*1 McKINLEY, JODY Respondent, Claimant COMPANY, MANUFACTURING AMERICAN DENTAL Fund, De Employer, Insurance Appellants. fendants No. 87-365. 4, 1988.
Submitted
May
Decided
Julio Morales & claimant respondent.
MR. JUSTICE Opinion WEBER delivered Court. appeal This is attorney by an of the amount of fees awarded McKinley’s Compensation Workers’ in Court Ms. claim for disabil- ity benefits. We Compensation reverse remand to the Workers’ Court. (State
Appellant Fund) Compensation Fund Insurance states issue is whether lower ignoring court erred in offers of settle- prior ment made to in determining trial fee awardable 39-71-612, (1983). under Section MCA McKinley The claimant Ms. industrial her suffered an accident to hand, right arm, paid in and shoulder 1984.The State Fund temporary disability January 1986, total Ms. until when McKinley time, employer. started to work a new At that disability began State Fund terminated total benefits and paying McKinley Ms. permanent partial benefits. complaint filed before Workers’ Court was disagreement per- of a McKinley’s
because on the of Ms. calculation partial McKinley argued successfully manent benefits. Ms. 39-71-705, that her benefits should be calculated under Section permanent MCA. The disa- court awarded her 500 weeks of bility week, benefits at or the rate a total of court noted that since benefit rate based on earnings, may change. actual lost The court ruled the rate year McKinley either may or the return once a recompute wages pre-injury to the difference between current McKinley’s request for attor- wages. denied Ms. The court therefore paid Ms. ney in them as fees sum but ordered a receives her benefits. computed Ms. at- Court Workers’
torney between the amount awarded and fee based on the difference $9,695, by State Fund. the “floor offer” which it determined appealed. That determination is ignoring of settlement made
Did the lower court err offers Section 39- determining trial in fee awardable under 71-612, MCA? 39-71-612, governs the fees MCA award provided, part:
in this That case. statute relevant “(1) payment compen- employer pays If or or insurer tenders title, controversy Chapter but relates to sation or compensation or the amount of due and the settlement award employer in- greater or tendered than surer, attorney’s as the division or reasonable fee established gone hearing, judge if the case has the workers’ solely upon for or based difference between the amount settled may paid, in addi- awarded and the amount tendered or awarded compensation.” tion to the amount of *3 upon 1985, solely
As amended the difference words “based between settled or and the amount ten- the amount for awarded must paid” dered or are from the statute. we eliminated Wight Hughes apply injury. in effect of the statute as on date Co., key 98, Livestock Inc. P.2d 303. Our 204 Mont. 664 question of fee when amount a reasonable solely upon amount the fee “based the difference between of paid.” for amount settled or awarded and tendered correspondence and between Ms. Compensa- filing State of with the Worker’s Fund to the claim tion Court can summarized as follows: 16, 1985, Morales wrote August
“On Ms. Mr. Fund, for her making payment to the for of benefits demand totaling $57,400. disability 29, 1986,
“On to Mr. Morales. State Fund wrote McKinley to returned State Fund had advised that because work, 39- Section payments begin per week under $113.07 would at 71-703, MCA, wages. The Fund also men- for the diminution asked rating person whole impairment tioned an 15% the she wanted his whether that Mr. Morales contact client and advise
95 pointed benefits Section or Section 705. The Fund out under 703 per under 705 amount to week $138.50 benefits would for not to exceed 75 weeks. February
“On to State Fund. He Mr. Morales wrote objected perma- changing temporary total to to the benefits from Also, nent made a total benefits. demand indemnity payment demand was made for the of the minimum ben- — rating recog- impairment efit was based on 15% suggested agreement nized in Mr. letter. Morales Mckinley to $138.50 entitled the maximum benefits $69,250.. 500 weeks for total of He for settlement on that asked amount. February 27,1986,
“On replied let- the State Fund to Mr. Morales’ February ter of 7 stating interpreted that it the letter to mean that Ms. McKinley would like have benefits under Section 705. Therefore, days wage from date of letter loss that, under Section 703 would be discontinued and one month after begin payment Section 709 the State Fund would of “the un- disputed liability (Note resulting impairment rating.” from the letter.) April fact is what the Fund did in its The State Fund also advised that did not it believe that Ms.
entitled to 500 weeks at $138.50as its calculations showed that even pay if she year were to past receive a 5% increase each for the years she qualify Finally, would not for the $138.50. the Fund noted $57,400. that Mr. originally requested Morales had settlement for rejected The State Fund lack that offer for of sufficient information gone up observed that the demand had 4, 1986, “On March Mr. Morales wrote to the Fund. Mr. theory Morales earning capacity outlined his at loss of 75 weeks plus $138.50 at week at or a total weeks $68,762.67. accept He then willing indicated his client was foregoing in full permanent partial benefits.
“On This the State Fund wrote to Morales. Mr. words, letter contained the ‘our on this case is offer of settlement $36,927.80.’ paragraph The next how was enti- described the client *4 partial tled per to 70 weeks of for a benefits at week total $138.50 $9,695. hourly paragraph pointed The next loss of out that wages per so that for $129.68 translates week under Section 703 $27,232.80. weeks, remaining 210 These she would be entitled to of settlement of figures together total the offer two course $36,927.80. 1986, In April 28, Mr. Morales. Fund wrote to
“On letter, receive that Ms. was to Fund mentioned biweekly from per payable $138.50 for 70 weeks at week benefits 1, 1986, indem- of her first entitlement to April was date which They weeks had nity also advised that 3 benefits under payment. In passed lump sum addi- so she was entitled to a $415.50 pay- McKinley needed a sum tion the Fund stated that if Ms. future she the claims examiner.” ment of benefits should contact filed on The claim the Workers’ Court was before 27,1986. before Workers’ March Prior to the trial 27, 1986, Court, August wrote a for the State Fund on McKinley’s attorney offering settlement in the amount letter to $40,940. — pre- lower found the first “offer” offer court — January cipitated of Ms. Mc- dispute 1986 reduction was Kinley’s permanent a from a total rate to in this offer was rate. it found that the duration of benefits $36,927.80 unclear. It then found that a offer extended 21, 28, 1986, April in the 1986 let- letter but was withdrawn $138.50, ter, bringing parties to 70 weeks at back reasonable fee in this matter court determined that “a should be based on the between the amount awarded and difference firm, specific the first offer made the defend- determinable ant,” is, $9,695.
Factually the State as of March we conclude that Fund had offer of in the amount of made an settlement com weekly to the specific and there was on basis as breakdown putation conclu disagree the lower court’s that amount. We with Holton April In sion that this 28 letter. offer withdrawn (Mont. 1981), 263, Mont. F.H. Land & Lumber Co. Stoltze 10, duty 1835, has a St.Rep. an insurer 637 P.2d Court held that promptly of which pay any undisputed compensation, refusal penalties. case, State Fund triggers In this as liability Section 39- acknowledged had benefits under MCA, 71-705, weeks. We for not to exceed 75 week April 28, forth Ms. conclude that the letter sets conclusion simply basis for the Holton benefits. There is no factual men- no The letter makes that the March offer was withdrawn. *5 $36,927.80, tion of offer we that it the March 21 of conclude does not of that offer. constitute a withdrawal argues August that offer its attorney compared should be the final offer to determine attor with & (Mont. fees. It cites Lasar v. Sons ney 1986), Mont. [222 Oftedal 251,] case, St.Rep. 721 P.2d In that this Court held attorney there were two an of fees conditions to award 39-71-612, (1983): attorney MCA the amount of fees must controversy, be in and the awarded must exceed the amount Lasar, paid or tendered. P.2d at 354. This refused to Court attorney trial, award fees in that case because three weeks compensation insurer had of conceded total amount due. requirement Thus first application for statute was not contrast, met. In present the amount in case controversy in through remained trial.
Here, following $36,927.80, petition the State Fund’s offer of was filed in the in Workers’ 1986. In Court March June, July, and August parties engaged discovery in including depositions hearing interrogatories, Sep- written set $40,940 tember 2. The letter in which the offer was made is dated August 27, day pretrial one before conference and less than a hearing week before the scheduled date. The does statute not clarify paid” whether the “amount tendered could refer to this conclude, however, late $40,940 offer. We that use of the eve-of-trial figure attorney would not result in a “reasonable fee” under case, facts of this case. In this we conclude that the “reasonable at- torney 39-71-612, computed fee” under Section MCA is us- ing $36,927.80 the difference between the amount awarded and the offer preceding filing petition. made McKinley’s counsel has the issues of whether he was briefed erroneously denied a sum he award his fees and whether entitled to interest on his fees. he has not these raised properly by filing issues cross-appeal. not con- Therefore we will issues, sider ruling these and the will that attor- lower court’s stand ney paid fees weekly will on a basis as Ms. paid.
are points agreement counsel also out that his fee with Ms. fees be entitles him to increase provides cause case appealed. agreement this has The fee been ap he compensation payments will receive 40% if the case pealed was, to this Court. Because it the Workers’ Fund to the State to be may his fee Court increase awarded and the amount difference between 40% Com- to the Workers’ this motion We remand tendered. consistent fees entry order for pensation of an Court opinion. with this HARRI- and MR. JUSTICES TURNAGE JUSTICE
MR. CHIEF concur. SON and GULBRANDSON HUNT, dissenting:
MR. JUSTICE lump-sum fee should opinion majority’s I concur with the not respondent did reason that case for the not be awarded *6 cross-appeal. properly raise this issue however, disregard of the Workers’ dissent, majority’s I with the $36,000 even original offer is finding that Compensation Court’s it had been with- Compensation judge found though the Workers’ up to the fact finder by It is replaced one for drawn and 39-71- under Section is to be used what offer or tender determine Compensation Court found In this case the Workers’ MCA. letter. That offer in the March 28 offer contained “floor” to be the determinable “first, firm, specific and $9,000 finding of the of- is a of a floor. Where there proper criteria seems to me to be fer” offer, offer, replaced a lesser genuine is later withdrawn when, through the efforts defeated fees cannot be than claimant greater amount attorney, the claimant recovers a attorney. help of the received without would have Work- decision, purpose of the By majority ignores that its injured on worker provide is to for the ers’ Act 39- himself; ignores that Section provide it also job who cannot statutes 71-104, MCA, of these requires liberal construction which McKinley’s injury and courts, time of still in effect at the applicable is still to this case. dissent join in the and SHEEHY
MR. JUSTICES McDONOUGH of MR. JUSTICE HUNT.