39-71-611, MCA

MONTANA SUPREME COURT DECISIONS

Stewart v. Liberty Northwest Ins. Corp. [04/23/13] 2013 MT 107 Where the insurer’s claims manager terminated payment for the claimant’s pain patches after reviewing the WCC’s prior ruling that the claimant failed to prove causation between her injury and her pain, reliance on the prior ruling formed a reasonable basis for denying liability so as to preclude an award of attorney fees, particularly where the insurer began paying for the patches again under a reservation of rights.

[1983] Galetti v. Montana Power Company [8/29/00] 2000 MT 234 Claimant is not entitled to attorney fees under section 39-71-611, MCA (1983) where insurer conceded liability at commencement of hearing, which did not amount to adjudication of compensability.

In the Matter of Clarke v. Scott Massey, d/b/a All Seasons Constr., 271 Mont. 412 (1995) (No. 95-106) Where there is absolutely nothing in the plain language of section 39-71-611, MCA (1989), that would make its provisions for award of attorney fees applicable to uninsured employers, and no indication from the statutory language of a legislative intent that the statute by so applied, the Workers’ Compensation Court was correct in determining that fees could not be awarded against an uninsured employer in a workers’ compensation proceeding. Affirming Clarke v. Scott Massey, d/b/a/ All Seasons Construction, 1995 MTWCC 8.
 
WORKERS' COMPENSATION COURT DECISIONS

Davidson v. Benefis [05/30/14] 2014 MTWCC 18 Where Petitioner was able to perform the duties of a CNA prior to her injury despite a 3% impairment rating, but clearly could not perform her CNA duties post-injury with a 0% impairment rating, a legitimate factual dispute existed as to whether Petitioner suffered an actual wage loss as a result of her injury, precluding an award of attorney fees or a penalty.  The Court distinguished McAdam v. Nat’l Union Fire Ins. Co. of Pittsburg, where the claimant also had a 0% impairment but his symptoms were the same pre-and post-injury whereas here, Petitioner’s  injury exacerbated her symptoms to the point she was unable to return to her time-of-injury job.

Nelson v. Montana Schools Group Ins. Auth. [05/28/14] 2014 MTWCC 15 To be entitled to an award of costs, a claimant must be the prevailing party pursuant to § 39-71-611(1), MCA, where an insurer denies liability or terminates benefits and the claim is later adjudged compensable.  Since Petitioner’s claim for treatment with her out-of-state physician in 2011 and 2012 has not been adjudged compensable, she is not entitled to costs, attorney fees or a penalty.

Koch v. Employers Ins. Group [05/19/14] 2014 MTWCC 14 Once Petitioner’s claim was adjudged compensable, Respondent became liable for it.  After Respondent refused to authorize treatment and terminated liability without clear justification, the Court found its actions unreasonable and held Petitioner to be entitled to her attorney fees.

Baeth v. Liberty NW Ins. Corp. [05/05/14] 2014 MTWCC 10 Where Respondent relied on the opinions of three physicians who did not see evidence of Petitioner’s exposure to asbestos and who opined that her pulmonary condition was either emphysema or COPD brought on by years of smoking, Respondent was not without a reasonable basis to deny liability.

Engle v. Hartford Underwriters Ins. Co. [12/31/13] 2013 MTWCC 27 The Court found Respondent unreasonably adjusted Petitioner’s claim where the claims adjuster deemed a fall Petitioner suffered after her occupational disease claim to be a new injury without reviewing any medical records or seeking additional medical opinions.  While the adjuster determined that the subsequent fall severed liability and accelerated Petitioner’s condition, nothing in the medical records supports that theory.  Moreover, when Petitioner disputed the adjuster’s conclusions, the adjuster did not investigate further, did not reinstate Petitioner’s benefits, and did not conduct additional investigation after she received a medical opinion disputing the adjuster’s theory of liability.

Dostal v. Uninsured Employers' Fund [12/04/12] 2012 MTWCC 45 The Court concluded that attorney fees were available to Petitioner where the Court orally ruled that she was entitled to a referral her treating physician had made and where the Court subsequently issued a written ruling.

Dostal v. Uninsured Employers' Fund [11/15/12] 2012 MTWCC 42 Since the UEF was included in the definition of “insurer” in § 39-71-116(10), MCA (1991), it is therefore treated as such for purposes of § 39-71-611, MCA, and can be held liable for attorney fees if its actions in denying liability or terminating benefits are found unreasonable by this Court.

Taylor v. Montana State Fund [05/23/12] 2012 MTWCC 17 Petitioner had numerous, undocumented visits with her treating physician.  Since the insurer had an incomplete picture of Petitioner’s injury and treatment, it was not unreasonable for the insurer to believe a second incident was a new injury and to deny Petitioner’s claim on that basis.

Baker v. Fireman's Fund Ins. Co. [03/22/12] 2012 MTWCC 9 In order to award attorney fees and costs pursuant to § 39-71-611, MCA, there must be an adjudication of compensability.  At trial, the Court bench ruled on the issue of compensability of certain medical bills, but neither party could advise the Court whether the bills remained unpaid.  The Court reserved ruling on the issue of fees and costs until the parties conferred and determined whether the medical bills were paid before or after the bench ruling.

Pearson v. MIGA [01/09/12] 2012 MTWCC 1 The Montana Insurance Guaranty Association is not an “insurer” as defined in § 39-71-116, MCA, and within the meaning of the WCA, which provides that attorney fees and penalties can only be awarded in cases involving insurers.  Since it is not an insurer, MIGA is not subject to the penalty and attorney fee statutes of the WCA.
Salazar v. Montana State Fund [12/28/11] 2011 MTWCC 28 Tendering a settlement offer does not constitute unreasonable conduct under § 39-71-611, MCA, because it has no effect on whether the insurer denied liability or terminated benefits.
Wright v. Ace American Ins. Co. [05/24/10] 2010 MTWCC 11 Claimant is not entitled to his attorney fees where he does not allege that the insurer has been unreasonable, but rather alleges that he should receive attorney fees because he cannot afford to pay his attorney out of any award he may receive. Claimant's argument does not provide a statutory basis for an award of attorney fees.
Montana State Fund v. Uninsured Employers' Fund and Folda [05/11/10] 2010 MTWCC 10 Section 39-71-611, MCA, restricts who can be ordered to pay attorney fees to insurers, but does not carry a similar restriction as to who can receive them.  However, § 39-71-614, MCA, provides that the amount assessed against an insurer must be based exclusively on the time spent by the attorney in representing the claimant. . .  .  Therefore, a party to a workers’ compensation case who is not a claimant cannot recover attorney fees under § 39-71-611, MCA.
Brown v. Hartford Ins. Co. [12/16/09] 2009 MTWCC 38 The Court concluded that Petitioner was entitled to her attorney fees due to the unreasonable actions of an insurer in denying liability where the insurer presented no evidence that Petitioner was not suffering from an occupational disease, but argued solely that its adjuster’s “confusion” as to Petitioner’s diagnoses denying her claim. The Court noted that claim’s first adjuster reviewed Petitioner’s medical records and noted that her condition was not work-related when the medical notes explicitly stated that it was, and that the file sat for four months with no adjuster assigned to it. The Court further noted that both medical providers recorded objective medical findings to support their diagnoses, and the claim’s second adjuster sat on the file for seven months without seeking clarification regarding her “confusion” about the diagnoses, and later continued to deny liability and again failed to seek clarification after the physician again examined Petitioner and found her to be suffering from an occupational disease.
Russell v. Watkins & Shepard [08/17/09] 2009 MTWCC 27 Petitioner, who prevailed on some, but not all issues presented, cannot recover the costs associated with the issues upon which he did not prevail, including: the deposition of an expert witness whose testimony only regarded an issue upon which the claimant did not prevail; the testimony of a witness regarding Respondent’s claims handling when Petitioner did not prevail in his request for attorney fees or a penalty; and the acquisition of medical records which pertained to medical conditions which this Court concluded were not caused by Petitioner’s industrial accident.
Long v. New Hampshire Ins. Co. [04/10/09] 2009 MTWCC 14 Respondent’s actions in denying liability were unreasonable where a claims adjuster authorized Petitioner to receive ongoing TTD benefits after Petitioner returned to work at his alternate employment, and when another claims adjuster took over the claim, rather than reevaluating the previous adjuster’s authorization, she simply denied that the authorization existed, and threatened Petitioner with garnishment of his wages to recoup the alleged overpayment. Additionally, the claims adjuster attempted to dissuade Petitioner’s counsel from obtaining a complete copy of his claims file by answering her inquiries in a misleading fashion. Furthermore, the claims adjuster acknowledged that for a period of time, the previous adjuster’s notes were not accessible by anyone in Montana, in violation of § 39-71-103(3), MCA.
Briese v. Ace American Ins. Co. [02/20/09] 2009 MTWCC 5 Sections 39-71-611 and -612, MCA, address the potential liability of an insurer for reasonable attorney fees if the Court determines the actions of the insurer were unreasonable in its payment of benefits. A Lockhart lien, conversely, addresses the payment of attorney fees paid by the claimant “out of his or her medical benefits.” Therefore, Respondent’s reliance on these statutes for the argument that this Court lacks jurisdiction to determine a Lockhart lien is misplaced.
Narum v. Liberty Northwest Ins. Corp. [06/04/08] 2008 MTWCC 30 In a case which was settled with medical benefits left open, Respondent stopped paying for ongoing medical treatment without notifying Petitioner, denied authorization for hip replacement surgery even though the possibility of this surgery was specifically identified in the settlement agreement, and provided no persuasive explanation that could justify stopping payment of Petitioner’s medical treatment. The Court concludes Respondent’s actions are unreasonable and Petitioner is entitled to reasonable attorney fees.
Porter v. Liberty Northwest Ins. Corp. [03/06/08] 2008 MTWCC 12 Where Petitioner prevailed on some issues, but not on the issue related to his cervical condition, and where one doctor’s involvement with Petitioner’s case was specific to the causation issue involving the cervical condition, Petitioner cannot recover attorney fees for time his counsel spent working on that doctor’s involvement with the case.
Porter v. Liberty Northwest Ins. Corp. [03/06/08] 2008 MTWCC 12 A nurse consultant is not an attorney and therefore, although Respondent was ordered to pay Petitioner’s attorney fees, Respondent is not statutorily required to pay an “attorney fee” for the services of a nurse consultant.
Porter v. Liberty [10/19/07] 2007 MTWCC 42 Respondent terminated Petitioner’s benefits without notice and while relying on the opinion of a treating physician whom Respondent knew had not treated Petitioner in over a year. Respondent’s claims adjuster further knew that Petitioner had sought authorization to change treating physicians and a previous claims adjuster on the case had indicated that she intended to grant the change. Respondent’s claims adjuster refused to authorize treatment with a specialist to whom Petitioner’s treating physician refused to refer him for the reason that the treating physician did not want to provide a referral. Respondent’s claims adjuster received medical bills for Petitioner which he did not pay without informing Petitioner that the bills were not being paid or why. The claims adjuster further undertook no investigation in spite of knowing that Petitioner was dissatisfied with his treating physician, that his treating physician refused to provide him a referral to a specialist, and that a previous claims adjuster had already determined that a change in treating physicians was warranted. The insurer’s actions were unreasonable and Petitioner is entitled to his attorney fees.
Vanbouchaute v. Montana State Fund [08/23/07] 2007 MTWCC 37 In order to recover costs and attorney fees pursuant to § 39-71-611, MCA, the denial of the claim must be adjudged compensable by the Court. In this case, the Court indicated to the parties at the conclusion of the evidence what the decision would be on the issue of surgery. However, the Court did not formally adjudge the compensability of Petitioner’s claim before it was accepted and paid by Respondent. Although the Court made its intent clear to the parties as to the issue of medical benefits, the record is clear that it was not issuing a bench ruling on this issue. Since Respondent authorized Petitioner’s surgery before his claim was adjudged compensable by the Court, Petitioner cannot be awarded attorney fees or costs.
Popenoe v. Liberty Northwest [12/01/06] 2006 MTWCC 37 Because the insurer denied liability for a claim which was adjudged compensable by this Court, and because the Court determined that the insurer's actions in denying liability were unreasonable, Petitioner is entitled to his attorney fees.
[2001] Mosca v. American Home Assurance [2/13/04] 2004 MTWCC 6 Where within thirty days the claimant reported his belief that his herniated disk was job related and the only medical opinions in evidence were that his condition was in fact job related, liability was reasonably clear and it was unreasonable for the insurer to deny the claim and take the case to trial. Attorneys fees are therefore awarded under section 39-71-611, MCA (2001).
[2001] Pekus v. UEF [4/25/03] 2003 MTWCC 33, rev'd in part, 2012 MTWCC 42 The UEF is not an insurer under section 39-71-611 or 39-71-612, MCA (2001), and is not subject to an award of attorney fees.
[1985] Stephenson v. CIGNA [3/29/01] 2001 MTWCC 12 Under 1985 law, which applies in this case, the claimant is entitled to attorney fees since the insurer denied his request for permanent total disability benefits and he prevailed in his request.
[1997] Patrick v. State Fund [4/4/00] 2000 MTWCC 20 Attorneys Fees awarded where insurer unreasonably limited rehabilitation evaluation to the gathering of information to support the insurer's prior conclusion claimant suffered no wage loss. Facts suggesting unreasonable delay and denial of rehab benefits included adjuster's hiring of private investigator based only a computer generated "fraud flag," which in turn was based only on claimant's failure to return to work within a predicted period of time, and did not consider claimant's serious preexisting condition upon which work injury was imposed; adjuster's apparent communication to investigator, without any support, that there was no objective evidence of injury and treating physician was "making matters worse"; referral for neuropsychological evaluation without basis; provision of report unfavorable to claimant, but not report favorable to claimant, to expert; and general tendency to ignore evidence favorable to claimant while seeking opinions to support adjuster's conclusion. (After decision, parties settled and presented a Stipulated Judgment to the Court, which then issued its Order Nunc Pro Tunc For Entry of Judgement and Dismissal with Prejudice, Patrick v. State Compensation Insurance Fund, 2000 MTWCC 20A.)
[1991] Pattee v. Twin City Fire Ins. Co. [2/9/99] 1999 MTWCC 14 Where insurer agreed to send settlement checks within one week, but took three weeks, there was unreasonable delay. Claimant was not entitled to attorneys fees under section 39-71-611, MCA (1991), however, because that section requires unreasonable denial or termination of benefits, which did not occur in this matter.
[1983] Galetti v. Montana Power Company [2/4/99] 1999 MTWCC 11 Self-insured employer accepted liability for claimant's 1983 back injury, but denied liability for 1994 flare-up. Although the employer accepted liability at the commencement of the hearing, trial proceeded on claims for attorneys fees and penalty. WCC found the self-insured employer's denial of the claim for medical benefits unreasonable where the adjuster had persisted in maintaining claimant's flare-up was not compensable despite medical information and legal precedent to the contrary in his files. Further evidence of unreasonable conduct claim came through evidence the employer ignored several requests by claimant for a copy of his entire file, failing even to provide a copy of the doctors' response to the self-insured employer's inquiries. Attorneys fees were not awarded, however, because the employer conceded liability at the commencement of the hearing and adjudication on the issue of liability was therefore unnecessary. [Note: the WCC was reversed on this point; see Galetti v. Montana Power Company, 2000 MT 234, ¶ 15-25, which held that fees were proper under section 39-71-612, MCA (1983).]
[1995] Leastman v. Liberty Mutual Fire Ins. Co. [1/6/99] 1999 MTWCC 2 After claimant refused to adhere to insurer's rehabilitation provider's advice, insurer refused any rehabilitation benefits. Coupled with the rehabilitation provider's inadequate job of evaluating claimant's realistic job prospects with and without retraining, the delay and denial of benefits caused by this position was unreasonable, giving rise to a penalty and attorneys fees.
[1997] Ronemus v. Business Ins. Co. [7/28/98] 1998 MTWCC 59 Although Court found claimant credible and was not persuaded by insurer's witnesses on issues of occurrence of accident and reporting, insurer's conduct in resisting claim was not unreasonable where a legitimate credibility issue existed.
[1989] Stevens v. National Union Fire Ins. Co. of Pittsburgh [7/17/97] 1997 MTWCC 45 Despite the finding of unreasonable conduct, claimant was not entitled to attorneys fees or costs under sections 39-71-611 or -612, MCA (1989) where the claim for benefits was settled without an order of the workers' compensation court. See, Lasar v. E.H. Oftedal & Sons, 222 Mont. 251, 252, 721 P.2d 352 (1986); Yearout v. Rainbow Painting, 222 Mont. 65, 68, 719 P.2d 1258 (1986).
[1995] Martinez v. State Fund [3/5/97] 1997 MTWCC 9 Insurer is liable for penalty on all accrued, unpaid benefits based on unreasonable delay. Where insurer has conceded it delayed unreasonably after a particular point, the delay impacted all benefits accrued to that date, not merely benefits accruing after that date. Indeed, the delay is more unreasonable as to earlier accrued benefits as they were past due for a longer period. Attorneys fees awarded as well.
[1993] Deborah (Evans) Brian v. State Fund [11/22/96] 1996 MTWCC 73 Attorneys fees awarded where insurer unreasonably refused to pay for back surgery although overwhelming evidence indicated claimant's accident caused increased, totally disabling back pain. Reliance on fact that pre- and post-accident MRIs were the same, and fact that surgery had been recommended prior to the accident, was not reasonable where claimant and physicians made clear her pain increased and total disability ensured, where she had previously been working.
[1995] McClanahan v. State Fund [7/5/96] 1996 MTWCC 50 Attorneys fees awarded where Insurer's conduct was unreasonable for failure to investigate. Insurer took employer's story that claimant did not injure his back at face-value, failing to interview witnesses, ignoring consistent medical records, and not facing conflicts within employer's version of events.
[1993] Larsen-English v. Lumbermens Mutual Casualty [6/14/96] 1996 MTWCC 43 Attorneys' fees awarded where insurer's denial of liability was unreasonable. When claimant, a waitress, slipped and aggravated her existing knee condition, she was following a cook who playfully stole a pan from her after tossing whipped cream on her. Insurer's contention claimant was acting outside the course and scope of employment was not only unreasonable, but also mean-spirited, where the clear facts show the incident was precipitated for a work-related reason, that claimant did not initiate the incident, and that some horseplay, in any event, was tolerated by the employer.
Caekaert v. State Compensation Ins. Fund [10/12/95] 1995 MTWCC 78 Claims examiners and attorneys are not qualified to make medical judgments; where medical questions are involved, it is unreasonable for the insurer to disregard uncontroverted medical opinion.

Caekaert v. State Compensation Ins. Fund [10/12/95] 1995 MTWCC 78 Insurer acted unreasonably where medical opinion did not provide affirmative proof of an aggravation by claimant’s post-injury work, but were equivocal. Proceeding to trial without independent medical support for the insurer’s position entitled claimant to attorney fees.

Caekaert v. State Compensation Ins. Fund [10/12/95] 1995 MTWCC 78 Though the Occupational Disease Act contains no express provision for award of attorneys fees in the Workers’ Compensation Court, the attorney fee provisions of the Workers’ Compensation Act, sections 39-71-611 and -612, MCA (1987) are applicable to occupational disease cases litigated in the Workers’ Compensation Court through section 39-72-402(1), MCA (1987) and judicial decision.

Caekaert v. State Compensation Ins. Fund [10/12/95] 1995 MTWCC 78 Costs in the Workers’ Compensation Court are not conditioned upon a finding of unreasonableness.
Clarke v. Massey d/b/a All Seasons Construction [01/27/95] 1995 MTWCC 8 While section 39-71-515, MCA (1989) provides for attorney fees to a claimant recovering in district court against an uninsured employer, no statute in the 1989 Act allows the Workers’ Compensation Court to award fees against an uninsured employer relating to a case in the Workers’ Compensation Court.