No. 92-041
IN THE SUPREME COURT OF THE STATE OF MONTANA
1992
THOMAS BAETA,
Claimant and Appellant,
-vs-
DON TRIPP TRUCKING,
Employer,
and
S E P 2 2 1992
STATE COMPENSATION MUTUAL
INSURANCE FUND,
OF dr-n;.w.; COURT.
Defendant and Respondent. STATE s;;~;~~T~NA
APPEAL FROM: The Workers' Compensation Court,
The Honorable Timothy W. Reardon, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Rex Palmer, Attorney at Law, Missoula, Montana
For Respondent:
Michael Prezeau, Garlington, Lohn & Robinson,
Missoula, Montana
Submitted on Briefs: July 30, 1992
Decided: September 22, 1992
Filed:
Justice John Conway Harrison delivered the Opinion of the Court.
This is an appeal from the Workersf Compensation Court, the
Honorable Timothy W. Reardon presiding. The Workers' Compensation
Court determined that claimant Thomas Baeta was entitled to $46,825
in benefits and an award of reasonable attorney's fees and costs
pursuant to 5 5 39-71-612 and -614, MCA (1985). The court denied
Baeta's request for attorney's fees and costs incurred in
litigating the fee and cost issue. Baeta now appeals from that
judgment. We affirm.
The issues are:
1. Did the Workers' Compensation Court err in limiting State
Compensation Mutual Insurance Fund's (State Fund) liability for
attorney's fees and costs incurred in litigating the claim for
workers' compensation benefits?
2. Did the court err in denying attorney's fees and costs
incurred in litigating the fee and cost issue?
Baeta injured his shoulder when he fell while working in the
scope and course of his employment as a truck driver. At the time
of the injury his employer, Don Tripp Trucking, was enrolled under
Plan I11 of the Montana Workers' Compensation Act, and State Fund
was the compensation carrier. State Fund accepted liability for
compensation, but disputedthe extent of Baeta's entitlement. When
the parties could not reach a settlement, Baeta filed a Petition
for Hearing in the Workers' Compensation Court in January 1990.
Baeta claimed his circumstances entitled him to 500 weeks of
benefits at the maximum allowable rate of $149.50 per week for a
2
total of $74,750 even though the maximum statutory entitlement was
$41,860 (280 weeks at $149.50 per week). State Fund offered to
settle the claim for $30,000. Baeta rejected the offer and filed
his petition with the court. At the time of trial, State Fund had
paid $18,388.50 as a partial lump sum payment.
In April 1991, the court entered its Findings of Fact,
Conclusions of Law and Judgment, ruling that Baeta was entitled to
$46,825 in permanent partial disability benefits with credit to
State Fund for the $18,388.50 previously paid. Because the award
exceeded the amount paid or tendered by State Fund to that point,
the court also ruled that claimant was entitled to attorney's fees
and costs pursuant to §§ 39-71-612 and -614, MCA (1985).
Baeta's attorney, Rex Palmer, then submitted an affidavit
containing a claim in the amount of $20,566 for attorney's fees
(205.66 hours at $100 per hour) and $4,033.23 for costs. State
Fund objected to the statement of hours and costs and requested an
evidentiary hearing. On June 28, 1991, State Fund offered to
settle the entire fee and cost issue for $16,500. Baeta rejected
this offer. He also requested an additional award of attorney's
fees and costs for litigating the fee and cost issue. As of July
23, 1991, State Fund had tendered $10,000 in payment of attorney's
fees and $3,796.23 in costs.
In lieu of presenting live testimony at the evidentiary
hearing, the parties deposed two practicing attorneys, both well
established in the field of workers' compensation, to render
opinions regarding the time spent and the hourly rate claimed by
Mr. Palmer. Baeta deposed John Whiston who devotes his workers'
compensation practice to claimants. Whiston opined that the hours
spent and the hourly rate were reasonable. State Fund deposed P.
Mars Scott who represents both claimants and insurers. He
expressed doubt as to the need for all the time spent, but did not
question the veracity of the time statements. Neither expert would
give an opinion as to the reasonableness of the fee itself, feeling
that was within the province of the court to decide.
Following the evidentiary hearing, the court awarded Baeta
attorney's fees in the amount of $12,500 (125 hours at $100 per
hour) and $3,805.59 as reimbursement for all costs except telephone
and copying expenses.
Did the Workers' Compensation Court err in limiting State
Fund's liability for attorney's fees and costs incurred in
litigating the claim for workers' compensation benefits?
The statutes in effect at the time the injury occurs govern
the determination of workers' compensation benefits and attorney's
fees. Caldwell v. Bechtel Power Corp. (1987), 225 Mont. 423, 425,
732 P.2d 1352, 1354. As Baeta's injury occurred on October 25,
1986, the 1985 statutes govern. The pertinent sections of the 1985
statutes stated:
Section 39-71-612, MCA (1985):
Costs and attorneyst fees that may be assessed against an
employer or insurer by workerst compensation judge. (1)
If an employer or insurer pays or tenders payment of
compensation under chapter 71 or 72 of this title but
controversy relates to the amount of compensation due,
the case is brought before the workers' compensation
judge for adjudication of the controversy, and the award
granted by the judge is greater than the amount paid or
tendered by the employer or insurer, a reasonable
attorney's fee as established by the workers'
compensation judge if the case has gone to a hearing may
be awarded by the judge in addition to the amount of
compensation. ...
Section 39-71-614, MCA (1985):
Calculation of attorney fees. (1) The amount of an
attorney's fee assessed against an employer or insurer
under 39-71-611 or 39-71-612 must be based exclusively on
the time spent by the attorney in representing the
claimant on the issues brought before the workers'
compensation judge. The attorney must document the time
spent and give the documentation to the judge. The judge
shall determine a reasonable attorney fee and assess
costs. He is not bound by the documentation submitted to
him. The hourly fee the judge applies to the time spent
must be based on the attorney's customary and current
hourly fee for legal work performed in this state. ...
The Workers' Compensation Court did in fact apply these
statutes. Baeta, however, argues that the court applied them
improperly in this case. Section 39-71-614, MCA (1985), gives the
court discretion in determining a reasonable fee. Worts v. Hardy
Construction Co. (1991), 249 Mont. 477, 483, 817 P.2d 231, 235.
This Court will not interfere with a determination of reasonable
attorney's fees absent a showing that the Workers' Compensation
Court has abused its discretion. Worts at 483, 817 P.2d at 235.
The question here is whether the Workers' Compensation Court abused
its discretion in determining that $12,500 was a reasonable fee in
this matter.
Baeta argues that under 5 39-71-614 the court is only to
determine the number of hours spent by the attorney and then
multiply that by the attorney's hourly rate. The intent of 5 35-
71-614, however, was to specify that the reasonable fee awarded by
the court was to be based on an hourly basis rather than a
contingency basis. Senate Judiciary Committee Hearing on House
Bill 778, March 18, 22, and 28, 1985. The Legislature was
responding to this Court's holding in Wight v. Hughes Livestock
Co., Inc. (1983), 204 Mont. 98, 664 P.2d 303, which created a
strong presumption in favor of the reasonableness of a contingent
fee contract. The purpose of the bill was to limit the employer's
or insurer's obligation for attorney's fees to an amount based on
an hourly fee rather than a contingent fee. Hence 5 39-71-614, MCA
(1985), specifies that a fee "must be based exclusively on the time
spent by the attorney . . .," and that "[tlhe hourly fee the judge
applies to the time spent must be based on the attorney's customary
and current hourly fee for legal work performed in this state."
This language was intended to eliminate any question as to what the
basis for the fee would be. See Gullett v. Stanley Structures
(1986), 222 Mont. 365, 722 P.2d 619; Caldwell, 225 Mont. 423, 732
P.2d 1352.
Baeta argues that the wording of 5 39-71-614 reduces the
court's job to simple mathematical calculation. However, he
ignores the key wording in the statute that clearly grants the
judge discretion in determining a reasonable fee. Section 39-71-
614, MCA (1985), also states that Ig[t]he attorney must document the
time spent and give the documentation to the judge. The iudae
shall determine a reasonable attornev fee and assess costs. He is
not bound bv the documentation submitted to him." (Emphasis added.)
These sentences leave no doubt as to the discretion vested in the
judge . They are mere surplusage if one follows claimant's
argument. As noted above, both parties submitted the deposition
testimony of experienced attorneys in the workers' compensation
field. Mr. Whiston, for the claimant, expressed his opinion that
the number of hours and the hourly rate were reasonable. Mr.
Scott, for the insurer, questioned the necessity for all the time
spent. Most notably, however, neither expert would offer an
opinion as to the reasonableness of the fee, feeling that was
wholly within the court's province to decide. Mr. Whiston stated
in his deposition:
I'm not here to testify whether the fee is reasonable.
I think that that is the prerogative of the court.
That's a final determination, I think, that the court is
going to have to make. I'm very uncomfortable preempting
the court's power to review that.
Mr. Scott made similar concessions in his deposition.
In addition to the expert testimony, the court considered the
nature of the case itself. In its Order Awarding Attorney's Fees
the court stated:
This case is a straight forward "earning capacity" case.
Evidence from physicians, vocational consultants and the
claimant are the norm, not the exception. The file
reflects no extraordinary discovery requests or demands
and no particularly innovative procedural questions.
Such cases, for experienced counsel have resulted in time
expenditures from less than fifty hours to well over one
hundred. Invariably however, those cases requiring a
greater expenditure of time, involve extensive discovery,
disputes related to discovery such as protective orders
or motions to compel discovery, etc. Such is not the
case here.
Based on this, we hold that the Workers' Compensation Court
did not abuse its discretion in its award of attorney's fees.
The next question is whether it abused its discretion in
awarding costs. Not every litigation expense is recoverable.
Luppold v. Lewis (l977), 172 Mont. 280, 292, 563 P.2d 538, 545.
The trial court has broad authority in taxing costs. See Cash v.
Otis Elevator Co. (1984), 210 Mont. 319, 333, 684 P.2d 1041, 1048.
Section 25-10-201, MCA, lists the costs that may be allowed:
Costs generally allowable. A party to whom costs are
awarded in an action is entitled to include in his bill
of costs his necessary disbursements, as follows:
(1) the legal fees of witnesses, including mileage,
or referees and other officers;
(2) the expenses of taking depositions;
(3) the legal fees for publication when publication
is directed;
(4) the legal fees paid for filing and recording
papers and certified copies thereof necessarily used in
the action or on the trial;
(5) the legal fees paid stenographers for per diem
or for copies;
(6) the reasonable expenses of printing papers for
a hearing when required by rule of court;
(7) the reasonable expenses of making transcript for
the supreme court;
(8) the reasonable expenses for making a map or maps
if required and necessary to be used on trial or hearing;
and
(9) such other reasonable and necessary expenses as
are taxable according to the course and practice of the
court or by express provision of law.
Only those costs expressly stated in this statute may be
charged to the opposing party unless they are allowed by a more
specialized statute, by stipulation of the parties, or by rule of
court. Thayer v. Hicks (1991), 243 Mont. 138, 158, 793 P.2d 784,
796-797 (citing Luppold). Like Baeta, the respondent in L u ~ ~ o l d
argued that another section of the code, 5 89-1015, RCM (1947),
expressly provided for taking the costs out of 5 93-8618, RCM
(1947) (recodified as 5 25-10-201, MCA). The court noted that in
order for a statute to qualify as an IE1express
provision of lawIg1
it must "address the issue of what is an allowable 'cost' and
ldisbursement'.llLuppold at 292, 563 P.2d at 545. The court held
that 5 89-1015, RCM (1947), determined who paid the costs; it did
not determine what were allowable costs.
Baeta argues that 5 39-71-612, MCA (1985), takes this case out
of 5 25-10-201. However, 5 39-71-612 only grants the Workers'
Compensation judge discretion to award the claimant fees and costs.
It does not address the issue of what those costs are.
Baeta also argues that the "net recovery" concept of Wiaht
mandates an award of all costs in a workers' compensation case.
However, he fails to present any authority, and this Court has
found none, that automatically grants a claimant all of his or her
costs. A claimant, like any other party, is still subject to the
mandates of 5 25-10-201, MCA, and the court's authority to tax
costs. There can be no question that even under the "net recovery"
concept, the court has discretion in determining fees. The same
holds true for costs, subject to the mandates of 5 25-10-201, MCA.
We hold that the Workers' Compensation Court did not abuse its
discretion in its award of costs.
II
Did the District Court err in denying attorney's fees and
costs incurred in litigating the fee and cost issue?
In his Order Awarding Attorney's Fees, Judge Reardon stated,
"[Tlhe Court finds that the insurer is obligated, pursuant to
sections 39-71-612 and 39-71-614, MCA, to pay claimant $12,500.00
in fees plus costs. . . . Baeta then filed a Motion for
Clarification or in the Alternative to Alter or Amend, asking that
the original order be clarified or that it be altered or amended to
award fees and costs incurred in litigating the fee and cost issue.
He relied on the discussion of the terms "tenderw and "offer11in
Hilbig v. Central Glass Co. (1991), 249 Mont. 396, 816 P.2d 1037,
to argue that State Fund's settlement offer of June 28, 1991, did
not constitute a tender as required by 5 39-71-612, MCA (1985).
The court in its Order of Clarification Regarding Attorney Fees
noted, I1[T]he controversy is not over the 'tender' of compensation
or the '. . . amount of comwensation due . . .' as set forth in
section 39-71-612, MCA, but rather the tender of a separate
benefit, namely attorney fees paid by the insurer." We agree. In
construing the provisions of the Workers' Compensation Act, "we
must determine the plain meaning of the words used, interpreting
the language in accordance with usual, ordinary and accepted
meaning, and the intention of the Legislature should be gathered
from the language therein." Solheim v. Tom Davis Ranch (1984), 208
Mont. 265, 278, 677 P.2d 1034, 1041. It is clear that the term
"compensation" as used in 5 39-71-612, MCA (1985), does not include
attorney's fees. Therefore, we are not governed by the
"tender/offerU semantics of Hilbiq or the statute.
This Court has held that attorney's fees and costs incurred in
litigating the fee and cost issue are only recoverable on those
issues on which the claimant prevails. Worts at 485, 817 P.2d at
236. In the instant case, we cannot see how claimant prevailed.
In fact, he lost ground by forcing the Workers' Compensation judge
to decide the amount of fees and costs to be awarded. State Fund
offered to settle for $16,500 over two months before the
evidentiary hearing. The court ultimately awarded $16,305.59. We
cannot see how Baeta prevailed on his claim for fees of $20,566
when the court determined a reasonable fee to be $12,500. The
State Fund made a reasonable offer in light of the court's ultimate
award. Therefore, it should not be penalized under these facts.
In light of the foregoing, Baeta's request for fees and costs
of appeal are denied.
Affirmed.