IN THE SUPREME COURT OF THE STATE OF MONTANA 

1993 

ROBERT D. FIELD, 

petitioner and Appellant, 

-vsSEARS, ROEBUCK & COMPANY, 

Defendant and Respondent. 

GLL. .n tF S;IPHEME COURT 

55 ATE. OF MONTANA 

APPEAL FROM: The Workers1 Compensation Court, 

The Honorable Timothy W. Reardon, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Geoffrey R. Keller, Matovich, Addy & Keller, 

Billings, Montana 

For Respondent: 

J. Michael Young and Steven T. Potts, ~ardine, 

Stephenson, Blewett and Weaver, Great Falls, Montana 

Filed: 

Submitted on Briefs: August 6, 1992 

~ecided: February 25, 1993 
Justice Karla M. Gray delivered the Opinion of the Court. 

Robert D. Field appeals from the Findings of Fact, Conclusions 

of Law and Judgment of the Workers' Compensation Court denying 

attorney's fees and costs for pursuit of permanent total disability 

benefits, and refusing to impose a penalty against Sears, Roebuck 

& Company. We affirm. 

We restate the issues on appeal as follows: 

1. Did the Workers' Compensation Court err in denying 

claimant's request for attorney's fees and costs for pursuit of 

permanent total disability benefits? 

2. Did the Workers' Compensation Court err by failing to 

impose a penalty for unreasonable delay in conceding permanent 

total disability? 

On December 22, 1980, claimant Robert D. Field was injured 

while driving a repair truck for Sears, Roebuck & Company (Sears), 

his employer. Sears paid temporary total disability benefits from 

the date of the accident until claimant returned to work. 

Claimant's employment with Sears terminated on July 19, 1984. 

At that time, claimant requested reinstatement of temporary total 

disability benefits. Sears refused. On March 13, 1985, Sears 

offered claimant $15,000 as a full and final compromise settlement. 

Claimant rejected this offer and demanded that Sears place him on 

temporary total disability retroactive to July, 1984. Sears agreed 

to make the payments under a reservation of rights. 

On March 1, 1991, claimant requested that Sears formally 
accept his claim as a claim for permanent total disability. Sears 

responded that it was not prepared to concede permanent total 

disability and requested additional vocational testing. The 

results of that testing were received on June 5. On June 18, Sears 

asked claimant to make a settlement offer; claimant responded on 

July 10 with a demand for $15,000, $72,000 in attorney's fees and 

an annuity paying $700 per month for twenty years. 

Nine days later, on July 19, claimant filed a petition for 

hearing with the Workerst Compensation Court on the issues of 

permanent total disability; a lump sum advance for home repairs, 

vehicle replacement and debts; attorney's fees; and penalty. Sears 

responded, in part, by denying that claimant was permanently 

totally disabled. At the pretrial conference on August 22, Sears 

continued to deny permanent total disability benefits; the hearing 

was set for September 23. Sears conceded permanent total 

disability on August 29 and filed an amended response reflecting 

the concession. The hearing was continued to, and held on, October 

7, 1991. 

The Workerst Compensation Court heard testimony regarding the 

lump sum advance and the events leading to Sears' concession of the 

permanent total disability issue. The Workers' Compensation Court 

awarded claimant a lump sum conversion and attorney's fees relative 

to the lump sum issue. It denied attorney's fees and costs for 

claimant's pursuit of permanent total disability benefits under 

5 39-71-612, MCA (1979), and declined to award a penalty for 

unreasonable delay under 5 39-71-2907, MCA (1979). 
Did the Workers' Compensation Court err in denying claimant's 

request for attorney's fees and costs for pursuit of permanent 

total disability benefits? 

In its Conclusions of Law, the Workers' Compensation Court 

determined that claimant was not entitled to attorney's fees and 

costs for pursuit of permanent total disability benefits under 

5 39-71-612, MCA (1979). Section 39-71-612, MCA (1979), provides: 

If an employer or insurer pays or tenders payment of 

compensation under chapter 71 or 72 of this title, but 

controversy relates to the amount of compensation due and 

the settlement or award is greater than the amount paid 

or tendered by the employer or insurer, a reasonable 

attorney's fee as established by the division or the 

workers' compensation judge if the case has gone to a 

hearing, based solely upon 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. 

Although the legislature has amended fr 39-71-612, MCA, since 1979, 

we determine whether a claimant is entitled to attorney's fees 

under the statute in effect on the date of injury. Hilbig v. 

Central Glass Co. (1991), 249 Mont. 396, 399, 816 P.2d 1037, 1039. 

The Workers' Compensation Court determined that this case was 

factually similar to Lasar v. E.H. Oftedal & Sons (1986), 222 Mont. 

251, 721 P.2d 352, and applied the Lasar reasoning in concluding 

that claimant was not entitled to attorney's fees and costs based 

on pursuit of permanent total disability benefits under fr 39-71- 

612, MCA (1979). The Workers' Compensation Court correctly applied 

Lasar . 

In Lasar, we stated that the attorney fee statute at issue, 

identical to that before us, requires a claimant to satisfy two 

conditions before recovering attorney's fees: (1) the amount of 
compensation must be in controversy; and (2) the amount awarded 

must exceed the amount paid or tendered. m, 222 Mont. at 253, 

721 P.2d at 354. In Lasar, the insurer conceded permanent total 

disability approximately three weeks prior to trial. We concluded 

that "[s]ince the insurer agreed on the amount of compensation due, 

no controversy existed at trial and the amount awarded was the same 

as that agreed upon as due." Lasar, 222 Mont. at 253, 721 P.2d at 

354. Like the insurer in Lasar, Sears conceded claimant's 

permanent total disability and corresponding compensation due 

approximately three weeks prior to the original trial date (and 

five weeks before the hearing actually occurred). Neither the 

extent of claimant's disability nor the amount of compensation due 

him for that disability was in issue at any time thereafter or when 

claimant's petition proceeded to hearing. Therefore, claimant 

failed to satisfy the first condition to attorney's fees required 

by 5 39-71-612, MCA (l979), and Lasar, that the amount of 

compensation be in controversy. 

Claimant offered several theories to show that the amount 

awarded exceeded the amount paid or tendered--the second condition 

required by 5 39-71-612, MCA (1979), and Lasar. Claimant contended 

he was entitled to attorney's fees based on the difference between 

the $15,000 settlement offer and the permanent total disability. 

Alternatively, claimant contended he was entitled to attorney's 

fees based on the difference between "permanent partial disability" 

he alleges Sears paid between June 5 and August 29 and the 

permanent total disability. Because claimant fails to meet the 
first condition of 5 39-71-612, MCA (1979), we do not address the 

second condition. 

Claimant attempts to distinguish Lasar by focusing on the 

interval of time between discovery of the information on which 

concession subsequently was based and actual concession of the 

issue. In Lasar, the insurer conceded benefits within two weeks of 

deposing claimant. Here, Sears had all the information it later 

relied on to concede total permanent disability benefits on June 5, 

when it obtained the results of the vocational testing; it conceded 

the issue on August 29. According to claimant, this is the pivotal 

time period which distinguishes the present case from Lasar. 

It is true that, here, Sears had possession of the information 

upon which it ultimately conceded the permanent total disability 

issue longer than the insurer in Lasar. The time period between 

completion of discovery upon which concession was made and the 

concession itself was not the basis of our decision in Lasar, 

however. We focused in Lasar on the three week period remaining 

after the concession and before trial and on the fact that the 

concession occurred before additional discovery or new 

documentation on the conceded issue was undertaken. The facts 

which formed the basis for our decision in Lasar are similar to 

those in the case before us; if anything, the facts before us are 

more compelling. Here, the concession occurred some five weeks 

before the hearing and no discovery was undertaken by either party 

on the permanent total disability issue between June 5 and Sears' 

concession on August 29. Subsequent to Lasar, we have reiterated 
that there must be a controversy concerning disability that is 

later judged compensable before attorney's fees can be awarded 

under 5 39-71-612, MCA. Komeotis v. Williamson Fencing (1988), 232 

Mont. 340, 345, 756 P.2d 1153, 1156. As in Lasar, the insurer in 

Komeotis conceded disability benefits prior to the hearing. We 

affirmed the Workers1 Compensation Court's denial of attorney's 

fees because disability benefits did not remain at issue for 

adjudication by the court. 

Claimant relies on Krause v. Sears Roebuck & Company (1981), 

197 Mont. 102, 641 P.2d 458, for the proposition that attorney's 

fees properly are awarded absent an adjudication of permanent total 

disability. Claimant misreads Krause. 

In Krause, claimant was receiving temporary total disability 

benefits from Sears. He petitionedthe Workers' Compensation Court 

for permanent total disability benefits converted into a lump sum 

award. Sears denied permanent total disability. Discovery was 

completed on all issues and the case proceeded to hearing. Only 

after the hearing had begun did Sears concede permanent total 

disability. Notwithstanding the concession, claimant presented 

proof on his permanent total disability in conjunction with his 

lump sum conversion request. The disability issue having remained 

in controversy into the adjudication phase of the proceedings and 

proof having been submitted on the issue, the Workers1 Compensation 

Court entered a conclusion of law on claimant's permanent total 

disability. It denied the lump sum conversion, relying on evidence 

of claimant's disability which would prevent him from making a 
success of the project for which the lump sum was sought. It also 

refusedto award attorney's fees on the disability issue. Claimant 

appealed the denial of attorney's fees, contending that he 

prevailed on the issue. 

We held on appeal that, because the court concluded that the 

claimant was suffering from a permanent total disability, he was 

entitled to attorney's fees under 5 39-71-612, MCA, in relation to 

his proof that he was permanently totally disabled. While our 

holding was not explicit, it was premised on the Workers' 

Compensation Court's reliance on claimant's proof and its 

conclusion that claimant was permanently totally disabled; the 

issue was, in fact, adjudicated. 

Here, Sears conceded permanent total disability benefits three 

weeks before the original hearing date and some five weeks before 

the actual hearing. Neither discovery nor proof was required on 

the issue. No controversy over claimant's disability or 

corresponding compensation was adjudicated at the hearing. Thus, 

the facts which formed the basis for our decision in Krause are not 

present here. We hold that the Workers' Compensation Court did not 

err in denying claimant's request for attorney's fees on the 

permanent total disability issue. 

Did the Workers1 Compensation Court err by failing to impose 

a penalty for delay in conceding permanent total disability? 

The Workers' Compensation Court refused to impose a penalty 

against Sears for unreasonable delay under 5 39-71-2907, MCA 

(1979), which provides: 
Increase in award for unreasonable delay or refusal to 

pay. When payment of compensation has been unreasonably 

delayed or refused by an insurer, either prior or 

subsequent to the issuance of an order by the workers' 

compensation judge granting a claimant compensation 

benefits, the full amount of the compensation benefits 

due a claimant, between the time compensation benefits 

were delayed or refused and the date of the order 

granting a claimant compensation benefits, may be 

increased by the workers9 compensation judge by 20%. . . 

Claimant argues that Sears had all the information it used to 

concede permanent total disability benefits on June 5, when it 

received the results of the vocational testing. Thus, according to 

claimant, its delay in conceding the issue until August 29 was 

unreasonable. 

Unreasonable delay is a question of fact to be determined by 

the trier of fact; we will not reverse the Workers' Compensation 

Court's decision on awarding a penalty if the decision is supported 

by substantial, credible evidence. Jaenish v. Super 8 Motel 

(1991), 248 Mont. 383, 389-90, 812 P.2d 1241, 1243. In addition, 

the penalty statute requires unreasonable delay or refusal in 

payment of compensation prior or subsequent to an order granting 

compensation benefits. 

The Workers' Compensation Court found that Sears opened 

negotiations toward final resolution shortly after it obtained the 

vocational test results on June 5. Claimant made a settlement 

demand on July 10, and filed his petition for hearing on July 19. 

Sears conceded claimant's permanent total disability on August 29, 

1991. Substantial evidence exists to support the Workers9 

Compensation Court9s determination that the facts of this case do 
not warrant a penalty under 3 39-71-2907, MCA (1979). Furthermore, 

compensation was being paid throughout the period from June 5 to 

August 29; no delay or refusal in pavment, as required by the 

statute to support a penalty award, occurred. Additionally, no 

award of permanent total disability benefits was made by order of 

the Workerst Compensation Court that would serve as a basis for a 

penalty under 3 39-71-2907, MCA (1979). We hold that the Workerst 

Compensation Court did not err in refusing to award a penalty 

pursuant to 5 39-71-2907, MCA (1979). 

1 

Affirmed. 

Chief Justice 

Justices 
Justice Terry N. Trieweiler dissenting. 

I dissent from the opinion of the majority. 

In Lasarv. E. H. Oftedal&Solls (l986), 222 Mont. 251, 721 P.2d 352, 

and again in Komeocisv. WilliamsonFencing (1988), 232 Mont. 340, 756 P.2d 

1153, this Court blatantly ignored the plain language of 

§ 39-71-612, MCA (1979), to conclude that a court award of benefits 

is a condition to an award of attorney fees. In this case, the 

majority blindly follows its prior decisions without any analysis 

of the plain terms of the attorney fee statute. 

Section 612 does not simply provide that when the court's 

award is greater than the amount offered, the claimant is entitled 

to an attorney fee. It clearly provides that when the ultimate 

settlement is greater than the amount originally offered, the 

claimant is entitled to recover his attorney fees which were 

incurred to pursue his claim for the full amount of his benefits. 

That section states: 

If an employer or insurer pays or tenders payment of 

compensation under chapter 71 or 72 of this title, but 

controversy relates to the amount of compensation due and 

the settlement or award is greater than the amount paid 

or tendered by the employer or insurer, a reasonable 

attorney's fee as established by the division or the 

workers' compensation judge if the case has gone to a 

hearing, based solely upon 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. [Emphasis added.] 

Section 39-71-612 (1) , MCA (1979) . 

In this case, claimant demanded that he be paid permanent 

total disability benefits on March 1, 1991. That demand was 
rejected by defendant on ~pril 4, 1991. Claimant filed his 

petition for permanent total disability benefits on July 19, 1991, 

and in its answer dated August 7, 1991, defendant denied that 

claimant was permanently totally disabled. Defendant continued in 

that denial as late as the pretrial conference on August 22, 1991, 

Therefore, according to our prior case law, there was a controversy 

over the amount of compensation due. 

We held, in Kraltsev. SearsRoebuck& Company (1982), 197 Mont, 102, 

641 P.2d 458, that: 

The basic controversy between the parties was one 

dealing with the difference between the amount of 

benefits tendered and the amount of benefits awarded, and 

the issue of whether the claimant's disabif ity was 

permanent was the foundation for that controversy. 

Because the court concluded that the claimant was 

suffering from a permanent total disability, we hold that 

under section 39-71-612, MCA, the claimant is entitled to 

attorney fees and costs in relation only to his proof 

that he was permanently totally disabled. 

In other words, we have previously held that when the 

controversy is whether claimant is permanently or temporarily 

disabled, that is a controversy relating "to the amount of 

compensation due1' within the contemplation of 5 39-71-612, MCA 

(1979) , As of August 22, 1991, there was such a controversy in 

this case. 

On August 29, 1991, that issue was settled when defendant 

conceded that claimant was permanently totally disabled. On that 

date, then, there was a settlement for benefits greater in value 

than the benefits that had been previously tendered, and according 
to the plain language of 39-71-612, MCA (1979) , claimant was 

entitled to an award of attorney fees that were incurred to recover 

the full amount of his benefits. 

The majority opinion completely ignores the language in the 

attoxney fee statute which provides that when a settlement is 

greater than the amount originally offered, claimant is entitled to 

recover an attorney fee. This Court ignored that language in the 

Lasar case; it ignored it in the Komeofis case; and like an ostrich 

with its head buried in the sand, the majority continues to ignore 

that language in this case for the apparent reason that its 

erroneous precedent is more important than the plain language of 

the statute. 

I would reverse this Court's decisions in Lasar and Komeotis and 

reverse the trial court's refusal to grant attorney fees in this 

case. 

I would also reverse the Workerst Compensation Court's refusal 

to award the statutory penalty to claimant pursuant to 

5 39-71-2907, MCA (1979). That statute provides that when payment 

of compensation has been unreasonably delayed or refused by an 

insurer, a penalty equal to 20 percent of those benefits may be 

awarded. In this case, the insurer's conduct was unreasonable in 

two respects. 

According to the testimony of claimant's claims representative 

who handled this claim, she had all of the vocational and medical 

information with which to make an evaluation of claimant's 
disability by June 5, 1991. Cathy Andersen testified that she had 

a medical report concluding that claimant was unable to work in any 

capacity as early as April 19, 1991. She acknowledged that she had 

vocational evaluations and psychological reports by June 5, 1991, 

which indicated that claimant has the equivalency of a sixth grade 

education, that he has a learning disability, and that he was not 

a candidate for retraining. Furthermore, she admitted that she 

received no additional medical or vocational information from that 

date until Sears conceded permanent total disability on August 29, 

1991, And yet, defendant's attorney continued to take the position 

in his answer to claimant's petition, and again at the time of the 

pretrial conference, that claimant was not permanently totally 

disabled. Obviously, defendant continued to deny liability for the 

full extent of claimant's disability, even though it was fully 

aware of claimant's condition, in order to strengthen its 

bargaining position for purposes of settling claimant's claim. In 

doing so, I conclude that it acted unreasonably. 

Furthermore, defendant acted unreasonably when, without any 

basis in fact, it refused to convert a portion of claimant's future 

disability benefits to a lump sum pursuant to § 39-71-741, MCA. 

This is apparent from the following finding entered by the trial 

court : 

Defendant has designated Cathy Andersen as its 

claims adjuster in Montana relative to this case. 

However, Andersen testified that she was not privy to 

petitioner's affidavit regarding a lump sum, nor had she 

seen petitioner's discovery responses, nor had she read 

petitioner's deposition. Hence, she knew of no reasons 

why petitioner's lump sum request had not been granted, 
and she had absolutely no information as to whether 

payment of the lump sum request was in petitioner's best 

interest. Moreover, Andersen had no explanation 

regarding Sears9 refusal to concede permanent total 

disability until three weeks before the original trial 

setting. It was apparent at trial that only defense 

counsel and an adjuster in Linwood, Washington, were 

making the decisions and denying petitioner's requests. 

Andersen had little, if any, authority regarding 

petitioner's file. [Emphasis added.] 

As pointed out by the Workers1 Compensation Court, 

24.29.804(1) ARM, provides as follows: 

Every insurer is required to designate at least one 

adjuster, maintaining an office in Montana, which shall 

pay compensation when due and which shall have authority 

to settle claims. 

The adjuster for defendant who had the responsibility to pay 

compensation which was due with regard to this claim was Cathy 

Andersen, and yet, defendant's attorney did not even provide her 

with the information that formed the basis for claimant's claim. 

There is no way she could have acted reasonably. The fact that she 

did not is evident by the last minute concession regarding the 

nature of claimant's disability and the Workers' Compensation 

Court's decision to convert a part of claimantqs disability 

benefits to a lump sum, in spite of defendant's refusal to do so. 

Insurers wha force claimants to incur the expenses of 

litigation and who clog Montana's Workers' Compensation Court 

because of this kind of conduct are the exact parties for whom 

§ 39-71-2907, MCA, was intended. 

In this decision, this Court has ignored the plain language of 

the Workers' Compensation Court in two respects. It has refused to 
award attorney fees, and it has refused to impose the statutory 

penalty when both were clearly warranted. 

Apparently, the principles of "strict constru~tion~~ about 

which "conservative" jurists so proudly pound their chests, don't 

apply to the statutory rights of injured workers. 

For these reasons, I dissent from both conclusions in the 

majority opinion. 

Justice William E. Hunt, Sr., concurs in the foregoing dissent 

of Justice Trieweiler. 
I 

1 February 25, 1993 

CERTIFICATE OF SERVICE 

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

following named: 

I Geoffrey R. Keller, Esq. 

MATOVICH, ADDY & KELLER, P.C. 

225 Petroleum Building 

2812 First Ave. North 

Billings, MT 59101 

J. Michael Young, Esq. 

Steven T. Potts, Esq. 

JARDINE, STEPHENSON, BLEWETT Sr WEAVER, P.C. 

P.O. Box 2269 

Great Falls, MT 59403-2269 

ED SMITH 

CLERK OF THE SUPREME COURT 

STATE OF MONTANA