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Ranger Insurance Co. v. Bates

Court of Workers Compensation of Montana

March 16, 1998

RANGER INSURANCE COMPANY Appellant
v.
VELLEDA BATES Respondent.

          Submitted: December 30, 1997

          ORDER AFFIRMING ORDER OF THE DEPARTMENT OF LABOR AND INDUSTRY WITH MODIFICATIONS

          MIKE MCCARTER JUDGE

         Summary: Insurer appealed from summary judgment entered by Department of Labor hearing officer determining insurer was liable for "add on" attorneys fees relating to benefits paid to respondent/claimant. Insurer challenged DOL's authority to issue summary judgment, complained that the DOL did not require claimant to shoulder her burden of proof, and argued attorneys fees were not properly awarded.

         Held: While the Montana Administrative Procedures Act (MAPA) requires an evidentiary hearing in contested cases (§2-4-601, MCA), it does not prohibit summary rulings where there are no evidentiary facts of consequence in dispute. Where the facts proffered by claimant in support of the motion were not contested by appellant, the argument regarding burden of proof is meaningless. Under Madill v. State Compensation Ins. Fund, 280 Mont. 450, 930 P.2d 665 (1997) and section 39-71-612, MCA (1981), attorney fees were properly awarded to claimant with respect to all PTD benefits payable after the date on which she filed her petition for those benefits, even though hearing was not necessary. As in Madill, claimant demanded PTD benefits, her demand was refused, and the insurer ultimately conceded liability for those benefits. However, attorney fees are not properly awarded with respect to benefits which the insurer attempted to reduce through petition to the Court. Those benefits had already been paid, thus did not meet statutory criteria for allowing an award of attorneys fees. Although the hearing officer requested information under Wight v. Hughes Livestock Co., 204 Mont. 98, 664 P.2d 303 (1983) in order to set fees, the fee agreement between counsel and claimant presumptively sets the amount of fees and reference to the Wight standards is not necessary. Finally, claimant's counsel is not entitled to an add-on of 33 1/3% of benefits as attorneys fees under the theory the case went to hearing. What went to hearing were issues of attorney fees, not benefits for claimant. Under the fee agreement, the lesser amount of 25% is appropriate.

         Topics:

Constitutions, Statutes, Regulations and Rules: Montana Code Annotated: section 2-4-601, MCA (1981). While the Montana Administrative Procedures Act (MAPA) requires an evidentiary hearing in contested cases (§2-4-601, MCA), it does not prohibit summary rulings where there are no evidentiary facts of consequence in dispute.
Constitutions, Statutes, Regulations and Rules: Montana Code Annotated: section 39-71-612, MCA (1981). Under Madill v. State Compensation Ins. Fund, 280 Mont. 450, 930 P.2d 665 (1997) and section 39-71-612, MCA (1981), attorney fees were properly awarded to claimant with respect to all PTD benefits payable after the date on which she filed her petition for those benefits, even though hearing was not necessary. As in Madill, claimant demanded PTD benefits, her demand was refused, and the insurer ultimately conceded liability for those benefits. However, attorney fees are not properly awarded with respect to benefits which the insurer attempted to reduce through petition to the Court. Those benefits had already been paid, thus did not meet statutory criteria for allowing an award of attorneys fees.
Administrative Procedure: Contested Case Hearing: Evidence. While the Montana Administrative Procedures Act (MAPA) requires an evidentiary hearing in contested cases (§2-4-601, MCA), it does not prohibit summary rulings where there are no evidentiary facts of consequence in dispute.
Cases Discussed: Madill v. State Compensation Insurance Fund. Under Madill v. State Compensation Ins. Fund, 280 Mont. 450, 930 P.2d 665 (1997) and section 39-71-612, MCA (1981), attorney fees were properly awarded to claimant with respect to all PTD benefits payable after the date on which she filed her petition for those benefits, even though hearing was not necessary. As in Madill, claimant demanded PTD benefits, her demand was refused, and the insurer ultimately conceded liability for those benefits. However, attorney fees are not properly awarded with respect to benefits which the insurer attempted to reduce through petition to the Court. Those benefits had already been paid, thus did not meet statutory criteria for allowing an award of attorneys fees.
Attorney Fees: Cases Awarded. Under Madill v. State Compensation Ins. Fund, 280 Mont. 450, 930 P.2d 665 (1997) and section 39-71-612, MCA (1981), attorney fees were properly awarded to claimant with respect to all PTD benefits payable after the date on which she filed her petition for those benefits, even though hearing was not necessary. As in Madill, claimant demanded PTD benefits, her demand was refused, and the insurer ultimately conceded liability for those benefits. However, attorney fees are not properly awarded with respect to benefits which the insurer attempted to reduce through petition to the Court. Those benefits had already been paid, thus did not meet statutory criteria for allowing an award of attorneys fees.

         ¶1 Ranger Insurance Company (Ranger) appeals from a summary judgment of the Department of Labor and Industry (Department). The Department determined that Ranger is liable for attorney fees for benefits paid to respondent, Velleda Bates (Bates). It further directed claimant's attorney to provide Ranger with an accounting addressing the Wright[1] factors and reserved "continuing jurisdiction" to determine the amount of fees and costs in the event the parties are unable to do so.

         Procedural and Factual Background

         ¶2 On February 24, 1997, Bates petitioned the Department for an award of attorney fees with respect to benefits her attorney had previously secured for her. The petition followed on the heels of the Supreme Court's decision in Madill v. State Compensation Ins. Fund, 280 Mont. 450, 930 P.2d 665 (1997)[2], decided less than two months prior to Bates' petition. In Madill the Supreme Court held that under section 39-71-612, MCA (1979), a claimant is entitled to an award of attorney fees with respect to disputed benefits recovered by way of settlement or by way of concession if the insurer initially resisted payment of the benefits.

         ¶3 In her petition to the Department, Bates sought a determination that she is entitled to "add-on attorney fees" and costs on account of disputes going back to 1988 and 1989. The petition did not specifically ask the Department to determine the amount due.

         ¶4 Ranger responded to the petition with a Motion to Dismiss. Orders issued by the Department's hearing officer on March 25 and 28, 1997, indicate that during a March 24, 1997 telephone conference call, counsel for Bates and Ranger agreed to submit the case for decision via a motion for summary judgment. On March 25 the hearing officer issued a Submission Schedule, which read as follows:

Based upon agreement of the parties reached in a Status Telephone Call conducted on March 24, 1997, the following Submission Order is hereby established:
Ten (10) days following Motion for Summary Judgment, Respondent/Defendant response, five (5) days thereafter Petitioner/Claimant rebuttal. The parties agreed to follow Worker Compensation Court procedures identified and used for Summary Judgment Petitions. [Emphasis added.]

         On March 28, he issued a Notice Vacating Pre-hearing, which read:

Based upon agreement of the parties to submit this matter for determination based on Motion submission and response, the pre-hearing set for April 2, 1997 is hereby vacated. [Emphasis added.]

         ¶5 Petitioner's Motion for Summary Judgment was thereafter filed on May 5, 1997. It was supported by a brief, an affidavit, and exhibits attached to and authenticated by the affidavit. Briefly summarized, the factual basis for the requested fees was as follows:

• Bates suffered an industrial injury on October 6, 1982. Ranger was the insurer at risk and accepted liability for her claim.
• On or about October 21, 1988, Ranger field a petition in Workers' Compensation Court seeking an Order permitting it to convert claimant's benefits from temporary total disability (TTD) benefits to permanent partial disability (PPD) benefits. It urged that claimant had reached maximum medical healing on April 4, 1984, and requested that all TTD benefits paid after that date be credited to any liability it might have respecting PPD benefits. (Affidavit in Support of Petitioner's Motion for Summary Judgment, ¶'s 7-8 and Ex. D.)
• On March 27, 1989, following written discovery and a deposition of Bates, Ranger moved to dismiss its own petition. (Affidavit in Support of Petitioner's Motion for Summary Judgment, ¶ 10 and Ex. E.) In an affidavit supporting the motion, Ranger stated it would "continue paying Claimant temporary total disability benefits until such time as conversion is warranted." (Id.)
• On May 24, 1989, the Workers' Compensation Court dismissed Ranger's petition. (Affidavit in Support of Petitioner's Motion for Summary Judgment, ¶ 11.)
• Meanwhile, on April 25, 1989, Bates petitioned the Workers' Compensation Court for a conversion of her benefits from TTD to permanent total disability (PTD) benefits. (Affidavit in Support of Petitioner's Motion for Summary Judgment, ¶12, Ex. F.)
• Following written discovery and a medical deposition, on September 29, 1989, Ranger conceded that claimant was permanently totally disabled. (Affidavit in Support of Petitioner's Motion for Summary Judgment, ¶ 15.) The concession was confirmed in writing. (Id. and Exs. G and H.)
• On October 26, 1989, Bates' attorney demanded that Ranger pay a 25% attorney fee on "all benefits paid after April 4, 1984." (Affidavit in Support of Petitioner's Motion for Summary Judgment, ¶ 17, Ex. I.) Ranger refused (Affidavit in Support of Petitioner's Motion for Summary Judgment, ¶ 17, Ex. J), and there the matter languished until the filing of the present proceeding.
• On June 9, 1983, Bates and her attorney executed a contingency fee agreement providing that the attorney receive 25% of any settlement recovered without having to go to hearing. (Affidavit in Support of Petitioner's Motion for Summary Judgment, ¶ 4, Ex. C.)
• In connection with the two petitions to Workers' Compensation Court, Bates incurred costs in the amount of $332.85.

         ¶6 On May 20, 1997, Ranger served Insurer's Brief in Opposition to Claimant's Motion for Summary Judgment. Despite the agreement of counsel reflected in the hearing officer's March 25 and 28, 1997 Orders, Ranger questioned the authority of the Department to grant summary judgement:

At the outset, the Insurer would note that by submitting a Brief in Opposition to Claimant's Motion for Summary Judgment before the Department, it is neither conceding that the Department has jurisdiction to render such a determination on the issues in this case, nor that the Department has the ability to render a summary judgment pursuant to its own internal rules.

(Id. at 1-2.)

         Ranger went on to state that it was nonetheless submitting an opposing brief "for purposes of preserving its objection to the position taken by the Claimant . . . ." (Id. at 2.)

         ¶7 With respect to the merits of the motion, Ranger did not take issue with the facts tendered by Bates, nor did it file any counter-affidavits. Rather, it argued that Bates ignored a critical fact, namely that Bates' benefits had never been reduced or terminated by the insurer. It argued that since benefits had not been terminated and no judgment had ever been entered by the Workers' Compensation Court, Bates could not recover attorney fees. Finally, it argued that the claim for attorney fees, coming some eight years after the controversies between the parties had been resolved, was barred by the doctrine of laches.[3]

         Hearing Officer's Decision

         ¶8 On August 1, 1997, the hearing officer issued Findings of Fact; Conclusions of Law; and Order. Despite its caption, the decision was one granting summary judgment. The hearing officer noted that the parties had expressly agreed to proceed on Petitioner's Motion for Summary Judgment. He then proceeded to the merits and entered findings of fact based on the affidavit supporting Bates' motion.

         ¶9 In his conclusions of law, the hearing officer determined that the facts pertaining to Bates' 1989 petition were nearly identical to the facts presented in Madill, hence Bates is entitled to attorney fees. He went on to reject Ranger's laches arguments based on this Court's decision in Klimek v. State Compensation Insurance Fund, WCC No. 9602-7492, Order and Partial Summary Judgment (October 11, 1996).

         ¶10 While the hearing officer found that Bates is entitled to attorney fees, he addressed only fees requested with respect to her 1989 petition for PTD benefits; he did not address Bates' contention that she is entitled to attorney fees with respect to Ranger's attempt to cut off TTD benefits retroactively to 1984. The hearing officer also did not determine the amount of the attorney fees, although he ...


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