                                      NO.      96-102
              IN THE SUPREME COURT OF THE STATE OF MONTANA
                                             1996


CATHERINE   E.    SATTERLEE,




LUMBERMEN'S      MUTUAL CASUALTY COMPANY,                          i,// i   j /,j ~~~~~~$~~




BUTTREY FOOD AND DRUG,
            Employer.



APPEAL   FROM:      The Workers'       Compensation    Court,
                    The Honorable       Mike McCarter,    Judge                presiding.


COUNSEL OF RECORD:
            For    Appellant:
                    Bernard      J. "Ben"      Everett;   Knight,   Dahood,
                    McLean      & Everett;      Anaconda,   Montana
            For    Respondent:
                    Thomas A.      Marra;      Marra,     Wenz, Johnson
                    & Hopkins;      Great      Falls,     Montana


                                   Submitted        on Briefs:              September       12,    1996
                                                        Decided:            December    10,       1996
Filed:
Justice          Terry             N.         Trieweiler                delivered                  the     opinion                 of    the         Court.

           Catherine                     E.        Satterlee                  filed           a      petition                 in         the         Workers'

Compensation                   Court               for         the     State          of      Montana              in     which              she      alleged

that       she        was          totally               disabled              as a result                    of         injuries               sustained

during          the     course                of her            employment                 at Buttrey               Food and Drug                       at     its

Anaconda               store,                but         that         Buttrey's                   insurer,              Lumbermen's                     Mutual

Casualty                Company,                    had              wrongfully                   terminated                    her            disability

benefits.                 Lumbermen's                           admitted              that         Satterlee                  had        been         injured

while        working               for         Buttrey,               but      claimed              that      she had recovered                               from

that         injury                a      short                time          thereafter,                     and         that             any         present

disability               is        a result               of unrelated                     mental          and physical                      conditions.

After           consideration                             of          evidence               presented                   at          trial            and       by

deposition,                    the             Workers'                  Compensation                      Court              found             that           her

disability               was not                a result                of her          work-related                     injury,               and denied

disability                benefits.                        Satterlee                  appeals              from          that            finding.               We

reverse           in      part            and        affirm             in      part          the        judgment               of       the         Workers'

Compensation                   Court.

           The claimant                        raises            the         following               issues             on appeal:

           1.          Are         the         Workers'               Compensation                      Court's          findings                supported

by substantial                         credible                 evidence?
           2.           Did         the         Workers'                Compensation                     Court          err         when        it      denied

Satterlee's                    requests                    for          an      award              of      attorney                     fees         and       the

imposition                    of         a      twenty                percent                penalty              in          addition                 to      her

disability               benefits?




                                                                                  2
                                                          FACTUAL BACKGROUND
            Catherine                 Satterlee                 was born                  on September                     30,        1934.            On the
date      that          her      claim           came before                    the       Workers'             Compensation                      Court       for

trial,            she      was         sixty            years            old.             She did             not        graduate              from         high

school,            but         did      receive               her        graduate               equivalency                    degree.              She has
no other             formal             education.

            For         fifteen                 years         prior              to       the          date         of      her         work-related

injury,            Satterlee                 worked            as a checker                      for        Buttrey             Food      and Drug            at

its       store           in         Anaconda.                  The          evidence                  was,         and         the      trial           court

found,          that           during            that         time        Satterlee                had developed                        degenerative

arthritis                 in         her        cervical                 spine,             but         that         she          experienced                 no

symptoms            or         disability                from         that            condition.                Until             the     date         of    her

injury,            she performed                        her     duties,                  which         included             stocking              shelves,

dusting            and         cleaning              floors,               and checking                       out         customers,               without
physical                limitation.                       She missed                      no work              due        to      her         underlying

cervical            condition.

            In May 1990,                    Satterlee's                    adult           son was killed                       in an automobile

accident.                 As a result                    of that            loss,          she suffered                     severe            depression

and missed                 several               months             of     work.                However,             following                   treatment

for       her       condition,                    which             was         later            diagnosed                 as     post-traumatic

stress            disorder,                she       returned                   to       work     in        1991         and worked                without
any further                    loss        of     time        until             the       date         of her            injury         which          is    the

subject            of     this          appeal.

            On July               25,           1992,         while             waiting            on        a customer                  at       Buttrey,

Satterlee               bent          over        and twisted                    her       body        in     an attempt                to rearrange

a forty-five                    pound           bag of dog food                          so that            she could                 read       the     price

                                                                                     3
label.              As         a result                of       that          effort,               she        experienced                  a pulling
sensation                in     her          left         shoulder,               followed                by pain            in      that      part      of
her      body,        as well                     as in        her      neck          and down her                    left        arm.         She had
experienced                    no     similar                pain        at      any         time         prior         to      that        incident.

She testified                       that          since        that       incident              she has had continuous                                pain

in    her      left            shoulder                and neck.                      The      Workers'               Compensation                  Court
found         her         to         be       a      credible                 witness             and          did       not        question            her

testimony             in        that          regard.
            Following                her          injury,           Satterlee                attempted               to return              to work      on

two consecutive                           days,        but      could           not     perform             her      duties,           and has not

worked         in     any           capacity                since        July         28,      1992.

            Since             her         injury,              Satterlee                has         been          seen         and     treated           or

evaluated             by        numerous                  physicians.                    Her        injury            has       been        variously

diagnosed                  as             "left             trapezius                  strain,"                   "neck           strain,"              and
"degenerative                        disc            disease             and          degenerative                      arthritis              of       the

cervical            spine."

            Satterlee                 was           treated            with           medication                  and        therapy          for       her

cervical              and           shoulder                 pain.              However,              that           treatment               has      been

unsuccessful.

            Satterlee's                     pain        is      constant,               it     causes             headaches,                which       are

present             most             of       the           time,         and          her        symptoms                are        worsened            by

activity.

            Due to             her        pain         and discomfort,                         she        is      no longer              capable         of

performing               most          of her household                          responsibilities.                             The majority              of

her      waking           hours             are       spent           sitting           in     a recliner.



                                                                                 4
           During            1993,         while           visiting             her        daughter               in       the      state           of
Washington,                  Satterlee              was       examined                by       a physician                   who       advised

Lumbermen's                that       whatever              soft         tissue          injury             she had sustained                       at

work       should            have        healed           within           a six           week         period,            and      that       any

continuing                 disability                was       a      result             of       her        preexisting                   spinal

disease.             Following              receipt           of that           correspondence,                        on February             23,

1993,        Lumbermen's                 terminated            Satterlee's                    total         disability             benefits.

           During          1993,         Satterlee's                adult         daughter              died        at     the     age of           33
from       cystic          fibrosis            after        she was unable                     to obtain               necessary            organ

transplants.                      During         that         same         year,           a foster              daughter             and      her
children            died      from        a fire          in their             home,          and Satterlee's                     sister       was

diagnosed              with         a terminal                brain           tumor.              Satterlee's                preexisting

emotional                  condition                worsened.                       After               further              psychiatric

evaluation,                  she      was      against             diagnosed               with         major            depression            and

post-traumatic                     stress        disorder.

           Satterlee               applied          for     social            security           disability                benefits,           and

was          found            vocationally                     disabled                  by           the        Social              Security

Administration                      on      December               14,        1993.             The          SSA attributed                    her

disability              to     both         back       pain        and severe                 emotional                trauma.

           It    is,         and has           been,         Lumbermen's                   position             that        any     physical

disability             which          resulted             from       Satterlee's                 work-related                    injury       was

temporary.                 Lumbermen's                 contends            that        she has fully                     recovered            from

any       soft       tissue           injury           and     that,           even           though          she        experienced                no

symptoms            from       her       underlying                degenerative                   condition               prior        to     that

injury,          any current                 pain         or physical              impairment                  that        she currently



                                                                          5
experiences                   is       strictly                  a result                     of     her       preexisting                       degenerative
condition.                  There           was medical                       testimony                   to support                 that         contention.

          Lumbermen's                       also            contends                    that,            to      the       extent               Satterlee                   is

disabled              from            gainful               employment,                            the     primary              factor                is      not         her

physical              impairment,                       but         her            emotional                   disorder               which                developed
subsequent                  to      her         work-related                         injury,                  and      that          therefore,                     it      is

not      responsible                      for        any disability                                caused         by that             disorder.

          Satterlee                    has           contended,                    and         continues                  to    assert                 on appeal,
that         she was free                       of     pain         prior               to         her     injury,             has         been            unable           to

function             due         to       pain         since             her        injury,                and that                 the     evidence                     does

not      support              any finding                    other            than            that         she is          totally               disabled                 due

to     her        work-related                        injury.

          The           Workers'                 Compensation                            Court             did       not        completely                      accept

either            party's             argument.                   Its      findings,                     some of which                     are         designated

as "findings,"                        some of               which             are        included                under          "conclusions,"                            and

some of             which             are       set         forth             in        its         order         that         denied                 Satterlee's

post-trial                  motions,                  are        summarized                        as follows:

             1.          Satterlee                    was a credible                               witness.                (Finding                   No.     7.)

             2.          Satterlee                    was          able            to         perform               all        of         her         job       duties

during            the       fifteen                  years         prior             to         her        injury,             and         testified                     that

she      suffered                  no       neck            or      left            shoulder                  pain         prior            to         that         date.

Medical             exams           conducted                    after             her         injury            showed             that         she        suffered

from         preexisting                     cervical                   disc            disease.                  However,                 that            condition

was asymptomatic                            prior            to         her        injury.                    (Finding              No.         8.)

             3.          Although                Satterlee's                        daughter                  died        in    the        spring              of        1993

 (Finding               No.        Zl),          the        internal                    medicine                 specialist                 from            whom she

                                                                                         6
sought           treatment                 for        depression               beginning               on May 10,                 1993,          noted
that      that          loss        was only             the         latest          in      a series            of personal                  losses,

and      that         her          son     was killed                  in      an automobile                      accident              two      years

prior       to        her         industrial                injury.                 That      loss         also      led         to     treatment

for     depression                   and insomnia.                          (Finding           No.        22.)

           4.           On December                   14,      1993,          the     Social           Security            Administration

concluded               that        Satterlee                 was totally                  disabled          because             of     back        pain

and severe                   emotional                trauma.               (Findings           No.        29 and          30.)

           5.           When Satterlee                        testified               that          she     had pain              in      her       left

shoulder,                neck,             and        arm       ever          since           1992,         the      Court              found        her

testimony               credible.                     (Finding           No.        33.)

           6.           Based            on the         medical               testimony,              the        court      was persuaded

that       Satterlee's                     1992         industrial                  injury          aggravated              a preexisting

cervical              disease              and         made      her          condition              symptomatic,                      triggering
pain       and associated                         muscle         spasm.               (Finding             No.      44.)

           7.           Even          though            Satterlee                 suffers             from         shoulder              and        neck

pain,           her      psychological                        condition               amplifies              her         pain.             (Finding

No.      46.)

           8.           If        motivated,                Satterlee               could       tolerate            her      pain         and work

on a regular                       basis         in     either           of       two        positions             identified                  by     the

insurer's               vocational                    consultant.                    (Finding             No.     49.)

           9.           However,                  the         court            attributed                   Satterlee's                   lack             of
motivation                   to      her         depression                 and       general             mental           condition,                 and

found           that,             based          on     the      combination                   of      her        circumstances,                      she

would           be unable                to      cope         with      her         pain       while         working             on a regular

basis.            (Finding               No. 49.)               The court                 was unpersuaded,                   however,               that
absent         her     personal               losses,           Satterlee                     would         be unable                  to     cope          with
her     pain         and work.                (Finding            No.            50.)

          10.         The       court          agreed            that             at      the        time             of      trial           Satterlee

could          not         cope       with          her      pain,                and         therefore                     return             to         work.

However,             the     court       was not            persuaded                    that         absent               the      psychological
trauma          associated              with         the        death             of      her        daughter                 and other                    close

relatives,                 Satterlee's                pain         would                preclude                 her         from           physically
performing                 either       of     the        two jobs                which            were         medically                approved              by

Dana      Headapohl,                  M.D.           The        court             did         conclude                that          Satterlee                 had

valid        medical            and psychological                            reasons                for         her        inability                 to     cope

with      pain,            however,            it     further               concluded                  that            those           reasons              were

attributable                   to       subsequent                    unrelated                     events,                 and         not          to       her

industrial                 injury.             (Conclusion                   of        Law No.              12.)

          11.         When the           Workers'                Compensation                         Court            denied           Satterlee's

post-trial                 motions,           it     clarified                   that         it      did        not         find       Satterlee's

pain      to     be anything                   other         than           as         she claimed,                        but      believed                that
she      truthfully                  reported             her     disabling                        pain.              However,                it      stated

that     her underlying                      psychological                       condition                 is      amplifying                 her pain,

and that             the      losses          which        have            led        to her          underlying                      psychological

condition              have          occurred             since            her          injury.                 The         court           recognized

that         pain           which        is         amplified                    by       a        preexisting                        psychological

condition              is      compensable,                     but         in         this         case,             concluded                    that       the

principle              events           which           caused              Satterlee's                      post-traumatic                               stress

disorder             occurred           subsequent                    to     her         work-related                        injury.
                                                                    ISSUE            1
          Are        the     Workers'                 Compensation                   Court's             findings              supported                   by

substantial                credible           evidence?

          We will            uphold          the       Workers'                Compensation                     Court's            findings                if

they      are        supported              by        substantial                    credible                evidence.                   Wunderlich v.

Lumbermen’sMutualCas.Co.                      (1995),           270 Mont.                   404,        408,      892 P.2d               563,         566.

          Following               the      entry         of    judgment                   for      the       defendant,                  Satterlee

moved         the     Workers'             Compensation                   Court             to     amend         its      findings                   based

on     her       contention                 that        they         were             not        supported               by        substantial

evidence.                  That         motion          was         denied,               and      her          appeal          is        from         the

denial          of    that         motion.               Lumbermen's                      has      not         cross-appealed,                         and

therefore,             we accept             as true           those            findings             which         were         favorable                  to

Satterlee.                 Those         findings            were that,                  while       Satterlee                suffered                from

an underlying                   condition              of     degenerative                       disc        disease           prior            to     her

work-related                    injury,               she      experienced                         no        symptoms                from             that

condition             and was able                 to perform                  all       of her          job     duties            for      fifteen

years.          Due to            that      injury,            however,                  she aggravated                   the        underlying

degenerative                 disease             in     her     neck,                and has            experienced                  continuous

pain          and      muscle             spasm             since          the           date           of      her          injury.                   The
combination                of     her      pain         and     her        inability                    to     deal       with           that         pain

due      to     her        emotional               condition,                  render            her         unable           to       work           on        a

regular          basis.            However,             absent         her           underlying                 emotional                disorder,

there         are     two       jobs       that        Satterlee                 could           perform.

          The Workers'                    Compensation                    Court           correctly               concluded                 that           an

employer             takes          its      employee                as        it        finds           her,          and      that            if     her


                                                                           9
disability                is       aggravated                     by        an underlying                      physical                 or     emotional
condition,                that         the      employer                is    liable             for        disability                 which         results

from       that          aggravation.                        Shumacher             V. Empire Mfg.              (197?),            I?5        Mont.          411,

413-14,           574 P.2d               987,         988.             However,                the      critical                finding,             and the

one on which                   the       denial             of      Satterlee's                      benefits              is     based,             was the
court's           finding               that         her      emotional                   condition                resulted                from       events

which        occurred              subsequent                     to her work-related                              injury,             and that             that

condition                did           not          preexist                 her         injury.                   We must,                  therefore,
determine                 whether                   that          finding                 is         supported                   by        substantial

evidence.

           In      the         record,               there          are        only            three          sources             of       information

which           relate           to      the          onset            of      Satterlee's                      post-traumatic                        stress

disorder.                They          include             the      claimant's                   own testimony                        at the         time      of

trial,           the      medical               records                of     Martin             D.         Cheatle,              Ph.D.,             and     the

medical           records               of     Kenneth              C. Olson,                  M.D.

           When asked                   during             trial,             Satterlee                 stated             that         she       believed

her       post-traumatic                       stress             symptoms               developed                 in      May 1990 when her
son was killed.                          She stated                    that         she was out                    of      work         and involved

in       treatment               for         that         condition                for         eight          months            after          her      son's

death,          but      had been able                       to     return            to work                following             that        period          of

treatment              until            this         injury            occurred.

           Dr.        Cheatle            was the              psychologist                       who evaluated                         Satterlee             for

the       St.      Patrick              Hospital                 Medical             Panel             to     which          she was              referred

for        evaluation.                              His           records                indicate                  that,              although               her
psychological                     condition                 declined                after            the       death         of        her     daughter,

the       diagnosis                of         post-traumatic                         stress                 disorder              was        first          made

                                                                               10
following                  the        death          of     her            son in             1990,            and that             her        treatment              by
psychotherapy                         first          began            following                    that         incident.

           It         was            Dr.        Cheatle's                   opinion                    that         Satterlee's                   persistent

cervical               and left                 shoulder               pain,            and her                ability            to deal             with         that

pain,            were             complicated                     by         post-traumatic                              stress               disorder              and

depression.                          However,              he does                 not,             at        any        point           in     his         report,

distinguish                          between              the           post-traumatic                                stress              disorder                 that
resulted                from            the          death            of         her         son         and        any        worsening                of         that

condition                  which            occurred              following                       the        death        of     her          daughter.
          Dr.          Kenneth                 C. Olson               is     a psychiatrist                            to      whom Satterlee                       was

referred               for           evaluation                  in        August             1993            by Dr.           Michael            Sadaj,            her

attending                  physician.                      His         report                to     Dr.        Sadaj           indicates               that         the

onset           of     Satterlee's                     emotional                   problems                    began        following                 the         death

of      her          son        in     1990,          and         that            the         emotional                  trauma           was         so severe

that      she          lost           her      memory            for        a period                    of     eight        months.               His        report

indicates                  that         during            his         interview                   of     her        she cried                 and expressed

anger           when            discussing                     the         loss          of        her          son.             Similar              emotional

reactions                  are        not       related               to     any other                       event.            He diagnosed                       major

depression                   with           unresolved                     pathological                        grief           and        post-traumatic

stress               disorder.                       Nowhere                in         his         report              does         he        relate              those
emotional                  conditions                     to      events                that             occurred                after          Satterlee's

work-related                         injury.               Any             inference                    that         can       be      drawn           from         his
report               suggests                 that        the         primary                 factor            related              to        those         mental

disorders                  is        the        death           of         her         son,            which          occurred                prior          to     her

work-related                         injury.



                                                                                       11
            There          is      no      other           evidence                  which         suggests            a     cause         for
Satterlee's                   emotional            disorder,                other         than     the      evidence          set       forth

above.              Therefore,               we         conclude             that          there         was    not        substantial

evidence            to     support           the      Workers'              Compensation                 Court's          finding        that

Satterlee's                depression              or post-traumatic                         stress        disorder          was caused

by events            which          occurred             subsequent                  to    her     work-related               injury.

            We have             previously              held        that:

             [I]t      is well    established           that   an employer         takes     his
            employee        subject        to     the     employee's      physical          and,
            logically,         emotional         condition      at    the    time      of    his
            employment.         Birnie \I. U.S. Gypsum Co., 134 Mont.          39, 328 P.2d
            13 3 ( 19 5 8 ) ; Peilz v. Industrial Accident Board, 12 7 Mont . 3 16 , 2 6 4
            P.2d        709  (1953).          An employee          who suffers         from      a
            pre-existing        condition       is entitled      to compensation          if the
            condition       was aggravated          by an industrial       injury.         Rumsey
            v. Cardinal Petroleum, 16 6 Mont. 17, 530 P.2d 433 (1975);                     Weakley
            11.Cook, 126 Mont.         332, 249 P.2d 926 (1952).

Shumacher , 175 Mont.                      at      413-14,            574 P.2d             at      988

            The Workers'                 Compensation                Court           correctly           recognized            this      rule

of   law         when,          during       trial,            it    stated:
            Sounds like         we've      got the principle           that    you take the
            worker     as you find them, so if they are suffering                       from an
            underlying        psychological         condition      and they've       got pain
            that's      triggered,        even though that pain continues                  to be
            -- they continue          to feel more severe pain than they would
            without       the psychological           condition,      this    sounds like         a
            multi-factorial             thing.           You ' ve    got     some      of     the
            psychological          condition      arising     before,      some after,       with
            the psychological           condition       probably    amplifying      the pain.

            It    logically              follows           that        if      Satterlee's                work-related                injury

in     1992              aggravated                an      underlying                     condition            of         degenerative

arthritis                or      disc      disease,                 and        she        experiences              pain       from       that

aggravation,                    which      is      made worse                  by physical                activity,           and which

she cannot               cope with            due to a preexisting                              emotional           condition,           such

                                                                          12
as depression                       or       post-traumatic                       stress            disorder,                  her        employer             is
liable           for      the        disability                   which           results              from           that         combination                 of

physical               and         emotional              conditions.                          In      this           case,           the        Workers'

Compensation                       Court          found          and       concluded                  that        Satterlee                  was        not      a
candidate               for         regular             employment                   due         to       the         combination                  of         her
physical               and emotional                    impairment.

           Therefore,                        we       reverse                the           judgment                     of          the          Workers'

Compensation                      Court        to     the        extent            that        it      denied            Satterlee's                    claim

for      total          disability                   benefits,               and remand                   this          case         to     that        court

for       entry              of          judgment                in        favor          of          the         claimant,                  Catherine

Satterlee.
                                                                           ISSUE      2

           Did          the         Workers'                Compensation                       Court             err          when          it      denied

Satterlee's                    requests                for            an     award             of         attorney                  fees         and          the

imposition                    of         a     twenty             percent               penalty                  in          addition              to         her

disability               benefits?
           Satterlee                 also           contends               that      Lumbermen's                        termination                 of        her

total        disability                  benefits            was unreasonable                             and,         therefore,                that         she

is      entitled              to     an award               of        attorney            fees         pursuant                to         5 39-71-611,

MCA (1991),                and the                imposition                of a twenty                 percent               penalty            pursuant

to       5 39-71-2907(l),                            MCA         (1991).                Based             on      its          conclusion                 that

Lumbermen's                  was correct                  when it            terminated                 her disability                       benefits,

the      Workers'              Compensation                      Court       held         that         the       insurer             had not             acted

unreasonably.

           Although                 we reverse                   that        part         of        the        Workers'               Compensation

Court's            judgment                  which     denied              disability                 benefits                to     Satterlee,                we

                                                                              13
conclude          that         there             was substantial                      evidence          upon     which     the         court
could       have       found              that     the       insurer            did    not      act     unreasonably             when       it

terminated                her             benefits.                   Specifically,                     correspondence                  from
Alvin       J.     Harris,                 M.D.,       dated         February             1,     1993,         created         an      issue

with      regard          to the            cause        of her        continuing               physical         complaints.               We

conclude           that         it        was not            unreasonable                as a matter              of     law     for      the

insurer           to       rely              on       that          information                 as      the      basis          for       its

termination               of          benefits.                 Therefore,                the         Workers'         Compensation

Court's          denial              of      attorney           fees        and        a twenty           percent         penalty           is

affirmed.
          This      case             is     remanded           to     the       Workers'             Compensation              Court      for

entry       of     judgment                 consistent              with        this      opinion.




                                                                           14
