No. 87-15
IN THE SUPREMECOURTOF THE STATE OF MONTANA 1987

ROBERT LEIKAM, Claimant and Appellant,-vsEDSON EXPRESS, Employer,
and HOME INSURANCE COMPANY, Defendantand Respondent.

APPEAL FROM: TheWorkers' Compensation Court,TheHonorable Timothy Reardon,Judge presiding.
COUNSELOF RECORD:
ForAppellant:
Vernon E. Woodward, Billings,Montana
ForRespondent: James,Gray & McCafferty; Randall H. Gray,Great Falls,Montana

Submittedon Briefs: April 16, 1987 Decided: August 12, 1987 Filed: 

### AD@

## 12

## 198f.Mr. Justice William 

### E. Hunt, Sr.

## , delivered the Opinion of the Court.

Claimant,Robert

### W. Leikam,appeals froman order of the Workers1 Compensation Court denying his motion to enter judgment in his favor after the parties stipulated to d.efendantls liability and tovacate trial. We affirm the order of the Workers1CompensationCourt. The issues presented for reviewby claimant in this case are: 1. Whether the Workers1 Compensation Court erred in denying claimant'smotion for entry of judgment. 2. Whether claimant is entitled to an award of attorney fees pursuant to 

### 5 39-71-611,MCA. The facts in this case are undisputed. Appellant, Robert Leikam, was a long distance truck driver for Edson Express from 1981 through early 1986. On September 20, 1984, Leikam suffered a low back injury while unloading washingmachines. Leikam timely reported his injury to his employer and filed a claim for compensation. The insurance carrier,Home Insurance Company (hereinafterHome), accepted liability for the injury. Leikam continued working after the accident until he lost his job on January 16, 1986 for reasons not related to his Workers' Compensation claim. Between the date of the injury and February of 1986, Leikam visited a chiropractormany times for treatment. Home compensatedLeikam for these treatments. In March, 1986, claimant saw Dr. James T. Lovitt, a Billings Montana orthopedic surgeon who advised him that he could no longerwork as a result of his industrial accident.

### He informed Home of this new development and requested that Home begin paying temporary total disability benefits to him. Home denied the claim, requesting additional medical examinations before complete medical benefits and temporary total disability benefits would be paid. Claimant filed a petition with the Workers1CompensationCourt. As discovery developed, Home agreed to place Lleikamon temporary total disability benefits, on a non-acceptance basis, pending further investigation. On July 14, 1986, the parties filed a final pre-trial orderwhich listed the following issues to be resolvedby the WorkersI 

### CompensationCourt. 1. Is the Claimant currently temporarily totally disabled as a result of the September 22, 1984, industrial injury? 2. If so,what, if any,temporary totaldisa.bility benefits is the Claimant entitled to? 3. Is the Claimant entitled to any penalty pursuant to Section 39-71-2907,MCA? 4. 

### Is the claimant entitled to reasonable attorney's fees and costs? 5. 

### Is the Defendant estopped from denying acceptance of this claim? The case was initially scheduled for trial on July 22, 1986, but was continued untilNovember. On July 29, counsel for both parties had a lengthy telephone conversation with a neurologist from Billings who had treated Leikam upon referral by his primary treating physician. As a result of thisphone conversation,Home stipulated to liability for the September 22, 1984 injury and agreed to retroactivelypay all temporary total disability benefits arising therefrom. The November trial date was vacated. Subsequent to the parties'stipulation,Leikam moved theWorkers' Compensation Court for entry of judgmentpursuant to the stipulated agreement. On December 26, 1986, the Workers1 Compensation Court entered its order denying Leikam's motion for entry of judgment and dismissing the petition sua sponte. The order 

### - was based on a lack of jurisdiction to enter judgment when therewas no longer any dispute. Claimant appeals from this order alleging: 1) that the Workers' Compensation Court does have jurisdiction to enter judgment and 2) should award claimantattorney fees, costs and a 20% penalty provided for by 5 39-71-2907,MCA. The second issue of whether claimant is entitled to an award of attorney fees and/or a penalty is dispositive in this case. Regardless of whether or not we hold that the Workers1 Compensation Court did have jurisdiction to enter judgment pursuant to the parties' stipulation, the outcome would be the same as to attorney fees. Entering judgmentpursuant to
a stipulation does not amount to a judgment of compensabilityas requiredby 

### 5 39-71-611,MCA: 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 attorneys1fees as established by theworkers1 compensation judge.
In Lasar v. Oftedal & Sons (Mont. 1986), 721 P.2d 352, 353, 43 St.Rep. 1239, 1240,this Court held thatwhere there is a situation in which the insurer does not deny liability for a claim or terminate benefits the claimant is not entitled to attorneys fees and costs under 

### 5 39-71-611,MCA. Home accepted liability for Leikamls claim and did not terminate hisbenefits.Adjudication of a Workers' Compensation claim as compensable is a prerequisite to allowance of attorney fees pursuant to this statute. Cosgrove v. Industrial Indemnity Co. (1976), 170Mont. 249, 254, 552 P.2d 622, 624.
If an insurer denies liability for a claim for compensation, the insurer is liable for attorney's fees if the claim is later adjudged compensableby the Workers' Compensation judge. It is clear from the language of the statute that there must be an adjudication of compensability before an award of attorney's fees is authorized.
Yearout v. State Compensation Insurance Fund (~ont.1986), 719 P.2d 1258, 1259, 43 St.Rep. 1063, 1065. In this case, there was no adjudication of compensability. The parties settled their compensation dispute before the trial date, vacating the trial. As we stated in Yearout, 719 P.2d at 1260, the proper forum for redress of this sometimes harsh result is the Legislature. Other alternative remedies may be available to claimant. The decision of the Workers' Compensation Court is affirmed.

We Concur: A 

# 2/xC/

- Chief Justice

# /P&-,/ Justices

### Mr. Justice JohnC. Sheehy,dissenting:

I 

### dissented in Yearout, 719 P.2d at 1260-1261, and I dissent here for the same reasons. The practice of insurers in the state (and it is a practice) to force employees to obtain attorneys in order to get their rightfulbenefits,and then to confess liability at
or near the time of trial ought to be condemned by us and prohibited by the assessment ofpenalties and attorney fees. This Court reads 39-71-611, MCA too narrowly when it requires an actual adjudiciation before it will assess the penalties. The intent and purpose of the Workers' CompensationAct is tomake someprovision to theworker for his economic loss brought about by his injuries. Rarely does he recover the whole amount ofhis loss. When a recalcitrant insurer delays and denies his benefits, and forces him to the Workers' Compensation Court to obtain his rights, at that point he should be entitled to the penalties if his cause is just. Our refusal of those penalties is another economic loss to the worker because he must then bear the expense of his litigation. I 

### cannot believe that result is what the