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Galetti v. Montana Power Co.8/25/2000
APPEAL FROM: Workers' Compensation Court The Honorable Mike McCarter, Judge presiding.
Submitted on Briefs: March 16, 2000
1 Gary Galetti appeals from both the Findings of Fact, Conclusions of Law and Judgment and the Order Denying Motion to Amend Except as to Costs entered by the Workers' Compensation Court of the State of Montana. We reverse.
2 Galetti raises the following issues on appeal:
3 . Whether the Workers' Compensation Court erred in failing to assess attorney fees against Montana Power?
4 . Whether the Workers' Compensation Court erred by not imposing a 20 percent penalty on all of the medical benefits Montana Power unreasonably delayed or refused?
BACKGROUND
5 The facts as found by the Workers' Compensation Court are essentially undisputed by the parties. On August 13, 1983, Galetti suffered a compensable back injury while employed by Montana Power. Montana Power accepted liability for this injury. As a result of this injury, Galetti underwent a surgical procedure known as chemonucleolysis, which resulted in severe degenerative changes to Galetti's lumbar spine.
6 On December 11, 1994, Galetti experienced a flare-up of his back problem. The flare-up occurred after Galetti coughed while lying in bed. Galetti had been snowmobiling the day before. Galetti was hospitalized for five days as a result of the flare-up and incurred approximately $10,000 in medical expenses. These medical expenses were paid by Galetti's employer-provided health insurance plan, which is funded by contributions from both employees and Montana Power.
7 Galetti sought recovery from Montana Power for the medical expenses associated with the flare-up of his back condition, claiming that they were the result of his previous compensable injuries. Montana Power concluded that Galetti's medical expenses were due to Galetti's snowmobile outing and denied liability for his claim. However, Montana Power did offer to pay Galetti $10,000 on a "non-acceptance basis." Galetti testified that Montana Power offered him between $10,000 and $12,000 in exchange for his agreement to give up his present claim for medical costs associated with his flare-up along with any further claims for workers' compensation liability arising out of his compensable back condition.
8 On June 4, 1998, Galetti filed a Petition for Hearing in the Workers' Compensation Court seeking reimbursement from Montana Power for reasonable medical expenses, attorney fees, and a 20 percent penalty for unreasonable refusal and delay in paying benefits. Montana Power denied liability, claiming that Galetti had not made a request for payment. The Workers' Compensation Court held a hearing on Galetti's petition on November 12, 1998. At the hearing, Montana Power conceded that Galetti's 1994 flare-up was related to his compensable injury in 1983 and accepted liability for his medical expenses. The issue of attorney fees and penalties remained.
9 The court entered its Findings of Fact, Conclusions of Law and Judgment on February 4, 1999. The court denied Galetti's request for attorney fees because Montana Power's concession of liability at the commencement of the hearing made an adjudication of liability unnecessary. The court imposed a 20 percent penalty against Montana Power for unreasonable delay or refusal to pay compensation, but not on the entire amount of reasonable medical expenses. The court segregated the portion of expenses paid by Galetti's health insurance plan into two categories: payments attributable to employee contributions and payments attributable to Montana Power contributions. The court did not impose a 20 percent pen
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