No. 87-207

IN THE SUPREME COURT OF THE STATE OF MONTANA
1987

RUSSELL A. LAMB, Claimant and Appellant,-vsMISSOULA IMPORTS, INC., Employer, and UNIVERSAL INSURANCECO.,
Defendant and Respondent.

APPEAL FROM: TheWorkers' Compensation Court, The Honorable Timothy Reardon, Judgepresiding.

COUNSETJ OF RECORD:
ForAppellant: Williams Law Firm; Shelton C. Williams, Missoula, Montana
For Respondent: Garlington, Lohn & Robinson;Robert E. Sheridan, Jr., Missoul-a,Montana

Submitted on Briefs: Nov. 13, 1987 Decided: January 19,1988

- .(. rJ

### 1988

,;: 1- Filed:Mr. Justice William E. Hunt, Sr., delivered the Opinion of the Court.

Claimant appeals from the judgment of the Workers' Compensation Court which denied him an award of attorney's fees after adjudging that he was entitled to permanent partial disability benefits. Because of a lack of the introduction of relevant wage figures, the judge was unable to determine the exact amount claimant should receive for permanent partial disability benefits. Claimant appeals on the issue of attorney's fees. We reverse and remand. The specific issues raised for our review are as follows: 1. Whether claimant is entitled to attorney's fees pursuant to a prior ruling on the same case which awarded fees under 

### 5 39-71-611,MCA. 2. Whether claimant is entitled to attorney's fees under 

### 5 39-71-612, MCA, after going to a hearing which resulted in an increase inbenefits. In 1978,Russell Lamb worked for Missoula In~portsas a janitor. On September 11, 1978,he slipped and fell,hitting his head on the cement floor. He was diagnosed as having sustained a concussion. In February, 1979,Lambwas further diagnosed as suffering from epilepsy. Even with medication, Lambhad occasional seizures. On March 9,1982,while driving down abusy street,Lamb had a seizure. He drove off the road, and hit his car head

on with a tree, causing serious head injuries and permanent brain damage. This Court in Lamb v. Missoula Imports, Inc.

(Mont. 1984), 684 P.2d 498, 41 St.Rep. 1414, (Hereinafter Lamb I), affirmed the Workers' Compensation Court in holding -- that Lamb's epileptic seizures were a direct cause of his1978 slip and fall injurywhile working forMissoula Imports. Lamb was awarded temporary total disability benefits, retroactive to the date of the auto accident. In -- Lamb I, claimant received attorney's fees pursuant to 39-71-611, MCA

# . In January, 1987, Lamb again went to hearing to determine whether he was entitled to increased permanent partial disability benefits and domiciliary care payments Defendantdenied liability for domiciliary care payments, and disputed the proper amount of permanent partial disability benefits. The Workers' Compensation Court found that Lamb was entitled to receive payment forboth domiciliary care aswell

as permanent partial disabilitybenefits. However, claimant failed to introduce evidence ofwhat the pay would be at the time of the hearing for someone working as a janitor in the same capacity as Lamb was at the time of his injury in 1978. Consequently, the court was unable to determine the correct amount which Lamb should receive for permanent partial disability benefits, but did provide a general formula from which to calculate the correct amount. In its order, the court encouraged the parties to resolve their dispute using the guidance the judge provided. The Workers' Compensation Court summarized the issue of abenefits increase in the form of permanent partial disability benefits by stating: "There is no question of whether claimant is disabled, the only question ishowmuch topay." In the 

### -- Lamb I1 judgment,the Workers' Compensation Court awarded attorney's fees to claimant on all issues brought upon which he prevailed. Irnnlediately following the entry of the court's order, the parties agreed on an increase of benefits from $52.38 per week to $94.00 per week. In a memorandum subsequent to the -- Lamb I1 judgment

## , the courtclarified the award of attorney's fees. The judge ordered defendant topay as attorney's fees, 25 percent of claimant's future benefits for domiciliary care and a lump sum of 25 percent of those benefits already received. As to the fees pertaining to the issues of permanent partial disability benefits, the court denied Lamb's claim on the grounds that he did notmeet his burden ofproof regarding the applicable rate.We will first address the issue of whether claimant is entitled to fees pursuant to § 39-71-611,MCA, orpursuant to the ruling and award of fees in Lamb I. 

### -- Claimantwas forced to hire an attorney and litigate his claim in order to receive temporary total disabilitybenefits forhis 1978head injury and subsequent injuries sustained in 1982. The insurer denied liabilitywhich was later adjudged compensable by both the Workers' Compensation Court and the Montana Supreme Court. In Lamb I the claimantwas properly 

### -- awarded attorney's feespursuant to § 39-71-611,MCA. Following that decision,defendant paid claimant $52.38 per week for approximately 5 years. When claimant reached maximum healing and requested permanent partial benefits calculated at a rate which would increase hisweekly benefits to $120.50 per week, the insurer disputed the amount to be paid and denied liability for any amount greater than $52.38 per week. This new round of litigation cannot be construed as falling under § 39-71-611,MCA. The insurerwas not denying liability,but was disputing the amount of compensation owed. The facts fall squarely within the language of S 39-71-612, MCA (1983)

### ,which was in effect on the date ofLanb's injury. The standards for computations of benefits for the claimant

are fixed by the statutes in effect as of the date of injury. Ruckman 

### v. Montana Deaconess Hospital (Mont. 1986), 730 P.2d380, 382, 43 St.Rep. 2216, 2218, citing Trusty v. Consolidated Freightways (Mont. 1984), 681 ~.2d 1085, 41

Section 39-71-612,MCA (1983) states:

(1) If payment this titan employer or insurer pays or tenders of compensation under chapter 71 or 72 of lebut controversy relates to the amount of compensation due and the settlement or award is greater than the amount paid or tendered by the employeror insurer, a reasonable attorney's feeas established by the division or the workers' compensation judge if the casehas gone tohearing, based solelyupon the difference between the amount settled for or awarded and the amount tendered or paid, may be awarded in addition to the amount of compensation.

We hold that neither 5 39-71-611,MCA, nor theWorkers' Compensation Court ruling in -- Lamb I, which awarded fees pursuant to that statute,apply to the facts of -- Lamb I1as it is now before this Court. The applicable statute is 5 39-71-612,MCA (1983)

# . Defendant next requests this Court to rule that 5 39-71-612,MCA, does notmandate an award of attorney's fees either. We disagree. Defendant asserts that claimant did not prevail on the issue of permanent partial disability benefits and therefore doesnot merit an award of attorney's fees. Defendant relies

on the fact that claimantwas demanding benefits of $120 per week rather than the $52.38 per week being paid. Further, the order from the Workers' Compensation Court did not specifyany correct amount owed to claimant. Although it is true that the court ultimately held that claimant did not prevail on his claim for permanent partial disability benefits, the language of the opinion and resulting increase inbenefits would indicateotherwise. Thespecific language used by the Workers' Compensation judge is

as follows: In order to calculate a diminution in earning capacity, one must first determine the wages earned at date of injury and then compare those wageswith what claimant's capacity to earn is with his disability. Claimant has demonstrated that he has no normal job market.

## i in din^ of Fact No. 12.) 

### - However, as the Montana Supreme Court has held in McDanold v. 

### E.~rans~ort, 

# x., -Mont. 

## , P.2d

### -

## - , 41 St.Rptr. 472 (1984), earning capacity must be measured by comparing pre-injury earning capacity with post-injury earning capacity in the same time frame. So, in order to properly 

### ---- calculate claimant's permanent partial disability rate,we would need to know what the iob claimani

4 held in September of 1978 would pay today. No evidence was presented as to that pay rate. No determination -of permanent partial disability can bemade by thisCourt. The Court would hope that, given the findings and guidance herein, the parties should be able to resolve this dispute. There is no question of whether claimant is disabled, the only question is howmuch topay. Following this judgment, defendant promptly agreed to a $41.62 per week increase in benefits to $94.00 per week. It is also true that claimant agreed to reduce his demand of $120.50, but that doesnotnegate the fact thathis benefits were ultimately increased as a result of the hearing. Section 39-71-612, MCA (1983), clearly states that claimant is entitled to attorney's fees if "the settlementor award is greater than the amount paid by the employer or insurer." (Emphasis added.) In this case, the employer settledwith claimant formore than the amount thatwasbeing paid before the hearing. If a dispute in amount owed is resolved in favor of claimant, this Court inevitably finds that an award of attorney's fees is appropriate. Polich v.Whalen's O.K. Tire Warehouse (1983),203 Mont. 280, 661 P.2d 38;Walkerv. H. F. Johnson, Inc. (1978), 180Mont. 405, 591 P.2d 181; Catteyson v. Falls Mobile Home Center (19791,183 Mont. 284, 599 P.2d 341. Although the discretionary word "may" is found in § 39-71-612,MCA, itdoes not leave an award of attorney's fees totally up to the Workers' Compensation Court's discretion. It is a general principle in statutory construction that, where the word "may" is used in conferring power upon an officer, court,or tribunal,and the public or a third person has an interest in the exercise of power, then the exercise of the power becomes imperative. (Citationsomitted.) Adoption of Bascon (1952), 126 Mont. 129, 136, 246 P.2d 223,

The Workers' Compensation Court found that Lamb was entitled to permanent partial disability benefits. Obviously, the amount of $52.38 being paid by defendantwas not considered adequate or the court would not have expended the time and energy in providing the parties with a formula tobe used in calculating the correctamount. If the judge's formula was meant to lower Lamb's weekly benefits, it is inconceivablethatdefendant so readilyagreed to an increase of $41.62 perweek to $94.00 per week inbenefits. In light of the foregoing discussion,we conclude with the most compelling reason to find that this claimant,under these facts, is deserving of an award of attorney's fees pursuant to § 39-71-612,MCA. As thisCourt has said: If therefore, the social purpose of Workers' Compensation Acts is to provide for the injured worker a fund which replaces his lost earnings or his lost earning capacity, the reasonable cost of effectuating such social purpose where litigation is necessary ought also be the burden of the industry. Any erosion of the workers' right of recovery by imposing upon the worker the cost ofprocuring his rights erodes to that extent the socialpurpose.
It is clear to us that it is the objective of the statutes allowing attorneys fees in compensation cases to preserve intact the eventual award recovered by the claimant for his impairment, by assessing in addition his attorneys fees and costs against the insurer or employer. It is a further purpose of the statutes to allow the Workers' Compensation Court or Division to regulate attorneys fees for successfulclaimants. Wight v. Hughes Livestock Co., I~c.(Mont. 1983)t 664

While theworkers' compensation judge may determine which attorney's fees are reasonable, the clear meaning of [S 39-71-6121 is to provide attorney fees above and beyond the compensationawarded to a successfulclaimant. Holtonv. F. H. StoltzeLand and LumberCo. (1981), 195Mont. 263, 270, 637P.2d 10, 14. We hold that claimant is entitled to an award of reasonable attorney's fees on the issue of his permanent partial disability benefit rate. The amount is to be based solely upon the difference between the amount settled for

($94.00) and the amount paid ($52.38). Section 39-71-612, MCA (1983). Reversed and remanded to theWorkers' Compensation Court for a determinationof reasonableatporney's fees.

We Concur:-\

Justices