No. 86-364 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1986 

MAREE S. HUNTER, 

Claimant and Respondent, 

GIBSON PRODUCTS OF BILLINGS HEIGHTS, 

INC. , 

and 

GLACIER GENERAL ASSURANCE COMPANY, 

and WESTERN GUARANTY SERVICES FUND, 

Defendant and Appellant. 

APPEAL FROM: The Workers' Compensation Court of the State of 

Montana, The Honorable Timothy Reardon, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Mulroney, Delaney & Scott; P. Mars Scott, Missoula, 

Montana 

For Respondent: 

Neil S. Keefer, Billings, Montana 

Submitted on Briefs: Oct. 23, 1986 

Decided: December 30, 1986 

Filed: DEC 3 0 1986 

Clerk 
Mr. Justice Frank R. Morrison, Jr. delivered the Opinion of 

the Court. 

Defendant Glacier General Assurance Company appeals the 

summary judgment awarded by the Workers' Compensation Court 

in favor of claimant Maree Hunter. We affirm. 

In 1983, claimant elected to begin receiving social 

security monthly retirement benefits prior to reaching age 65 

as provided for by the Social Security Act. In 1984, 

claimant obtained a part-time job at Gibson's Garden Center 

in Billings Heights, Montana. On May 29, 1984, claimant 

severely injured her back while working at Gibson's. 

Claimant filed a claim for workers compensation. Glacier 

General Assurance Company (Glacier) accepted the claim and 

began paying temporary total disability benefits from the 

date of injury in the amount of $64.49 per week. 

On February 6, 1986, claimant's attorney wrote a letter 

to one of Glacier's adjusters stating that he believed 

Glacier was liable for 500 weeks of permanent partial 

disability benefits upon claimant's reaching age 65. Glacier 

responded that it would cease paying benefits on September 

23, 1986, the date claimant reached 65. Glacier's position 

was that when a claimant who is receiving temporary or 

permanent total disability benefits reaches the age of 65 and 

social security benefits are converted by law to retirement 

benefits, the claimant is considered to be retired and no 

longer entitled to such disability benefits. 

Claimant filed a petition for hearing with the Workers' 

Compensation Court on April 16, 1986. Claimant requested 

that the court convert her temporary total disability 

benefits to permanent partial benefits commencing September 

23, 1986, award a lump sum, plus costs and attorneys' fees, 

and increase the award by 20% for Glacier's refusal to pay. 
Claimant moved for summary judgment on all issues except the 

lump sum. The court granted summary judgment in favor of 

claimant and found that Johnson v. Peter Kiewit & Sons, Inc., 

WCC No. 8411-2704 (1985) controlled. In Johnson, the court 

ruled that § 39-71-710, MCA, entitles a claimant who has been 

receiving permanent total disability benefits to receive 

permanent partial disability benefits once the claimant 

reaches the age of 65. 

The court noted that the 20% penalty was appropriate in 

this instance because Glacier chose to ignore the holding in 

Johnson, supra. Glacier filed a motion for reconsideration 

which was denied by order dated July 25, 1986. Glacier 

appeals the decision of the Workers' Compensation Court. We 

address the following issues: 

1) Did the Workers' Compensation Court correctly 

interpret $ 39-71-710, MCA, in awarding claimant permanent 

partial disability benefits upon reaching age 65 when she had 

been receiving temporary total disability benefits prior to 

that time and had also been receiving reduced social security 

retirement benefits? 

2) Did the Workers' Compensation Court abuse its 

discretion in awarding a twenty percent penalty to claimant 

pursuant to 5 39-71-2907, MCA? 

Glacier asserts Johnson, supra, is distinguishable from 

the present case and the Workers' Compensation Court has 

stretched construction of .§ 39-71-710, MCA, beyond its 

breaking point. Section 39-71-710, MCA, provides: 

If a claimant is receiving total disability 

compensation benefits and the claimant receives 

retirement social security benefits or disability 

social security benefits paid to the claimant are 

converted by law to retirement benefits, the 

claimant is considered to be retired and no longer 

in the open labor market. When the claimant is 

considered retired, the liability of the insurer is 

ended for payment of such compensation benefits. 
This section does not apply to permanent partial 

disability benefits. Medical benefits are 

expressly reserved to the claimant. 

In Johnson, the claimant was 67 years of age at the time 

of injury and was receiving social security retirement 

benefits. Claimant began receiving temporary total 

disability benefits but the insurance company terminated 

payments on the basis that claimant was not entitled to 

benefits pursuant to § 39-71-710, MCA, because she was 

receiving social security retirement benefits and thus 

considered retired. The Workers' Compensation Court 

disagreed, stating: 

A plain reading of MCA § 39-71-710, coupled with a 

review of the legislative history of this statute, 

persuades the Court that the legislature fully 

intended to provide that a person receiving social 

security retirement benefits would not be entitled 

to receive permanent total disability benefits 

under the Workers' Compensation Act. 

It is equally clear that the legislature intended 

to leave temporary total and partial disability 

benefits in place "to properly compensate a worker 

for temporary disability and for physical 

impairment that may exist. " (Memora.ndum by the 

Workers' Compensation Division regarding Senate 

Bill No. 64, submitted by Laury Lewis on January 

29, 1985.) 

. . . [Elquity demands that individuals in the 

claimant's situation be compensated to some degree 

for injuries suffered while working. Otherwise, a 

nonsensical result would follow: A "retired" 

individual who is only slightly injured would 

qualify for workers' compensation benefits, while a 

"retired" individual who suffers a permanently 

totally disabling injury would not. 

. . . If § 39-71-710, MCA, were strictly construed, 

[claimant's] in jury would be completely 

noncompensable. 

To avoid this unjust result, this Court concludes 

that the permanently totally disabled claimant is 

entitled to receive permanent partial disability 

benefits pursuant to MCA § 39-71-710. The Court is 

aware that it is stretching its mandate of liberal 

construction, but it has not stretched it to the 

breaking point. 

In the present case, cl-aimant was 62 years of age at the 

time of her injury. She received approximately 24 years of 
temporary total benefits prior to reaching age 65. Glacier 

contends that while the result in Johnson was fair, the 

present case is distinguishable because claimant was injured 

prior to being "retired" under S 39-71-710, MCA, and did 

receive compensation for the injury. Further, that the 

legislative intent of S 39-71-710, MCA, was to terminate 

total disability benefits at age 65 because social security 

retirement benefits would thereafter be adequate income for 

the retired worker. 

Claimant contends S 39-71-710, MCA, does not address the 

specific facts of this case. However, liberal construction 

of the statute, as mandated by § 39-71-104, MCA, results in 

the conclusion claimant is entitled to an award of permanent 

partial benefits upon reaching the age of 65. 

Section 39-71-710, MCA, explicitly provides: "This 

section does not apply to permanent partial disability 

benefits." In the present case, claimant, who had been 

receiving temporary total disability benefits, petitioned the 

Workers1 Compensation Court for an award of permanent partial 

benefits commencing on her 65th birthday. 

As noted by the Workers' Compensation Court in Johnson, 

supra, strict construction of S 39-71-710, MCA, would result 

in an absurdity: A worker injured past the age of 65 may 

recover compensation if partially disabled but not if totally 

disabled. We agree with the court's interpretation of 

S 39-71-710, MCA, allowing for payment of permanent partial 

disability benefits to a permanently totally disabled 

claimant who has reached the age of 65. 

The next issue raised by Glacier is whether the Workers' 

Compensation Court abused its discretion in assessing a 20% 

penalty against Glacier. Pursuant to S 39-71-2907, MCA, the 

workers' compensation judge may increase the award to the 
claimant by 20% upon a finding of unreasonable delay or 

refusal to pay by the insurer. In this instance, the judge 

assessed the penalty against Glacier because it chose to 

litigate an issue which had been clearly decided in Johnson, 

supra, and Glacier's attorney was aware of that decision 

since he represented the claimant in Johnson. 

Whether the insurer's action is unreasonable is a 

question of fact and on appeal a finding of unreasonableness 

will not be overturned if supported by substantial evidence. 

Coles v. Seven Eleven Stores (Mont. 1985), 704 P.2d 1048, 42 

St.Rep. 1238. Glacier contends the award was not proper 

because the present case is distinguishable from Johnson, 

supra. While the issue is a close one, we find substantial 

evidence to uphold the penalty assessment. Though the facts 

in Johnson were slightly different than the present case, the 

court's interpretation of S 39-71-710, MCA, in Johnson, was 

clearly applicable in this instance and there is evidence to 

support the Workers' Compensation Court finding that Glacier 

should not have contested the award of permanent partial 

disability benefits. 

Judqment for claimant is affirmed. 

We concur: 

ief 3Cstice 

Mr. Justice Fred J. Weber dissents as follows: 

My dissent is aimed primarily at our Montana Legislature. I hope the Legislative Council and the Legislature 

itself may be able to address the contradictions present in 

$5 39-71-710, MCA. That contradictory statute is set forth in 

full in the majority opinion. 

Section 39-71-710, MCA, provides that if a claimant is 

receiving total disability compensation benefits and attains 

65 years of age so that he becomes entitled to receive retirement social security benefits, then his total disability 

compensation benefits stop, and the liability of the insurer 

is ended for payment of such benefits. The statute does not 

explain the reasoning behind the complete elimination of a 

right to receive total disability compensation benefits. The 

succeeding sentence provides that the section does - not apply 

to permanent partial disability benefits. These provisions 

contradict each other. If a claimant is totally disabled so 

that the claimant becomes entitled to receive total disability benefits for the rest of his life, on what theory can that 

totally disabled person be found no longer entitled to benefits, while a partially disabled person may still receive 

disability benefits? 

The section accords unequal treatment to those who are 

totally disabled and those who are partially disabled. As 

this case demonstrates, it suggests a legislative policy 

which would prohibit any type of disability benefits to a 

person who is totally disabled when working after he attains 

65 years of age. As an example, if a 66 year old person 

receiving social security retirement benefits becomes totally 

disabled while working, that person is apparently not 
entitled to total disability benefits. I cannot imagine that 

was the intention of the legislature at the time of the 

adoption of this section. I therefore request the legislature to consider the inequalities and contradictions contained in the present section. 

In the majority opinion, the defendant is charged a 20% 

penalty because of a claimed unreasonable delay in the making 

of payment. As I read 5 39-71-710, MCA, the facts of the 

present case come precisely within the wording of the first 

two sentences of that section. Those sentences provide that 

if a claimant is receiving total disability compensation 

benefits (as was the claimant here) and the claimant then 

receives retirement social security benefits (as the claimant 

was about to receive) then the claimant is considered to be 

retired and the liability of the defendant insurer is ended 

for the payment of such compensation benefits. If that 

section were construed to mean what it says, upon attaining 

age 65, claimant was no longer entitled to receive his compensation benefits from the defendant. The majority has 

chosen to accept the Workers' Compensation Court's decision 

which disregarded the express wording of the statute and 

concluded that it would be unfair to so terminate a totally 

disabled claimant. Without the benefit of statutory authority, both the Workers' Compensation Court and the majority 

have concluded that a claimant who is totally disabled can 

seek permanent partial disability benefits and obtain the 

same even in the absence of any statutory authority for doing 

so. The rationale is that such partial disability benefits 

are presumably less expensive than total disability benefits 

so the Workers' Compensation Court can award the same. I 

admire the concern for the claimant which has resulted in 
this construction. Clearly it is more fair than a termination of all benefits. On the other hand, I find it totally 

inappropriate to charge a penalty of 20% against an insurer 

who read the statute to mean what it says.