No. 86-324 

IN THE SIJPREME COURT OF THE STATF OF MONTANA 

1986 

JANICE PAULSEN, 

Claimant and Appellant, 

-vsBONANZA STEAK HOUSE, Employer, 

and 

CRAWFORD AND COMPANY, 

Defendant and Respondent. 

APPEAL FROM: The Workers' Compensation Court, The Honorable 

Timothy Reardon, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Kelleher Law Office; Robert L Kelleher, Jr, Billings, 

Montana 

For Respondent : 

Crowley Law Firm; William J Mattix, Billings, Montana 

Submitted on Briefs: Oct. 23, 1986 

Decided: January 27, 1987 

Clerk 
(1) The amount of an attorney's fee 

assessed against an employer or insurer 

under 39-71-611 or 39-71-612 must be 

based exclusively on the time spent by 

the attorney in representing the claimant 

on the issues brought before the workers' 

compensation judge. The judge shall 

determine a reasonable attorney fee and 

assess costs. He is not hound by the 

documentation submitted to him. The 

hourly fee the judge applies to the time 

spent must be based on the attorney's 

customary and current hourly fee for 

legal work performed in this state. 

(2) This section does not restrict a 

claimant and an attorney from entering 

into a contingency fee arrangement under 

which the attorney receives a percentage 

of the amount of compensation payments 

received by the claimant because of the 

efforts of the attorney. However, an 

amount equal to any fee and costs 

assessed against an employer or insurer 

under 39-71-611 or 39-71-612 and this 

section must be deducted from the fee an 

attorney is entitled to from the claimant 

under a contingency fee arrangement. 

Attorney Norman Grosfield of Helena authored the bill 

that subsequently became S 39-71-614, MCA. Gros field 

primarily practices in the workers' compensation field and 

was chief legal counsel and then administrator of the 

Workers' Compensation Division from 1975-79. During his 

tenure as administrator, Grosfield was directly involved in 

the assessment of attorney fees against insurance carriers. 

Assessments at that time were made on an hourly basis and 

were in line with what the Division thought was the customary 

fee charged by the legal profession in the state of Montana. 

Grosfield testified that the hill was aimed at addressing 

this Court's decision in Wight v. Hughes Livestock Co., Inc. 

(Mont. 1983), 664 P.2d 303, 40 St.Rep. 696. In wight, 
attorney fees were assessed against an insurance carrier 

based on the time incurred by the claimant's attorney and a 

proper hourly amount as determined by the Workers' 

Compensation Court. We found that the procedure used by the 

Workers' Compensation Court was improper and held that the 

court should base the assessment of attorney fees on the 

contingency fee contract between the claimant and his 

attorney. Grosfield's intent was to reinstate the procedure 

employed prior to Wight in an effort to hold down the costs 

of workers' compensation and to prevent a severe backlash by 

the legislature. 

As to the hourly fee to be applied, subsection (1) of 

§ 39-71-614, MCA, says that "The hourly fee the judge applies 

to the time spent must be based on the attorney's customary 

and current hourly fee for legal work performed in this 

state." Grosfield testified that the statute granted the 

workers' compensation judge an opportunity to calculate the 

appropriate hourly amount based on the judge's knowledge of 

the charging of legal fees in the state of Montana. 

Grosfield's remark is not an accurate reflection of the final 

version of the statute. The fee is to be based on what the 

individual attorney has established as his customary and 

current hourly fee, not on what is recognized as a reasonable 

hourly fee by lawyers in the state of Montana. We adopted 

this view in Gullett v. Stanley Structures (Mont. 1986)) 722 

P.2d 619, 43 St.Rep. 1335. 

As expected, Grosfield encountered several questions 

about the bill's effect. We refer to Grosfield's depositi-on 

testimony. 

Q. The third question raised was whether 

the bill would prevent a claimant's 

attorney from obtaining a windfall fee in 

cases involving large amounts of money. 
What prompted you to raise and address 

that question? 

A. My concern was that Workers' 

Compensation cases can, anymore, involve 

substantial amounts of money; and with 

larger and larger awards, if the Wight 

decision continued in effect it would 

amount to larger and larger assessments 

of attorney fees against insurance 

carriers, which would have the ultimate 

effect of substantially increasing the 

costs to the employer in the State of 

Montana, which costs are rising, in my 

opinion, inordinately. That was the 

primary intent of the bill, to prevent 

the substantial assessments of attorney 

fees against insurance carriers in the 

larger cases. 

Q. Does the bill prevent a claimant's 

attorney in such cases from collecting a 

contingency fee? 

A. No. 

Q. Why is that? 

A. The bill specifically provides that a 

claimant's attorney may charge a fee 

based on the contingency contract, but 

any amount awarded or assessed against an 

insurance carrier shall be deducted from 

the total attorney fee that is received 

by the attorney. 

Q. The fourth question that you raised 

and addressed is whether the bill would 

assist claimants involving small amounts 

of disputed monies. Why, again, did you 

raise and address that question? 

A. There are situations in which there 

are relatively minor amounts of money 

involved: and ---- in fact in the articular 

case befbre the Court, - I wouli consider 

that articular case involvin a 

relativLy small amount of money. BUE 

there are situations wrere insurance 
carriers refuse to pay the small amount 

in medical costs, etc. ; and if one were 

to strictly apply the Wight case, it 

would have the reverse effect in 

assisting claimants in receiving proper 

representation. There are appropriate 

situations where I can see the award of 

attorney fees against an insurance 

company could even be larger than what 

the actual recovery was, and I've had 

situations like that. So in granting an 

attorney - fee based on an hourly amount, 

- it encourages attorneys to -- take those 

issues before - the Court if ---- they know that 

they are going to get something other 

-- than tx contingency fee amount if they 

are successful. (~rnphzs added. )- 

In this case, claimant's attorney, Robert Kelleher, 

Jr., failed to establish that his customary and current 

hourly fee was $125. Kelleher testified that he set the $125 

hourly fee in direct response to the enactment of 

S 39-71-614, MCA. In the absence of a standard by which to 

set Kelleher's fee under the statute, the Workers' 

Compensation Judge concluded that a $70 hourly fee was 

appropriate: 

The $70 per hour figure yields an 

attorney fee in this case of $3,318.50 

($70 times 54.55 hours) . This amount is 

roughly three times greater than what 

claimant's counsel could have expected to 

earn under a contingency fee agreement. 

Under a contingency award, claimant's 

counsel would have earned $20.78 per 

hour. Clearly, this amount would not 

adequately compensate him for the energy 

expended in pursuing this matter. 

However, it is an indication that the $70 

figure is a reasonable one, and that the 

$125 per hour fee requested by claimant's 

counsel would not be justified under the 

facts of this case. 
The judge did the best he could with the situation 

presented to him. In future cases, the hourly fee the 

Workers' Compensation Judge applies to the time spent should 

be based on the individual attorney's current and customary 

hourly fee as established by that particular attorney. 

Affirmed. 

I 

We concur: A 

Justices 
Mr. Justice John C. Sheehy, specially concurring: 

I concur with the majority and add the following: 

In this case, the Workers' Compensation Court accepted, 

or at least relied heavily on, the testimony of Norman 

Grosfield, that the usual and customary fees assessed in 

Montana by Montana lawyers was the yardstick to which the 

Workers' Compensation Court was bound in fixing the attorney 

fees in this case. 

In leading the Workers' Compensation Court to use the 

usual and customary fees of other lawyers, Grosfield 

misinterpreted or misapprehended what the legislature 

intended in adopting the 1985 revisions to § 39-71-612, MCA. 

Grosfield testified in deposition before the Workers' 

Compensation Court: 

The intent in drafting the bill and the intent as 

expressed by myself to the legislature as the 

primary author was exactly the opposite, to correct 

what I perceived as a problem in the Wight decision 

and to reinstate the system that existed 

previously. That would provide for an assessment 

of attorneys fees based on customary attorneys fees 

charged in Montana by Montana lawyers. 

Grosfield Deposition, at 21. 

Whatever Grosfield intended in drafting the bill, his 

intention was not followed by the legislature. Instead, the 

legislature eliminated from the bill any consideration of 

hourly fees recognized by the legal profession. 

The 1985 amendments to 5 39-71-612, MCA, are contained 

in Ch. 575, Laws of Montana (1985). The amendments 

originated in H.B. 778, authored, as we are told, by 

Grosfield, who was intent that contingent attorney fees 

contracts should not be the basis of attorney fees awards in 

compensation cases, especially large awards. 
The central paragraph of Grosfield's bill as first 

proposed and introduced in the House during the 1985 

Legislature Session said: 

. . . (1) The amount of an attorney's fee assessed 

against an employer or insurer under 39-71-612 must 

be based exclusively on the time spent by the 

attorney in representing the claimant on the issues 

brought before the workers' compensation judge. 

The attorney must document the time spent and give 

the documentation to the judge. he judge shall 

determine a reasonable attorney fee and assess 

costs. He is not bound by the documentation 

submitted to him. The hourly fee the judge applies 

to the time spent -- must be based -- on a customary and 

current hourly fee recognized by the legal 

rofession as a reasonable hourly -- fee for legal 

Eork perfor@d-in -- this state. (Emphasis added.) 

Introduced Bill H.B. 778 (1985 session). 

The language underlined above in Grosfield's proposed 

bill was not accepted by the legislature. It refused the 

concept of applying the usual and customary fees of other 

attorneys. Instead, the legislature revised the offered bill 

to read as follows: 

. . . (1) The amount of an attorney's fee assessed 

against an employer or insurer under 39-71-611 or 

39-71-612 must be based exclusively on the time 

spent by the attorney in representing the claimant 

on the issues brought before the workers' 

compensation judge. The attorney must document the 

time spent and give the documentation to the judge. 

The judge shall determin a reasonable attorney fee 

and assess costs. He is not bound by the 

documentation submitted to him. The hourly fee the 

judge applies to the time spent -- must be based on 

the attorney's customary and current hourly -- fee for 

legal work performed -- in this state. 

Reference H.B. 778. 

The language underlined above is what the legislature 

inserted in place of the language that Grosfield had 

profferred. It is clear that the legislature recognized that 
the matter of attorney fees charged by individual attorneys 

is largely subjective; that such fees vary from lawyer to 

lawyer; that factors in determining those fees include age, 

experience, ability, and the availability of the attorney to 

perform the kind of legal work involved. 

In construing statutes, the court must give effect to 

the legislative will, if possible, and not defeat that will. 

State ex rel. School District No. 8 v. Lensman (1939), 108 

Mont. 118, 88 P.2d 63. If no ambiguity exists in the 

statute, the letter of the law will not be disregarded under 

the pretext of pursuing its spirit. Vaughn & Ragsdale 

Company v. State Board of Equalization (1939), 109 Mont. 52, 

96 P.2d 420. A court cannot give effect to supposed 

unexpressed intentions, in a legislative act, merely to find 

a basis for a certain construction of an act. State v. J. C. 

Maguire Construction Company (1942), 113 Mont. 324, 125 P.2d 

433. The function of the court with respect to statutory 

construction is to interpret the intention of the 

legislature, if at all possible, from the plain meaning of 

the words, and if the meaning of the statute can be 

determined from the language used, the court is not at 

liberty to add to or detract from the language of the 

statute. Montana Deaconess Hospital v. Cascade County 

(1974), 164 Mont. 256, 521 P.2d 203. While it is a general 

rule that it is the duty of the court to ascertain the 

intention of the legislature, if possible, and construe the 

act with reference to that intention, it is equally true that 

the intention must be gathered from the language employed by 

the lawmakers and not from street rumors. State ex rel. 

Murray v. Walker (1922), 64 Mont. 215, 228, 210 P. 90. 

Nonetheless, the Workers' Compensation Court was correct 

in deciding that Kelleher did not provide the court with 

adequate evidence on which to base his customary fee for 
these cases. The legislature created the dilemma by adopting 

Grosfieldls bill, an anomaly and an impossibility for a 

lawyer whose compensation work is limited to representing 

claimants based on a contingent fee. As attorney Prindle 

testified in this case, it is impossible for a court to 

equate an hourly fee basis with a contingent fee basis. The 

two are simply not comparable. It behooves this Court then, 

in that situation, to give sustenance to the efforts of the 

legislature to limit fees by suggesting to the Workers' 

Compensation Court types of evidence that it should consider. 

The evidence on fees should be related solely to the 

attorney or firm handling the worker's claim. Pertinent 

factors to be considered should include the experience of the 

attorney in the field, and the complexity of the claim. The 

attorney should document for the Workers' Compensation Court 

the claimed hourly fee by supplying to the court figures that 

would represent his annual overhead in handling legal 

business; his justifiably expected annual income from the 

legal business; and the number of annual billable hours that 

the attorney normally would apply to the legal business. 

Using such figures, the Workers' Compensation Court could 

determine, in its discretion, a proper hourly fee to be 

awarded. Other methods or evidence may suggest themselves to 

the Workers1 Compensation Court or to attorneys, but in all 

cases, the methods or evidence should relate to the 

"attorney's customary or current hourly fee" for his 

services. Evidence of what other lawyers charge is 

irrelevant to the inquiry. Norm's norm is not the norm in 

this case. 

---3 

Mr. Justice Frank B. 

I concur with J 

Mor 

usti 

rison, 

ce She 
Mr. Justice William E. Hunt, Sr. concurring: 

I concur in the result reached by the majority and by 

Justice Sheehy in his special concurrence. But I am 

perplexed by what seems to be objection to considering the 

testimony of Norman Grosfield, an experienced practitioner of 

Workers' Compensation law, who was counsel and later 

administrator of the Montana Workers' Compensation Division, 

the state agency that oversees the entire Workers' 

Compensation program in Montana. In addition to that 

experience, the witness testified that since entering private 

practice, 80% of his work was and is Workers' Compensation 

law primarily representing claimants. 

Grosfield testified by deposition and was subject to 

cross-examination. His testimony was considered by the 

Workers' Compensation judge who, in his analysis said: 

Since Mr. Grosfield' s opinion testimony was not. 

answered by other countervailing deposition 

testimony, claimant's counsel has failed to carry 

his burden of proof and has not prepondered on the 

reasonableness of the heightened hourly rate 

originally requested. 

Further, the judge said: 

While this court is not bound by Mr. Grosfield's 

opinion as to what would be a reasonable hourly 

rate for any given attorney in this case, the Court 

finds the $70 figure to be a valid one. 

This conclusion seems to me to be in line with S 

39-71-614, MCA, which says, "The judge is not bound by the 

documentation submitted to him. The hourly fee the judge 

applies to the time spent must be based on the attorney's 

customary and current hourly fee for legal work performed in 

this state." 
In my opinion the judge was correct in considering t-he 

opinion of this expert.