Swanson v. Champion International Corp.

No. 81-229
IN THE SUPREME COURT OF THE STATE OF MONTANA

1981

GARY P. SWANSON (fatal), KIM SWANSON
COLLINS, formerly known as Kim R.
Swanson, Personal Representative of Estate
of GARY P. SWANSON,
Appellant and Claimant,

CHAMPION INTERNATIONAL CORPORATION,
Employer, and LIBERTY MUTUAL INSURANCE
COMPANY,
Defendants and Respondents.

Appeal from: Workers' Compensation Court,
Honorable William E. Hunt, Judge presiding
Counsel of Record:
For Appellant:
James J. Benn argued, Missoula, Montana
For Respondents:
Garlington, Lohn and Robinson, Missoula, Montana
Robert Sheridan argued, Missoula, Montana

Submitted : December 1, 1981
Decided :
APR 9 - 1982 Ictm 0 1982
Filed:
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.

This case comes to us on appeal from the Workers'
Compensation Court, which entered an order affirming a
determination by the Workers' Compensation Division that
Liberty Mutual Insurance Company was entitled to $24,000 out
of a settlement of $56,250 that Kim Swanson had received for
claims arising out of the death of her husband Gary P.
Swanson.
Gary P. Swanson, an employee of Champion International
Corporation, died in an airplane crash on July 14, 1976 in
the course of performing an aerial timber cruise for his
employer. At the time of the accident, Champion was insured
for its Workers' Compensation liabilities by Liberty Mutual.
The insurer paid a total amount of $37,862.75 in benefits to
Kim R. Swanson, the surviving spouse of the decedent, in
full satisfaction of the Workers' Compensation obligations
of Champion and Liberty Mutual Insurance Company.
The airplane in which the decedent Gary P. Swanson was
killed was owned by Stockhill Aviation of Kalispell. Stockhill's
insurer, National Aviation Underwriters, Inc. brought a
declaratory judgment action contesting coverage. On April 12,
1978, counsel for Kim Swanson wrote to counsel for Liberty
Mutual "tendering" participation under section 39-71-414(2),
MCA, in the declaratory judgment suit, and asking for further
participation by Liberty Mutual in a proposed action against
Cessna Aircraft, on a products liability claim against the
manufacturer. On May 5, 1978, Liberty Mutual, through its
counsel, pointed out that it was already participating in
the declaratory judgment action and that it would thereafter
participate in any subsequent action by the widow against
Stockhill Aviation. Liberty Mutual declined to participate
in a proposed lawsuit against Cessna upon the ground that it
had only a remote chance of success.
While the declaratory judgment action was pending, Kim
R. Swanson, through her attorney, settled with National

Aviation Underwriters, Inc., the insurer for Stockhill, all
of her claims against Stockhill for the sum of $56,250. As
between Stockhill and Kim R. Swanson, the settlement was
allocated $3,000 to the survival action, and $53,250 to the
wrongful death action.
It is not clear in the record that suit, as distinguished
from claim, had been instituted against Stockhill Aviation,
Inc. by Kim R. Swanson either on the survival action or the
wrongful death action.
Liberty Mutual filed a petition before the Workers'
Compensation Division asking the Division to determine
Liberty Mutual's subrogation rights in the settlement that
had been effectuated. The division by order determined that
Liberty Mutual was entitled to a subrogation interest out of
the settlement of $24,000.
Kim R. Swanson appealed the decision of the Workers'
Compensation Division to the Workers' Compensation Court.

There Kim R. Swanson contended that the settlement included
payment by the responsible third party for noneconomic
as well as economic losses sustained by the claimant and that
such noneconomic losses were the property right of Kim R .
Swanson and not subject to the subrogation claims of ~iberty
Mutual. The Workers' Compensation Court, relying on s is her
v. Missoula White Pine Sash Co. (1974), 164 Mont. 41, 518
P.2d 795, concluded that the Workers' Compensation Act does
not provide a differentiation between those portions of the
settlement allocated to wrongful death and survival claims,
or to economic and noneconomic losses, or to the wife and
children. On that basis, the Workers' Compensation Court
affirmed the division order that Liberty Mutual was entitled
to subrogation of $24,000 from the settlement.
Kim R. Swanson duly appealed the order of the Workers'
Compensation Court to this Court.
We frame the issue before us thus: where the death of
an employee in the course of his employment is caused by the
neglect of a party other than his employer or fellow employees
(section 39-71-412, MCA) and the heirs of the decedent
employee receive proceeds from settlement or judgment from
the responsible third party, does the Workers' compensation
lien of decedent's employer or its insurer attach to that
portion of the proceeds which may represent noneconomic
damages to the heirs?
Counsel for Kim R. Swanson has carefully limited the
issue to those noneconomic damages that she would have
received in her personal right which may be part of the settle-
ment.
At first blush, it would seem that this case is controlled
by this Court's earlier holding in Fisher, supra. There, we
held that the Workers' Compensation Act does not in its
subrogation clause differentiate between survival actions
and actions for wrongful death. Therefore, this Court
reasoned, all recoveries made through either claim of action
were subject to the subrogation interest of the employer or
the insurer if the death of the decedent arose out of or in
the course of his employment.
 The case at bar presents a facet slightly different
than the court faced in Fisher. Here the claimant widow
contends squarely that the noneconomic damages recovered by
her as a part of the settlement of both causes of action
against the responsible third party are not subject to
subrogation by the employer or its insurer. It is a con-
tention that leads us to re-examine the totality of the
holding in Fisher for two reasons: (1) the intrinsic
differences in the sources and effect of recoveries between
survival actions and wrongful death actions were not discussed
in Fisher; and, (2) the changes in the subrogation provisions
of the Workers' Compensation Act since Fisher which require
a reassessment of the bases on which Fisher is grounded.
We look first at the causes of action that are open in
Montana to the survivors of a decedent whose death is caused
by the negligence of another.
One cause of action is the "survival" action. It
arises from section 27-1-501, MCA, t k Montana version of
-e
Lord Campbell's Act. By this statute, a cause of action,
including tort actions existing during the lifetime of a
person survive his death, and the cause may be pursued
against the responsible party by his personal representative.
See section 72-3-604, MCA. The damages that may be recovered
in the survival cause of action for the death of the decedent
through tort include his lost earnings from the time of his
injury to his death; the present value of his reasonable
earnings during his life expectancy, Krohmer v. Dahl (19651,
145 Mont. 491, 402 P.2d 979; the medical and funeral expenses
incurred by him as a result of the tort; reasonable compen-
sation for his pain and suffering, and other special damages.

Beeler v. Butte and London Copper Development Co. (1910),
41 Mont. 465, 478, 110 P. 528.
 Note that the source of the damages recoverable in the
survival action are personal to the decedent. They do not
include any damages suffered by the decedent's widow, children
or other heirs. Marinkovich v. Tierney (1932), 93 Mont. 72,
86, 17 P.2d 93, 96.
Note further the effect of recovery of such damages by
settlement or satisfaction of judgment for the survival
claim. Such damages belong to the decedent's estate. They
are subject to the claims of his creditors. They must be
included in any computation to determine if inheritance
taxes are due from his estate.
Only the personal representative may sue for the damages
suffered by the decedent in survival actions. Section 27-1-
501, MCA. Neither the widow nor any other heir has a legal
right to pursue such an action unless appointed as a personal
representative. The damages suffered are so personal to the

decedent that this Court has held that no survival action
exists if the decedent's death is instantaneous. illo on v.
Great Northern Ry. Co. (1909), 38 Mont. 455, 502, 100 P o
960, 966. Reason: the cause of action must have existed
in the lifetime of the decedent to survive him under the
survival statute.
The distribution by the personal representative of
damages recovered in a survival action is controlled by the
law of probate. After payment of creditors, expenses of
administration and inheritance taxes, if any, the personal
representative distributes the damage proceeds as a part of
the estate of the decedent, controlled by his will or by the
laws of intestate succession.
Since the subrogation clause of the Workers' Compensation
Act refers to the personal representative, section 39-71-414,
MCA, i t i s c l e a r t h a t t h e c a u s e of a c t i o n embraced i n t h e

s u r v i v a l p r o v i s o o f s e c t i o n 27-1-501, MCA, is subject t o the

e m p l o y e r ' s s u b r o g a t i o n r i g h t s under 37-71-414, MCA. The

employer o r h i s i n s u r e r i s i n e f f e c t and by t h i s s t a t u t e a

s u p e r c r e d i t o r of t h e e s t a t e of t h e d e c e d e n t , having a c l a i m

p r i o r t o any o t h e r c r e d i t o r of t h e d e c e d e n t o r t a x agency t o

t h a t p o r t i o n of t h e d e c e d e n t ' s e s t a t e i n c l u d e d i n t h e e m p l o y e r ' s

subrogation r i g h t s . E s p e c i a l l y t h e s u b r o g a t i o n c l a i m comes

b e f o r e any h e i r ' s r i g h t of d i s t r i b u t i o n o f t h e r e c o v e r e d

damages from t h e e s t a t e .

W e must be c o n s c i o u s , however, of t h e p o i n t t h a t t h e

damages r e c o v e r e d by t h e p e r s o n a l r e p r e s e n t a t i v e i n t h e

s u r v i v a l a c t i o n may i n c l u d e economic and noneconomic i t e m s .

I n a d d i t i o n t o m e d i c a l c o s t s , f u n e r a l e x p e n s e s , and wage-

l o s s damages, t h e p a i n , s u f f e r i n g , and d i s f i g u r e m e n t o f t h e

d e c e d e n t may have been compensated, Beeler, s u p r a , and even

p u n i t i v e damages awarded. Nonetheless, t h e subrogation

clause is clear. The employer o r h i s i n s u r e r i s e n t i t l e d t o

s u b r o g a t i o n from t h e p e r s o n a l r e p r e s e n t a t i v e w i t h o u t r e g a r d

t o t h e n a t u r e o f t h e damages f o r which t h e d e c e d e n t t h r o u g h

h i s e s t a t e i s compensated i n t h e s u r v i v a l a c t i o n . Section

39-71-414(1), MCA. Thus f a r w e a r e i n agreement w i t h t h e

holding i n Fisher.

Now l e t u s examine t h e n a t u r e , s o u r c e , and e f f e c t of
damages r e c o v e r a b l e under t h e "wrongful d e a t h " s t a t u t e .

By v i r t u e o f s e c t i o n 27-1-513, MCA, a cause of a c t i o n
f o r t h e wrongful d e a t h o f o n e n o t a minor ( f o r t h e w r o n g f u l

d e a t h o f a minor, see s e c t i o n 27-1-512, MCA; the result is

t h e s a m e ) i s c r e a t e d and v e s t s i n t h e h e i r s of t h e d e c e d e n t .
The c a u s e o f a c t i o n may be p r o s e c u t e d by t h e p e r s o n a l r e p r e s e n t -

a t i v e o r by t h e h e i r s . S e c t i o n 27-1-513, MCA.
 The law is not specific about the source of damages in
a wrongful death action. It provides that "damages may be
given as under all the circumstances of the case may be
just." Section 27-1-323, MCA. Generally the proof of

damages under this cause of action will include loss of

consortium by a spouse, Mize v. Rocky Mountain Bell Telephone
Co. (19091, 38 Mont. 521, 535, 100 P. 971, 974; the loss of
comfort and society of the decedent suffered by the surviving
heirs; and the reasonable value of the contributions in
money that the decedent would reasonably have made for the
support, education, training and care of the heirs during
the respective life expectancies of the decedent and the
survivors. Hennessey v. Burlington Transp. Co. (U.S.D.C.
Dist. Mont. 1950), 103 F.Supp. 660, 665. No specific pecuniary
loss need be shown. Waltee v. Petrolane, Inc. (1973), 162
Mont. 317, 321, 511 P.2d 975, 978.

Note again that the source of the damages recoverable
in a wrongful death action is personal to the survivors of

the decedent. The damages are not those of the decedent,
but of the heirs by reason of his death. The action may be

prosecuted without regard to whether the decedent's death
was instantaneous.
Again note further the effect of the recovery of damages
in a wrongful death cause of action by settlement or by
satisfaction of judgment. Such damages do not belong to the
decedent's estate. They are not subject to the claims of
decedent's creditors. They are not a part of the estate for

the determination of inheritance taxes. They pertain to the
personal loss of the survivors. Though the personal repre-
sentative of the decedent, under the wrongful death statute,
may sue the responsible party, any recovery made by the
personal representative in the wrongful death claim is not
in his capacity as personal representative. He is a trustee
of the moneys for the person entitled. Batchoff v. Butte Pacific
Copper Co. (1921), 60 Mont. 179, 183-184, 198 P. 132, 134.
When a wrongful death action is prosecuted, the damages
are returned by general verdict, covering all of the heirs
involved. The jury is not given the duty of ascribing so
much to one heir and so much to another. Rather, the trial
court, after the verdict, is given the task of allocating
the money damages among the heirs. State ex rel. Carroll v.
District Court (1961), 139 Mont. 367, 372, 364 P.2d 739, 741.
The distribution of the damages to the heirs is not controlled
by the decedent's will or by the laws of intestate succession.
This Court has never had occasion to examine the damages
recoverable in a wrongful death action as economic or non-
economic in nature. Who is to say? Such damages will
usually be founded on such factors as the loss of counsel,
protection, aid, comfort, guidance and society of the decedent,
the loss of consortium, and the loss by the survivors of
reasonable support, contributions, and the opportunity for
education or training from the decedent. The loss of support
or education is not measured by the lost future earnings of
the decedent, per se, although proof of such earnings is
necessary in wrongful death actions. Rather, it is measured
in terms of the needs of the heirs which the decedent would
reasonably have supplied to the heirs had he lived.
In any event, the damages recoverable in a wrongful
death action are so personal to the heirs that the subrogation
clause of the Workers' Compensation Act must be stretched to
the fullest extent to include them. The obvious intent of
the wrongful death statute is to provide a recovery for
 -,f" i
,b- ' /- (
- :1 ?% bLLf L d : - : I Lf
losses not covered by h
,
d
e
-
r for heirs who
might otherwise have no recovery for their personal loss,
especially if the death of the decedent were instantaneous.
The heirs were not parties to the employment contract that
existed between the employer and the employee-decedent. To
construe the compensation subrogation clause as including
the damages appointed under the wrongful death statute is to
lessen the personal rights of heirs of employees as compared
to the heirs of noncompensated decedents. There exists in
that light a conflict between the wrongful death statutes on
the one hand, which seek to provide succor for heirs, and
the subrogation clause on the other, which seeks to invade
that succor.
Then there is the nature of subrogation itself. "Sub-
rogation" has its root in the latin "subrogare", to pray
under or through. It is the right of one who has paid what
another should have paid to recover the payment from the
party justly responsible. Skauge v. Mountain States Tel. &

Tel. Co. (1977), 172 Mont. 521, 524, 565 P.2d 628, 630.
Compensation payments are of two kinds: (1) for medical or
funeral expenses incurred, and, (2) payments in lieu of
wages. These are the items of damages, as we have shown
above, that are recoverable in the decedent's estate
through the survival action. (It is true, however, that
medical and burial expenses can be reimbursed through the
wrongful death action.) It is in the survival action that
"the party justly responsible" ordinarily makes recompense
for the expenses incurred and wages lost to the decedent.
It is there that the subrogation rights of the employer, by
the nature of subrogation should reach.
We have said that there is another factor, in looking
at Fisher, that we should consider: namely, the changes in
the subrogation clauses as they existed at the time of
Fisher to the clauses that now apply to the case at bar.
The statute in effect when Fisher was decided was
section 92-204, R.C.M. 1947. With respect to subrogation,
it provided in pertinent part:
"I. . . In the event said employee shall
prosecute an action for damages for or on
account of such injuries so received, he shall
not be deprived of his right to receive compensation
but such compensation shall be received by him
in addition to and independent of his right to
bring action for such damages, provided, that in
the event said employee, - - - -of his death,
or in case -
his personal representative, shall bring such
action, then the employer or insurance carrier paying
such compensation shall be subrogated only to
the extent of either one-half (1/2) of the gross
amount paid at time of bringing action and the
amount eventually to be awarded - -
to such employee
as compensation under the workmen's compensation
law, or one-half (1/2) of the amount recovered and
paid to such employee in settlement of, or by
judgment in said action, whichever is the lesser amount.
All expense of prosecuting such action shall be
borne by the employee, or if the employee -shall -
- fail
to bring such action or make settlement of -his
--
cause of action within six (6) months from the time
such injury is received, the employer or insurance
carrier who pays such compensation may thereafter
bring such action and thus become entitled to all
of the amount received from the prosecution of such
action up to the amount - - employee under the
paid the
Workmen's Compensation Act, and all over that amount
shall be - -to the employee
paid - .
. . 1 164 Mont. 41,
11

46-47, 518 p.2d 795, 798. (Emphasis added.)
The legislature amended section 92-204, R.C.M. 1947, by
breaking the complex and wandering statute up into several
components. The result is that the pertinent parts of our
statutes as they apply to this case are as follows:
"39-71-412. Liability _ _ -____ than
of third party other -
employer - fellow employee--additional cause -
or of
action.
. . . Whenever such event occurs to an employee
while performing the duties of his employment and
such event is caused by the act or omission of
some persons or corporations other than his employer
or the servants or employees of his employer, the
employee or in case of his death his heirs or
personal representative shall, in addition to the
right to receive compensation under this chapter,
 have a right to prosecute any cause of action he
may have for damages against such persons or
corporations."

"39-71-414. Subrogation. (1) If an action
is prosecuted as provided for in 39-71-412 or
39-71-413, and except as otherwise provided in
this section, the insurer is entitled to
subrogation for all compensation and benefits
paid or to be paid under the Workers'
Compensation Act. The insurers right of
subrogation is a first lien on the claim,
judgment, or recovery.
" (2) (a) If the injured employee intends to
institute the third party action, he shall give
the insurer reasonable notice of his intention
to institute the action.
" (b) The injured employee may request that the
insurer pay a proportionate share of the reasonable
cost of the action, including attorneys' fees.
"(c) The insurer may elect not to participate
in the cost of the action. If this election is
made, the insurer waives 50% of its subrogation
rights granted by this section.
"(d) If the injured employee or the employee's
personal representative institutes the action,
the employee is entitled to at least one-third
of the amount recovered by judgment or settlement
less a proportionate share of reasonable costs,
including attorneys' fees, if the amount of
recovery is insufficient to provide the employee
with that amount after payment of subrogation.
"(3) If an injured employee refuses or fails to
institute the third party action within 1 year from
the date of injury, the insurer may institute the
action in the name of the employee and for the
employee's benefit or that of the employee's
personal representative. If the insurer institutes
the action, it shall pay to the employee any amount
received by judgment or settlement which is in excess
of the amounts paid or to be paid under the Workers'
Compensation Act after the insurer's reasonable costs,
including attorneys' fees for prosecuting the action,
have been deducted from the recovery."
Especially pertinent to our discussion here is the foregoing
provision of section 39-71-414(3), MCA, that if the injured
employee refuses or fails to institute the third party
action, the insurer may institute it for the benefit of "the
employee's personal representative." No mention is made in
that statute of an action "for the benefit of the heirs"
The statute could not be construed as giving the employer or
its insurer the right to institute a wrongful death action.
While it is true, as we have pointed out above, that a
personal representative may sue for the wrongful death
rights of the heirs, nonetheless if recovery is made, the
personal representative holds those proceeds, not as a
personal representative, but as a trustee of the moneys for
the benefit of the heirs. Batchoff, supra.
More important is the change that was made in the 1977
Montana Legislature of the provisions that relate to the
protection of the employer through the exclusivity of the
Workers' Compensation Act. In Fisher, this Court placed
great reliance on that part of former section 92-204, R.C.M.
1947, which stated, "and in case of death shall bind his
personal representative, and all persons having any right or
claim to compensation for his injury or death," as meaning
that the recovery rights of the heirs were subject to the
subrogation rights of the employer. 164 Mont. at 45, 518

The 1977 amendment removed this language from the sub-
rogation portions of former section 92-204, and established
a separate statute which related to the exclusivity of the
Workers' Compensation Act as to the employer. The intent of
the legislature that the heirs were bound as to exclusivity
but not as to subrogation is now more clear. That statute
now reads:
"39-71-411. Provisions of chapter exclusive
remedy--nonliability ofsured employer. For
all employments covered under the Workers'
Com~ensationAct or for which an election has
been made for coverage under this chapter, the
provisions of this chapter are exclusive. Except
 as provided in part 5 of this chapter for uninsured
employers and except as otherwise provided in
the Workers' Compensation Act, an employer is not
subject to any liability whatever for the death of
or personal injury to an employee covered by the
Workers' Compensation Act or for any claims for
contribution or indemnity asserted by a third person
from whom damages are sought on account of such
injuries or death. The Workers' Compensation Act
binds the employee himself, and in case of death
binds his personal representative and all persons
having any right or claim to compensation for his
injury or death, as well as the employer and the
servants and employees of such employer and those
conducting his business during liquidation, bank-
ruptcy, or insolvency."
A study of the foregoing statute will demonstrate that
the inclusion of the words "all persons having any right or
claim to compensation for his injury or death" is intended
to bind those persons as to suits against the employer, not
third parties. In that context, any reference to this
language with respect to the subrogation rights in the
succeeding statutes is to take the quoted language out of
context and away from the subject to which it is intended to
pertain. The language relates to exclusivity; under the
present statutory scheme, it should not be construed to
include the Workers' Compensation subrogation provisions,
for in none of the present subrogation provisions is there
any indication that the legislature intended to include the
rights of heirs within the employer's subrogation lien.
We therefore conclude that under the present statutory
scheme, as it applies to this case, and because of the
intrinsic differences that exist now and have always existed
in the source and effect of recoveries made in survival
actions as distinguished from wrongful death actions,
the subrogation rights of the employer or its insurer under
the Workers' Compensation Act do not extend to recoveries
made under wrongful death claims. To that extent, we
distinguish Fisher v. Missoula White Pine Sash Co. (19741,
164 Mont. 41, 518 P.2d 795.
Decisions of other states with respect to subrogation
rights of the employer or its carrier are not helpful. The
variety and shades of opinion or statutory background differ
from state to state. Suffice it to say that in recognizing
subrogation rights as extending to benefits received by
dependents, regardless of the nature of the action, we
appear to be following the trend of the majority of the
decisions in the United States. Of special interest on this
point is the fact that in Utah it is recognized that because
of state constitutional provisions, nondependent heirs are
not divested of their rights to damages as against subrogating
carriers. Oliveras v. Caribou-Four Corners, Inc. (Idaho 1979),
598 P.2d 1320. In Idaho, it is provided by statute that if
no dependents survive the decedent, the employer has a cause
of action for the benefits paid, and the heirs separately
5
have a right of action. Idaho Code (1972), 5 223 ( f ) .
Having so concluded, we do not, however, end the dis-
cussion with regard to the rights of the widow Kim R. Swanson
in this case. What has been presented to us here, in the
carefully tailored issue presented by Swanson's counsel, is
whether the Workers' Compensation Court should hold a
hearing to determine and allocate the portion of the settlement
that is referable to the economic, as distinguished from
the noneconomic damages that the settlement may include.
That aspect of the case requires some examination.
We pointed out above that in a survival action, the
lost wages between the date of the injury and the death, and
the future earnings (reduced to present value) that the
decedent might have earned during his life expectancy are
proper elements of damages. We have also pointed out
that in wrongful death actions, in determining "such damages
. . as under all the circumstances of the case may be
just" (section 27-1-323, MCA), the jury may include as a
factor in such damages the reasonable value of the contributions
in money that the deceased would reasonably have made during
his lifetime for the support, education, training and care
of the heirs during their respective life expectancies.
It is obvious that the contributions which a decedent
might have made to his heirs for their support, maintenance,
education or training would come out of his earnings during
his lifetime. While it is true that survival actions and
wrongful death actions are separate and distinct causes of
action and that recovery of lost earnings in the survival
action, or the value of contributions in the wrongful death
action, are each proper factors for determination in those
respective cases, it is also true that in Workers' Compen-
sation cases where a death is involved, the heirs receive
benefits that represent the wages that the employee would
have received had he lived. Under considerations of equity
and the doctrine of subrogation, therefore, apart from the
statutory provisions, it is meet and just in cases of
instantaneous death that the subrogation lien of the employer
or its insurer should extend to that portion of the recovery
made under the wrongful death claim that may represent
reasonable contributions to the heirs derived from the
earnings of the decedent.
Where the death of the employee is instantaneous, no
recovery exists under the survival action. If recovery is
made nonetheless in the wrongful death phase of the claim,
and no recovery is possible under the survival action, the
Workers' Compensation Court should determine the value of
the economic damages in the settlement or the judgment.
By "economic damages" we refer to those elements of damages
in a wrongful death case that would have their source in the
earnings of the decedent, and recompensed medical and burial
expenses paid partly or wholly by the subrogating carrier.
Once that portion of the wrongful death settlement or
judgment is determined, the Workers' Compensation Court
should apply the subrogating carriers' rights to the economic
damages received by dependent heirs in the usual fashion.
Whether the Workers' Compensation Court allows sub-
rogation out of survival proceeds, or out of wrongful death
proceeds, the attorneys fees and costs would, in the absence
of circumstances requiring otherwise, be allocated pro-rata
between the subrogated portion and the remaining portion of
the whole settlement.
The order of the Workers' Compensation Court in this
case should take the following form:
(1) Amount of third party action recovery $56,250.00
(2) Attorneys' fees and costs 20,250.00
(3) Amount of recovery allocated to
survival action (in instantaneous
death write "none") $

(4) Amount of recovery in wrongful
death allocation determined to
represent economic damages (use
a figure only if death were
instantaneous, otherwise enter
" none " 1

(5) Amount of recovery subject to
employer/carriergs subrogation
rights (enter figure from (3) or
(4))

(6) Attorneys fees and costs allocable
to subrogation rights
I
 (7) Factor to be used in determining
proportion of attorneys fees and
costs to be assumed by insurer and
claimant [(6)/(5)]
(8) Claimants minimum statutory entitle-
ment excluding proportionate share
of attorneys fees and costs
[ (5) x 1/31

(9) Insurer's maximum statutory entitle-
ment excluding proportionate share
of attorneys fees and costs
[ (5) x 2/31 $

(10) Insurer's total payments to date $37,862.75
(11) Insurer's portion to date of attorneys
fees and cost obligation [ (7) x (6)
% 1 $

(12) Net portion insurer is entitled to
from third party recovery for
payments made [ ( 9 ) - (ll), or (10)
whichever is the lesser] $

In the settlement of this case, counsel for the heirs
of the decedent and counsel for National Aviation Under-
writers, between themselves, allocated the sum of $3,000 to
the survival action, and the remainder of the settlement to
the wrongful death action. When subrogation is considered,
neither the court nor the Workers' Compensation Court or
Division should be bound by the allocations so made between
private counsel. We find it proper here that the Workers'
Compensation Court be directed to consider, in the absence
of a District Court determination, all of the elements that
went into the settlement arrived at, and to apportion therefrom
that portion of the settlement that represents the settlement
value of the survival action, if the decedent's death was
not instantaneous. If his death was instantaneous, then the
entire settlement should be regarded as a wrongful death
recovery and the economic damages allocated accordingly.
The order and judgment of the Workers' Compensation
Court denying the motion of Kim R. Swanson to determine the
economic and noneconomic elements of the settlement for
purposes of subrogation is hereby vacated and the cause is
remanded to the Workers' Compensation Court with instructions
to conduct hearings, and to make and enter its findings,
conclusions and order determining the subrogation rights of

the employer or its insurer based on the guidance of this

opinion.

i
.X.1/
,
c ib,
Justice

We Concur:

-
Chief Justice

Morrison, Jr .
Mr. C h i e f J u s t i c e Haswell, d i s s e n t i n g :
I dissent. I n my v i e w , o u r d e c i s i o n i n F i s h e r v. M i s s o u l a

W h i t e P i n e and S a s h Co. ( 1 9 7 4 ) , 1 6 4 Mont. 4 1 , 518 P.2d 7 9 5 , man-
d a t e s a f f i r m a n c e of t h e o r d e r of t h e Workers' Compensation Court.
The m a j o r i t y h o l d t h a t t h e s u b r o g a t i o n r i g h t s o f t h e
e m p l o y e r and i n s u r e r d o n o t e x t e n d to a w r o n g f u l d e a t h r e c o v e r y

b y t h e h e i r s of t h e deceased employee a g a i n s t a t h i r d p a r t y . I

f i n d no s u p p o r t f o r t h i s h o l d i n g i n t h e s u b r o g a t i o n s t a t u t e o f

t h e Workers' Compensation A c t . S e c t i o n 39-71-414, MCA.

M o r e o v e r , s u c h h o l d i n g is d i r e c t l y c o n t r a r y to o u r d e c i s i o n i n

Fisher.
I n F i s h e r w e h e l d t h a t t h e d i s t i n c t i o n between s u r v i v a l

a n d w r o n g f u l d e a t h a c t i o n s was n e i t h e r p r e s e r v e d n o r d i f f e r e n -
t i a t e d u n d e r t h e s u b r o g a t i o n p r o v i s i o n s o f t h e Workers

C o m p e n s a t i o n A c t ; t h a t s u c h d i s t i n c t i o n f i n d s no s u p p o r t i n t h e

s t a t u t o r y p l a n o r purpose of t h e A c t ; t h a t t h e compensatory pur-
p o s e o f t h e s u b r o g a t i o n p r o v i s i o n r e m a i n s t h e same w h e t h e r com-

p e n s a t i o n b e n e f i t s a r e p a i d to t h e e m p l o y e e o r i n case o f h i s
d e a t h t o h i s s u r v i v i n g d e p e n d e n t s ; and a c c o r d i n g l y t h e e m p l o y e r
a n d i n s u r e r is s u b r o g a t e d to t h a t p o r t i o n o f a compromise s e t t l e -
m e n t t h a t t h e widow r e c e i v e d from a t h i r d p a r t y t o r t f e a s o r i n a
wrongful death action.

The f o l l o w i n g p a s s a g e s from F i s h e r i l l u s t r a t e i t s r a t i o n a l e :
"Claimant c o n t e n d s t h a t any s u b r o g a t i o n r i g h t
t h e e m p l o y e r or i t s i n s u r e r p o s s e s s e s is p u r e l y
s t a t u t o r y u n d e r s e c t i o n 92-204, R.C.M. 1947, of
t h e Montana Workmen's C o m p e n s a t i o n A c t . She
a r g u e s -- s t a t u t e g r a n t s s u b r o g a t i o n o n l y
that this
o n d e r i v a t i v e claims o f t h e i n j u r e d e m p l o y e e and
-s-o a p p l i c a t i o n t o w r o n g f u l d e a t h a c t i o n s
ha n
i n v o l v i n g claims f o r d a m a g e s s u f f e r e d b y t h e
survivors." (Emphasis added.) 1 6 4 Mont. a t 44-45,
518 P.2d a t 797.

"We r e j e c t s u c h c o n s t r u c t i o n as i n c o n s i s t e n t
w i t h t h e s t a t u t o r y p l a n and p u r p o s e o f t h e
Workmen1 s C o m p e n s a t i o n A c t . The p u r p o s e of t h e
s u b r o g a t i o n p r o v i s i o n s is to compensate t h e
e m p l o y e r and h i s i n s u r e r to some e x t e n t f o r t h e
a d d i t i o n a l l i a b i l i t y t h e y assume under t h e
Workmen s C o m p e n s a t i o n A c t f o r w r o n g f u l a c t s o f
independent t h i r d p a r t y t o r t f e a s o r s . Koppang
 v . S e v i e r , 1 0 1 Mont. 234, 5 3 P.2d 455. 164
Mont. a t 4 7 , 518 P.2d a t 798.

"Accordingly, t h e claimed d i s t i n c t i o n between
s u b r o g a t i o n r i g h t s i n s u r v i v a l a c t i o n s and
w r o n g f u l d e a t h a c t i o n s f i n d s no s u p p o r t i n t h e
s t a t u t o r y p l a n o r p u r p o s e o f t h e Workmen's
Compensation Act." 1 6 4 Mont. a t 48, 518 P.2d a t
799.
The m a j o r i t y a t t e m p t t o d i s t i n g u i s h F i s h e r o n two g r o u n d s :
( 1) s t a t u t o r y changes i n t h e Workers' Compensation A c t s i n c e

F i s h e r , and ( 2 ) t h e d i f f e r e n c e s b e t w e e n w r o n g f u l d e a t h and s u r -
v i v a l a c t i o n s and e c o n o m i c and noneconomic damages.

I n reasoning t h a t s t a t u t o r y changes i n the A c t s i n c e

F i s h e r r e q u i r e a d i f f e r e n t r e s u l t i n t h i s case, t h e m a j o r i t y
i g n o r e o u r d e c i s i o n i n T u t t l e v . Morrison-Hnudsen Co., Inc.

( 1 9 7 8 ) , 1 7 7 Mont. 1 6 8 , -QBH
P.2d 1379:
Sw
"The s t a t u t e u n d e r c o n s i d e r a t i o n [ t h e s u b r o g a -
t i o n s t a t u t e i n t h e W o r k e r s ' C o m p e n s a t i o n Act]
was amended i n 1 9 7 7 . The amendments s i m p l y
c l e a r e d up t h e l a n g u a g e i n t h e s t a t u t e and
d i v i d e d it i n t o t w o s e c t i o n s . - - -t
They d i d n o
make a n y s u b s t a n t i v e c h a n g e - -e s t a t u t e . "
in th
( ~ m p h z s dded. )
a
The m a j o r i t y t h e n e x p l a i n a t l e n g t h t h e d i f f e r e n c e b e t w e e n
s u r v i v a l a c t i o n s and wrongf u l d e a t h a c t i o n s and e c o n o m i c damages

a n d noneconomic damages. I agree t h a t these differences e x i s t .

I d o n o t a g r e e t h a t t h e l e g i s l a t u r e i n t e n d e d to i n c o r p o r a t e t h e s e

d i f f e r e n c e s i n t h e W o r k e r s ' C o m p e n s a t i o n A c t and d e n y s u b r o g a t i o n

i n wrongful d e a t h r e c o v e r i e s a g a i n s t t h i r d persons.

The c o n t r o l l i n g s t a t u t e p r o v i d e s i n p e r t i n e n t p a r t :
"39-71-414. S u b r o g a t i o n . (1) I f a n a c t i o n is
p r o s e c u t e d as p r o v i d e d f o r i n 39-71-412 [ t o r t
a c t i o n a g a i n s t t h i r d p a r t y ] o r 39-71-413 [ a c t i o n
a g a i n s t f e l l o w e m p l o y e e f o r i n t e n t i o n a l and
m a l i c i o u s a c t s ] a n d e x c e p t as o t h e r w i s e p r o v i d e d
i n t h i s s e c t i o n , t h e i n s u r e r is e n t i t l e d t o
s u b r o g a t i o n f o r a l l c o m p e n s a t i o n and b e n e f i t s
p a i d or to be p a i d u n d e r t h e W o r k e r s '
Compensation A c t . " (Emphasis added. )
Here c o m p e n s a t i o n and b e n e f i t s u n d e r t h e W o r k e r s '
C o m p e n s a t i o n A c t were p a i d t o t h e s u r v i v i n g widow. She p r e s e n t e d

a t o r t claim a g a i n s t a t h i r d p a r t y , S t o c k h i l l A v i a t i o n , who p a i d
h e r $56,250. Under t h e p l a i n l a n g u a g e o f t h e A c t q u o t e d a b o v e ,
t h e W o r k e r s ' C o m p e n s a t i o n i n s u r e r is e n t i t l e d to s u b r o g a t i o n f o r

a l l c o m p e n s a t i o n and b e n e f i t s p a i d . N o d i s t i n c t i o n is made b e t -

ween s u r v i v a l and w r o n g f u l d e a t h a c t i o n s , b e t w e e n i n s t a n t a n e o u s
and p r o l o n g e d d e a t h o r b e t w e e n economic and noneconomic damages.
The m a j o r i t y have s i m p l y engaged i n some j u d i c i a l l e g i s l a -
t i o n to j u s t i f y t h e r e s u l t t h e y s e e k . I n t h e p r o c e s s t h e y have
d e n i e d e f f e c t t o F i s h e r and have i g n o r e d T u t t l e .

b
\
Chief J u s t i c e