No. 54-332 IN THE SUPREME COURTOF THE STATEOF MONTANA 1985

DEBF@= L. CARLSON, Claimant andAppellant,

JERRY CAIN, Employer, and UZIJINSUFLED EPlPLOYERS FUND, and LEE ENTERPRISES,d/b/a THE BILLINGS GAZETTEI Employer, and HARTFORD ACCIDENT AND INDEMNITY COMPANYI Defendantand Respondent.

APPEAL FROM: TheWorkers' CompensationCourt, The HonorableTimothy Reardon, Judgepresiding.

COUNSEL OF RECORD: ForAppellant: 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 2311985

Filed: 

### "IIUY ;?S

## !Y85

ClerkMr. 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 IndemnityCompany (Mont. 1983), 664P.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 feespursuant 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 concerningpast-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, includemedical benefits so as to entitle Carlson to the 20 percent penalty for unreasonable delay inpayment ofmedical 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 sumof $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 reimbursedby 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 issuediscussedherein.

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 ayearher med-icalbills 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

casewas 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,theMontana Supreme Court affirmed theWorkers' Compensation Court in the decision referred to above, and remanded for a determination of reasonable costsand attorney fees.After remittitur, when Hartford still hadn't paid, claimant's counsel threatened a proceeding before the DivisionofWorkers' 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,theWorkers' 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, 1-980to 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 amountshad been awarded by the April 23, 1982 judgment of the Workers' Compensation Court. Hartford, however, refused to pay intereston theApril 23, 1982 judgmentat 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 WorkersqCompensation 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 DistrictCourt." 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 duebenefits 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 provisionsof S 39-71-2905, MCA, which includes in pertinentpart: "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 71. " (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, theWorkers1Compensation 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." 133Mont. 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 theWorkers1Compensat.ionjudgeexclusive 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 formeract included aprovision that a 10percent 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). Thepenalty provision howeverwas 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 courtsmay not legislate thereon."

The Application of the 20 Percent Penalty For Unreasonable 

### - --- 

## - Delay in Payment

## - of Medical Benefits.In its finding of factno. 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 themedical 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 ondelayedmedical reimbursements. Section 39-71-2907 above provides a penalty on delayed or refused 'compensation benefits' only; these are separate and distinct frommedical 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 benefitswas tolled until order of the Montana Supreme Court on June 8, 1983. Penalties on delay of medical benefits arewarranted,but are not included in the Workers' Compensation Act and the provisions therein are exclusive. Some consolationmay be found, little though itmay be, in an award of reasonableattorney fees." Thus, the Workers' Compensation Court decided that it could consider medical expenses for the purpose of determiningattorney fees allowable to the claimant, but that it could not a.ssessa penalty for unreasonable delay in the payment of themedical 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 grantinga 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 judgeby 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 frommedical 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 servicesandmedicines when needed and such other treatment as may be approvedby the division for the injuries sustained



# .

# .." (Emphasisadded.) We hold that the Workers' Compensation Court erred on this point. Although several statutes in the Workers' CompensationAct 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. Tobeginwith, the penalty statute itself,S 39-71-2907, MCA,provides that in the event of delay, "the 

### -- full amount ofthe compensation benefits due a claimant 

# .. . may be increased by the Workers' Compensation judge by 20 percent." The legislature d.idnot 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 theAct. 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 compensationplan 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.ttorneyfees uses the term "compensationbenefits," and the Workers' Compensation Court construed that term to include medical benefits in determining attorney fees. Yet, the useof the same term, "compensation benefits" in the penalty clause isdistinguishedby theWorkers' Compensation judge as not allowing apenalty to be assessed. As an example of thepl-acesin theWorkers' 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 statuteprovides: "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 legislatureused 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). Itprovided: "When payment of compensationhasbeen 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 theweekly award. " There is no question that thiswording would relate the penalty to the weekly benefits thatwere paid to the injured employee. When the officeof theWorkers' Compensation judge was created, the same provision was carried forward assection 92-849, R.C.M. (1947),except that the new statute provided that the Workers1Compensation judgewould make the determination. However, in 1979, in Ch. 63, S 5, Laws of Monta.na (1.979),thepenalty provisionwas amended as follows, with theunderlined words showing the amendments: "Whenpayment of compensationhasbeen 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 Workers1Compensationjudge

### & 20percent." 

### - - 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 theWorkers1Compensation judge. It is clear then from the legislative history of theAct that before 1979 the penalty did not apply to medical benefits since the penaltywas limited to "theweekly award." After the amendment in 1979,thepenalty applied to "the full amount of the compensationbenefits." 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. Itwasmet by the Kansas Court in Farm Bureau Mutual Insurance Company v. Commercial St-andardInsurance Company (1980), 5 Kan.App. 127, 612 P.2d 1265, where the insurerpaid a death benefit of $1,000 to the funeralhome, and sought to subrogate for thepayment 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:"Pursuantto this statute,plaintiff paid $1,000.00 to the funeralhome. Unlike the $5,000.00 payment to the fund, this sum confers a benefit on the decedent's representatives and is compensation under theAct. By virtue of theplaintiff'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 isentitled tobe subrogated for the amount of the funeral bill and reverse the trial court on thispoint." 612P.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 includemedical payments in its subrogation claim is found in S 39-71-414, MCA, which provides: "The insurer is entitled to subrogation forall compensation

### - orbenefitspaid under the act.'I (Emphasisadd-ed. ) Thus, medical payments under the act for thepurposes of subrogation are treated as

a compensationbenefit; for the same reason,medical payments shouldbe treated as a compensation benefit when apenalty is considered for wrongful refusalordelay inpayment.

TheWorkers' CompensationCourthad Jurisdiction

### - toAward 

## - a.nd Should.HaveAwarded - a DollarAmount 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,theWorkers1 Compensation Court ruled on July 3, ,-984 in conclusion of law

no. 

### 4 that the claimantwas 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 differencebetween home nursing servicesand 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 testwhether servicesprovided in the home are compensable. The factorsare: "(1) The employerknows of the employee's need for medical services at home resulting from the industrial injury; (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 thenatureand extent of duties tobe 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 renderedby trained attendantsand beyond the scope of normal household duties; and (5) there is a means to determine with reasonable certainty the approximate value of the servicesperformed." 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-erS 39-71-704, MCA, which we have quoted above, and as such the services must be approved by theDivisionofWorkers' Compensation. The court left the decision ofhowmuch should be paid toMrs. Ehert tothe 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 fordomiciliary 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" tobe compensablemust be approved by the Division. Yet, in this case, the Workers' Compensation Court determined that the "other treatment" was necessary as amedical expensebut 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 ofpayment. Theworkers' 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 avoidmultifariousness 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 theAct, ithas 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 Carlsonwas entitled. We do not know from the record before us the exact status of the claim for Carlson's claim fordomiciliary care. If, following the Workers' Compensation order in this case, the Division is now considering that issue, then we order that theDivision continue to considerandmake 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 isnotbeing consideredby the Division,thenwe remand the issue to the Workers' Compensation Court for the fixingof the doll-aramount of domiciliary ca.re. IV. Whether the Out-of-Pocket Expenses 

### - of Edith Ebert In the Sum 

### --- of $6,497.53 are aNecessary 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. WhenMrs. 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 themother were praiseworthy and indicative of her concern for the daughter, nevertheless denied the claim for out-of-pocket expenses on the ground thatnomedical need for the servicesperformed had been demonstratedby 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 themother's travel and per diem costs while the claimant was hospitalized was denied. Here, the Workers' CompensationCourthas 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 shouldbe denied the right of subrogation.Carlson's contentionon this issue demonstrateswhatmay 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 settlementwith 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 facemany times in these situations. There were outstanding at that time medical bills of $70,000 and her condition of disability threatened to be permanent. TheWorkers' Compensation carrierhad denied her compensation claim. These factors brought about the necessity, as it appeared.to Carlson's counsel,to settle theNational Trailer Convoy, Inc. case at a substantially reducedvalue. 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 insuredThe Billings Gazette for Workers' Compensation coverage. 

### - The Bill-ings Gazette contracted with Jerry Cain for the delivery of its newspapers. Carlsonwas not a directemployee of TheBilling Gazette, but rather was a direct employee of Jerry Cain. Hartford became liable under S 39-71-405, MCA, when it wasdetermined that Jerry Cain failed to provide Workers' Compensation coverage forhis 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 Cainbecause 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.nemployer, 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 TrailerConvoy, 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 afire insurance company subrogation case that when the sum recovered from the responsible third party is less than the total loss sufferedby the insured,and either the insured or the insurermust to some extent go unpaid, the loss shouldbe borne by the insurer for that is the risk the insurer has been paid to assume. Skaugev. Mountain StatesTel. & Tel.

(1977),172Mont. 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 inwhich the Courtwould.have to legislatewhere the legislaturehas 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' CompensationCourt.

,

# @'---'.

We Concur:Justices