NO. 91-067 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1991 

PETER J. WORTS, 

Claimant and Appellant, 

v. 

HARDY CONSTRUCTION COMPANY, 

Employer, 

and 

PACIFIC EMPLOYERS INSURANCE COME 'ANY, 

Defendant and Respondent. 

APPEAL FROM: Workers' Compensation court, 

The Honorable Timothy W. Reardon, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Lloyd E. Hartford, Attorney at Law, Billings, 

Montana 

For Respondent: 

Andrew J. Utick; Utick & Grosfield, Helena, Montana 

Filed: 

Submitted on briefs: June 18, 1991 

I 

Clerk 
Justice Karla M. Gray delivered the Opinion of the Court. 

On January 26, 1989, the Workerst Compensation Court 

determined that the claimant was entitled to an award of reasonable 

costs and attorney's fees pursuant to 5 39-71-611, MCA (1983). An 

evidentiary hearing was held to determine the amount to be awarded 

and, on November 30, 1990, the Workerst Compensation Court issued 

an order awarding attorney's fees of $3,329.39 based on the 

contingent fee agreement between the claimant and his attorney. 

From this order, the claimant appeals. We affirm. 

The claimant raises the following issues on appeal: 

1. Did the Workerst Compensation Court abuse its discretion 

by awarding attorney's fees in accordance with the contingent fee 

agreement and not on an hourly basis? 

2. Should attorney's fees be awarded for the time spent 

litigating the fee issue? 

3. Should attorney ' s fees be based on future benefits as well 

as the reinstated temporary total disability benefits and payment 

for psychological counseling if the contingent fee agreement 

controls? 

The respondent raises as an additional issue on appeal 

whether sanctions should be imposed against the claimant pursuant 

to Rule 32, M.R.App.P., for bringing this appeal. 

The claimant, Peter Worts, sustained a work-related injury on 

June 30, 1983. The respondent, Pacific Employers Insurance 

Company, accepted liability and paid the claimant temporary total 
disability benefits of $263 per week. Later, effective May 8, 

1986, the respondent reduced the claimant's benefits fromtemporary 

total to permanent partial at a rate of $131.50 per week. 

Following the reduction in benefits, the claimant retained 

attorney Lloyd Hartford to represent him in connection with his 

claim for benefits. The claimant and Mr. Hartford entered into a 

contingent fee agreement which provided in part: 

4. That the Attorney accepts this employment, and the 

Client agrees to pay the Attorney, a fee not to exceed 

the following amounts: 

(b) For cases that go to a hearing before the Workers' 

Compensation Judge, thirty-three percent (33%) of the 

amount of compensation payments the Client received from 

an order of the Workers' Compensation Court. 

On January 30, 1987, the claimant filed a petition for an 

emergency trial with the Workers' Compensation Court requesting 

reinstatement of his temporary total benefits and payment for 

psychological counseling. Prior to the trial, the respondent moved 

to dismiss the case upon the ground that, as a result of the 1987 

amendments to the Workers' Compensation Act regarding mandatory 

mediation of claims, the Workers' Compensation Court lacked subject 

matter jurisdiction. This motion was denied by the Workers' 

Compensation Court and the matter proceeded to trial. 

The respondent then filed an application for a writ of 

supervisory control with this Court. On February 3, 1988, we 

issued our opinion concerning the jurisdictional issue, holding 
that the 1987 amendments to the Act covering dispute resolution did 

not apply retroactively to cases in which petitions had been filed 

with the Workers' Compensation Court prior to July 1, 1987, the 

effective date of the amendments; therefore, the Workers' 

Compensation Court had jurisdiction. See State ex rel. Pac. Emp. 

Ins. Co. v. Workers' Comp. Court (1988), 230 Mont. 233, 749 P.2d 

522. 

By the time the jurisdictional question had been resolved, 

the trial had already been held on eight issues raised by the 

claimant. On January 26, 1989, the Workers' Compensation Court 

entered its findings of fact, conclusions of law and judgment, 

ruling in the claimant's favor on three issues, including 

reinstatement of temporary total disability benefits retroactive 

to the date such benefits were reduced by the respondent, an award 

of medical benefits for psychological treatment, and an award of 

reasonable costs and attorney's fees. The court ruled in the 

respondent's favor on the five remaining issues. 

The Workers' Compensation Court directed Mr. Hartford to 

submit a statement of the hours he spent in pursuing the matter, 

the costs incurred, a statement of his customary and current hourly 

fee and a copy of the fee agreement as approved by the Division of 

Workers' Compensation. On February 14, 1989, Mr. Hartford filed 

Claimant's Memorandum of Time and Costs in which he moved for an 

award of fees in the amount of $48,510 and costs of $1,202.40. Mr. 

Hartford claimed that he spent 215.60 hours on the case. He also 

asserted that he does not charge an hourly rate in the regular 
course of business, but claimed that $225 represented a reasonable 

hourly fee for his services based upon an accountant-prepared 

formula utilized for determining his hourly cost of doing business. 

The respondent requested an evidentiary hearing regarding the 

propriety of the requested award of attorney's fees. A dispute 

arose during the preparation for that hearing concerning Mr. 

Hartford's refusal to completely answer certain interrogatories; 

the dispute culminated in the WorkersF Compensation Court imposing 

sanctions against Mr. Hartford in the amount of $1,000. 

Thereafter, the claimant filed a motion to disqualify the Workerst 

Compensation Judge. The Workers' Compensation Court denied the 

motion but appointed a hearing examiner to hear the attorney fee 

matter and make proposed findings and conclusions. 

On July 24, 1990, Mr. Hartford moved to supplement his request 

for attorneyfs fees and costs to add a claim for 67 additional 

attorney hours and ten paralegal hours for time spent in pursuing 

the claim for attorney's fees. Again, the claim was based upon a 

rate of $225 per hour for Mr. Hartford, with $35 per hour claimed 

for paralegal time. Thus, as of July 24, 1990, the total amounts 

requested for attorney's fees and costs were $63,935 and $1,202.40, 

respectively, 

The evidentiary hearing was held on August 20, 1990. The 

pertinent issue to be decided at the hearing, as stated in the 

pretrial order, was: 

The amount of attorney's fees and costs to be 

awarded to claimantls counsel and whether claimant is 

entitled to attorney's fees based on an hourly rate as 
set forth in his memorandum of time and costs filed 

February 14, 1989, together with added fees and costs as 

supplemented on July 24, 1990 and hours to be 

supplemented at the termination of the case. 

On November 30, 1990, the hearing examiner entered his 

Findings of Fact, Conclusions of Law and Proposed Judgment. The 

examiner found that, based on the evidence presented at the 

hearing, the January 26, 1989 decision of the Workers' Compensation 

Court resulted in the payment of $8,124.05 in reinstated temporary 

total disability benefits to the claimant. In addition, the 

decision resulted in the payment of $1,965 in medical benefits to 

Dr. Traynham for psychological counseling. Thus, Mr. Hartford 

recovered a total of $10,089.05 for the claimant by reason of the 

order of the Workers' Compensation Court. The examiner further 

found that Mr. Hartford failed to present strong countervailing 

evidence sufficient to overcome the presumption in favor of the 

contingent fee agreement as establishing a reasonable fee; 

therefore, in accordance with the contingent fee agreement, Mr. 

Hartford was entitled thirty-three percent of the total award 

received by the claimant, or $3,329.39, plus costs of $1,202.40. 

The respondent was entitled to credit the $1,000 sanction against 

Mr. Hartford against the award of fees and costs. The Workerst 

Compensation Court adopted the findings of fact and conclusions of 

law and entered judgment on November 30, 1990. A rehearing was 

denied on January 7, 1991. 

I 

Did the Workerst Compensation Court abuse its discretion by 
awarding attorney's fees in accordance with the contingent fee 

agreement and not on an hourly basis? 

In determining attorney's fees, the Workers' Compensation 

Court examined the factors set out by this Court in Wight v. Hughes 

Livestock Co., Inc. (1983), 204 Mont. 98, 664 P.2d 303, for 

assessing the reasonableness of a contingent fee agreement. Those 

factors include: 

"(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 successful. 

(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." 

Wiqht, 204 Mont. at 114, 664 P.2d at 312 (quoting Clark v. Sage 

(Idaho 1981), 629 P. 2d 657, 661) . A tenth factor noted by this 

Court is "the market value of the lawyer's services at the time and 

place involved." Wiqht, 204 Mont. at 114, 664 P.2d at 312. In 

addition, we stated that: 

In considering . . . [the claimant'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 in accordance with the contingent fee contract, 

he shall state with particularity his reasons in writing, 

based upon strong countervailing evidence, why the 

contingent fee contract is not followed by him, and 

precisely what weight he accorded to the contingent fee 

contract. 

Wiuht, 204 Mont. at 115, 664 P.2d at 312. 

The Workers7 Compensation Court concluded that the contingent 

fee agreement between Mr. Hartford and the claimant established a 

reasonable attorney's fee based on its determination that Mr. 

Hartford failed to present strong countervailing evidence 

sufficient to overcome the presumption in favor of the contingent 

fee agreement. The Workers' Compensation Court concluded that: 

Mr. Hartford did not offer any testimony or evidence 

whatsoever regarding the ten factors that must be 

considered under Wisht, supra. . . . [HI is entire case 

was designed to show that his cost of doing business 

justified an hourly rate of $225.00. An attorney's cost 

of doing business is not a proper factor for 

consideration under Wisht or under Rule 1.5 of the Rules 

of Professional Conduct. Mr. Hartford simply did not 

attempt to meet his burden of presenting evidence that 

his contingency fee did not establish a reasonable fee. 

Mr. Hartford challenges the Workerst compensation Court's 

award of attorneyfs fees, arguing that, on its face, a fee of 

$3,329.39 for 215.60 hours of work is unreasonable. He also 

asserts that the Workers1 Compensation Court erred in its 

application of several of the Wisht factors. 

 his Court has held that workerst compensation benefits, 

including the claimant's award of attorney's fees, are determined 

by the statutes in effect on the date of the injury. Cadwell v. 

Bechtel Power Corp, (1987), 225 Mont. 423, 732 P.2d 1352. Here, 
the claimant was injured on June 30, 1983, before the 1985 

amendments to gg 39-71-612 and 39-71-614, MCA. Therefore the 1983 

statutes govern this case. Section 39-71-611, MCA (1983), gives 

the Workers' Compensation Court discretion to determine reasonable 

attorney's fees. Swan v. Sletten Construction Co. (1986), 223 

Mont. 477, 480, 726 P.2d 1170, 1172. Thus, this Court will not 

interfere with the Workers' Compensation Court's determination of 

reasonable attorney's fees absent an abuse of discretion. Swan, 

223 Mont. at 480, 726 P.2d at 1172. 

We find no abuse of discretion on the part of the Workers' 

Compensation Court. The issue to be determined at the evidentiary 

hearing, as set forth in the pretrial order, was the "amount of 

attorney's fees and costs to be awarded . . . and whether claimant 

is entitled to attorney's fees based on an hourly rate as set forth 

in his memorandum of time and costs . . . . " At the hearing, Mr. 

Hartford's only evidence was that of his accountant, Richard Hobbs, 

who testified regarding Mr. Hartford's alleged cost of doing 

business and the formula for determining an hourly rate from that 

cost of doing business. Mr. Hartford did not testify on his own 

behalf, present any other attorney to testify on his behalf, offer 

any evidence concerning the Wicrht factors, or make any effort 

whatsoever to overcome the presumption in favor of the contingent 

fee agreement. Moreover, subsequent to the evidentiary hearing 

Mr. Hartford abandoned his theory that attorney's fees should be 

set at $225 per hour based upon his cost of doing business and, in 

Claimant's Proposed Findings of Fact, Conclusions of Law and 
Judgment, he proposed that the Workers1 Compensation Court award 

attorney's fees at a rate of $125 per hour, his prior hourly rate. 

However, no evidence was presented at the hearing regarding Mr. 

Hartford's prior hourly rate. 

The respondent presented evidence from Geoffrey Keller, an 

attorney experienced in representing claimants in workersi 

compensation matters. It was Mr. Keller's opinion that this case 

was a rather routine case, and that the work required to be 

performed was not sufficient or unusual enough to take the case 

outside the presumption in favor of the contingent fee contract as 

establishing a reasonable attorney's fee. The Workersf 

compensation Court ultimately agreed with Mr. Keller. 

In addition, Mr. Hartford's assertion that a fee of $3,329.39 

for 215.60 hours of work is patently unreasonable is unfounded. 

In Buckman v. Montana Deaconess Hospital (1989) , 238 Mont. 516, 776 

P.2d 1210, we held that a claimant's attorney is entitled to 

attorney's fees only on those issues upon which the claimant 

prevailed in a workerst compensation case. In this case, the 

claimant prevailed on three of eight issues and Mr. Hartford made 

no attempt to identify the hours he devoted to those issues. 

Mr. Hartford further asserts that, as the party moving for the 

evidentiary hearing, the respondent had the burden of proof to 

establish that the claim for attorney's fees was unreasonable. He 

argues that the record speaks for itself and no additional evidence 

was required regarding the claim for attorney's fees. We disagree. 

As already noted, a contingent fee agreement carries with it a 
presumption of establishing a reasonable fee under our decision in 

Wisht. It follows logically that the party contesting the 

reasonableness of the contingent fee agreement has the burden of 

overcoming the presumption. It was the claimant in this case who 

contested the reasonableness of the contingent fee agreement and 

he had the burden of overcoming the presumption of reasonableness. 

Having presented no evidence regarding the Wisht factors in 

determining the reasonableness of the contingent fee agreement, he 

failed to carry his burden of proof. We hold that the Workers' 

Compensation Court did not abuse its discretion by awarding 

attorney's fees in accordance with the contingent fee agreement. 

I I 

Should attorney's fees be awarded for the time spent 

litigating the fee issue? 

The claimant contends that he should be awarded attorney's 

fees for time spent litigating the fee issue, arguing that the 

effect of holding otherwise diminishes the value of the attorney's 

fees awarded by the order of the Workers1 Compensation Court. 

As noted previously, the claimant is entitled to attorney's 

fees only as to those issues on which he prevailed. Buckman, 238 

Mont. 516, 776 P.2d 1210. The claimant did not prevail on his 

argument that the contingent fee agreement did not establish a 

reasonable attorney's fee. Therefore, we hold that the Workers' 

Compensation Court correctly refused to award Mr. Hartford 

attorney's fees for litigating the issue. 
I11 

Should attorney's fees be based on future benefits as well as 

the reinstated temporary total disability benefits and payment for 

psychological counseling if the contingent fee agreement controls? 

The claimant contends that if this Court is not persuaded that 

attorney's fees should be awarded on an hourly basis, the fees 

awarded under the contingent fee agreement should take into account 

future benefits as well as the reinstated temporary total 

disability benefits and payment for psychological counseling. He 

notes that his underlying claim for benefits was subsequently 

settled on January 18, 1991, for $65,750 on a full and final 

compromise basis. 

Mr. Hartford received exactly what his fee agreement provided 

for, thirty-three percent of the compensation payments the claimant 

received from an order of the Workers' Compensation Court, 

determined in accordance with the evidence presented at the 

hearing. The action involved only a claim for reinstatement of 

temporary total disability benefits and payment for psychological 

counseling. The evidentiary hearing was held to determine a 

reasonable attorney's fee for Mr. Hartford's efforts in obtaining 

those benefits for the claimant. Resolution of the underlying 

claim for benefits was a matter completely separate from the 

present action. The order approving the full and final compromise 

settlement was not even in existence at the time of the evidentiary 

hearing on attorney's fees and is not properly part of the record 

on appeal. Therefore, we hold that the Workers' Compensation Court 
correctly determined attorney's fees based only on the 

reinstatement of temporary total disability benefits and payment 

for psychoZogica1 counseling. 

We also note that in support of his argument on this issue, 

the claimant's attorney cited a nonciteable, unpublished opinion 

of this Court. In December 1989, we amended our Internal Operating 

Rules to allow for nonciteable, unpublished, abbreviated opinions 

in certain cases. We take this opportunity to remind counsel that 

such opinions shall not be cited as precedent. 

IV 

Should sanctions be imposed against the claimant pursuant to 

Rule 32, M.R.App.P., for bringing this appeal? 

Rule 32, M.R.App.P., provides: 

If the supreme court is satisfied from the record 

and the presentation of the appeal in a civil case that 

the same was taken without substantial or reasonable 

grounds, such damages may be assessed on determination 

thereof as under the circumstances are deemed proper, 

Where a reasonable ground for appeal exists, sanctions or 

damages will not be imposed under Rule 32, M.R.App.P. Searight v. 

Cirnino (19881, 230 Mont. 96, 103-04, 748 P.2d 948, 952. We believe 

that the statutory and case law governing attorney's fees in this 

case, and the Workerst Compensation Court's actions in accordance 

therewith, were sufficiently clear. The claimant s total 

abandonment of the attorney fee theory he propounded at the 

evidentiary hearing, after that hearing, lends further credence to 

the existence of such clarity. Because of a modicum of legitimate 

confusion as to the burden of proof at the evidentiary hearing 
regarding attorney's fees, however, a barely reasonable ground for 

appeal did exist. For that reason, we will not impose sanctions 

against the claimant. 

Af f inned. 

We concur: 

1 diT& Chief Justice d7c 
August 29, 1991 

CERTIFICATE OF SERVICE 

I hereby certify that the following order was sent by United States mail, prepaid, to the 

following named: 

Lloyd E. Hartford 

ATTORNEY AT LAW 

P.O. BOX 1517 

Billings, MT 59103 

Andrew J. Utick 

ATTORNEY AT LAW 

P.O. Box 512 

Helena, MT 59624-0512 

ED SMITH 

BY: