97-434




                                                                                 No. 97-434

                                         IN THE SUPREME COURT OF THE STATE OF MONTANA

                                                                               1998 MT 106



                                                                             MICHAEL BARE,

                                                                      Appellant/Claimant,
                                                                               v.

                                                          LIBERTY MUTUAL FIRE INSURANCE CO.,

                                                                    Respondent/Insurer for

                                                                    UNITED PARCEL SERVICE,

                                                                      Employer/Respondent.




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



                                                                    COUNSEL OF RECORD:

                                                                        For Appellant:

                            Laurie Wallace, Bothe & Lauridsen, Columbia Falls, Montana

                                                                      For Respondent:

                            Larry Jones, Liberty Mutual Fire Insurance Company,
                                               Missoula, Montana




                                                   Submitted on Briefs: December 11, 1997

                                                                             Decided:               May 4, 1998
                                                                               Filed:




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                                                  __________________________________________
                                                                     Clerk

Justice William E. Hunt, Sr., delivered the Opinion of the Court.


¶1    Michael Bare appeals from the order and judgment of the Workers'
Compensation Court. The court dismissed Bare's claim for permanent total
disability benefits pursuant to § 39-71-702, MCA (1989), because he had
failed to exhaust the rehabilitation panel procedures set forth at §§ 39-71-1012
through 39-71-1033, MCA (1989). We affirm.

¶2   The issue before this Court is whether the Workers' Compensation
Court erred when it dismissed Bare's petition on the basis that it lacked
jurisdiction to determine a claimant's disability status under the 1989 version
of the Workers' Compensation Act prior to the exhaustion of the rehabilitation
panel procedures.

¶3   On February 14, 1990, Bare injured his neck when he tripped and
landed with his chin and neck on a package he was carrying. The injury
occurred in the course and scope of his employment with United Parcel
Service. The insurer, Liberty Mutual Fire Insurance Company ("Liberty
Mutual"), accepted liability and paid Bare temporary total disability benefits
through March 7, 1997.

¶4   On February 25, 1997, Bare requested a mediation conference
regarding the issue of permanent total disability, which was held on March 18,
1997. When mediation did not resolve the dispute, Bare filed a petition for a
hearing before the Workers' Compensation Court, alleging that he was
permanently, totally disabled. The court dismissed the petition on May 27,
1997, holding that the face of the petition showed a lack of jurisdiction
because Bare had not exhausted the rehabilitation panel procedures. It held
that its jurisdiction to determine whether a worker was able to return to work
was limited to appellate jurisdiction over the Department's final decision. It
further concluded that it had original jurisdiction only when the Department
determined that none of the return-to-work options set forth in § 39-71-1012,
MCA (1989), were appropriate. It is from this order that Bare appeals to this
Court.

¶5   In the meantime, however, Bare utilized the rehabilitation panel
procedures and on June 10, 1997, the panel found that the first appropriate
return-to-work option for Bare was to "return to a related occupation suited to
the claimant's education and marketable skills." Section 39-71-1012(2)(c),
MCA (1989).    On June 17, 1997, Bare appealed the Department's initial
order of determination. The record before the Court does not reflect whether
the Department has entered a final order of determination or whether the
Workers' Compensation Court has heard or determined the matter. In any
event, that case is not before this Court.


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¶6   We review the Workers' Compensation Court's conclusions of law to
determine whether its interpretation is correct. Gibson v. State Comp. Mut.
Ins. Fund (1992), 255 Mont. 393, 396, 842 P.2d 338, 340 (citing Steer, Inc. v.
Department of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603).
Additionally, it is well-settled that the statutes in effect on the date of the
injury determine a workers' entitlement to compensation benefits. Buckman
v. Montana Deaconess Hospital (1986), 224 Mont. 318, 321, 730 P.2d 380,
382. Because Bare was injured in 1990, his claim is governed by the 1989
version of the Workers' Compensation Act.

¶7   Bare argues that he was entitled to proceed directly to the Workers'
Compensation Court with regard to his claim that he was permanently totally
disabled. He contends that by dismissing his petition for a hearing, the court
ignored the fact that it has exclusive jurisdiction over the issue of whether he
was entitled to benefits under the Act pursuant to § 39-71-2905, MCA (1989).

¶8   Liberty Mutual, on the other hand, contends that although broad, the
jurisdiction of the Workers' Compensation Court is not without limits. It
maintains that the rehabilitation panel process embodied at §§ 39-71-1001
through 39-71-1033, MCA (1989) is a dispute resolution mechanism which the
parties were required to satisfy prior to filing a petition with the Workers'
Compensation Court. Section 39-71-2905, MCA (1989).    Although the
statutes are not a model of clarity, we agree with Liberty Mutual's analysis.

¶9   The Act provides that a claimant may petition the Workers'
Compensation Court only after "satisfying dispute resolution requirements
otherwise provided in this chapter." Section 39-71-2905, MCA (1989):
     A claimant or an insurer who has a dispute concerning any
     benefits under chapter 71 of this title may petition the workers'
     compensation judge for a determination of the dispute after
     satisfying dispute resolution requirements otherwise provided in
     this chapter. . . . After parties have satisfied dispute resolution
     requirements provided elsewhere in this chapter, the workers'
     compensation judge has exclusive jurisdiction to make
     determinations concerning disputes under chapter 71, except as
     provided in 39-71-317 and 39-71-516. (Emphasis added.)

The words "this chapter" refers to Chapter 71 of Title 39, which includes the
rehabilitation panel statutes contained at §§ 39-71-1001 through 39-71-1033,
MCA (1989). We conclude that the rehabilitation statutes are such a "dispute
resolution requirement."

§10 First, utilization of rehabilitation services is expressly required. In his
petition, Bare claims that he is a "disabled worker" which is defined as "one
who has a medically determined restriction resulting from a work-related
injury that precludes the worker from returning to the job the worker held at
the time of the injury." Section 39-71-1011(2), MCA (1989).    The Act
specifically requires all disabled workers to use the rehabilitation services.
See § 39-71-1014(1), MCA (1989)("Rehabilitation services are required for


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disabled workers. . . .")(emphasis added). Hence, according to the plain
language of the Act, Bare was required to utilize the rehabilitation services.
See also Higginbotham v. Stoltze-Connor Lumber (1991), 248 Mont. 161,
167-68, 810 P.2d 295, 299 (stating that the rehabilitation statutes require the
parties to follow the rehabilitation procedure and holding "[f]rom the date of
remand the statutory procedures in the rehabilitation sections shall be
followed.")

¶11 The Act further elaborates on the steps a disabled worker must proceed
through when using the rehabilitation services:
          (1) If a disabled worker is capable of returning to work,
     the designated rehabilitation provider shall evaluate and
     determine the return-to-work capabilities of the disabled worker
     pursuant to 39-71-1012(2)(a) through (2)(d).
          (2) If an insurer's designated rehabilitation provider has
     determined all appropriate services have been provided to the
     disabled worker under 39-71-1012(2)(a) through (2)(d) and the
     worker has returned to work, the insurer shall document that
     determination to the department.
          (3) If the worker has not returned to work as provided in
     subsection (2), the insurer shall notify the department. The
     department shall then designate a rehabilitation panel as
     provided in 39-71-1016 and refer the worker to the panel.
Section 39-71-1015, MCA (1989)(emphasis added). The Act thus required
Bare, who has not returned to work, to eventually submit to a rehabilitation
panel. The rehabilitation panel is charged in part with identifying the first
appropriate rehabilitation option set forth in § 39-71-1012, MCA (1989). See
§ 39-71-1017(2)(a), MCA (1989). Nothing in the Act, however, prevents the
panel from finding that none of the options are appropriate.

¶12 Upon receiving the rehabilitation panel's report, the Department of
Labor and Industry ("Department") then issues its initial order of
determination, either accepting or rejecting the panel's findings and
recommendations. Section 39-71-1018, MCA (1989). At that point, if a
disabled worker such as Bare disagrees with the determination, he may submit
written exceptions to the order and may ultimately appeal a final order to the
Workers' Compensation Court. Section 39-71-1018, MCA (1989).

¶13   In addition to being a requirement, the rehabilitation services also
provides a mechanism by which the parties may resolve their dispute. The
claimant and the insurer may resolve the dispute by agreement, § 39-71-1013,
MCA (1989), or they may accept either the Department's initial order of
determination or the final order of determination after a hearing. In any event,
they are not required to file an appeal with the Workers' Compensation Court.

¶14 Bare contends that such an interpretation of these statutory provisions
robs him of his right to a hearing before the Workers' Compensation Court,
which is charged with acting as a fact-finder to resolve such disputes.
Unfortunately for the claimant, in Martelli v. Anaconda-Deer Lodge County
(1993), 258 Mont. 166, 852 P.2d 579, this Court impliedly rejected Bare's

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arguments. Martelli was decided under the 1987 version of the Act, which for
all relevant purposes is identical to the 1989 version of the Act. In that case,
Martelli suffered injuries during the course of his employment and proceeded
through the rehabilitation panel procedures. Following a contested case
hearing before the Department (then known as the Division), the Department
issued a final order stating that an appropriate rehabilitation option pursuant
to § 39-71-1012, MCA (1987) was for Martelli to return to a related
occupation suited to his education and skills. Martelli, 258 Mont. at 167, 852
P.2d at 580. Martelli did not appeal the order to the Workers' Compensation
Court as provided for in § 39-71-1018, MCA (1987). Instead, over one year
later, he filed a petition directly with the Workers' Compensation Court
seeking permanent total disability benefits. Martelli, 258 Mont. at 168, 852
P.2d at 580. To the employer's contention that he was required to have filed
an appeal with the Workers' Compensation Court in order to present the issue
to that court, he, like Bare in this case, argued that the Workers' Compensation
Court has exclusive jurisdiction over the issue of his entitlement to permanent
total disability benefits under the Act. Martelli, 258 Mont. at 168, 852 P.2d
at 580.

¶15 This Court rejected Martelli's position. The Court held that the
doctrine of collateral estoppel precluded the court from determining the issue,
because in order to determine whether Martelli was entitled to permanent total
disability benefits, the Workers' Compensation Court would first have to
determine that he could not return to work in a related occupation suited to his
education and skills, which was the return-to-work option already chosen by
the rehabilitation panel. Martelli, 258 Mont. at 169, 852 P.2d at 581.
Because the parties could not relitigate the issue, the Workers' Compensation
Court was bound by the Department's determination that he could work in a
suitable occupation. It thus could not determine that Martelli was permanently
and totally disabled. Martelli, 258 Mont. at 169, 852 P.2d at 581.

¶16 Although the issue of whether the rehabilitation procedures must first
be exhausted before the Workers' Compensation Court has jurisdiction over
a person's claim to permanent total disability benefits was not directly at issue,
the effect of the decision was to require exhaustion. Otherwise, nothing would
have prevented Martelli from filing a petition for hearing before the Workers'
Compensation Court at any time. As the dissent in Martelli noted, the
majority's opinion limited the role of the Workers' Compensation Court in
determining disability benefits to that of an appellate court, even though the
scope of review on an appeal would not be the equivalent of a full fact-finding
hearing before the Workers' Compensation Court guaranteed by § 39-71-2905,
MCA.   Martelli, 258 Mont. at 171-72, 852 P.2d at 582-83 (Trieweiler, J.,
dissenting). Although the author of this opinion joined with the dissent,
Martelli is the law and we are bound to follow it.

¶17 Bare next argues that the legislature could not have intended to divest
the court of jurisdiction, because by "artfully pleading" a petition, a claimant
can easily "reinvest" the court with jurisdiction by presenting an additional
dispute over which the Workers' Compensation Court does have original
jurisdiction. Once the Court has acquired jurisdiction over the additional

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dispute, it would then have jurisdiction to decide all the issues that arise
between the parties. See Carlson v. Cain (1985), 216 Mont.129, 141, 700 P.2d
607, 615. That theory of course is speculation as it is applied to this case, and
we need not address it today.

¶18   Finally, Bare maintains that requiring a party to exhaust the
rehabilitation panel provisions will result in excessive litigation, because the
Workers' Compensation Court could reverse the Department's decision and
require him to resubmit his case to the Department. However, that is the
nature of appellate procedure. The legislature expressly gave the court
appellate jurisdiction over the final determination of the Department, and it is
not the function of this Court to rewrite the statute simply because the process
is cumbersome.

¶19 We hold that the Workers' Compensation Court lacks jurisdiction to
determine a claimant's disability status under the 1989 version of the Act prior
to the exhaustion of the rehabilitation panel procedures. In this case, Bare did
not exhaust those procedures prior to filing the petition for hearing. Thus, the
court did not err in dismissing his petition.

¶20       Affirmed.

                                                             /S/       WILLIAM E. HUNT, SR.


We Concur:

/S/       KARLA M. GRAY
/S/       JAMES C. NELSON
/S/       W. WILLIAM LEAPHART
/S/       JIM REGNIER




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