoula, Montana. Montana State Fund (State Fund) accepted liability for Mitchell’s injury and paid appropriate medical and wage-loss benefits. On January 6, 2006, Mitchell filed a claim with Liberty, alleging that he had suffered an occupational disease (OD) involving his low back while working for Industrial Services, Inc. Industrial was enrolled in Compensation Plan No. 2 of the Workers’ Compensation Act (Act) at the time of the alleged injury and was insured by Liberty. Liberty denied liability for Mitchell’s claim.

In May 2006, Mitchell filed a claim with State Fund alleging he had suffered an OD to his low back in 2002 while employed with Environmental Contractors, LLC (Environmental), in Missoula. At the time of the alleged OD exposure, Environmental was enrolled under Compensation Plan No. 3 of the Act and insured by State Fund. State Fund denied liability as well. Both Liberty and State Fund then continued to deny liability for Mitchell’s claim, although Liberty paid benefits to Mitchell under a reservation of rights in accordance with Belton v. Carlson Transp., 202 Mont. 384, 658 P.2d 405 (1983), superseded by statute on other grounds as recognized in In Re Abfalder, 2003 MT 180,  14, 316 Mont. 415, 75 P.3d 1246.

After the denial of his claims, Mitchell filed a claim with the WCC. Mitchell contended that he suffered an OD while working for Industrial and that Liberty was responsible for his workers’ compensation claim. The WCC held a trial on July 29, 2008. The WCC received testimony from Mitchell and found him to be a credible witness. The WCC also received sworn statements, depositions, and medical evidence from two doctors who examined Mitchell, Dr. John C. Schumpert (Dr. Schumpert) and Dr. Randale.

In its conclusions of law, the WCC determined that the 2005 version of the Act would apply since both Drs. Sechrest and Schumpert agreed that his work at Industrial in 2005 contributed to his current low-back condition. See Fleming v. Intl. Paper Co., 2008 MT 327,  27, 346 Mont. 141, 194 P.3d 77. The WCC then considered whether Mitchell was suffering from an OD and the major contributing cause of the OD. The WCC noted that an OD is defined as “harm, damage, or death arising out of or contracted in the course and scope of employment caused by events occurring on more than a single day or work shift.” Section 39-71-116(20), MCA (2005). An OD must be established by objective medical findings that the events occurring on more than a single day or work shift are the major contributing cause of the OD in relation to other factors that may contribute to an OD. Section 39-71-407(9)(a) and (b), MCA (2005). A “major contributing cause” is defined as “a cause that is the leading cause contributing to the result when compared to all other contributing causes.” Section 39-71-407(13), MCA (2005). Under this standard and in light of the objective medical evidence, the WCC concluded that Mitchell suffered from an OD whose major contributing cause was

Mitchell’s lifetime of heavy-labor employment.

The WCC then turned to the question of which employer was liable for Mitchell’s low-back condition. Under § 39-71-407(10), MCA (2005), “[w]hen compensation is payable for an occupational disease, the only employer liable is the employer in whose employment the employee was last injuriously exposed to the hazard of the disease.”

The WCC founded Liberty Northwest is liable for Mitchell’s low-back condition because according to evidence, Drs. Sechrest and Schumpert, Mitchell was last injuriously exposed to the hazard of his OD at the time of his employment with Liberty Northwest’s insured.

Liberty now appeals from the WCC’s decision. Liberty asserts that the WCC incorrectly interpreted the applicable workers’ compensation statutes, and that there was not substantial credible evidence to support the conclusion that Mitchell was last injuriously exposed to the hazard of his OD while working for Industrial. The Supreme Court state the issue presented by this appeal as follows:

Did the WCC apply the correct legal standard in determining when Mitchell suffered his last injurious exposure to the hazard of his occupational disease, and was the WCC’s decision supported by substantial credible evidence?

After the Supreme Court reviewed the WCC’s findings of fact to determine whether they are supported by substantial credible evidence and its conclusions of law to determine whether they are correct The Supreme Court affirm the WCC and hold that for purposes of the initial liability determination of an OD where two or more employers are potentially liable, the “last injurious exposure” to the hazard of the OD occurs during the last employment at which the claimant was exposed to working conditions of the same type and kind which gave rise to the OD.