Hilbig v. Central Glass Co.

• Court: Montana Supreme Court
• Writing for the Court: TRIEWEILER; TURNAGE
• Citation: Hilbig v. Central Glass Co., 816 P.2d 1037, 249 Mont. 396 (Mont. 1991)
• Decision Date: 01 August 1991
• Docket Number: No. 90-296,90-296
• Parties: Ronald F. HILBIG, Claimant and Respondent, v. CENTRAL GLASS COMPANY, Employer, and State Compensation Insurance Fund, Defendant and Appellant.

Page 1037

816 P.2d 1037

249 Mont. 396

Ronald F. HILBIG, Claimant and Respondent, v. CENTRAL GLASS COMPANY, Employer and State Compensation Insurance Fund, Defendant and Appellant.

No. 90-296.

Supreme Court of Montana.

Submitted on Briefs March 28, 1991.

Decided Aug. 1, 1991.

Honorable Marc Racicot, Atty. Gen., R. Scott Currey, James Scheier, Agency Legal Services Bureau, Helena, for defendant and appellant.

R.V. Bottomly, Great Falls, for claimant and respondent.

TRIEWEILER, Justice.

This is an appeal from the Workers' Compensation Court's order awarding attorney fees to the claimant based upon his recovery of benefits for domiciliary care. We affirm in part and remand to the Workers' Compensation Court for further consideration.

The issues are:

1. Did the Workers' Compensation Court err in awarding attorney fees to the claimant based upon his recovery of benefits for domiciliary care?

2. If the claimant was entitled to an award of attorney fees, what was the proper rate of payment?

The claimant was injured on November 17, 1983, during the course of his employment with Central Glass Company when he fell from the scaffolding on which he was working and sustained severe head injuries. The defendant, State Compensation Insurance Fund, insured Central Glass Company against workers' compensation claims at the time of claimant's injury.

After some initial disagreement, the State Fund conceded that the claimant was totally disabled and has paid him permanent total disability benefits. However, a dispute arose over the claimant's entitlement to a lump sum advance of his benefits, and a petition was filed on the claimant's behalf on July 18, 1986. During the course of those proceedings, and based upon evaluations of the claimant by a clinical psychologist, a neurologist, and a home health care nurse, the claimant also made a claim for 24-hour-a-day domiciliary care. That claim was denied by the defendant.

The claimant's case went to trial before the Workers' Compensation Court on January 26, 1987. On June 20, 1988, that court entered its judgment denying the claimant's claim for a lump sum advance of benefits, but awarding the claimant benefits for domiciliary care during the period of time from December 18, 1986, through April 8, 1987. Although the court, at that time, found that the claimant's condition was "not improving but was likely to decline" and that home health care services "are necessary and an essential component of claimant's care," no provision was made for the payment of benefits for home health care beyond April 8, 1987.

That judgment by the Workers' Compensation Court was appealed by the claimant to this Court. On August 11, 1989, we issued our decision affirming the trial court's denial of the claimant's claim for a lump sum advance and remanding this case to the Workers' Compensation Court for further consideration of the claimant's entitlement to benefits for domiciliary care after April 8, 1987, and in the future. Hilbig v. Central Glass Co. (1989), 238 Mont. 375, 777 P.2d 1296.

On remand, without the benefit of or need for further evidence, and based upon the record from the prior proceeding, the trial court entered summary judgment for the claimant; ordered the defendant to pay the claimant's wife $7.50 an hour, 24 hours a day, from April 8, 1987; and also ordered the defendant to pay for the claimant's health club membership, which it found to be necessary for the claimant's further therapy and treatment. The claimant was awarded attorney fees pursuant to Sec. 39-71-612, MCA (1983).

The Workers' Compensation Court found that the claimant's award of benefits for domiciliary care subsequent to April 8, 1987, resulted from this Court's decision, and ordered the defendant to pay the claimant's attorney fees in an amount equal to 40 percent of the value of benefits for domiciliary care due from the defendant after April 8, 1987.

On appeal, the defendant argues that it has voluntarily paid benefits to the claimant for domiciliary care; the recovery of those benefits did not result from a decision of the Montana Supreme Court, nor the Workers' Compensation Court; and therefore, the claimant is not entitled to an award of attorney fees. In the alternative, the defendant argues that if the claimant is entitled to an award of attorney fees, then that award should be limited to the 25 percent rate which is provided for in the claimant's attorney fee agreement in those cases which have not gone to hearing.

In order to address the issues raised by the defendant, it is first necessary to set forth the rules that pertain to the recovery of attorney fees in this case.

The claimant was injured on November 17, 1983, and the statute which was in effect on the date of his injury determines the attorney fees to which he is entitled. Cuellar v. Northland Steel (1987), 226 Mont. 428, 736 P.2d 130. That statute is Sec. 39-71-612, MCA (1983). It provided in relevant part as follows:

1. 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.

In Wight v. Hughes Livestock Company, Inc. (1983), 204 Mont. 98, 664 P.2d 303, we held that the purpose of the aforementioned statute was to provide a "net recovery of compensation benefits" to the claimant and that therefore, there would be a "strong presumption" that fees to successful claimants should be based upon their contracted-for obligation with their attorney. In this case, the claimant's fee agreement with his attorney provided that he would pay him at the following rates:

(a) For cases which have not gone to hearing before the Workers' Compensation Court, TWENTY-FIVE PERCENT (25%) of the amount of benefits the claimant receives due to the efforts of the attorney;

(b) For cases which go to a hearing before the Workers' Compensation Judge, THIRTY-THREE PERCENT (33%) of the amount of benefits the Client receives from an order of the Workers' Compensation Judge;

(c) For cases which are appealed to the Montana Supreme Court, FORTY PERCENT (40%) of the amount of benefits the Client receives based on the Order of the Supreme Court.

In this case, the defendant argues that because it offered to pay a portion of the domiciliary benefits that claimant was eventually awarded after the trial but before the trial court's judgment was actually entered, the claimant is not entitled to an award of attorney fees at all. The defendant's position requires an analysis of the following sub-issues:

1. Whether the tender or payment of workers' compensation benefits after trial but before judgment is entered can preclude a claim for attorney fees 2. Whether a mere "offer" without actual payment serves any purpose under Sec. 39-71-612, MCA (1983); and

3. What, if any, domiciliary benefits had been paid by the defendant to the claimant prior to this Court's decision on August 11, 1989.

FACTUAL BACKGROUND

This case went to trial on January 26, 1987. It is clear from the pretrial order and the proposed judgments filed by both parties that the claimant's entitlement to benefits for domiciliary care was an issue at the time of trial and the defendant denied any liability for those benefits.

One of the issues set forth in the pretrial order was as follows:

6. Whether the State Fund has paid all medical expenses of which payment is required pursuant to Section 39-71-704, MCA.

In a brief filed two and one-half months after trial, the defendant acknowledged that the issue regarding medical expenses was based on the claimant's contention that he was entitled to benefits for past and future domiciliary health care pursuant to our decisions in Carlson v. Cain (1985), 216 Mont. 129, 700 P.2d 607, and Larson v. Squire Shops, Inc. (1987), 228 Mont. 377, 742 P.2d 1003. The State Fund also acknowledged that at the time of trial the claimant sought compensation for a health care attendant while his wife was at work, and payment for his wife's services during the remaining hours of the day while she attended to his needs.

On April 8, 1987, the defendant wrote to the claimant's attorney and offered to pay for a home health care attendant while the claimant's wife was at work, and also offered to pay someone to occasionally substitute for the claimant's wife so that she could take a periodic break from the care that she provided to her husband 16 hours a day during the week and 24 hours a day on weekends. The defendant's offer was for a temporary trial period and did not include 24-hour-a-day service as had been demanded by the claimant. The claimant responded that the offer was inadequate and that he would not drop his claim based on the offer, but would welcome immediate payment of any amount. (Payment to a third party for eight hours per day of care was commenced on July 1, 1987.)

On the basis of that offer, the defendant asked the Workers' Compensation Court to conclude that future home health care was no longer an issue. However, the court refused to do so. In that motion, the defendant acknowledged that the pretrial order issue regarding medical services was based on the claimant's claim that "his wife should be paid for providing domiciliary care services the remaining 16 hours a day every day and during weekends."

The State Fund then concluded, and still contends, that its offer to pay a professional attendant eight hours a day somehow eliminated the issue of whether claimant's wife was entitled to payment for her services during the remaining 16 hours of every day and for...