No. 84-287 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1985 

E. L. McDANOLD, 

Claimant and Appellant, 

-vsB. N . TRANSPORT, INC. , 

Employer- Defendant and Respondent. 

APPEAL FROM: Workers' Compensation Court, The Honorable Timothy 

Reardon, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

William T. Kelly, P.C.; Halverson, Sheehy & Prindle, 

Billings, Montana 

Gene A. Picotte, Clancy, Montana 

For Respondent : 

Utick, Grosfield & Uda, Helena, Montana 

Thomas Spence, Billings, Montana 

Filed: 

Submitted on Briefs: Feb. 28, 1985 

Decided: June 27, 1985 

JUN 2 '. 1985 

- ,.- 

Clerk 
Mr. Justice Fred J. Weber delivered the Opinion of the Court. 

This is an appeal from the decision of the Workers' 

Compensation Court limiting claimant's fee to the contingent 

fee agreement without regard to the time records of his 

counsel. We reverse and remand. 

The underlying Workers' Compensation proceeding was 

commenced before the Workersf Compensation Court in 1979. 

Two appeals to this Court followed. McDanold v. B. N. Transport, Inc. (Mont. 1981), 634 P.2d 175, 38 St.Rep. 1466; 

McDanold v. B.N. Transport, Inc. (Mont. 1984), 679 P.2d 1188, 

41 St.Rep. 472. Following appeal of the lower court determination in the second case that the total amount of weekly 

benefits was $15,452.70, the matter was remanded for determination of attorneys fees and costs. 

The issues presented on appeal are: 

1. Was it reversible error for the Workers' Compensation Court to enter its order determining attorneys fees 

without allowing claimant at least five days time to respond 

to the defendant's memorandum? 

2. Was it reversible error to fix the attorneys fees at 

the amount of the contingent fee contract without regard to 

attorneys ' affidavits? 

By order dated May 4, 1984, the Workers' Compensation 

Court determined claimant's entitlement to temporary total 

disability and permanent partial disability at a total of 

$15,452.70. The order further stated: 

"Further, claimant's counsel shall, within 10 days 

of receipt of this Order, provide the Court with a 

Request for Reasonable Costs and Attorney Fees, and 

Proposed Order. Said requests shall include a 

statement of itemized costs, calculations concerning the determination of a reasonable attorney fee, 

and a copy of the claimantf s attorney fee agreement. Counsel sha 1 1 simultaneously provide defendant's counsel with copies of these documents." 
Pursuant to the order, claimant's attorney filed a copy 

of the attorney-client agreement under which claimant agreed 

to pay his attorney a contingent fee, based upon the following provision: 

"In the event the case should be appealed by either 

the defendant insurance company of the Workmen's 

Compensation Division, or the CLIENT, as the situation may occur, to the district court or the Supreme Court of the State of Montana, then and in 

such event, said ATTORNEY shall receive as his fee 

a sum equal to one-third (1/3) of all sums 

recovered. l1 

In addition, sworn affidavits were filed, the first of 

which established that one firm of attorneys worked on the 

case for a total of 239.06 hours, resulting in claimed attorneys fees of $18,684.15. The other affidavit established a 

total of 119.75 hours worked by another attorney and claimed 

a fee of $10,777.50. The affidavits contained detailed 

statements of the time records converted to money based upon 

the routine hourly rate of the attorney involved. The affidavits contained no further factual explanation with regard 

to the nature of the services performed. The affidavits did 

not address the reason why fees should be determined on an 

hourly basis instead of under the contingent fee agreement. 

The defendant filed its objection to any award of attorneys fees in excess of the contingent fee agreement. By 

order dated June 19, 1984, the court made the following 

findings and conclusions: 

"The claimant's attorneys have submitted a copy of 

their contingent fee agreement, which provides for 

one-third (1/3) of all sums recovered upon a successful appeal to the Montana Supreme Court, plus 

reasonable costs incurred. They have also submitted a statement of the hours compiled in pursuing 

this matter and the costs incurred. 

"There exists a rebuttable presumption that the 

attorney fee due claimant's attorney under the 

continqent fee aqreement is a reasonable fee. 

Wight ;. Hughes ~ivestock, Inc., Mont. I 

664 p.Td 303, (1983) . 
"Neither party has filed a Motion for Evidentiary 

Hearing Regarding Reasonableness of Attorney fees 

based on the contingent fee agreement and an award 

of costs based on claimant's attorney's statement 

of costs. 

"It appears from the record that the defendant paid 

$8,890.00 in temporary total disability benefits 

and $2,083.68 in permanent partial disability 

benefits before a controversy arose. Following the 

claimant's attorneys ' efforts, and a successful 

appeal to the Montana Supreme Court, that Court 

determined that temporary total and permanent 

partial entitlement totaled $15,452.70. . . [TI he 

claimant's attorneys are entitled to an award of 

attorney fees based on the $4,479.02 

difference. . . 

"The instant case is one in which the attorney fee 

award appears inadequate when compared to the total 

number of hours reported by claimant's attorneys. 

However, no Request for Evidentiary Hearing wa s 

received, and no evidence was presented (besides 

the lone statement of hours) suggesting a departure 

from the presumed reasonableness of the contingent 

fee agreement. Therefore, an attorney fee award 

under the contingent fee contract, and pursuant to 

Wight, supra., shall govern. 

"Based solely on the difference between the total 

amount the Supreme Court awarded and the amount the 

defendant previously paid the claimant, the claimant's attorneys are entitled to an award of 

$1,492.01 under the terms of the contingent fee 

agreement. (33 1/3 percent times $4,479.02, equalling $1,493.01) ." 

Claimant's attorneys appeal from the foregoing order. 

Was it reversible error for the Workers' Compensation 

Court to enter its order determining attorneys fees without 

allowing claimant at least five days time to respond to the 

defendant's memorandum? 

Claimant's attorneys point out that the administrative 

rules of the Workers' Compensation Court do not provide for 

post-trial motions, so there is no specific provision which 

would have allowed them to respond to the objection to fees 

filed by the defendant. Claimant argues that under Rule 

2.52.316, A.R.M., pertaining to pre-trial motions, a five day 
period should have been allowed comparable to the five days 

allowed for a reply brief on pre-trial motions. 

The defendant replies that there is no requirement under 

the order to grant any additional time for such a reply and 

contends that this is merely a "red herring." The defendant 

points out that, under Sorenson v. Drilcon, Inc. (Mont . 

1983), 664 P.2d 320, 40 St.Rep. 829, even after the entry of 

the order setting attorneys fees, claimant's attorneys were 

free to request an evidentiary hearing. They have failed to 

do so even up to the present time. 

In Sorenson, following the entry by the Workers' Compensation Court of an order fixing attorneys fees, claimant's 

attorney requested a hearing and an opportunity to present 

evidence to justify her fee. This Court reversed the lower 

court's denial of the motion for a hearing and remanded the 

matter to the lower court with instructions to hold an 

evidentiary hearing regarding the attorney's fee. We held 

that it was an abuse of discretion not to allow the hearing. 

In the instant case, the claimant failed to request an 

evidentiary hearing. In the absence of any rule requirement, 

we conclude that the lower court did not err in denying 

claimant the opportunity to file a response to the defendant's memorandum. 

Was it reversible error to fix the attorneys fees at the 

amount of the contingent fee contract without regard to the 

attorneys' affidavits? 

Both counsel rely on Wight v. Hughes Livestock Co., bnc. 

(Mont. 1983), 664 P.2d 303, 40 St.Rep. 696, which discusses 

the elements to be considered in determining the reasonableness of contingent fee contracts and the amount of attorneys 

fees to be awarded. Citing an Idaho Supreme Court decision, 
this Court adopted several factors to be considered by the 

judge or the Division: 

" [I]n determining a reasonable attorneys 

fee . . . [the judge or the Division] must engage 

in a balancing process and consider on contingent 

basis the following factors: 

'(1) The anticipated time and labor required to 

perform the legal service properly. 

' (2) The novelty and difficulty of legal issues 

involved in the matter. 

' (3) The fees customarily charged for similar legal 

services. 

' (4) The possible total recovery if successfu1. 

' (5) The time limitations imposed by the client or 

circumstances of the case. 

' (6) The nature and length of the attorney-client 

relationship. 

(7) The experience, skill and reputation of the 

attorney. 

'(8) The ability of the client to pay for the legal 

services rendered. 

' (9) The risk of no recovery.' 629 P.2d at 661. 

"Not mentioned by the Idaho court in Clark v. Sage, 

supra, but surely a factor to be considered: is the 

market value of the I awyerl s services at the time 

and place involved. Indeed it may be said that in 

every retainer contract, be it personal or public, 

hourly, fixed fee or contingent fee, each such 

contract is in reality based on the market value of 

the lawyer's services. With the added factor of 

the market value of the lawyer's services at the 

time and place involved, we adopt the factors set 

out by the Idaho Supreme Court to be considered by 

Montana ' s Workers ' Compensation judge or the Division in determining the reasonabl eness of contingent fee contracts and the amount of attorneys fees 

to be awarded to successful claimants." Wight, 664 

P.2d at 311-12, 40 St.Rep. at 706. 

Under Wight, the lower court was required to consider the 

foregoing in its determination of the reasonableness of the 

contingent fee contract and the amount of attorneys fees to 

be awarded. 

In discussing Wight, defendant emphasizes the holding by 

the court with regard to the strong presumption in favor of 

the contingent fee contract: 

"In considering Wight's contingent fee contract 

with his attorney, the Workers' Compensation judge 

should accept the approved contract as having a 

strong presumption in its favor. If the judge does 

not set a fee i.n accordance with the contingent fee 

contract, he shall state with particu3 arity his 

reasons in writing, based upon strong 
countervailing evidence, why the contingent fee 

contract is not followed by him, and precisely what 

w~ight he accorded to the contingent fee contract." 

Wight, 664 P.2d at 312, 40 St.Rep. at 707 (emphasis 

added). 

Defendant's counsel contends that in failing to request 

a hearing and failing to set forth strong countervailing 

evidence, claimant's attorneys have failed to discharge the 

burden which is placed upon them. As a result, they argue 

that the lower court order must be affirmed. 

Claimant's attorney argues that under Wight, claimant 

was not required to request an evidentiary hearing. Claimant 

attempts to place the duty upon the court to extend the 

opportunity for hearing once the controversy arises. Claimant further argues that under Sorenson, which granted a 

claimant a right to an evidentiary hearing, such a hearing 

must be held. 

Respondent has attached to its brief a copy of the 

present administrative rules in effect for the Workers' 

Compensation Court. These rules provide the basis for a 

hearing upon the request of a party to determine the reasonableness of attorneys fees. Those rules of coursp are not 

applicable in the present case. However, they do indicate a 

reasonable procedure for the determination of attorneys fees. 

Based upon Sorenson, claimant properly could have requested a hearinq before the court following its adverse 

order of June 19, 1984. The record does not disclose the 

reason for claimant's failure to make that type of a motion. 

Claimant's evidence contained significant contradictions. On the one hand, the contingent fee agreement justified an award of $1,493.01 in attorneys fees. On the other 

hand, the time records, if accepted on their face, would 

justify an award in excess of $28,000. The evidence further 

demonstrates that the attorneys were successful in securing 
approximately $5,000 for the claimant. Before it could 

adequately compare the evidence submitted, the Workers1 

Compensation Court required substantial additional evidence 

on the various Wight factors, such as the anticipated time 

and labor required, the novelty and difficulty of the legal 

issues, and the fees customarily charged for similar services. In addition, it would have been appropriate for both 

sides to have submitted evidence of the market value of the 

lawyers1 services under these unusual circumstances. 

While it might have been appropriate to affirm the lower 

court in the absence of more adequate evidence, undek all the 

circumstances we have concluded it is just to allow a hearing 

before the Workers' Compensation Court. While both sides may 

present additional evidence at that hearing, the claimant1 s 

counsel have the primary obligation to present appropriate 

evidence from which the court may determine a reasonable 

attorneys fee. 

We reverse the decision of the Workers1 Compensation 

Court. This cause is remanded for such further hearing and 

consideration as the court may deem advisable in accordance 

with this opinion. 

We concur: