Newlon v. Teck American, Inc.

Newlon v. Teck American, Inc., 2015 MT 317 (Nov. 10, 2015) (Wheat, J.) (5-0, aff’d)

Issue: (1) Whether Teck and Newlon formed an enforceable contract; and (2) if so, whether Teck can assert the 60-month rule under § 39-71-704(1)(d) to avoid having to pay Newlon’s benefits.

Short Answer: (1) Yes; and (2) no.


Facts: Newlon worked for Teck as a miner from 1972 until the mine closed in 1993. Newlon was injured in several incidents over the years, including at least three separate injuries involving his left knee. Newlon had surgery on the knee in 1993 and 1996, but his symptoms and problems persisted.

Teck’s assistant manager, Moore, approached Newlon in 1996 about settling all of Newlon’s work comp claims. Newlon had been advised by his doctors that he would probably need future treatment for his knee and his back. Eventually, and without legal representation, Newlon agreed to settle all of his outstanding injury claims against Teck for a lump sun of $25,000 and lifetime medical care for his left knee and back. After signing the agreement, Moore forwarded it to the Montana Department of Labor and Industry.

Newlon did not seek medical treatment for his knee from 1996 until 2000. After that, he did not seem treatment again until 2007. In 2012, Newlon’s doctors recommended a total knee replacement. Teck told Newlon’s counsel it did not believe it was liable for additional care under the statute, and agreed to pay under a reservation of rights.

Newlon petitioned the Workers’ Compensation Court in 2011, asking the court to order Teck or the Montana State Fund to pay claims for his left knee. MSF was dismissed, and the court held a hearing.

Procedural Posture & Holding: The Workers’ Compensation Court held that Newlon was entitled to medical benefits related to injuries he sustained while working for Teck. It found that Newlon’s claim was not barred by a superseding intervening cause, that Teck was equitably estopped from denying medical benefits based on § 39-71-704(1)(d), and held that Teck’s statute of limitations and statute of repose defenses were moot. Teck appeals and the Supreme Court affirms.

Reasoning: (1) All four elements necessary for contract formation were present here. The Workers’ Compensation Court’s findings regarding the contract are supported by substantial credible evidence, and the settlement agreement is a valid, enforceable contract.

(2) Parties have the freedom to contract around the statutes, which Teck and Newlon did here. Teck made a specific promise of lifetime coverage for Newlon’s knee and back, distinguishing this case from Wiard.