No. 81-229 INTHE SUPREME COURT OF THE STATE OF MONTANA 1981

GARY P. SWANSON (fatal), KIM SWANSON COLLINS, formerlyknown as Kim R. Swanson,Personal Representative of Estate of GARY P. SWANSON, Appellant and Claimant,

CHAMPION INTERNATIONAL CORPORATION, Employer, and LIBERTY MUTUAL INSURANCE COMPANY, Defendants and Respondents.

Appeal from: Workers' CompensationCourt, Honorable William 

### E. Hunt, Judgepresiding Counsel of Record: For Appellant: James J. Benn argued, Missoula, Montana For Respondents: Garlington, Lohn and Robinson, Missoula, Montana Robert Sheridan argued,Missoula, Montana

Filed:

## APR9

# -1982 Submitted: December 1, 1981 Decided: 

## Ictm0 1982Mr. Justice John C. Sheehy delivered the Opinion of the Court.

This case comes to us on appeal from the Workers' Compensation Court, which entered an order affirming a determinationby theWorkers' Compensation Division that Liberty Mutual Insurance Companywas entitled to $24,000 out of a settlement of $56,250 that Kim Swanson had received for claims arising out of the death of her husband Gary P. Swanson. Gary P. Swanson,an employee of Champion International Corporation,died in an airplane crash on July 14, 1976 in the course of performing an aerial timber cruise for his employer. At the time of the accident, Champion was insured for itsWorkers' Compensation liabilitiesby LibertyMutual. The insurer paid a total amount of $37,862.75 in benefits to Kim R. Swanson, the surviving spouse of the decedent, in full satisfaction of theWorkers' Compensation obligations of Champion and Liberty Mutual InsuranceCompany. The airplane inwhich the decedent Gary P. Swansonwas killedwas owned by Stockhill Aviation of Kalispell. Stockhill's insurer, National Aviation Underwriters, Inc. brought a declaratory judgment action contesting coverage. OnApril 12, 1978, counsel for Kim Swansonwrote to counsel for Liberty Mutual "tendering"participation under section 39-71-414(2), MCA, in the declaratory judgment suit, and asking for further participationby Liberty Mutual in a proposed action against CessnaAircraft, on a products liability claim against the manufacturer. On May 5, 1978,Liberty Mutual, through its counsel,pointed out that itwas already participating in the declaratory judgment action and that itwould thereafter participate in any subsequent action by thewidow againstStockhillAviation. Liberty Mutual declined to participate in a proposed lawsuit against Cessna upon the ground that it had only a remote chance of success. While the declaratory judgment actionwas pending, Kim R. Swanson, throughher attorney, settledwith National Aviation Underwriters, Inc., the insurer for Stockhill, all of her claims against Stockhill for the sum of $56,250. As between Stockhill and Kim R. Swanson, the settlementwas allocated $3,000 to the survival action, and $53,250 to the wrongful death action. It isnot clear in the record that suit, as distinguished from claim,had been instituted against StockhillAviation, Inc. by Kim R. Swanson either on the survival action or the wrongful death action. Liberty Mutual filed a petition before the Workers' Compensation Division asking the Division to determine Liberty Mutual's subrogation rights in the settlement that had been effectuated. The division by order determined that Liberty Mutual was entitled to a subrogation interestout of the settlement of $24,000. Kim R. Swanson appealed the decision of the Workers' Compensation Division to theWorkers' Compensation Court. There Kim R. Swanson contended that the settlement included payment by the responsible third party for noneconomic as well as economic losses sustainedby the claimant and that suchnoneconomic losseswere the property right of Kim R. Swanson and not subject to the subrogation claims of ~iberty Mutual. TheWorkers' Compensation Court, relying on s is her

v. Missoula White Pine Sash Co. (1974), 164 Mont. 41, 518 P.2d 795, concluded that the Workers' CompensationAct doesnot provide a differentiationbetween those portions of the settlement allocated to wrongful death and survival claims,

or to economic and noneconomic losses, or to thewife and children. On that basis, theWorkers' Compensation Court affirmed the division order that Liberty Mutual was entitled to subrogation of $24,000 from the settlement. Kim R. Swansonduly appealed the order of the Workers' Compensation Court to this Court. We frame the issue before us thus: where the death of

an employee in the course of his employment is caused by the neglect of a party other than his employer or fellow employees

(section39-71-412, MCA) and the heirs of the decedent employee receive proceeds from settlement or judgment from the responsible third party, does the Workers' compensation lien of decedent's employer or its insurer attach to that portion of the proceeds which may represent noneconomic damages to the heirs? Counsel for Kim R. Swanson has carefully limited the issue to those noneconomic damages that shewould have received in her personal rightwhich may be part of the settlement.At first blush, itwould seem that this case is controlled by this Court's earlier holding in Fisher, supra. There,we held that the Workers' CompensationAct does not in its subrogation clause differentiate between survival actions and actions forwrongful death. Therefore, this Court reasoned,all recoveries made through either claim of action were subject to the subrogation interest of the employer or the insurer if the death of the decedent arose out of or in the course of his employment.The case at bar presents a facet slightlydifferent than the court faced in Fisher. Here the claimantwidow contends squarely that the noneconomic damages recovered by her as a part of the settlement of both causes of action against the responsible third party are not subject to subrogation by the employer or its insurer. It is a contention that leads us to re-examine the totality of the holding in Fisher for two reasons: (1) the intrinsic differences in the sources and effect of recoveries between survival actions and wrongful death actionswere not discussed in Fisher;and, (2)the changes in the subrogation provisions of the Workers' Compensation Act since Fisherwhich require a reassessmentof the bases onwhich Fisher is grounded. We look first at the causes of action that are open in Montana to the survivors of a decedentwhose death is caused by the negligenceof another. One cause of action is the "survival"action. It arises from section 27-1-501,MCA, t-ke Montana version of Lord Campbell's Act. By this statute, a cause of action, including tort actions existing during the lifetime of a person survivehis death, and the causemay be pursued against the responsible party by his personal representative. See section 72-3-604,MCA. The damages thatmay be recovered in the survival cause of action for the death of the decedent through tort include his lost earnings from the time of his injury to his death; the present value of his reasonable earnings during his life expectancy,Krohmer v. Dahl (19651, 145Mont. 491, 402 P.2d 979; the medical and funeral expenses incurred by him as a result of the tort; reasonable compensation for his pain and suffering,and other special damages. Beeler v. Butte and London Copper DevelopmentCo. (1910), 41Mont. 465, 478, 110 P. 528.Note that the source of the damages recoverable in the survival action are personal to the decedent. They do not include any damages suffered by the decedent's widow, children

or other heirs. Marinkovich 

### v. Tierney (1932), 93Mont. 72, 86, 17 P.2d 93, 96. Note further the effect of recovery of such damages by settlement or satisfaction of judgment for the survival claim. Such damagesbelong to the decedent's estate. They are subject to the claims of his creditors. They must be included in any computation to determine if inheritance taxes are due from his estate. Only thepersonal representativemay sue for the damages suffered by the decedent in survival actions. Section 27-1- 501,MCA. Neither thewidow nor any other heir has a legal right to pursue such an action unless appointed as a personal representative. The damages suffered are so personal to the decedent that this Court has held that no survival action exists if the decedent's death is instantaneous. illo on v. GreatNorthern Ry. Co. (1909), 38 Mont. 455, 502, 100 Po 960, 966. Reason: the cause of actionmust have existed in the lifetime of the decedent to survivehim under the survival statute. The distribution by the personal representative of damages recovered in a survival action is controlled by the law of probate. After payment of creditors,expenses of administrationand inheritance taxes, if any, the personal representative distributes the damageproceeds as a part of the estate of the decedent, controlled by his will or by the laws of intestate succession. Since the subrogation clause of theWorkers' Compensation Act refers to thepersonal representative, section 39-71-414,MCA, it is clear that the cause of action embraced inthe survival proviso of section 27-1-501, MCA, is subject tothe employer's subrogation rights under 37-71-414, MCA. The employer orhis insurer is ineffect and by this statutea super creditor of theestate of the decedent, having a claim prior toany other creditor of the decedent ortax agency to thatportion of the decedent's estateincluded inthe employer's subrogation rights. Especially the subrogation claimcomes before any heir's right of distribution of therecovered damages from the estate. Wemust be conscious, however, of the point that the damages recovered by the personal representative inthe survival actionmay include economic and noneconomic items. In addition tomedical costs, funeral expenses, and wageloss damages, thepain, suffering,and disfigurement of the decedent may have been compensated, Beeler, supra, and even punitive damages awarded. Nonetheless, the subrogation clause isclear. The employer orhis insurer is entitled to subrogation from thepersonal representative without regard tothe nature of the damages forwhich the decedent through his estateiscompensated inthe survival action. Section 39-71-414(1), MCA. Thus farwe areinagreement with the holding inFisher. Now letus examine the nature, source, and effectof damages recoverable under the "wrongful death" statute. By virtueof section 27-1-513, MCA, a cause of action for thewrongful death of one not a minor (for thewrongful death of a minor, see section 27-1-512, MCA; theresult is the same) iscreated and vests inthe heirs of the decedent. The cause of actionmay be prosecuted by thepersonal representativeorby theheirs. Section 27-1-513, MCA.The law is not specific about the source of damages in a wrongful death action. Itprovides that "damagesmay be given as under all the circumstances of the casemay be just." Section 27-1-323, MCA. Generally the proof of damagesunder this cause of actionwill include loss of consortium by a spouse,Mize v. Rocky Mountain Bell Telephone Co. (19091, 38 Mont. 521, 535, 100 P. 971, 974;the loss of comfort and society of the decedent suffered by the surviving heirs; and the reasonable value of the contributions in money that the decedentwould reasonably have made for the support, education, training and care of the heirs during the respective life expectancies of the decedent and the survivors. Hennessey v. Burlington Transp. Co. (U.S.D.C. Dist. Mont. 1950), 103 F.Supp. 660, 665. No specificpecuniary loss need be shown. Waltee 

### v. Petrolane, Inc. (1973),162 Mont. 317, 321, 511 P.2d 975, 978. Note again that the source of the damages recoverable in a wrongful death action is personal to the survivors of the decedent. The damages are not those of the decedent, but of the heirs by reason of his death. The action may be prosecuted without regard to whether the decedent's death

was instantaneous. Again note further the effect of the recovery of damages in a wrongful death cause of action by settlement or by satisfactionof judgment. Such damages do not belong to the decedent's estate. They are not subject to the claims of decedent's creditors. They are not a part of the estate for the determination of inheritance taxes. They pertain to the personal loss of the survivors. Though the personal representative of the decedent,under the wrongful death statute, may sue the responsible party, any recovery made by thepersonal representative in the wrongful death claim is not in his capacity as personal representative. He is a trustee of the moneys for the person entitled. Batchoff v. Butte Pacific Copper Co. (1921), 60Mont. 179, 183-184, 198 P. 132, 134. When a wrongful death action isprosecuted, the damages are returned by general verdict, covering all of the heirs involved. The jury is not given the duty of ascribing so much to one heir and somuch to another. Rather, the trial court, after the verdict, is given the task of allocating themoney damages among the heirs. State ex rel. Carrollv. DistrictCourt (1961),139Mont. 367, 372, 364 P.2d 739, 741. The distribution of the damages to the heirs is not controlled by the decedent'swill or by the laws of intestate succession. This Court has never had occasion to examine the damages recoverable in a wrongful death action as economic or noneconomic in nature. Who is to say? Such damageswill usually be founded on such factors as the loss of counsel, protection, aid, comfort, guidance and society of the decedent, the loss of consortium,and the loss by the survivors of reasonable support,contributions, and the opportunity for education or training from the decedent. The loss of support

or education isnotmeasured by the lost future earnings of the decedent,per se,although proof of such earnings is necessary inwrongful death actions. Rather, it ismeasured in terms of the needs of the heirs which the decedentwould reasonably have supplied to the heirs had he lived. In any event, the damages recoverable in a wrongful death action are sopersonal to the heirs that the subrogation clause of the Workers' CompensationAct must be stretched to the fullestextent to include them. The obvious intent of thewrongful death statute is to provide a recovery fori ' -,f" ,b- /- (- :1 ?% bLLf Ld :-:I Lf losses not covered by herd-, for heirs who might otherwise have no recovery for their personal loss, especially if the death of the decedentwere instantaneous. The heirs were notparties to the employment contract that existed between the employer and the employee-decedent. To construe the compensation subrogation clause as including the damages appointed under thewrongful death statute is to lessen the personal rights of heirs of employees as compared to the heirs of noncompensateddecedents. There exists in that light a conflictbetween thewrongful death statutes on the one hand, which seek to provide succor for heirs, and the subrogation clause on the other, which seeks to invade that succor. Then there is the nature of subrogation itself. "Subrogation"has its root in the latin "subrogare",to pray under or through. It is the right of onewho has paid what another should have paid to recover the payment from the party justly responsible. Skaugev. Mountain States Tel. & Tel. Co. (1977), 172Mont. 521, 524, 565 P.2d 628, 630. Compensation payments are of two kinds: (1) for medical or funeral expenses incurred, and, (2)payments in lieu of wages. These are the items of damages, aswe have shown above, that are recoverable in the decedent's estate through the survival action. (Itis true,however, that medical and burial expenses canbe reimbursed through the wrongful death action.) It is in the survival action that

"theparty justly responsible" ordinarily makes recompense for the expenses incurred and wages lost to the decedent. It is there that the subrogation rights of the employer,by the nature of subrogation should reach. We have said that there is another factor, in looking at Fisher, thatwe should consider: namely, the changes inthe subrogation clauses as they existed at the time of Fisher to the clauses that now apply to the case at bar. The statute in effect when Fisher was decided was section 92-204,R.C.M. 1947. With respect to subrogation, itprovided in pertinent part:

"I.

# . . In the event said employee shall prosecute an action for damages for or on account of such injuries so received, he shall not be deprived of his right to receive compensation but such compensation shall be received by him in addition to and independentof his right to bring action for such damages,provided, that in the event said employee, 

### ----- or in case of his death, his personal representative, shallbring such action, then the employer or insurance carrierpaying such compensation shallbe subrogated only to the extent of either one-half (1/2) of the gross amountpaid at time of bringing action and the amount eventually to be awarded 

### -- to such employee as compensationunder the workmen's compensation law,or one-half (1/2) of the amount recovered and paid to such employee in settlementof, or by judgment in said action, whichever is the lesser amount. All expense of prosecuting such action shall be borne by the employee, or if the employee -- shall 

## - fail to bring such action ormake settlementof his 

### - cause 

### --of action within six (6)months from the time such injury is received, the employer or insurance carrier who pays such compensationmay thereafter bring such action and thus become entitled to all of the amount received from the prosecution of such action up to the amount 

### -- paid the employee under the Workmen's Compensation Act, and all over that amount shallbe paid to the employee

# . . . 1 11 --- 164 Mont. 41, 46-47, 518 p.2d 795, 798. (Emphasisadded.) The legislature amended section 92-204,R.C.M. 1947,by breaking the complex and wandering statuteup into several components. The result is that the pertinentparts of our statutes as they apply to this case are as follows: "39-71-412. Liability



## _ of



## _ third party 

## - other

____ 

### - than employer 

### - or fellow employee--additional cause of 

### - action.



### . 

# . . Whenever such event occurs to an employee while performing the duties of his employment and such event is caused by the act or omission of somepersons or corporations other than his employer or the servants or employees of his employer, the employee or in case of his death his heirs or personal representative shall, in addition to the right to receive compensationunder this chapter,have a right to prosecute any cause of action he may have for damages against such persons or corporations."

"39-71-414. Subrogation. (1) If an action is prosecuted as provided for in 39-71-412 or 39-71-413, and except as otherwiseprovided in this section, the insurer is entitled to subrogation for all compensation and benefits paid or to be paid under the Workers' CompensationAct. The insurers right of subrogation is a first lien on the claim, judgment, or recovery. 

### " (2) (a)If the injured employee intends to institute the third party action,he shall give the insurer reasonable notice of his intention to institute the action. 

### " (b) The injured employeemay request that the insurerpay a proportionate share of the reasonable cost of the action, including attorneys' fees. "(c) The insurermay elect not to participate in the cost of the action. If this election is made, the insurerwaives 50% of its subrogation rights granted by this section. "(d) If the injured employee or the employee's personal representative institutes the action, the employee is entitled to at least one-third of the amount recoveredby judgment or settlement less a proportionate share of reasonable costs, including attorneys' fees, if the amount of recovery is insufficient to provide the employee with that amount after payment of subrogation. "(3) If an injured employee refuses or fails to institute the third party actionwithin 1 year from the date of injury, the insurer may institute the action in the name of the employee and for the employee's benefit or that of the employee's personal representative. If the insurer institutes the action, it shallpay to the employee any amount received by judgment or settlementwhich is in excess of the amounts paid or to be paid under the Workers' CompensationAct after the insurer's reasonable costs, including attorneys' fees for prosecuting the action, have been deducted from the recovery." Especially pertinent to our discussion here is the foregoing provision of section 39-71-414(3),MCA, that if the injured employee refuses or fails to institute the third party action, the insurermay institute it for the benefit of "the employee's personal representative." No mention is made inthat statute of an action "for the benefit of the heirs" The statutecould not be construed as giving the employer or its insurer the right to institute a wrongful death action. While it is true, aswe have pointed out above, that a personal representativemay sue for thewrongful death rights of the heirs, nonetheless if recovery is made, the personal representativeholds those proceeds, not as a personal representative,but as a trustee of themoneys for the benefit of the heirs. Batchoff, supra. More important is the change thatwas made in the 1977 Montana Legislature of the provisions that relate to the protection of the employer through the exclusivity of the Workers' CompensationAct. In Fisher, this Court placed great relianceon that part of former section 92-204,R.C.M. 1947, which stated, "and in case of death shall bind his personal representative, and all persons having any right or claim to compensation for his injury or death," asmeaning that the recovery rights of the heirs were subject to the subrogation rights of the employer. 164Mont. at 45, 518

The 1977 amendment removed this language from the subrogation portions of former section 92-204, and established a separate statute which related to the exclusivity of the Workers' CompensationAct as to the employer. The intent of the legislature that the heirs were bound as to exclusivity but not as to subrogation is nowmore clear. That statute

now reads: "39-71-411. Provisions of chapter exclusive remedy--nonliability ofsured employer. For all employments coveredunder theWorkers' Com~ensation Act or for which an election has been made for coverageunder this chapter, the provisions of this chapter are exclusive. Exceptas provided inpart 5 of this chapter for uninsured employers and except as otherwiseprovided in the Workers' CompensationAct, an employer is not subject to any liabilitywhatever for the death of or personal injury to an employee covered by the Workers' Compensation Act or for any claims for contribution or indemnity asserted by a third person fromwhom damages are sought on account of such injuries or death. TheWorkers' CompensationAct binds the employee himself, and in case of death binds his personal representative and all persons having any right or claim to compensation for his injury or death, aswell as the employer and the servants and employees of such employer and those conducting his business during liquidation,bankruptcy,or insolvency." A study of the foregoing statutewill demonstrate that the inclusion of the words "all persons having any right or claim to compensation for his injury or death" is intended to bind those persons as to suits against the employer,not third parties. In that context,any reference to this language with respect to the subrogation rights in the succeeding statutes is to take the quoted language out of context and away from the subject to which it is intended to pertain. The language relates to exclusivity;under the present statutory scheme, it should not be construed to include theWorkers' Compensation subrogationprovisions, for in none of thepresent subrogation provisions is there any indication that the legislature intended to include the rights of heirs within the employer's subrogation lien. We therefore conclude that under the present statutory scheme, as it applies to this case,and because of the intrinsic differences that exist now and have always existed in the source and effect of recoveriesmade in survival actions as distinguished fromwrongful death actions, the subrogation rights of the employer or its insurer under theWorkers' Compensation Act do not extend to recoveries made under wrongful death claims. To that extent,wedistinguish Fisher v. Missoula White Pine Sash Co. (19741, 164 Mont. 41, 518 P.2d 795. Decisions of other stateswith respect to subrogation rights of the employer or its carrier are not helpful. The variety and shades of opinion or statutorybackground differ from state to state. Suffice it to say that in recognizing subrogation rights as extending to benefits received by dependents,regardless of the nature of the action,we appear to be following the trend of the majority of the decisions in the United States. Of special interest on this point is the fact that in Utah it is recognized that because of state constitutional provisions, nondependent heirs are not divested of their rights to damages as against subrogating carriers. Oliveras

### v. Caribou-Four Corners, Inc. (Idaho1979), 598 P.2d 1320. In Idaho, it isprovided by statute that if

no dependents survive the decedent, the employer has a cause of action for the benefits paid, and the heirs separately 

### 5 have a right

### of action. Idaho Code (1972)

### , 5 223(f)

# . Having so concluded,we do not, however, end the discussion with regard to the rights of the widow Kim R. Swanson in this case. What has been presented to us here, in the carefully tailored issuepresented by Swanson's counsel, is whether theWorkers' Compensation Court should hold a hearing to determine and allocate the portion of the settlement that is referable to the economic, as distinguished from the noneconomicdamages that the settlementmay include. That aspect of the case requires some examination. We pointed out above that in a survival action, the lost wages between the date of the injury and the death, and the future earnings (reducedto present value) that the decedent might have earned during his life expectancy areproper elements of damages. We have also pointed out that in wrongful death actions, in determining "such damages



# .

# . as under all the circumstances of the casemay be just" (section 27-1-323,MCA), the jury may include as a factor in such damages the reasonable value of the contributions inmoney that the deceasedwould reasonably havemade during his lifetime for the support, education, training and care of the heirs during their respective life expectancies. It is obvious that the contributions which a decedent might havemade to his heirs for their support,maintenance, education or training would come out of his earnings during his lifetime. While it is true that survival actions and wrongful death actions are separate and distinct causes of action and that recovery of lost earnings in the survival action, or the value of contributions in thewrongful death action, are each proper factors for determination in those respective cases, it is also true that in Workers' Compensation cases where a death is involved, the heirs receive benefits that represent the wages that the employee would have received had he lived. Under considerations of equity and the doctrine of subrogation, therefore, apart from the statutory provisions, it ismeet and just in cases of instantaneous death that the subrogation lien of the employer or its insurer should extend to thatportion of the recovery made under the wrongful death claim thatmay represent reasonablecontributions to the heirs derived from the earnings of the decedent. Where the death of the employee is instantaneous, no recovery exists under the survival action. If recovery is made nonetheless in the wrongful death phase of the claim, and no recovery ispossible under the survival action, theWorkers' Compensation Court should determine the value of the economic damages in the settlement or the judgment. By "economicdamages"we refer to those elements of damages in a wrongful death case that would have their source in the earnings of the decedent, and recompensed medical and burial expenses paid partly orwholly by the subrogating carrier. Once that portion of thewrongful death settlementor judgment is determined, the Workers' Compensation Court should apply the subrogating carriers' rights to the economic damages received by dependent heirs in the usual fashion. Whether theWorkers' Compensation Court allows subrogation out of survival proceeds, or out ofwrongful death proceeds, the attorneys fees and costs would, in the absence of circumstances requiring otherwise, be allocated pro-rata between the subrogated portion and the remaining portion of thewhole settlement. The order of theWorkers' Compensation Court in this

case should take the following form: (1) Amount of third party action recovery $56,250.00 (2) Attorneys' fees and costs 20,250.00 (3) Amount of recovery allocated to survival action (ininstantaneous deathwrite "none") $ (4) Amount of recovery inwrongful death allocation determined to represent economic damages (use a figureonly if death were instantaneous,otherwise enter "none

### "1 (5) Amount of recovery subject to employer/carriergssubrogation rights (enter figure from (3)or (4)) (6) Attorneys fees and costs allocable to subrogation rights 

# I(7) Factor to be used in determining proportion of attorneys fees and costs to be assumed by insurer and claimant [(6)/(5)] (8) Claimants minimum statutory entitlement excluding proportionate share of attorneys fees and costs [ (5)

### x 1/31 (9) Insurer's maximum statutory entitlement excluding proportionate share of attorneys fees and costs [(5)

### x 2/31 $ (10)Insurer's total payments to date $37,862.75 (11) Insurer's portion to date of attorneys fees and cost obligation [ 

### (7) % x (6) 

### 1 $ (12)Net portion insurer is entitled to from third party recovery for payments made [(9)

### - (ll),or (10) whichever is the lesser] $ In the settlement of this case, counsel for the heirs of the decedent and counsel for National Aviation Underwriters, between themselves,allocated the sum of $3,000to the survival action, and the remainder of the settlement to thewrongful death action. When subrogation is considered, neither the courtnor theWorkers' Compensation Court or Division should be bound by the allocations so made between private counsel. We find itproper here that the Workers' Compensation Court be directed to consider,in the absence of a District Court determination,all of the elements that went into the settlement arrived at,and to apportion therefrom that portion of the settlementthat represents the settlement value of the survival action, if the decedent's deathwas not instantaneous. If his deathwas instantaneous,then the entire settlement should be regarded as a wrongful death recovery and the economic damages allocated accordingly. The order and judgment of the Workers' Compensation Court denying the motion of Kim R. Swanson to determine the economic and noneconomic elements of the settlement for purposes of subrogation is hereby vacated and the cause is remanded to theWorkers' Compensation Courtwith instructionsto conduct hearings, and to make and enter its findings, conclusions and order determining the subrogation rights of the employer or its insurer based on the guidance of this opinion. 

### i ,1 

## ..X.c/ 

## ib, Justice

We Concur:

- Chief Justice

Morrison, Jr

# .Mr. Chief Justice Haswell, dissenting: I dissent. Inmy view, our decision in Fisher v. Missoula White Pine and Sash Co. (1974), 164Mont. 41, 518 P.2d 795, mandates affirmance of the order of the Workers' Compensation Court. The majority hold that the subrogation rightsof the employer and insurer do not extend to a wrongful death recovery by the heirs of the deceased employee against a third party. I find no support for thisholding in the subrogation statuteof the Workers' Compensation Act. Section 39-71-414, MCA. Moreover, such holding is directlycontrary to our decision in Fisher.InFisher we held that the distinction between survival and wrongful death actions was neither preserved nor differentiated under the subrogation provisions of the Workers Compensation Act; that such distinction finds no support in the statutoryplan orpurpose of the Act; that the compensatory purpose of the subrogation provision remains the same whether compensation benefits are paid to the employee or in case of his death to his surviving dependents; and accordingly the employer and insurer is subrogated to thatportion of a compromise settlement that the widow received from a third party tortfeasor in a wrongful death action. The following passages from Fisher illustrate its rationale: "Claimant contends that any subrogation right the employer or its insurer possesses is purely statutoryunder section 92-204, R.C.M. 1947, of the Montana Workmen's Compensation Act. She argues 

## -- that thisstatutegrants subrogationonly on derivative claims of the injured employee and hasno application towrongful death actions 

### -- involving claims fordamages suffered by the survivors." (Emphasis added.) 164Mont. at44-45, 518 P.2d at 797.

"We reject such construction as inconsistent with the statutoryplan and purpose of the Workmen1s Compensation Act. The purpose of the subrogation provisions is to compensate the employer and his insurer to some extent for the additional liability they assume under the Workmen s Compensation Act forwrongful acts of independent third party tortfeasors. Koppangv. Sevier, 101Mont. 234, 53 P.2d 455. 164 Mont. at47, 518 P.2d at 798.

"Accordingly, the claimed distinction between subrogation rights in survival actions and wrongful death actions finds no support in the statutoryplan orpurpose of the Workmen's Compensation Act." 164Mont. at48, 518 P.2d at 799. The majority attempt to distinguish Fisher on two grounds: (1)statutorychanges in the Workers' Compensation Act since Fisher, and (2)the differences between wrongful death and survival actions and economic and noneconomic damages. Inreasoning that statutorychanges in the Act since Fisher require a different result in this case, the majority ignore our decision inTuttle v. Morrison-Hnudsen Co., Inc. (1978), 177Mont. 168, -QBH P.2d 1379: 

# Sw "The statute under consideration [the subrogation statute in the Workers' Compensation Act] was amended in 1977. The amendments simply cleared up the language in the statute and divided it into two sections. They did not 

### --- make any substantivechange 

### -- inthe statute." (~mphzs added.) The majority then explain at length the difference between survival actions and wrongfuldeath actions and economic damages and noneconomic damages. I agree that these differences exist. I donot agree that the legislature intended to incorporate these differences in the Workers' Compensation Act and deny subrogation inwrongful death recoveries against third persons. The controlling statute provides inpertinent part: "39-71-414. Subrogation. (1)If an action is prosecuted as provided for in 39-71-412 [tort action against third party] or 39-71-413 [action against fellowemployee for intentional and malicious acts] and except as otherwise provided inthis section, the insurer is entitled to subrogation for all compensation and benefits paid or to be paid under the Workers' Compensation Act." (Emphasis added.) Here compensation and benefits under the Workers' Compensation Actwere paid to the surviving widow. She presented

a tort claim against a third party, StockhillAviation, who paid her $56,250. Under the plain language of the Act quoted above,the Workers' Compensation insurer is entitled to subrogation for allcompensation and benefits paid. No distinction is made between survival and wrongful death actions, between instantaneous and prolonged death orbetween economic and noneconomic damages. The majority have simply engaged in some judicial legislation to justify the result they seek. In the process they have denied effect to Fisher and have ignored Tuttle.

b Chief Justice \