No. 54-332 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1985 

DEBF@= L. CARLSON, 

Claimant and Appellant, 

JERRY CAIN, 

Employer, 

and 

UZIJINSUFLED EPlPLOYERS FUND, 

and 

LEE ENTERPRISES, d/b/a THE BILLINGS 

GAZETTE I 

Employer, 

and 

HARTFORD ACCIDENT AND INDEMNITY 

COMPANY I 

Defendant and Respondent. 

APPEAL FROM: The Workers' Compensation Court, The Honorable Timothy 

Reardon, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Keefer, Roybal, Hanson, Stacey & Jarussi; Neil S. Keefer 

argued, Billings, Montana 

For Respondent: 

bm $sek. ham LA&awks;' Mat er killiam Forsythe 

and Bradley Anderson argued, Billings, Montana 

Submitted: March 12, 1985 

Decided: May 231 1985 

Filed: "IIUY ;? S !Y85 

Clerk 
Mr. Justice John C. Sheehy delivered the Opinion of the 

Court. 

In an earlier case between these same parties, Carlson 

v. Cain and Lee Enterprises and Hartford Accident and 

Indemnity Company (Mont. 1983), 664 P.2d 913, 40 St.Rep. 865, 

we affirmed a decision of the Workers' Compensation Court 

awarding benefits to Debra Carlson following injuries 

incurred in an automobile accident while she was delivering 

newspapers for her fiance, a carrier who had contracted with 

- The Billings Gazette to deliver its newspaper. On 

remittitur, we remanded the case to the Workers' Compensation 

Court for a determination of reasonable costs and attorney 

fees pursuant to 5 39-71-611, MCA. 

The cause returns to us on appeal by claimant Carlson 

from certain portions of the findings of fact, conclusions of 

law and judgment of the Workers' Compensation Court, dated 

July 23, 1984, entered after remand from us. Carlson' s 

appeal raises the following issues: 

1. A final judgment of the Workers' Compensation Court 

upon a dispute concerning past-due benefits is a judgment for 

money entitled to interest under S 25-9-205, MCA, and Rule 

31, M.R.App.Civ.P. 

2. The terms "compensation" and "compensation benefits" 

as used in 5 39-71-2907, MCA, include medical benefits so as 

to entitle Carlson to the 20 percent penalty for unreasonable 

delay in payment of medical benefits. 

3. Under 5 39-71-2905, MCA, the Workers' Compensation 

Court has jurisdiction to award and should have awarded a 

dollar amount for domiciliary care as a medical expense. 
4. The out-of-pocket expenses of Ebert Ebert, 

claimant's mother, in the sum of $6,497.53 from June 28, 1980 

to October 15, 1980 are a reasonable and necessary medical 

expense under § 39-71-704, MCA, to be reimbursed by Hartford. 

5. An insurer liable under S 39-71-405, MCA, is not 

entitled to subrogation under 5 39-71-414, MCA. 

We will set forth the relevant facts as they pertain to 

each issue discussed herein. 

Interest - on Judgments -- of the Workers' Compensation Court. 

On June 29, 1980, appellant was severely injured in an 

automobile accident and suffered severe and irreversible 

brain damage. Hartford denied her Workers' Compensation 

claim. Within a year her med-ical bills approximated $70,000. 

Her Workers' Compensation claim was denied by Hartford. 

Carlson did not qualify for disability Social Security 

because she lacked the necessary qualifying quarters. The 

case was tried to the Workers' Compensation Court on November 

20, 1981, on the issue of liability. On April 23, 1982, the 

Workers' Compensation Court ruled in favor of Carlson, 

finding her to be entitled to temporary total disability 

benefits and to medical benefits. Hartford. appealed. On 

June 8, 1983, the Montana Supreme Court affirmed the Workers' 

Compensation Court in the decision referred to above, and 

remanded for a determination of reasonable costs and attorney 

fees. 

After remittitur, when Hartford still hadn't paid, 

claimant's counsel threatened a proceeding before the 

Division of Workers' Compensation to sell. Hartford's security 

bonds. A second hearing wa.s held before the Workers' 

Compensation Court on October 5, 1983. On July 3, 1984, the 
Workers' Compensation Court entered its judgment upon the 

second hearing. In conclusion of law no. 6, the Workers' 

Compensation Court found Hartford's actions to be 

unreasonable and subject to penalty. 

On July 14, 1983, Hartford paid the past-due 

compensation benefits from June 28, 1-980 to July 12, 1983 in 

the total sum of $5,267. On August 12, 1983, Hartford paid 

past-due medical bills of $17,067.48, and on September 16, 

1983, paid additional past-due medical bills of $17,430.02. 

These amounts had been awarded by the April 23, 1982 judgment 

of the Workers' Compensation Court. Hartford, however, 

refused to pay interest on the April 23, 1982 judgment at the 

time of payment. In its conclusion of law no. 2, the 

Workers' Compensation Court determined that claimant Carlson 

was not entitled to interest based on compensation and 

medical benefits awarded by its earlier judgment. 

Under this issue, Carlson points to § 39-71-2904, MCA, 

which provides that an appeal from a final decision of the 

Workersq Compensation judge shall he filed directly with the 

Supreme Court of Montana in the manner provided by law for 

appeals from the District Court in civil cases. Carlson 

argues that 25-9-205, MCA, provides that interest is 

payable on judgments "recovered in the courts of this State" 

at a rate of 10 percent per annum. Further, Rule 31, 

M.R.App.Civ.P. provides that if a judgment for money in a 

civil case is affirmed, whatever interest is allowed by law 

shall be payable from the date of the judgment "in the 

District Court." 

Carlson's position is that she is entitled to interest 

on the amounts contained in the judgment of the Workers' 

Compensation Court of April 23, 1982, until the past due 
benefits were in fact paid in July, August and September 

Respondents argue that the Workers1 Compensation judge 

was correct in adopting conclusion of law no. 2, by relying 

on the provisions of S 39-71-2905, MCA, which includes in 

pertinent part: 

"The penalties and assessments allowed against an 

insurer under chapter 71 are the exclusive 

penalties and assessments that can be assessed 

against an insurer for disputes arising under 

chapter 7 1. " 

(For the information of the reader, "Chapter 71" refers to 

Chapter 71 of Title 39 of the Montana Code Annotated, in 

which chapter are contained all of the statutory provisions 

relating to the subject of Workers' Compensation.) 

On this issue, the Workers1 Compensation Court relied on 

our decision in Gaffney v. Industrial Accident Board (1958), 

133 Mont. 448, 324 P.2d 1063. In Gaffney, this Court said: 

"It should be remembered that the Workers1 

Compensation Act is a special act designed solely 

to meet the situations and conditions therein 

particularly dealt with, and that the industrial 

accident fund is a trust fund to be administered by 

the board as trustees and as directed by the act. 

The schedule of payments set forth in the act are 

the maximum payments that are authorized and 

therefore allowable under the act. 

"In the absence of a specific statute authorizing 

the charging of interest on accrued compensation 

payments against this trust fund, no interest may 

be assessed or cha-rged. This is a matter that, if 

deemed of sufficient importance, should be called 

to the attention of the legislature for proper 

amendment. The courts may not legislate thereon. " 

133 Mont. at 454, 324 P.2d at 1066. 

Carlson argues that Gaffney should not apply here, 

because it was a case decided long before the Workers1 

Compensation Court was established by legislation in 1975. 

Section 39-71-2901, et seq., MCA. Indeed, it is § 

39-71-2905, MCA that gives to the Workers1 Compensat.ion judge 
exclusive jurisdiction to make determinations concerning 

disputes under Ch. 71. 

Prior to 1975, a claimant dissatisfied with a decision 

of the then existing Industrial Accident Board could appeal 

to the District Court where the claimant resided for an 

appellate review of the Board's decision. Section 92-833, 

R.C.M. (1947). The trial before the District Court was 

considered -- de novo. Section 93-834, R.C.M. (1947). Anyone 

dissatisfied with the decision of the District Court could 

then appeal to the Supreme Court, S 92-836, R.C.M. (1947). 

The former act included a provision that a 10 percent penalty 

could be levied on the weekly awa.rd of benefits for 

unreasonable delay or refusal to pay. Section 92-824.1, 

R.C.M. (1947). The penalty provision however was enacted in 

1961, after the decision in Gaffney. 

We hold that on this issue we are bound by the 

provisions of S 39-71-2905, MCA. The penalties and 

assessments allowed against an insurer under the Workers' 

Compensation chapter are the exclusive penalties and 

assessments that can be assessed against an insurer. In the 

27 years since Gaffney flagged the legislature that the 

Workers' Compensation laws did not provide for interest on 

claimant's judgments, the legislature has not acted to 

include such a provision, though the Workers' Compensation 

provisions relating to benefits have been amended several 

times and the procedures revamped in 1975. Gaffney reminds 

us that "the courts may not legislate thereon." 

- The Application of --- the 20 Percent Penalty - For Unreasonable 

Delay in Payment - of Medical Benefits. 
In its finding of fact no. 6, the Workers' Compensation 

Court found that under S 39-71-2907, MCA, claimant Carlson 

was entitled to a 20 percent increase for unreasonable delay 

in the payment to her of compensation benefits due between 

June 8, 1983 and July 14, 1983. The Workers' Compensation 

Court, however, refused to assess a penalty on the delayed 

payment of the medical expenses, saying: 

"The claimant further requests the penalty on the 

carrier's refusal to promptly and completely pay 

the claima.nt ' s medical expenses. While this Court 

specifically finds that Hartford's actions on this 

matter are unreasonable, the Court lacks 

jurisdiction to impose penalties on delayed medical 

reimbursements. Section 39-71-2907 above provides 

a penalty on delayed or refused 'compensation 

benefits' only; these are separate and distinct 

from medical benefits (See 5 39-71-704, MCA). 

"In light of Hartford's continuous unreasonable 

actions, it is regrettable that ad.ditiona1 

penalties cannot be awarded. However, liability 

for actual payment of accrued and future 

compensation benefits was tolled until order of the 

Montana Supreme Court on June 8, 1983. Penalties 

on delay of medical benefits are warranted, but are 

not included in the Workers' Compensation Act and 

the provisions therein are exclusive. Some 

consolation may be found, little though it may be, 

in an award of reasonable attorney fees." 

Thus, the Workers' Compensation Court decided that it 

could consider medical expenses for the purpose of 

determining attorney fees allowable to the claimant, but that 

it could not a.ssess a penalty for unreasonable delay in the 

payment of the medical expenses. 

Section 39-71-2907, MCA, provides in pertinent part: 

"39-71-2907. Increase - in award for unreasonable 

delay or refusal to pay. WE payment of 

compensation has been unreasonably delayed or 

refused by the insurer, either prior or subsequent 

to the issuance of a,n order by the workers' 

compensation judge granting a claimant compensation 

benefits, the full amount of the compensation 

benefits due a claimant, between the time 

compensation benefits were delayed or refused and 

the date of the order granting a claimant 

compensation benefits, may be increased by the 

workers' compensation judge by 20 percent." 
The claimant argues that the intent of S 39-71-2907, 

MCA, is to penalize the insurer who refuses to pay claims 

within a reasonable time and. to encourage prompt payment of 

all Workers' Compensation claims. There is no reason to 

exclude medical benefits from the penalty statute. Jledical 

expenses have not been specifically excluded; the generic 

term "compensation" is used in the same all-encompassing 

manner as it was used in. "Workers' Compensation Act" an.d 

"Workers' Compensation judge." 

Hartford argues that S 39-71-704, EICA, which defines 

medical expenses under the act makes it clear that weekly 

compensation and medical expenses are separate and distinct 

from medical payments. 

Section 39-71-704, MCA, provides: 

"39-71-704. Payment of medical, hospital and 

related services. ( 1) In addition to the 

compensation provided by this chapter and as an 

additional benefit separate & apart from 

compensation, the following shall be furnished: 

" (a) After the happening of the injury, the 

employer or insurer shall furnish, without 

limitation as t.o the length of time or dollar 

amount, reasonable services by a physician or 

surgeon, reasonable hospital services and medicines 

when needed and such other treatment as may be 

approved by the division for the injuries sustained . . ." (Emphasis added.) 

We hold that the Workers' Compensation Court erred on 

this point. Although several statutes in the Workers' 

Compensation Act use the words "compensation" and "benefits" 

interchangeably, the Workers' Compensation judge relied on 

one statute, S 39-71-704, MCA, to determine that medical 

payments are not included in the term "compensation" as it is 

used in § 39-71-2907, MCA. 

To begin with, the penalty statute itself, S 39-71-2907, 

MCA, provides that in the event of delay, "the -- full amount of 
the compensation benefits due a claimant . . . may be 

increased by the Workers' Compensation judge by 20 percent." 

The legislature d.id not limit the penalty to just the word 

"compensation;" it used instead the term "compensation 

benefits." There should be no argument that the compensation 

benefits which an injured worker receives under the Act 

includes compensation for time off the job, for disability 

and for medical payments. The Act itself makes the term 

"compensation" universally applicable to all of the sections 

of the Act. Section 39-71-103, MCA, provides: 

"39-71-103. Compensation provisions. The 

compensation provisions of this chapter, whenever 

referred to, shall be held to include the 

provisions of compensation plan no. 1, 2 or 3, and 

all other sections of this chapter applicable to 

the same or any part thereof." 

The following statute requires the Workers' Compensation 

Court to give a liberal construction to the chapter: 

"39-71-104. The court to give liberal construction 

- to chapter. Whenever this chapter or any part or 

section hereof is interpreted by a court, it shall 

be liberally construed by such court." 

The holding of the Workers' Compensation judge that 

medical benefits are not subject to penalty conflicts with 

its holding that the claimant could recover attorney fees 

relating to the medical benefits. Section 39-71-611, MCA, 

provides for costs and attorney fees: 

"39-71-611. In the event an insurer denies 

liability for a claim for compensation or 

terminates compensation benefits, and the claim is 

later adjudged compensable by the workers' 

compensation judge or on appeal, the insurer shall 

pay reasonable costs and attorney fees as 

established by the workers ' compensation judge. " 

It is evident that the statute relating to costs and 

a.ttorney fees uses the term "compensation benefits," and the 

Workers' Compensation Court construed that term to include 

medical benefits in determining attorney fees. Yet, the use 
of the same term, "compensation benefits" in the penalty 

clause is distinguished by the Workers' Compensation judge as 

not allowing a penalty to be assessed. 

As an example of the pl-aces in the Workers' Compensation 

Act where the word "benefits" is used interchangeably with 

"compensation" see 5 39-71-709, MCA, relating to partial 

disability benefits and indemnity benefits. Subdivision (1) 

of that statute provides: 

"39-71-709 (1) . In addition to temporary total 

disability benefits allowed in this chapter, a 

worker whose injury results in partial disability 

is entitled to receive compensation under 

39-71-703, or indemnity benefits under 39-71-705 

through 39-71-708." 

In the foregoing statute, the legislature used the word 

"compensation" and "benefits" interchangeably. This Court 

would not tolerate an argument that refusal of an insurer to 

pay indemnity benefits for partial permanent disability or 

for sched-uled losses is not subject to the 20 percent 

penalty. 

The Workers1 Compensation judge failed to take into 

consideration the legislative history of S 39-71-2907, MCA. 

The penalty provisions for delay of payment in compensation 

were first enacted in Ch. 227, Laws of Montana (1961). The 

enactment was codified as section 92-824.1, R.C.M. (1947). 

It provided: 

"When payment of compensation has been unreasonably 

delayed or refused, either prior or subsequent to 

the issuance of an award, the full amount of the 

order, decision or award may be increased by ten 

percent (10) of the weekly award. " 

There is no question that this wording would relate the 

penalty to the weekly benefits that were paid to the injured 

employee. When the office of the Workers' Compensation judge 

was created, the same provision was carried forward as 
section 92-849, R.C.M. (1947), except that the new statute 

provided that the Workers1 Compensation judge would make the 

determination. However, in 1979, in Ch. 63, S 5, Laws of 

Monta.na (1.979), the penalty provision was amended as follows, 

with the underlined words showing the amendments: 

"When payment of compensation has been unreasonably 

delayed or refused by an insurer, either prior or 

subsequent to the issuance of an order by the 

workers1 compensation judge granting a claim on 

compensation benefits, -- the full amount - of - the 

compensation benefits -- due a claimant, between the 

time compensation benefits are d.elayed - or refused 

----- and the date of the order granting a claimant 

compensation benefits, may - be increased by the 

Workers1 Compensation judge & 20 percent." 

- 

- 

The amendment of Ch. 63, S 5, Laws of Montana (19791, 

became what is now 5 39-71-2907, MCA, the section relied on 

by the Workers1 Compensation judge. 

It is clear then from the legislative history of the Act 

that before 1979 the penalty did not apply to medical 

benefits since the penalty was limited to "the weekly award." 

After the amendment in 1979, the penalty applied to "the full 

amount of the compensation benefits." 

Hartford also contends in this appeal that because the 

payments were made to the medical providers and not to the 

claimant herself, that the penalty provision should not 

apply. This argument is specious. It was met by the Kansas 

Court in Farm Bureau Mutual Insurance Company v. Commercial 

St-andard Insurance Company (1980), 5 Kan.App. 127, 612 P.2d 

1265, where the insurer paid a death benefit of $1,000 to the 

funeral home, and sought to subrogate for the payment against 

a third-party insurer. The third-party insurer contended 

that because the payment was not made directly to the 

decedent, it was not "compensation. " The Kansas Court 

stated: 
"Pursuant to this statute, plaintiff paid $1,000.00 

to the funeral home. Unlike the $5,000.00 payment 

to the fund, this sum confers a benefit on the 

decedent's representatives and is compensation 

under the Act. By virtue of the plaintiff's paying 

for the services rendered by the funeral home, 

decedent's parents were compensated to the extent 

that they were relieved of assuming an unavoidable 

expense (citing authority). The funeral bill is 

analogous to medical expenses which have been held 

to be compensation. Owen v. Ready-Made Buildings, 

Inc. 180 Kan. 286, 303 P.2d 168 (1956). Finally 

the fact that the payment is made directly to the 

provider of services does not affect its status as 

compensation. KSA 1979 Supp. 44-504(b) permits 

subrogation for compensation paid by the employer 

regardless of who receives the actual payment. We 

hold therefore that the employer or his insurance 

carrier is entitled to be subrogated for the amount 

of the funeral bill and reverse the trial court on 

this point." 612 P.2d at1268. 

In this case, Hartford claims subrogation against a 

third-party insurer, and by order of October 25, 1983, the 

Workers' Compensation Court determined that Hartford here 

could reduce its future obligations to the claimant by 50 

percent until it has pa.id $74,327. Thus Hartford has been 

subrogated to the extent of $74,327 against recovery made 

against a responsible third party. That sum includes the 

approximate $35,000 that it paid in medical benefits. Its 

right to include medical payments in its subrogation claim is 

found in S 39-71-414, MCA, which provides: "The insurer is 

entitled to subrogation for all compensation - or benefits paid 

under the act. 'I (Emphasis add-ed. ) Thus, medical payments 

under the act for the purposes of subrogation are treated as 

a compensation benefit; for the same reason, medical payments 

should be treated as a compensation benefit when a penalty is 

considered for wrongful refusal or delay in payment. 

The Workers' Compensation Court had Jurisdiction - to Award - a.nd 

Should. Have Awarded - a Dollar Amount for Domiciliary --- Care as a 

Medical Expense. 
Claimant's mother, Edith Ebert, has cared for the 

claimant since she was discharged from the hospital in 

October 1980. After a hearing in October 1983, the Workers1 

Compensation Court ruled on July 3, ,-984 in conclusion of law 

no. 4 that the claimant was entitled to the reasonable value 

of domiciliary care by her mother from the date of discharge 

to the present and continuing so long as the care is needed. 

In arriving at its decision, the court discussed the 

difference between home nursing services and household tasks. 

The court adopted a slightly modified version of the factors 

set forth in Warren Trucking v. Chandler (1981), 221 Va. 

1108, 227 S.E.2d 448 to test whether services provided in the 

home are compensable. 

The factors are: 

"(1) The employer knows of the employee's need for 

medical services at home resulting from the 

industrial in jury; (2) the preponderance of 

credible medical evidence demonstrates that home 

nursing care is necessary as a result of accident, 

and describes with a reasonable degree of 

particularity the nature and extent of duties to be 

performed by the family members; (3) the services 

are performed under the direction of a physician; 

(4) the services rendered are of the type normally 

rendered by trained attendants and beyond the scope 

of normal household duties; and (5) there is a 

means to determine with reasonable certainty the 

approximate value of the services performed." 

The Court found and the parties agree that the services 

Mrs. Ebert provided for her daughter passed the above test. 

The Workers' Compensation Court, however, ruled that it 

did not have jurisdiction to set a value on the services 

performed by Mrs. Ebert. The court ruled that the services 

constituted "such other treatment" und-er S 39-71-704, MCA, 

which we have quoted above, and as such the services must be 

approved by the Division of Workers' Compensation. The court 

left the decision of how much should be paid to Mrs. Ehert to 
the Division upon presentation to the Division of additional 

evidence. 

Claimant contends that the Workers' Compensation Court 

has the power to evaluate the services and make an award. 

Hartford claims that the amount of each award for domiciliary 

services in each case must be determined by the Division. 

The portion of S 39-71-704, MCA, which is applicable is 

that the employer must pay medical benefits for doctors, 

surgeons and hospitals and for "such other treatment as may 

he approved by the Division for the injuries sustained." A 

literal reading of that portion of the Act would indicate 

that the "other treatment" to be compensable must be approved 

by the Division. Yet, in this case, the Workers' 

Compensation Court determined that the "other treatment" was 

necessary as a medical expense but declined to set the dollar 

amount . 

Section 39-71-2905, MCA, relates to the jurisdiction of 

the Workers ' Compensation judge. In pertinent part, it 

provides: 

". . . If the dispute relates to benefits due a 

claimant under chapter 71, the judge shall fix and 

determine any benefits to be paid and specify the 

manner of payment. The workers' compensation judge 

has exclusive jurisdiction to make determinations 

concerning disputes under chapter 71.. . ." 

The foregoing portion of S 39-71-2905, MCA is an 

excellent example of the legislature using interchangeably 

the term "compensation" and "benefits." It is also an 

affirmation of the legislative purpose to grant to the 

Workers' Compensation judge "exclusive jurisdiction" in all 

matters relating to benefits recoverable under the Workers' 

Compensation Act. Medical payments constitute one form of 

such benefits. It is the policy of the law to avoid 
multifariousness in litigation. All issues involved in 

lawsuits should be tried in one trial-. We, therefore, hold 

that once the Workers' Compensation Court has acquired 

jurisdiction of a dispute under the Act, it has jurisdiction 

to try and decide all of the issues that arise between the 

parties before him. In this case, the Workers' Compensation 

Court should have fixed a dollar amount of the domiciliary 

care to which the Workers' Compensation judge found that 

claimant Carlson was entitled. 

We do not know from the record before us the exact 

status of the claim for Carlson's claim for domiciliary care. 

If, following the Workers' Compensation order in this case, 

the Division is now considering that issue, then we order 

that the Division continue to consider and make a decision as 

to the dollar amount due Carlson subject to Carlson's right 

of appeal to the Workers' Compensation Court on that issue. 

If, however, the matter has not been referred to the 

Division, or is not being considered by the Division, then we 

remand the issue to the Workers' Compensation Court for the 

fixing of the doll-ar amount of domiciliary ca.re. 

IV. 

Whether the Out-of-Pocket Expenses - of Edith Ebert --- In the Sum 

- of $6,497.53 -- are a Necessary Medical Expense. 

After the accident, Edith Ebert, claimant's mother, 

traveled to Billings, and remained at the bedside of her 

daughter for about 3 1/2 months. She helped feed, bathe and 

generally assist claimant Carlson while she was in the 

hospital. Dr. Wood, who cared for the claimant during this 

period testified at the hearing that Mrs. Ebert's presence 

and the services she performed benefited the claimant 

intellectually and shortened her stay in the hospital. When 
Mrs. Ebert took the claimant home and cared for her there, 

the expense of a nursing home was eliminated. During her 

stay in Billings, Mrs. Ehert incurred various expenses for 

food, lodging and transportation which totaled $6,497.53. 

Claimant Carlson seeks to recoup these out-of-pocket monies 

as medical expenses. The Workers' Compensation Court denied 

the request. 

The Workers' Compensation judge, finding that the 

actions of the mother were praiseworthy and indicative of her 

concern for the daughter, nevertheless denied the claim for 

out-of-pocket expenses on the ground that no medical need for 

the services performed had been demonstrated by the claimant. 

It found that while the expert testimony established that the 

mother's actions may have been beneficial, there was no need 

for physical therapy beyond that rendered by the hospital 

staff. Therefore, reimbursement for the mother's travel and 

per diem costs while the claimant was hospitalized was 

denied. Here, the Workers' Compensation Court has decided an 

issue of fact, determining that medical need was not 

established. by the evidence. Substantial support for the 

verdict exists and we may not set aside the findings of the 

Workers ' Compensation Court unless it is clearly erroneous. 

Rule 52 (a) , M.R.Civ.P. 

v. 

Whether the - Insurer Entitled - to Subrogation Under - 5 

39-71-414, MCA. 

The Workers' Compensation iudge held in this case that 

Hartford was entitled to the proceeds of subrogation under S 

39-71-414, MCA. Claimant Carlson contends that in this case 

Hartford should be denied the right of subrogation. 
Carlson's contention on this issue demonstrates what may 

be an inequity that exists in the Workers' Compensation 

statutes. Here, claimant Carlson had no memory of the 

accident. An investigation by her attorney developed the 

possibility that she had been run off the road by a vehic1.e 

operated by National Trailer Convoy, Inc. This company 

denied that they were present at the scene of the accident. 

Plaintiff's attorney formulated a case against National 

Trailer Convoy, Inc. that was based solely on circumstantial 

evidence described. at best as very marginal. Nonetheless, 

National Trailer Convoy, Inc. entered into a settlement with 

Carlson that her attorney claims was settled for a greatly 

reduced value in view of Carlson's injuries. At the time of 

the settlement, the attorney for Carlson faced the dilemma 

that plaintiffs' counsel face many times in these situations. 

There were outstanding at that time medical bills of $70,000 

and her condition of disability threatened to be permanent. 

The Workers' Compensation carrier had denied her compensation 

claim. These factors brought about the necessity, as it 

appeared. to Carlson's counsel, to settle the National Trailer 

Convoy, Inc. case at a substantially reduced value. 

After the settlement, Hartford demanded its right to 

subrogation und.er S 39-71-414, MCA. Carlson contends that 

because of the circumstances in this case, Hartford is not 

entitled to subrogation. The argument against subrogation 

follows this line: Hartford insured The Billings Gazette for 

Workers' Compensation coverage. - The Bill-ings Gazette 

contracted with Jerry Cain for the delivery of its 

newspapers. Carlson was not a direct employee of The Billing 

Gazette, but rather was a direct employee of Jerry Cain. 

Hartford became liable under S 39-71-405, MCA, when it was 
determined that Jerry Cain failed to provide Workers' 

Compensation coverage for his employee, Carlson. This is the 

established law of the case under Carlson v. Cain and Lee 

Enterprises and Hartford Accident and Indemnity Company, 

supra, 664 P.2d 913, 40 St.Rep. 865. Carlson contends that 

The Billings Gazette had not elected to cover claimant 

Carlson under 39-71-411, MCA, but was required to provide 

compensation pursuant to § 39-71-405, MCA. 

Section 39-71-405, MCA, gives Hartford a cause of action 

over and against Jerry Cain because the statute provides that 

any insurer who becomes liable for benefits may recover the 

amount of benefits paid from the contractor (Cain) who was 

primarily liable. Carlson, therefore, claims that 5 

39-71-405, MCA, deals with a specific situation, provides a 

specific remedy and is to be distinguished from the ordinary 

case where a.n employer, whose employee is injured by a third 

party, has a right of subrogation against the third party for 

the compensation benefits it pays under the subrogation 

provisions of S 39-71-414, MCA. Since Carlson was not the 

employee of The Billings Gazette, and therefore of its 

insurer, Hartford, Carlson claims that Hartford may not take 

advantage of the subrogation provisions of S 39-71-414, MCA, 

to proceed against the proceeds of settlement she made with 

National Trailer Convoy, Inc. 

Carlson's contention presents us with a case where in 

view of her injuries, a presentation of her claim in a trialagainst National Trailer Convoy, Inc. might have resulted in 

a judgment much larger than any possible recovery under the 

Workers' Compensation Act. As it was, she entered into a 

compromi-se settlement for $80,000, barely larger than the 

medical expenses which she had incurred. We have held in a 
fire insurance company subrogation case that when the sum 

recovered from the responsible third party is less than the 

total loss suffered by the insured, and either the insured or 

the insurer must to some extent go unpaid, the loss should be 

borne by the insurer for that is the risk the insurer has 

been paid to assume. Skauge v. Mountain States Tel. & Tel. 

(1977), 172 Mont. 521, 528, 565 P.2d 628, 632. 

Statutorily, however, Carlson's claim here cannot be 

sustained. Section 39-71-411, MCA, provides that the 

Workers' Compensation Act binds the employee himself, his 

personal representatives and any persons having any right or 

claim to compensation for his injury or death as well as the 

employer and the employer's representatives. Section 

39-71-414, MCA, provides that "the insurer is entitled to 

subrogation for all compensation and benefits paid or to be 

paid under the Workers "ompensation Act." It presents us 

with a case in which the Court would. have to legislate where 

the legislature has failed to act to accomplish an equitable 

result. We therefore hold that Hartford is entitled to its 

subrogation in this cause. 

The judgment of the Workers' Compensation Court in this 

cause is affirmed in part and reversed in part, and remanded 

to the Workers' Compensation Court. , @'---'. 

We Concur: 
Justices