No. 89-335 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1989 

LAINE P. CARROLL, 

Claimant and Appellant, 

-vWELLS FARGO ARMORED SERVICE CORPORATION, 

Employer, 

and 

CNA INSURANCE COMPANY, 

Defendant and Respondent. 

APPEAL FROM: The Workers' Compensation Court, The Honorable 

Timothy Reardon, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Eric R. Thueson, Thueson Law Office, Helena, Montana 

For Respondent: 

Larry W. Jones, Garlington, Lohn & Robinson, 

Missoula, Montana 

Submitted on Briefs: October 20, 1989 

Decided: December 1, 1989 

a 
Justice John Conway Harrison delivered the Opinion of the 

Court. 

Claimant Laine Carroll appeals a decision of the 

Workers' Compensation Court wherein the Workers' Compensation 

Court awarded claimant 175 weeks of partial disability 

benefits. As part of its decision the Workers' Compensation 

Court denied several of claimant's requests including the 

following: (1) denial of a lump sum advance; (2) denial of 

payment of certain medical expenses; (3) denial of request to 

include overtime hours as part of wage calculation; and 

(4) denial- of attorney's fees and costs. We affirm in part, 

reverse in part, and remand to the Workers' Compensation 

Court. 

Claimant presents four issues for review: 

1. Did the Workers' Compensation Court err because it 

failed to discuss the factors that must be evaluated when 

determining a claimant's disability factor under 

5s 39-71-705, -708, MCA (1985)? 

2. Did the Workers' Compensation Court err by not 

including claimant's overtime hours in determining his 

pre-injury wages? 

3. Did the Hearings Examiner err by not requiring the 

defendant to pay certain medical expenses? 

4. Did the Workers' Compensation Court err in holding 

that 5 39-71-612, MCA (1985), controlled the determination of 

attorney's fees rather than 5 39-71-611, MCA (1985)? 

On November 15, 1985, claimant injured his back during 

the course and scope of his employment as an armored car 

driver for Wells Fargo. Defendant initially accepted 

liability for claimant's injury and paid temporary total 

disability benefits and medical benefits. In a letter dated 
June 22, 1987, defendant offered to settle claimant's case 

for $30,317.58, representing 170 weeks of permanent partial 

disability benefits at the rate of $142.67 per week plus 

$6,063.48 in attorney's fees. Defendant stated in the letter 

that the offer was good for fifteen days. The Pretrial Order 

discloses that as of the hearing date, December 14, 1987, 

defendant had taken the position that claimant was not 

entitled to any indemnity benefits. 

At trial the Hearings Examiner heard the claimant's 

testimony and testimony from two vocational rehabilitation 

experts. Also part of the record are various depositions 

including depositions of medical doctors who had treated or 

examined the claimant. 

At the time of trial the claimant was 27 years old. He 

had a high school education and his work history included 

work as a gas station attendant, dishwasher, construction 

helper, and armored truck driver. At the date of his injury, 

claimant earned $5.35 per hour. It was undisputed that the 

claimant could not return to his former employment and that 

he is now limited to light or sedentary jobs that have 

starting wages of $3.50 to $4.50 per hour. Other facts will 

be discussed as necessary. 

I. 

Did the Workers' Compensation Court err because it 

failed to discuss the factors that must be evaluated when 

determining a claimant's disability factor under 

§§ 39-71-705, -708, MCA (1985)? 

This Court's task in reviewing a Workers' Compensation 

Court decision is to determine whether substantial evidence 

supports the Workers' Compensation Court's findings of fact 

and conclusions of law. Coles TT. Seven Eleven Stores (1985), 

217 Mont. 343, 347, 704 P.2d 1048, 1050. 
It is well established that SS 39-71-705, -708, MCA 

(1985), permanent partial disability benefits indemnify the 

claimant for possible loss of future earning capacity. 

McDanold v. B.N. Transport, Inc. (1384), 208 Mont. 470, 476, 

679 P.2d 1188, 1191. Also well established are the factors 

the court must consider in determining a claimant's 

disability under SS 39-71-705, -708, MCA (1985). The court 

must consider the claimant's age, education, work experience, 

pain and disability, actual wage loss, and loss of future 

earning capacity. Holton v. F.H. Stoltze Land and Lumber Co. 

(1981), 195 Mont. 263, 266, 637 P.2d 10, 12. The Conclr~sions 

of Law recognized these factors. 

After stating the appropriate standard for a 

SS 39-71-705, -708, MCA (1985), disability determination, the 

court set forth its rationale for its conclusion that 

claimant was 35% disabled. Appellant argues that the court's 

legal conclusion that the claimant is 35% disabled is flawed 

because the rationale does not reflect how, or even if, the 

court considered the above mentioned factors in reachinq its 

decision. We agree. 

As mentioned, case law interpreting §S 39-71-705, -708, 

MCA, requires that the court consider a claimant's age, 

education, work experience, pain and disability, actual waqe 

loss and possible loss of future earning capacity. Rased on 

the court's discussion, the only apparent consideration made 

by the court in determining claimant's disability was 

pre-injury versus post-injury earnings. Although the court 

listed the appropriate factors, it discussed only actual wage 

loss. The court's opinion contains no discussion of how any 

of the other factors weighed in its decision that claimant is 

35% disabled, which nearly approximates claimant's actual 

wage loss. Thus, on its face, the court's decision reads 
like a permanent partial disability determination under 

5 39-71-703, MCA (1985), which does look only to actual 

diminution in wages as the basis upon which benefits are 

determined. Because the court only discussed the claimant's 

actual wage loss and failed to discuss any of the other 

criteria, we hold that the court's decision is not supported 

by substantial evidence. 

Respondent asks us to adopt its version of what the 

Hearings Examiner must have thought in reaching his decision. 

Similarly, claimant asks us to adopt his version of what the 

Hearings Examiner should have thought and increase the 

compensation award. However, this Court cannot second guess 

how the Workers' Compensation Court must have arrived at its 

decision or dictate what decision it should have made. 

Both respondent and claimant supplied this Court with 

Workers' Compensation Court decisions. A review of the cases 

decided under 5s 39-71-705, -708, MCA (1985) , reveal in all 

some discussion of the necessary factors. Such a discussion 

is required so that the reviewing court can ascertain that 

all of the factors were indeed considered and discern the 

court's rationale. In the instant case the opinion discussed 

only the actual wage loss factor and none of the other 

mandatory considerations. We vacate the Workers' 

Compensation Court's award under 55 39-71-705, -708, MCA 

(1985), and remand to the Workers' Compensation Court for a 

redetermination of benefits consistent with the requirements 

of §S 39-71-7'05, -708, MCA (1985). 

11. 

Did the Workers' Compensation Court err by not 

including claimant's overtime hours in determining his 

pre-injury wages? 
Generally, overtime earnings are not included in 

determining a claimant's "usual hours of employment." Coles 

v. Seven Eleven Stores (1985), 217 Mont. 343, 348-49, 704 

P.2d 1048, 1052. "However, if the work record shows that the 

employer hired the claimant expecting overtime work and the 

claimant actually worked overtime on a consistent, regular 

basis . . . then that overtime becomes part of the usual 

hours of employment." Coles, 704 P.2d at 1052. In Coles, 

the claimant worked overtime in each of the weeks she worked 

at the Seven Eleven store. 

Claimant contends that the Workers' Compensation Court 

erred by not including overtime hours in his pre-injury wages 

because he worked overtime in 24 of the 48 weeks preceding 

his injury. Thus, claimant contends that his case falls 

within the Coles decision on overtime and that the Workers' 

Compensation Court's decision is not supported by substantial. 

evidence. We disagree. 

As the Workers' Compensation Court found, the claimant 

did not receive overtime wages for 21 weekly pay periods 

prior to his injury. In other words, claimant had not worked 

overtime in the five months preceding his injury. The record 

contains no other evidence of any overtime claimant worked. 

On its face claimant's overtime hours do not approach the 

standard of a "consistent, regular basis" set in Coles. We 

hold that the Workers' Compensation Court's decision not to 

include overtime hours in determining pre-injury wages is 

supported by substantial evidence. 

111. 

Did the Hearings Examiner err by not requirins the 

defendant to pay certain medical expenses? 
Claimant received medical treatment from Dr. Baggenstos 

for which defendant refused to pay. Defendant refused to pay 

Dr. Baggenstos' costs because neither did claimant's treating 

physician refer claimant to Dr. Baggenstos nor did defendant 

authorize Dr. Baggenstos' visit. 

Montana law specifically requires either a referral 

from a claimant's treating physician or an authorization by 

the insurer before an insurer will he liable for medical 

treatment expenses. Garland v. The Anaconda Co. (19781, 177 

Mont. 240, 581 P.2d 431. Claimant's visit to Dr. Baggenstos 

was clearly unauthorized under Montana law, even though 

claimant felt he had good reason for his actions. We affirm 

the Workers' Compensation Court's decision disallowing 

payment of Dr. Baggenstos' medical costs. 

IV. 

Did the Workers' Compensation Court err in holding that 

§ 39-71-612, MCA (1985) , controlled the determination of 

attorney's fees rather than S 39-71-611, MCA (1985)? 

Workers' Compensation statutes provide two methods of 

determining attorney ' s fees. Section 39-71-611, MCA (1985) , 

applies when an insurer denies liability while $ 39-71-612, 

MCA (1985), applies when an insurer accepts liability but 

disputes the amount of compensation due the claimant. 

Hartman v. Staley Continental (Mont. 1989), 768 P.2d 1380, 46 

St.Rep. 248. If the court awards more compensation than the 

defendant has offered, then attorney's fees are based on the 

difference. If the court awards less compensation then no 

attorney's fees are due. 

The Workers' Compensation Court awarded attorney's fees 

to claimant pursuant to § 39-71-612, MCA (1985) , and ordered 

claimant to submit his attorney's fees request. Defendant 
disputed attorney's fees and moved for summary judgment which 

the Workers' Compensation Court granted. The Workers' 

Compensation Court held that claimant was not entitled to 

attorney's fees because the court-awarded indemnity benefits 

($24,967.25 + $235.41 for attorney's fees) were less than the 

defendant's pretrial settlement offer ($30,317.58). 

Claimant contends that defendant denied liability and 

that the Workers' Compensation Court erred in not applying 

S 39-71-611, MCA (1985). In both its pretrial order and its 

proposed findings of fact and conclusions of law, defendant 

asserted that the claimant was not entitled to any permanent 

partial disability benefits. Claimant argues that under our 

Hartman holding these assertions constitute a denial of 

liability regardless of any pretrial settlement offer. We 

agree. 

The Hartman case is directly analogous to the instant 

case. In Hartman, the defendant made a pretrial settlement 

offer but asserted in its pretrial order and proposed 

findings and conclusions that the claimant was not entitled 

to any permanent partial disability benefits. Similar to 

defendant in this case, the Hartman defendant argued that 

$ 39-71-612, MCA (1985), applied because it was not denying 

liability but merely disputing the amount of compensation. 

We found that the record, in which defendant steadfastly 

claimed that claimant was entitled to nothing, did not 

support defendant's assertion that it was only disputing the 

amount of compensation. Hartman, 768 P.2d at 1385. 

The same reasoning applies to the instant case. If 

defendant were merely disputing the amount of compensation, 

then defendant would acknowledge that claimant was entitled 

to permanent partial disability benefits. See, Lamb v. 

Missoula Imports, Inc. (Mont. 1988), 748 P.2d 965, 45 St.Rep. 
127. To the contrary however, here defendant denied that 

claimant was entitled to compensation. In other words, 

defendant denied any liability for permanent partial 

benefits. We hold that claimant's attorney's fees are to be 

determined under § 39-71-611, MCA (1985). 

We remand to the Workers' Compensation Court for a 

determination of indemnity benefits and attorney's fees in 

accordance with this opinion. 

We concur: 

Justices I'