No. 88-303 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1988 

DONALD J. HARTMAN, 

Claimant and Respondent, 

-VSSTALEY CONTINENTAL, Employer, 

and 

NATIONAL UNION FIRE INSURANCE, 

Defendant and Appellant. 

APPEAL FROM: The Workers' Compensation Court, The Honorable ~imothy 

Reardon, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Marra, Wenz, Johnson & Hopkins; Gary L. Green, Great 

Falls, Montana 

For Respondent: 

Erik B. Thueson, Helena, Montana 

Submitted on Briefs: Nov. 3, 1988 

.J - L.> ~~1 Decided: February 16, 1989 

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.3 Clerk 
Mr. Justice William E. Hunt, Sr. , delivered the Opinion of 

the Court. 

Staley Continental and National Union Fire Insurance 

appeal the decision of the Workers' Compensation Court, 

awarding Donald J. Hartman, the claimant, $36,625.00 in 

permanent partial disability benefits, $13,690.60 in attorney 

fees and $1,915.29 in costs. We affirm and remand this case 

to assess reasonable attorney fees and costs in connection 

with this appeal and in accordance with S 39-71-611, MCA 

(1985). 

The two issues raised on appeal are: 

(1) Whether substantial, credible evidence supports the 

klorkers' Compensation Court's award to the claimant of 

$36,625.00; 

(2) Whether the Workers' Compensation Court erred in 

awarding the claimant $13,690.60 in attorney fees and 

$1,915.29 in costs. 

Staley Continental, a company that sells food, paper 

products and other supplies to restaurants, hospitals and 

nursing homes, hired Donald J. Hartman, the claimant, in 1980 

as a sales representative. Hartman's responsibilities for 

Staley Continental include developing and servicing new 

accounts in the Hi-Line area. Hartman drives over 750 miles 

a week in the course of his employment and works 12 to 15 

hours a day, four days a week. Half of his time is spent 

driving and seeing his clients and the other half is spent 

doing the necessary paper and computer work to ensure that 

the clients receive their orders. 

Hartman's starting salary with Staley Continental in 

1980 was approximately $1,100 per month. His income has 

gradually increased, and in 1987 he made approximately 

$63,000 plus substantial frjnqe benefits. Hartman 
contributes the majority of his success to the Hi-Line area, 

stating that the area is sparsely populated and generally 

ignored by food service industry people and therefore he is 

not faced with competition. He also contributes his success 

to his relationship with his customers which he has developed 

over many years. 

On September 22, 1980, while performing his duties for 

Staley Continental, Hartman was involved in an automobile 

accident. This accident resulted in lasting, but not 

disabling injuries. As a result of the 1980 accident, 

Hartman suffered injuries to his lower back and neck, hut 

Hartman testified that the accident caused no problems 

"whatsoe~rer" in his job performance for Staley Continental. 

Hartman filed a workerst compensation claim for this 

accident. This claim has been settled and is not at issue 

in this appeal. 

On October 28, 1985, Hartman was involved in a second 

automobile accident within the course and scope of his 

employment. This accident exacerbated Hartman's previous 

existing neck injury. A physician, Dr. Swift, examined 

Hartman after the 1985 accident and found that Hartman 

sustained a musculoligamentous sprain to his neck. As a 

result of this 1985 accident, Hartman claims that he is 

entitled, under §§ 39-71-705 through -708, MCA (1985), to 500 

weeks of permanent partial disability. 

On May 10, 1988, the Worker's Compensation Court issued 

its findings of fact and conclusions of law and concluded 

that Hartman was entitled to 250 weeks of permanent partial 

disability benefits at a rate of $146.50 per week, beginning 

on the date of injury. The court also concluded that Hartman 

was entitled to an award of reasonable costs and attorney 

fees pursuant to S 39-71-611, MCA (1985). On May 24, 1988, 

the court concluded that Hartman was entitled to reasonable 
attorney fees of $13,690.60 and $1,915.29 in costs. National 

Union Fire Insurance, the defendant, appeals. 

The first issue raised on appeal is whether substantial, 

credible evidence supports the Workers' Compensation Court's 

award to Hartman of $36,625.00. 

The court's findings, which are clearly set forth in the 

record, are based upon testimonies from Hartman, Dr. Swift, 

and two vocational rehabilitative counselors. At the October 

13, 1987 proceedings, Hartman testified that as a result of 

the 1985 accident the pain in his neck has increased; his 

daily work schedule exacerbates his neck injury; his driving 

has been hampered to the point that it has become dangerous 

for him to drive at times; and he has practically given up 

his hobbies and recreational activities because of the pain 

that such activities cause. In an attempt to alleviate his 

neck condition, Hartman testified that he has taken several 

different medications, undergone cervical traction and 

chiropractic manipulations, and has gone weekly, when allowed 

by his work schedule, to a physical therapist. 

None of the above treatments have been successful for 

Hartman in providing permanent relief for his neck condition. 

The physical therapist stated, in a letter to Dr. Swift, that 

" [p] rogress has been slow and variable, and it appears to he 

related to his work and the inconsistency of his therapv 

attendance which is because of his work schedule as well." 

Dr. Swift testified that, based on a reasonable degree of 

medical certainty, Hartman has one of three options if he is 

to qet some relief: (1) quit his present job and take on new 

employment that might not exacerbate his condition; (2) cut 

down on the number of hours that he works and the physical 

driving distances that he is presently required to do; or (3) 

transfer to some other job within his current company that 

would not require driving. Hartman testified that as a 
result of the detrimental emotional and physical consequences 

he suffers from the 1985 accident, he is not going to 

continue working at his present job. He also testified that 

the reason he has continued working after this accident, 

despite his injuries, is because of his financial obligations 

and because he did not become half-vested in his company's 

profit-sharing and retirement programs until May 20, 1988. 

In light of the above, the court found that Hartman cannot 

emotionally or physically continue with his present 

employment much longer. 

The Workers' Compensation Court appropriately applied 

the law in effect at the time of Hartman's accident. Trusty 

v. Consolidated Freightways (1984), 210 Mont. 148, 151, 681 

P. 2d 1085, 1087. The court then determined, based upon the 

information above, that Hartman was entitled to an award of 

permanent partial disability benefits pursuant to 

S§ 39-71-705 through -708, MCA (1985). The court first noted 

that permanent partial disability is defined in 

S 39-71-116(12) as: 

a condition resulting from injury as defined in 

this chapter that results in the actual loss of 

earnings or earning capability less than total that 

exists after the injured worker is as far restored 

as the permanent character of the injuries will 

permit. Disability shall be supported by a 

preponderance of medical evidence. 

The court then noted that in Montana a partially disabled 

claimant, injured prior to the enactment of the 1987 

amendments, may elect benefits under either § 39-71-703, MCA, 

to recover actual loss of earning capacity, or §§ 39-71-705 

through -708, MCA, which purportedly indemnifies a claimant 

for possible loss of future earning capacity, regardless of 

whether an actual loss in earning capacity is demonstrable. 

McDanold v. R.M. Transport, Inc. (1984), 208 Mont. 470, 
476-77, 679 P.2d 1188, 1191. The court recognized that in 

this case Hartman proceeded under SS 39-71-705 through -708, 

MCA . 

The specific statute pertaining to Hartman's type of 

permanent partial injury is S 39-71-706, MCA (1985). This 

statute provides in pertinent part that 

Ciln all other cases of permanent injury less than 

total not included in the schedule provided for in 

39-71-705, the compensation for partial disability 

shall bear such relation to the periods stated in 

the schedule provided for in 39-71-705 as the 

disabilities bear to those produced by the injuries 

named in the schedule or to partial disability (500 

weeks). 

The court recognized that the maximum allowable entitlement 

that a claimant could receive under this section for an 

injury occurring on October 28, 1985 is $146.50 per week for 

500 weeks which would total $73,250. 

In determining the degree to which Hartman's earning 

capacity has been impaired, the court appropriatelv 

considered Hartman's age, education, work experience, pain 

and disability, actual wage loss and possible loss of future 

earning capacity. Holton v. F.H. Stoltze Land and Lumber Co. 

(1981), 195 Mont. 263, 266, 637 P.2d 10, 12; Flake v. Aetna 

Life & Casualty Co. (1977), 175 Mont. 127, 129, 572 P.2d go?, 

909. The court recognized that at the time of the trial, 

Hartman was 39 years of age and had been a traveling salesman 

since 1979 and continues to work in that capacity. The court 

also recognized that he has a high school diploma and two 

years of college. 

The court then recognized that Hartman's 1987 salary 

recorded on his W-2 form was $68,000 plus. The court relied 

upon the testimonies of the two rehabilitative vocational 

counselors--Mark Williams, who was called by Hartman, and 
Jeanne Dussault, who was called by National Union Fire 

Insurance--to determine Martman's possible loss of future 

earning capacity. Dussault testified that one business she 

contacted expressed a possible interest in hiring Hartman and 

that one salesman for that company had made in excess of 

$100,000 a year. Hartman was subsequently called as a 

rebuttal witness and testified that he was familiar with the 

company referenced to by Dussault and that in his opinion, it 

would be an "absolute impossibility" for a sales 

representative to make over $100,000 for that company. In 

addition, Dussault testified on cross-exam that she has never 

placed an injured worker, with or without a college degree, 

in a position that pays over $60,000 a year. Dussault also 

testified that a management level position with Hartman's 

current employer, a possible alternative to Hartman's current 

position, has a base salary of $36,000 a year plus benefits 

or $45,000 a year if fringe benefits are included. Williams 

conducted an employers' survey, and based upon the responses, 

he testified that the average salesman earned approximately 

$25,000 to $26,000 per year and that in a best case scenario 

this figure would equal $38,000. In light of the above, the 

court found that Hartman will likely take a fifty percent 

reduction in his current income upon leaving his present 

position. 

When reviewing a decision by the Workers' Compensation 

Court, this Court's function is to determine whether 

substantial evidence exists to support the Workers' 

Compensation Court's findings of fact and conclusions of law. 

Coles v. Seven Eleven Stores (Mont. 1985), 704 P.2d 1048, 

1050, 42 St.Rep. 1238, 1240, Davis v. Jones (Mont. 19851, 701 

P.2d 351, 353, 42 St.Rep. 840, 843. In this case, the court 

found that although Hartman returned to work immediately 

after the 1985 accident and has not presentlv sustained 
actual loss of wages as a result of his injuries, he has 

nonetheless suffered pain and difficulties in his employment 

because of the accident. The court also found that Dr. 

Swift's testimony and Hartman's own testimony indicates that 

Hartman will have to make a change in his employment if he 

ever expects to he relieved of some of his pain and symptoms. 

Upon leaving his present position, the court found that 

Hartman will likely take a fifty percent reduction in his 

current income. The court then concluded that fifty percent 

was an appropriate disability factor on which to base 

Hartman's benefits for possible loss of earning capacity. In 

applying this figure, the court awarded Hartman 250 weeks of 

permanent partial disability benefits at a weekly rate of 

$146.50, beginning from the date of Hartman's 1985 accident. 

In view of the Workers' Compensation Court's findings of fact 

and conclusions of law, we hold that substantial credible 

evidence supports the Workers' Compensation Court's 

determination of Hartman's permanent partial disability 

benefits. 

The defendant, in an attempt to attack the basis of the 

court's findings, argues that the court "erroneously relied" 

on the deposition testimony from Hartman's two expert 

witnesses and then "misunderstood" oral testimony from its 

expert witness. We disagree. This Court is in as good a 

position as the Workers' Compensation Court to assess the 

weight given to deposition testimonv, Shupert v. Anaconda 

Aluminum Co. (Mont. 1985), 696 P.2d 436, 439, 42 St.Rep. 277, 

281-82, but this Court will defer to the Workers' 

Compensation Court's findings as to the weight and 

credibility of oral testimony. Frost v. Anaconda Co. (Mont. 

1985), 701 P.2d 987, 988, 42 St.Rep. 889, 891. In light of 

the evidence presented at the trial and discussed above, we 

hold that the Workers' Compensation Court did not erroneously 
rely on the deposition testimonies of Hartman's two expert 

witnesses--Dr. Swift and Mark Williams, the rehabilitative 

vocational counselor,--nor did the court misunderstand the 

defendant's expert witness's oral testimony. We conclude 

that the court properly considered and weighed all of the 

testimonies in determining Hartman's permanent partial 

disability benefits. 

The defendant also argues that substantial credible 

evidence presented at the trial supports its contentions that 

Hartman's salary will not decrease as a result of his 1985 

accident. However, as previously stated, this Court's 

function on review is to determine whether substantial 

credible evidence supports the lower court, and not, as the 

defendant argues, to determine whether substantial credible 

evidence exists to support contrary findings. Davis, 701 

P.2d at 353, 42 St.Rep. at 843. 

The second issue raised on appeal is whether the 

Workers' Compensation Court erred in awarding Hartman 

$13,690.60 in attorney fees and $1,915.29 in costs. 

On June 8, 1988, the Workers' Compensation Court issued 

an order awarding Hartman $13,690.60 in attorney fees and 

$1,915.29 in costs. In determining these amounts, the court 

relied upon 39-71-611, MCA (1985), the law in effect at the 

time of Hartman's accident. 

In asserting that the Workers' Compensation Court erred 

in awarding Hartman attorney fees, the defendant sets forth a 

series of novel "arguments." The defendant recognizes that 

successful claimants are entitled to attorney fees but argues 

that Hartman was not a "successful" claimant. Specifical-ly, 

the defendant argues that Hartman was not successful because 

Hartman contended he was entitled to $73,250.00 and the court 

awarded him only $36,625.00. The defendant further 

"supports" this "argument" by stating that its initial $5,000 
settlement offer more close1.y approximated the court's award 

of $36,625.00 than Hartman's request of $73,250.00, and 

therefore indicates that Hartman was not successful. 

We hold that defendant's argument set forth above lacks 

merit. The statute applied by the Workers' Compensation 

Court, 5 39-71-611, MCA (1985), merely states that a claimant 

who is "adjudged compensable by the workers' compensation 

judge or on appeal" is entitled to reasonable costs and 

attorney fees. In the present case, the Workers' 

Compensation Court found that Hartman was entitled to 

compensation under § 39-71-706, MCA (1985), and therefore 

entitled to reasonable attorney fees and costs. In Wight v. 

Hughes Livestock Co. (1983), 204 Mont. 98, 664 P.2d 303, this 

Court stated that the "objective of the statutes allowing 

attorney fees in compensation cases [is] to preserve in tact 

the eventual award recovered by the claimant for his 

impairment, by assessing in addition his attorney fees and 

costs against the insurer or employer." 204 Mont. at 108, 

664 P.2d at 309. By engaging in subjective evaluations of 

whether a claimant, who was awarded benefits by the Workers' 

Compensation Court, is "successful" according to defendant's 

definition would go against the objective of preserving the 

eventual award the claimant recovers, regardless of the 

actual amount recovered. We therefore disagree with 

defendant's definition of "successful" and hold that the 

plain meaning of S 39-71-611, MCA (1985), clearly allows a 

claimant, who is "adjudged compensable by the workers' 

compensation judge or on appeal," to recover reasonable costs 

and attorney fees. 

The defendant next argues that the Workers' Compensation 

Court incorrectly applied 39-71-611, MCA (1985), when 

assessing Hartman's attorney fees and costs. Section 

39-71-611, MCA (1985), applies when an insurer denies 
liability. The defendant argues that the appropriate statute 

in this case is S 39-71-612, MCA (1985), which applies when 

an insurer acknowledges liability but disputes the amount of 

compensation due the claimant. The defendant thus argues 

that they did not deny liability, but merely disputed the 

amount of compensation sought by Hartman and therefore the 

applicable statute in this case to determine attorney fees 

and costs is S 39-71-612, MCA (1985). The record does not 

support the defendant's factual assertions. In both the 

pretrial order and the defendant's proposed conclusions of 

law, the defendant asserts that the claimant is not entitled 

to any compensation. In addition, the defendant fails to 

argue how the application of § 39-71-612, MCA (1985), would 

cause a different assessment of attorney fees and costs in 

this case. We therefore hold that the Workers' Compensation 

Court properly applied § 39-7'1-611, MCA (1985), in assessing 

Hartman's attorney fees and costs. 

The defendant also argues that the court should have 

used the contingency fee agreement between Hartman and his 

attorney to assess the attorney Fees. In assessing the 

amount of reasonable attorney fees and costs, the court 

relied upon 5 39-71-614, MCA (1985). This statute does not 

state that a contingency fee agreement between a claimant and 

the attorney limits a court's determination of the amount of 

reasonable attorney fees awarded to a claimant. To the 

contrary, the statute requires that the attorney's fee "must 

be based exclusively on the time spent by the attorney in 

representing the claimant on the issues brouqht before the 

workers' compensation judge." Although the statute does not 

restrict the claimant and the attorney from entering into a 

contingency fee arrangement, the statute also does not tie a 

judae's hand by stating that a contingency fee agreement 
determines the upper limit of what constitutes reasonable 

attorney fees in a workers1 compensation case. 

The defendant also relies upon McHinley v. American 

Dental Manufacturing Co. (Mont. 1988), 754 P.2d 831, 45 

St.Rep. 892, to assert that a court must pay attorney fees 

based upon the difference between a settlement offer and the 

amount awarded by the court. The reliance by the defendant 

on McKinley is misplaced. In McKinley, this Court 

interpreted language in S; 39-71-612, MCA (1983), that the 

legislature subsequently repealed in 1985. Hartman' s 

accident occurred in 1985, therefore, the 1985 amendments 

apply in this case. We therefore hold that the Workers' 

Compensation Court properly assessed the attorney fees and 

costs awarded to Hartman. 

We affirm and remand this case, pursuant to Hartman1s 

request and in accordance with S 39-71-611, MCA, to the 

Workers' Compensation Court to award attorney fees and costs 

associated with this appeal. 

We Concur: 

Chief Justice 

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Justices 

- 12 - 
Mr. Justice L. C. Gul-brandson, dissenting. 

T respectfully dissent. 

In mv opinion, the permanent partial benefit award of 

$146.50 per week for 250 weeks is, at best, premature, and is 

based on a flawed computation methodologv. 

The record discloses that the claimant was injured on 

October 28, 1985, when he lost control of his car, received 

emergency medical treatment consisting of a muscle relaxant 

and a pain medication, was released from the hospital the 

same date, returned to work the following day, has had no 

wage loss, and has increased his gross wage income each year 

from $56,318.30 in 1985 to $68,000 in 1987. 

The Workers ' Compensation Court Judge, in his Findings 

and Conclusions of Law, included the following: 

The Court finds that the medical 

testimony and credible vocational 

evidence indicates that Mr. Hartman has a 

potential loss of future earning 

capacity. . . 

This testimony clearly indicates that 

claimant is going to have to make a 

change in his employment if he ever 

expects to be relieved of some of his 

pain and symptoms. 

The question, then, is: Can 

claimant make a change in his employment 

without experiencing a decline in his 

income? . . . 

Given the above facts, this Court 

finds that should claimant leave his 

current employment, it is likely that it 

would be for a position paying $36,000.00 

a year, or approximately 50 percent. of 
his 1987 income of $68,000.00. 

Furthermore, this Court holds that fifty 

percent is an appropriate disability 

factor on which to base claimant's 

benefits for potential loss of earning 

capacity. In applying this figure, 

claimant is entitled to 250 weeks of 

permanent partial disability benefits at 

a weekly rate of $146.50. These benefits 

are to be paid from the date of 

claimant's industrial accident. 

(Emphasis added) 

In my opinion, based on the deposition testimony, 

uncontroverted facts and pertinent statutes, the above quoted 

excerpts from the Findings and Conclusions are not legallv 

supportable. 

The medical record, in deposition form, is replete with 

references to the failure of the claimant to comply with the 

medically recommended exercise regime, which was based upon 

the knowledge that claimant would be driving long distances 

and working long hours durinq his four day work week. 

Testimony at trial indicated that claimant had six to eight 

weeks of paid sick leave available to him which he did not 

utilize for phvsical therapv purposes. Further, evidence 

disclosed that claimant took extended vacations to Seattle, 

Washington and Edmonton, Canada by motor vehicle when less 

strenuous activity might have aided his recovery. I find. 

erroneous the court's conclusion that "Claimant is going to 

have to make a change in his employment if he ever expects to 

be relieved of some of his pain and symptoms." 

Regarding the possible change of jobs in the future, 

the claimant stated: "I'm just trying to delay it until my 

very expensive teenagers get out of the home, and then I'm 

going to do something else." 
The claimant having remained on the job for the past 

three years, with increased earnings each year, and with the 

possibility of the claimant remaining in that same position 

for the next several years, it could only be through 

conjecture and speculation that the court found a fifty 

percent disability factor "on which to base claimant's 

benefits for potential loss of earning capacity." 

It is therefore my opinion that the award is premature 

and, as the court correctly stated: "Should claimant 

experience an actual diminution of his income for which he 

has not been compensated, he may withdraw his Sectior, 705 

election in favor of Section 703, for loss of a 

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Mr. Chief Justice J. A. Turnage: 

I concur in the foregoing dissent of Mr. Justice Gulbrandson. 

8: Chief Justice