No. 87-207
IN THE SUPREME COURT OF THE STATE OF MONTANA
1987
RUSSELL A. LAMB,
Claimant and Appellant,
-vs-
MISSOULA IMPORTS, INC., Employer,
and
UNIVERSAL INSURANCE CO.,
Defendant and Respondent.
APPEAL FROM: The Workers' Compensation Court, The Honorable
Timothy Reardon, Judge presiding.
COUNSETJ OF RECORD:
For Appellant:
Williams Law Firm; Shelton C. Williams, Missoula,
Montana
For Respondent:
Garlington, Lohn & Robinson; Robert E. Sheridan, Jr.,
Missoul-a, Montana
Submitted on Briefs: Nov. 13, 1987
Decided: January 19, 1988
-
, ;:
..
(
1-
r
J 1988
Filed:
Mr. Justice William E. Hunt, Sr., delivered the Opinion of
the Court.
Claimant appeals from the judgment of the Workers'
Compensation Court which denied him an award of attorney's
fees after adjudging that he was entitled to permanent
partial disability benefits. Because of a lack of the
introduction of relevant wage figures, the judge was unable
to determine the exact amount claimant should receive for
permanent partial disability benefits. Claimant appeals on
the issue of attorney's fees. We reverse and remand.
The specific issues raised for our review are as
follows:
1. Whether claimant is entitled to attorney's fees
pursuant to a prior ruling on the same case which awarded
fees under 5 39-71-611, MCA.
2. Whether claimant is entitled to attorney's fees
under 5 39-71-612, MCA, after going to a hearing which
resulted in an increase in benefits.
In 1978, Russell Lamb worked for Missoula In~portsas a
janitor. On September 11, 1978, he slipped and fell, hitting
his head on the cement floor. He was diagnosed as having
sustained a concussion. In February, 1979, Lamb was further
diagnosed as suffering from epilepsy. Even with medication,
Lamb had occasional seizures.
On March 9, 1982, while driving down a busy street, Lamb
had a seizure. He drove off the road, and hit his car head
on with a tree, causing serious head injuries and permanent
brain damage. This Court in Lamb v. Missoula Imports, Inc.
(Mont. 1984), 684 P.2d 498, 41 St.Rep. 1414, (Hereinafter
- - I), affirmed the Workers' Compensation Court in holding
Lamb
that Lamb's epileptic seizures were a direct cause of his
1978 slip and fall injury while working for Missoula Imports.
Lamb was awarded temporary total disability benefits,
retroactive to the date of the auto accident. In - - I,
Lamb
claimant received attorney's fees pursuant to 39-71-611,
MCA.
In January, 1987, Lamb again went to hearing to
determine whether he was entitled to increased permanent
partial disability benefits and domiciliary care payments
Defendant denied liability for domiciliary care payments, and
disputed the proper amount of permanent partial disability
benefits.
The Workers' Compensation Court found that Lamb was
entitled to receive payment for both domiciliary care as well
as permanent partial disability benefits. However, claimant
failed to introduce evidence of what the pay would be at the
time of the hearing for someone working as a janitor in the
same capacity as Lamb was at the time of his injury in 1978.
Consequently, the court was unable to determine the correct
amount which Lamb should receive for permanent partial
disability benefits, but did provide a general formula from
which to calculate the correct amount. In its order, the
court encouraged the parties to resolve their dispute using
the guidance the judge provided. The Workers' Compensation
Court summarized the issue of a benefits increase in the form
of permanent partial disability benefits by stating: "There
is no question of whether claimant is disabled, the only
question is how much to pay."
In the - -I1 judgment, the Workers' Compensation Court
Lamb
awarded attorney's fees to claimant on all issues brought
upon which he prevailed. Irnnlediately following the entry of
the court's order, the parties agreed on an increase of
benefits from $52.38 per week to $94.00 per week. In a
memorandum subsequent to the - -I1 judgment , the court
Lamb
clarified the award of attorney's fees. The judge ordered
defendant to pay as attorney's fees, 25 percent of claimant's
future benefits for domiciliary care and a lump sum of 25
percent of those benefits already received. As to the fees
pertaining to the issues of permanent partial disability
benefits, the court denied Lamb's claim on the grounds that
he did not meet his burden of proof regarding the applicable
rate.
We will first address the issue of whether claimant is
entitled to fees pursuant to § 39-71-611, MCA, or pursuant to
the ruling and award of fees in - - I.
Lamb
Claimant was forced to hire an attorney and litigate his
claim in order to receive temporary total disability benefits
for his 1978 head injury and subsequent injuries sustained in
1982. The insurer denied liability which was later adjudged
compensable by both the Workers' Compensation Court and the
Montana Supreme Court. In - - I the claimant was properly
Lamb
awarded attorney's fees pursuant to § 39-71-611, MCA.
Following that decision, defendant paid claimant $52.38
per week for approximately 5 years. When claimant reached
maximum healing and requested permanent partial benefits
calculated at a rate which would increase his weekly benefits
to $120.50 per week, the insurer disputed the amount to be
paid and denied liability for any amount greater than $52.38
per week.
This new round of litigation cannot be construed as
falling under § 39-71-611, MCA. The insurer was not denying
liability, but was disputing the amount of compensation owed.
The facts fall squarely within the language of S 39-71-612,
MCA (1983), which was in effect on the date of Lanb's injury.
The standards for computations of benefits for the claimant
are fixed by the statutes in effect as of the date of injury.
Ruckman v. Montana Deaconess Hospital (Mont. 1986), 730 P.2d
380, 382, 43 St.Rep. 2216, 2218, citing Trusty v.
Consolidated Freightways (Mont. 1984), 681 ~ . 2 d 1085, 41
Section 39-71-612, MCA (1983) states:
(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 and the settlement or award is
greater than the amount paid or tendered by the
employer or insurer, a reasonable attorney's fee as
established by the division or the workers'
compensation judge if the case has gone to hearing,
based solely upon the difference between the amount
settled for or awarded and the amount tendered or
paid, may be awarded in addition to the amount of
compensation.
We hold that neither 5 39-71-611, MCA, nor the Workers'
Compensation Court ruling in - - I, which awarded fees
Lamb
pursuant to that statute, apply to the facts of - -I1 as it
Lamb
is now before this Court. The applicable statute is 5
39-71-612, MCA (1983).
Defendant next requests this Court to rule that 5
39-71-612, MCA, does not mandate an award of attorney's fees
either. We disagree.
Defendant asserts that claimant did not prevail on the
issue of permanent partial disability benefits and therefore
does not merit an award of attorney's fees. Defendant relies
on the fact that claimant was demanding benefits of $120 per
week rather than the $52.38 per week being paid. Further,
the order from the Workers' Compensation Court did not
specify any correct amount owed to claimant.
Although it is true that the court ultimately held that
claimant did not prevail on his claim for permanent partial
disability benefits, the language of the opinion and
resulting increase in benefits would indicate otherwise. The
specific language used by the Workers' Compensation judge is
as follows:
In order to calculate a diminution in earning
capacity, one must first determine the wages earned
at date of injury and then compare those wages with
what claimant's capacity to earn is with his
disability. Claimant has demonstrated that he has
no normal job market. i in din^ of Fact No. 12.)
-
However, as the Montana Supreme Court has held in
x.,
McDanold v. E. ~ r a n s ~ o r t ,
,
- Mont. ,
P. 2d -- 41 St.Rptr. 472 (1984), earning
capacity must be measured by comparing pre-injury
earning capacity with post-injury earning capacity
- - - - time frame. So, in order to properly
in the same
calculate claimant's permanent partial disability
rate, we would need to know what the iob claimani
4
held in September of 1978 would pay today. No
evidence was presented as to that pay rate. No
determination -of permanent partial disability can
be made by this Court.
The Court would hope that, given the findings and
guidance herein, the parties should be able to
resolve this dispute. There is no question of
whether claimant is disabled, the only question is
how much to pay.
Following this judgment, defendant promptly agreed to a
$41.62 per week increase in benefits to $94.00 per week.
It is also true that claimant agreed to reduce his
demand of $120.50, but that does not negate the fact that his
benefits were ultimately increased as a result of the
hearing.
Section 39-71-612, MCA (1983), clearly states that
claimant is entitled to attorney's fees if "the settlement or
award is greater than the amount paid by the employer or
insurer." (Emphasis added.) In this case, the employer
settled with claimant for more than the amount that was being
paid before the hearing. If a dispute in amount owed is
resolved in favor of claimant, this Court inevitably finds
that an award of attorney's fees is appropriate. Polich v.
Whalen's O.K. Tire Warehouse (1983), 203 Mont. 280, 661 P.2d
38; Walker v. H. F. Johnson, Inc. (1978), 180 Mont. 405, 591
P.2d 181; Catteyson v. Falls Mobile Home Center (19791, 183
Mont. 284, 599 P.2d 341.
Although the discretionary word "may" is found in §
39-71-612, MCA, it does not leave an award of attorney's fees
totally up to the Workers' Compensation Court's discretion.
It is a general principle in statutory construction
that, where the word "may" is used in conferring
power upon an officer, court, or tribunal, and the
public or a third person has an interest in the
exercise of power, then the exercise of the power
becomes imperative. (Citations omitted.)
Adoption of Bascon (1952), 126 Mont. 129, 136, 246 P.2d 223,
The Workers' Compensation Court found that Lamb was
entitled to permanent partial disability benefits.
Obviously, the amount of $52.38 being paid by defendant was
not considered adequate or the court would not have expended
the time and energy in providing the parties with a formula
to be used in calculating the correct amount. If the judge's
formula was meant to lower Lamb's weekly benefits, it is
inconceivable that defendant so readily agreed to an increase
of $41.62 per week to $94.00 per week in benefits.
In light of the foregoing discussion, we conclude with
the most compelling reason to find that this claimant, under
these facts, is deserving of an award of attorney's fees
pursuant to § 39-71-612, MCA. As this Court has said:
If therefore, the social purpose of Workers'
Compensation Acts is to provide for the injured
worker a fund which replaces his lost earnings or
his lost earning capacity, the reasonable cost of
effectuating such social purpose where litigation
is necessary ought also be the burden of the
industry. Any erosion of the workers' right of
recovery by imposing upon the worker the cost of
procuring his rights erodes to that extent the
social purpose.
It is clear to us that it is the objective of the
statutes allowing attorneys fees in compensation
cases to preserve intact the eventual award
recovered by the claimant for his impairment, by
assessing in addition his attorneys fees and costs
against the insurer or employer. It is a further
purpose of the statutes to allow the Workers'
Compensation Court or Division to regulate
attorneys fees for successful claimants.
Wight v. Hughes Livestock Co., I ~ c . (Mont. 1983) t 664
While the workers' compensation judge may determine
which attorney's fees are reasonable, the clear
meaning of [ S 39-71-6121 is to provide attorney
fees above and beyond the compensation awarded to a
successful claimant.
Holton v. F. H. Stoltze Land and Lumber Co. (1981), 195 Mont.
263, 270, 637 P.2d 10, 14.
We hold that claimant is entitled to an award of
reasonable attorney's fees on the issue of his permanent
partial disability benefit rate. The amount is to be based
solely upon the difference between the amount settled for
($94.00) and the amount paid ($52.38). Section 39-71-612,
MCA (1983).
Reversed and remanded to the Workers' Compensation Court
for a determination of reasonable atporney's fees.
We Concur:
-\
Justices