Nos. 01-420, 01-441 and 01 -112
rzi THE SUPREME COURT OF THE STATE OF MONTXNrl,
.ALEXIS KAUSCL-I, as Conservator h r KEVIN R*\USCH, and on behalf of others similarly situated,
CHARLES FISCH, ind~vidually 011behalf of and others simrlarly situated,
THOMAS FROST, irtdividually and on behalf of others similarly situated,
STATE COMPENS24TION INSURAKCE FUND.
APPEAL FROM: Workers- Compensat~on Court, State of Montana The Honorable M ~ k e McCartcr, Judge pressdmg.
COUNSEL OF RECORD:
For Appellants:
Lon J. Dale, James T. Towe, Milodragovich, Dale, Steinbrenner & Binney, P.C., Missoula, Montana (For Rausch)
Monte D. Beck, Attorney at Law, Bozcman, Montana (For Fisch)
Stephen D. Roberts, Attorney at Law, Bo~eman. Montana (For Frost)
For Respondent: dw- - Greg E. Overturf, Montana State Fund, I-lelena, Montana
Submitted on Briefs: Decernber 13, 2001
Decided: September 5. 2002. CLERK OF SUPREME COURT fir$$E RAONTANW Justice Terry 21, 'Tric\vciler delivered the Opinion of the Court.
71 Appellants; Alexis Rausch (as conservator for Kevin Rausch'), Charles Fisch, and
Tlronias Frostt cacli filed separate petitions in Workers' Compensation Court claiming
cntitlernent to immediate payment of an impairment award based on their respective
impaimlent ratings. Respondent, State Compensation Insurance Fund, denied immediate
payment of the impairment awards, asserting that the benefit was not due until each claimant
reached his retirement age. Appellants brought their claims as individuals and on behalf of
others similarly situated, and also sought attorney fees, penalties, and common fund attorney
fees. The Workers' Compensation Court consolidated the three cases and concluded that
neither the 1991 nor 1997 Montana Workers' Compensation Acts (\vhich applied to these
claimants) provided a statutoty basis for an impainnent award to permanently totally disabled
claimants. Claimants contended that if that conclusion was correct, their rights to equal
protection and due process were violated. The Workers' Compensation Court held that the
Montana Workers' Compensation Act, as interpreted by the Court in its previous order, did
not violate either the equal protection or due process clauses of the Montana Constitution.
.%ppellants appeal from the LVorkers' Compensation Court's Order and Decision Disposing
of Non-Constitutional Issues, Order and Judgment Regarding Constitutional Challenge. and
the Judgment Respecting impairment Awards. We reverse the LVorkers' Compensation
C:ourt's orders \vhich denied impairment awards to permanently totally disabled workers and
denied attorney fees.
!2 I The issues presented on appeal arc restated as follows:
2 rili I . Did the District Court err as a ritalter of law when it cctnciudcd, pursiianl to the
1W h a d 1997 versions ofti~b: Montana Workers' Compei~salion that pern~ancntly Act; toraliy
disabled workers are not entitled to receive impairment awards'?
74 2. Is an impairment award due to a pemtanently totally disabled claimant upon the
receipt of his or her undisputed impairment rating or upon retirement?
35 3. Should an impaimlent award to a permanently totally disabled claimant be
characterized as a total or partial disability benefit?
1:6 4. Are elaimaiits' attorneys entitled to attorney fees pursuant to the common fund
doctrine?
FACTUAL AND PROCEDURAL BACKGROUND
'7 Kevin Rausch, Charles Fiseh; and Thomas Frost were all determined to be
pernlanently totally disabled as a result of work-related injuries. Kevin Rausch sustained a
head and spinal cord injury on July 8, 1992, and is quadriplegic with brain damage. Charles
Fisch sustained a spinal cord injury on July 9, 1998, and is an incomplete quadriplegic.
Thomas Frost sustained a back injury on August 30, 1997, and has undergone a series of four
back surgeries. The State Compensation Insurance Fund(State Fund) insured each claimant's
cnlployer and has accepted liability for each of the injuries.
ij8 Rausch, Fisch, and Frost currently receive pelmanent totiil disability benefits as a
r e s ~ ~oft thcir work-related injuries, and are entitled to those benefits until their death or l
retirement age, whichever occurs first. The claimants began receiving permanent total disability benefits immediately upon termination oftheir temporary total disability benefits.
None of tire claimants h a w ever received permanent partial disability benefits.
79 Each claimant has reached maximum medical improvement from his respective
injuries, On Deccmber 14, 1998, Kevin Rausch received an impairment rating equal to 96%
of the whole person. On July 29, 1999, Charles Fisch received an impairment rating equal
to 74% of the whole person and on August 26, 1999, Thomas Frost received an impairment
rating equal to 25?h of the whole person. Each impairment rating was based on the American
Medical Association Guide to Evaluation of Permanent Impairment, and on objective
medical findings.
Ti 10 Each elairnatlt filed separate petitions in the Workers' Compensation Court claiming
entitlement to immediate payment of an impairment award. The State Fund denied
immediate payment of the impairment awards, based on its contention that in~pairnlent
a\nlards for permanently totally disabled claimants are not due until the claimants either
receive social security retirement benefits or are entitled to receive social security retirement
bcnetits. Claimants also asserted that postponement of their impairment awards would
violate their rights to equal protection and substantive due process as guaranteed by the
Montana Constitution. Claimants sought attorney fees individually and pttrsuant to the
cornmon fund doctrine for similarly situated claimants. At no time did the State Fund
contend that claimants had no entitlement to an impairment award. The dispute centered on
the timing of the payn~ent. (11 1 On March 2 ) 20(rClf!, the Starc Fund offered to pay the impairment awards, as an "
undiscounted, lump srrrn, to each claimant concumeniwith permanent total dlsabiiiiy benefits.
In additiorr, the State Fund agreed to pay the claimants' attorney fees. Fisch and Frost
accepted the State Fund's offer, but continued to maintain standing for class certification and
for common fund attorney fees. Rausch rejected the State Fund's offer because of its
unwillingness to characterize the impaimlent award as a permanent total disability benefit
(which would impact whether there is a social security offset). Although the State Fund has
paid inipairmelit awards to Fisch and Frost, it has not paid impairment awards to all other
similarly situated claimants.
7 12 The Workers' Compensation Court consolidated the three cases, and bifurcated the
statutory and constitutional issues. It first examined the statutory basis for impairment
awards, arid then cxatnined the constitutionality of its decision in light of the claimants'
cosistitutional arguments. Based oil briefs and stipulated facts, the Workers' Compensation
Court issued an Order and Decision Disposing of Non-Constitutional Issues on September
13, 2000. It held that neither the 1991 nor 1997 Montana Workers' Compensation Acts
provided for impairment awards to pernianently totally disabled claimants. The Workers'
Cornpensation C o ~ ~ r t issued an Order and Judgment Regarding Constitutional Challenge then
on '4pril 20, 2001. In that Order, it held that the Court's interpretation of the Montana
Workcrs' Comperisation Act did not violate either the due process or cqual protection clauses
of thc Montana Constitution. "13 The ciaimanrs appealed the iVorkerst Compensation Courts Order and Dccision
Disposing of Non-Cor.rsiituiionai issues, Order and Judgment Regarding Constitutional
Challenge, and the Court's Judgment Respecting impairment Awards which was based on
those orders.
STANDARD OF REVIEW
114 We review the Workers' Cotnpensation Court's conclusions of law to determine
whether they are correct. ibfatthrws v. State Cornpensution112s.Fund, 1999 MT 225,15,296
Mont. 76, 1' 5,985 P.2d 741,T 5.
DISCLJSSION
ISSUE 1
71 5 Did the D ~ s t r ~Court e n as a matter of law when it concluded. pursuant to the 1991 ct
and I997 vers~onsof the Montana Workers' Compensation Act, that permanently totally
disabled workers are not entitled to receive impairment awards?
7116 The contested legal issue presented to the Workers' Compensation Court by the parties
related to when an impairment award should be paid to a permanently totally disabled
claimant. The claimants asserted that the impairment award should be paid immediately
upon receipt of their undisputed impairment ratings, while the State Fund responded that the
ilnpairmeiit award should be paid at age 65, upon retirement, pursuant to 5 39-71-710, MCA
I I & 9 ' 7 'The State Fund had already conceded that the claimants were entitled to
impairment auards. However, in analyzing the legal issue presented, the Workers'
Compensation Court concluded there was no statutory basis for impairment awards to
6 permancntiy totally disabled claimants in either the 19901 or 1997 versions of the Montana
Workcrs' Compensation ,Act. On that basis, the LL70rkers'Compensation Court concluded as
a matter of law that permanently totally disabled workers are not entitled to impainnent
awards. After review of the applicable statutes. we conclude that the Workers' Compensation
Court's intet~retation the acts IS incorrect. of
1 7 Workers' compensation benefits are determined by the statutes in effect on the date
of the injury. Rzickniaiz v. hlontnfzaDeaconess Nosp. (1986), 224 Mont. 318,321,730 P.2d
380,382. Therefore, with respect to the Rausch claim, the 1991 Workers' Compensation Act
is applicable. With respect to the Fisch and Frost claims, the 1997 Workers' Compensation
Act is applicable.
71 8 Montana recognizes four distinct classes of disability benefits: (1) temporarytotal; (2)
temporaty partial; (3) permanent partial; and (4) permanent total. 3 39-71- 116, MCA (1991 & 1997); lieeverts v. Sears, Roebuck & Co. (1994), 266 Mont. 509,5 17,881 P.2d 620,625.
The claimants in this ease have all been classified as permane~ttly totally disabled, and have
never been classified pemtanently partially disabled.
I Several sections of tile Montana Workers' Compensation Act discuss impairment
awards. We have previously stated that where one part of the law deals with a subject in
general and comprehensive tenns, while another part of it deals in a more specific or definite
way, the two parts should be read together and, ifpossible, harmonized, with a viem-to giving
effect to aconsistent legislative policy. 3 1-2-101, MCA; E.H. O@dirlc~t~d,Sorts. v. State Irzc. "120 No section of the tVorkersl Compensation ,4ct explicit1y authorizes impairment awards
pcr sc. HOMCLCT, impalrment abards arc impliedly authoriicd lo any injured bcorkcr
classified in one of the four distinct classes of disability benefits by two sections of the Act.
8 39-71-710, MCA, and (3 39-71-737, MCA. The 1991 and 1997 bersions of 6 39-71-710,
MCR, differed in only minor respects, and provided in relevant part:
Termination of benefits upon retirement. ( 1 ) If a claimant is receiving disability or rehabilitation compensation benefits and the claimant receives social security retirement benefits or is eligible to receive full social security retirement benefits, the claimant is considered to be retired. When the claimant is considered retired, the liability of the insurer is ended for payment of wage supplement, perfaanent total disability, and rehabilitation compensation benefits. However: the insurer remains liable for temporary total disability benefits, itny inzpmirnzenf itward, and medical benefits.
8 39-71-710(1), MC,4 (1991) (emphas~s added).
Termination of benefits upon retirement. (1) If a claimant is receiving disability or rehabilitation compensation benefits and the claimant receives social security retirement benefits or is eligible to receive or is receiving full social security retirement benefits or retirement benefits from a system that is an alternative to social security retirement, the claimant is considered to be retired. When the claimant is retired, the liability of the insurer is ended for payment of permanent partial disability benefits other than the impairment award, paynzerzt fffper-rnarterrt total disability benefits, and payment of rehabilitation compensation benefits. However, the insurer remains liable for temporary total disability benefits, urzy irnpuirn~enta~'i~irrit, and medical benefits.
3 39-71-710(1), MCA (199'7) (emphasis added). YiZI Section 3")-11-710, MCA (199 i i 1997). speciiicaiiy states thiir a11 insurer remains ,.
liable for other benefits, including "any inlpai1men.i award," upon cessation of pcmiancnt
totai disability benetits. The statute's contemplatio~~ when permanent total d~sabtlity of
bcncfits terminate and when impairment a\vard liability continues recognixes the fundamental
nature of the impalmwnt award itself. lmpa~rmenta~vardsare based on a worker's
impa~rnleat ratlng, n hich is a purely medical determination of the loss of physical function
ofthe bod3 caused by the injury. $39-71-71 1, MCA (1991 & 1997). ?'he lmpalrment rating
is the physical component on which the disability is based. Disability benefits compensate
tl~e worker for losses related to their inability to work. An impairment akvard is paid to
compensate the worker for the loss of physical function of his or her body, which may hake
ramifications beyond just the worker's ability to return to work. The difference is subtle, yet
important. The inclusion of continued impairment award liability in $ 39-71-710, MCA
(I991 8L 1997), ~ndicates distinct nature of the impairment award from other types of the
disability benetits
722 Furthermore, Impairment anards are implicitly recognized in 3 39-71-737, MCA.
Seetlons 39-71-737, MCA, of the 19% and 1907 Workers' Compensation Acts provided as
Compensation to run consecutively - exceptions. Compensation shall run consecutively and not concurrently, and payment shall not be made for two classiis of disability over the same period except that impairment awards and auxiliary rehabilitation benefits may be paid concurrently with otlier cliisses of betzejifits, and wage supplement and partial rehabilitation benefits may be paid concurrently. 5 89-71-737, klCA (19")) (emphasis added).
Compensation to run cansecutivefy - exceptions, Compensation must run consecutively and not concurrently, and payment may not be made for two classes of disability over the same period, except that impairment aviards and auxiliary rehabilitation benefits may be paid concurrently ivith otlier clusses ofbengfirs.
$ 39-71-737, MCA (1997) (emphasis added).
7/23 Section 39-71-737, MCA (1991 & 1997), like $ 39-71-710, MCA (1991 & 1997),
creates an entitleinent to an impairment auard for disabled workers within more than one
class of disability benefits. Since a permanent impairment rating is inconsistent with
temporary dlsabilrty benefits , impairment anards must necessarily be rccol erable by both
permanently partially and permanently totally disabled claimants.
721 The \h70rkers'Compensation Court concluded that the only section in the Workers'
awards 1s 4 39-71-703, MCA (1991 Compensat~on u bich directly authorizes ~mpairment Act
& 1997), pertaining to compensation for permailently partially disabled claimants. Because
Temporary benefits (meluding temporary partial and temporary total benefits) are recoverable as a result of losses incurred by a claimant prior to maximum healing. ,See $ 3%71-1 16(23), MCA (1991) and $39-71-1 lG(32) & (33),MCA (1997). By comparison, permanent benefits (including permanent partial and permanent total benefits) are detern-rined uper the worker has reuciwd mu~irnum ~~zedical heulirzg. See $; 39-71-1 16(15) & (16); MCA (1991) and 5 39-71-1 16(23) & (24), MCA (1997). Pursuant to $ 39-71-71 l(l)(a), blCA (1991 & l997), "[ajn impairment rating is a purely medical determination and must be determined by an impairment evaluator after a claimant has rcached maximum healing." $ 19-71-71 l(l)(a), MCA (1991 & 1997). Therefore, if impairment awards are payable concurrently with "other classes of benefits," it has to be pennanent partial and permanent total disability benefits. the claimants in this case c\-cre never ciassifiedpermarrently pariially disauied. the Coun heid
~t had no authority to a ~ l a r d compensation for permanent rmpaimcnt.
725 However, the Court's conclusion that i. 39-71-703, MCA, expressly provided h r ;
~mpairment auards in both the 1091 and 1997 Workers' Compensation Acts 1s ~ncorrect.
Sectlon 39-71-703. MCA. of the 1991 M'ot-kers' Compensation Acts pro~ided relevant in
part:
Compensation for permanent partial disability. (1) If an injured worker suffers a permanent partial disability and is no longer entitled to temporary total or permanent total disability benefits, the worker is entitled to a permanent partial disability award. (2) The permanent partial disability award must be arrived at by nlultiplying the percentage arrived at through the calculation provided in subsection (3) by 350 weeks. (3) An award granted an injured worker may not exceed a permanent partial disability rating of 1000/o. The criteria for the rating of disability must be calculated using the medical inlpairment rating as determined by the latest edition of the American medical association Guides to the Evaluation of Permanent Impairment. The percentage to be used in subsection (2) must be determined by adding the following applicable percentages to the impairment rating: (a) if the claimant is 30 years of age or younger at the time of the injury, 0%; if the claimant is over 30 years of age but under 56 years of age at the time of injury, 2%; and if the claimant is 56 years of age or older at the time of injury, 3%; (b) for a worker who has completed less than 9 years of cducation, 3%; for a worker who has completed 9 through 12 years of education or who has received a graduate equivalency diploma, 294; for a worker who has completed more than 12 years of education, 0%; (c) if a worker has no wage loss as a result of the industrial injury, 0%; if a worker has an actual w-age loss of $2 or less an hour as a result of the industrial injury: 10%; if a worker has an actual wage loss of more than $2 an hour as a result of the industrial injury, 20%; and (d) if a worker, at the time of the injury, was performing heavy labor activity and after the injury the worker can perform only light or sedentary labor activity, 20%; if a worker, at the time of injury, was performing heavy iabor activity and after the injury the worker can perform only medium labor activity, 15%; if a worker was performing medium labor activity at the time of the injury and after rhe injury the worker can perform only lighr or sedentary labor activity, 10%.
The same sectiot~ thc 1097 itct provided: in
Compensation for permanent partial disability. ( 1 ) If an injured worker suffers a permanent partial disability and is no longer entitled to temporary total or permanent total disability benefits, the worker is entitled to permanent partial disability award if that worker: (a) has an actual wage loss as a result of the injury; and (b) has a permanent impairment rating that: (i) is established by objective medical findings; and (ii) is more than zero as determined by the latest edition of the American medical association Guides to the Evaluation of Permanent Impairment. (2) When a worker receives an impairment rating as a result of a compensable injury and has no actual wage loss as a result of the injury, the worker is eligible for an impairnzent award onlJ!. (3) The permanent partial disability award must be arrived at by multiplying the percentage arrived at through the calculation provided in subsection (5) by 350 weeks. (4)A permanent partial disability award granted an injured worker may not exceed a permanent partial disability rating of 10004. (5) The percentage to be used in subsection (3) must be determined by adding all of the following applicable percentages to the impairment rating:
Section 39-71 -703, MCA (1997) (emphasis added).
v 26 The 1901 version of 5 39-71-703, MCA, did not expressly provide for impairment auarcis. The stattite simply discussed the use of the "impaimlent rating" as one factor it1
dctcrrnining permanent partial disability benefits 12 17 f h e i9W version of539-'71-703. MCA, on the other hand, does specifically provide
for irnpairmcnr a\*-ards. Howeber, they are not linked to pariial disability. Section 39-71-
7 3 2 , MCA (1997), provided that "[wlhen a worker receives an impairment rating as a 0()
result of a compensable injury and has no actual wage loss as a result of the injury, the
worker is eligible for an impairment award." Pursuant to the definition of "permanent partial
disability" found in 5 39-71-1 16(23), MCA (19!97), however, if there is no wage loss, there 1s no permanent partial disabilitj .'
728 Therefore, netther the 1991 nor 1997 version of $; 39-71-703, MCA, are authority for
ltmiting ~mpairmetlt awards to partially disabled claimants. In the 1991 version, they Mere
not expressly provided for. In the 1997 version, they here unrelated to the disability.
2 9 One final consideration is necessarily part of our statutory analysis. To provide an
~mpairment award to permanently partially disabled claimants and not to permanently totally
d~sabled claimants would lead to an absurd result, and contravene the intent underlying the
Workers' Compensation Act. When more than one interpretation is possible, in order to
promote justice, we will reject an interpretation that leads to an unreasonable result in favor
(23j "Permanent partial disability" means a physical condition in which a worker, after reaching maximum medical healing: (a) lias a permanent impairment established by objective medical findings; jbj is able to return to work in some capacity but the permanent impairment impairs the worker's ability to work; and (c) /?(IS a2 UC~ZINI~ g e US u ~ e s u lof the injuiy. 1 l v ~ 10s.~ t
3 39-71-1 16(23), MCA (1997) (emphasis added) of another that will lead to a reasonable result. Jol~ilsonv. ill/rrias River. EIec. Co-op, ~ I Z C .
(!084j, 21 1 Mont. 518, 524. 687 P,Zd 668, 671. As interpreted by the Workers'
Cornpensation Court, a pemanently partially disabled worker, cvho is by definition less
disabled, can receive an in~paimient award while a permanently totally disabled worker is
dcprived of the benefit. Therefore, the most disabled of all claimants, despite having an
undisputed impairment rating caused as a result of a permanent loss of physical ftrnction,
would receive no impairment award. Furthemlore, an injured worker who is at first
classified as a pem~anentlypartially disabled worker, hut is subsequently reclassified as
permanently totally disabled is eligible for a full impairment award, while another worker
with the same injury who is fro111 the onset classified as permanently totally disabled is
ineligible. Such a result would be unreasonable and callnot have been the Legislature's
intent.
130 We conclude. therefore, that permanently totally disabled claimants are legally entitled
to an impairment award for the loss ofphysical function of their body occasioned by a work-
related injury pursuant to the recognition of such awards in ij 39-71 -71 0. MCA, and 9 39-7 1-
737, VCA. The \Vorkersl Compensation Court's conclusion to the contrary is reversed.
ISSUE 2
731 is an impairment award due to a permanently totally disabled claimant upon the
receipt of his or her undisputed impairn~ent rating or upon retirement?
*i72 !,- Thc primary issue presented to the Workers' Compensation Court by the parties was
when an impairment award should be paid to a permanently totally disabled claimant. The
I4 award should be paid at age 65 upon retirement State Fund contended that an in~paiment
pursuant to 4 39--7-710, ?JICA. The claimants, on the other hand, contended that an
in~pairrnent award is due immediately upon thc rcccipt of an unhsputed impairmen1 rating,
permanent total disability benefits pursuant to 5 39-71- and should be paid concurreiitly \+-it11
737, MCA. The District Court did not reach this issue based on its resolution of Issue 1 .
'33 The rules of statutory construction require the language of a statute to be construed
according to its plain meaning. If the language is clear and unambiguous, no further
interpretation is required. Love11 v. Stute Conlpensntion Mut. Ins. Fund ( 1 993), 260 Mont.
279,285,860 P.2d 95.99.
7/34 Section 39-71-737, b1CA (1991 & 1997), states that compensation benefits shall run
consecutively "except that impairment awards and auxiliar)! rehabilitation benefits lnay be
paid concurrently with other classes." Section 39-71-737, MCA (1991 & 1997), is clear and
unambiguous, and the claimants in this case are, therefore, entitled to receive their
impairment awards concurrently with their permanent total disability benefits. The State
Fund's reliance on 5 39-71-710, MCA (1991 & 1997), is misplaced. Section 39-71-710.
MCA (1991 & 1997). merely states than an insurer remains liable for payment of an
impairment award if it has not already been paid to the claimant before age 65. !t says
nothing to suggest that payment should be delayed until retirement. Furthermore, to read
such a meaning into the statute would create another absurd result. Partially disabled
workers would be entitled to impairment awards while receiving their disability benefits, but totally disabled workcrs who presumably have the grater need would not be. Again, tve
conciude thar the Legisiature couid not reasonably have had such an intention.
7/35 For these reasons, we conclude that an impairment award is due a perma~~cntly totally
disabled claimant upon receipt of his or her undisputed impairment rating.
ISSUE 3
136 Should an inipairment award to a permanently totally disabled claimant be
characterized as a total or partial disability benetit?
737 An issue raised by the conservator of the estate of Kevin Rausch, which went
unaddressed by the Workers' Compensation Court based on its resolution of Issue 1, is how
impairment benefits due a permanently totally disabled clainiant should be characterized.
The characterization ofthe inipaiiment award is significant because it determines whether
there is a social security offset. The Social Security Administration offsets benefits which
are designated as partial benefits, but does not offset permanent or temporary total disability
benefits.
7138 Rausch contends that his impairment award should be characterized as part of his
permanent total disability benefits, since impairment is simply the functional or medical
component of that disability.
( j 3 9 T h e State Fund did not address this issue in its brief on appeal. However, in the
LVorkcrs' Coinpensation Court, the State Fund contended that an impair-ment award shou!d
be classified as netther a permanent total disabilrty benefit nor a permanent partial disablllty
benefit. The State Fund asserted that an itnpairment award is a unique benefit distinct from
16 disabtlrty benefits and rntcnded oniy to compensate cla~rnantc. r the med~cal h component of
their disability. Ti~crefore~ urged the Woi-K~TS' it Compensation Court to characteri;le
impairment awards as a special class of benefits referred to as an "impairment award."
740 The problem .v, ith the approach suggested by the State Fund is tl~at Social Security the
Administration does not recognve a class of benefits entitled "lmpalrment award" or
"impairment benefits." Periodically, the Social Security Administration requests \+orkersl
compensation insurers to complete a form for confirmation and classtfication of uorkers'
con~pensation bencfits being paid to individuals who concur-rently receive workers'
compensation benefits and social security disability benefits. Therefore, because Rausch will
receive an impairment award, the State Fund will have to advise the Social Security
Administration of how it classified those benefits by completing Form SSA-1709. Form
SSA-I 709, however, like Montana law, only recognizes the existence of four classifications
of benefits? i.e.; temporary partial, temporary total, permanent partial and permanent total.
If we were to adopt the State Fund's suggestion, and a fifth classification of benefits was
recognized under the guise of "impairment benefits," the Social Security Administration has
stated that it would categorize the impairment award as a permanent partial benefit,
Therefore, the Social Security Administration will offset Rausch's disability benefits, even
though Rauscl~ pennanently totally disabled, not permanently partially disabled. is
4 That result irrationally reduces Kausch's impairment award benefit, even though the
Statc Fund concedes that impairment is merely the medical component of his total disability
and that classification of impairment bencfits for a permanently totally d~sabled uorkcr as
17 21 partial disabi!ity bcnefit is improper. The nlost logical approach is to characterize the
inlpainncnt award consistently with the ciaimant's disability status, considering that the
impairment is a result of the claimant's injury and a substantial factor in his disability.
142 Therefore, we conclude that because Kevin Rausch was permanently and totally
disabled, his impanment a\?ard should be characteri~edas a permanent total disabrlity
benefit.
ISSUE 4
743 Are claimants' attorneys entitled to attomey fees pursuant to the common fund
744 Ciaimants' attomeqs contend they are elltitled to attorney fees pursuant to the coinmon
fund doctrine thrall similarly s~tuatedpermanently totally dtsabled claimants who hate been
dented immedtate tmpairment awards by the State Fund, and will now be able to obtain those
benefits as a rcsult of this decision. As authority, claimants' attorneys cite this Court's
decision in Murer v. Stare Chnzp. itf~it Ft~nd(1997), Mont. 210, 942 P.2d 69. The Ins. 283
State Fund did not rcspond to the claimants' request for common fund attorney fees in the
brief subnutted for thrs appeal
745 Generally, the common fund doctrine "authorizes the spread of fees among those
individuals benefitting from the litigation which created the common fi~nd.",bfou~ztai~z West
Faivii Buwc~u l l u thzs. C.i,. ~ . Y. f i l l , 2001 MT 314,l 14, 308 iblont. 29,T 14,38 P.3d 825,1;
1 1 . Thc common fund doctrine provides: [Wllicn a patty has an interest in a fund in common with others and incurs legal fees in order to establish, preserve, increase: or collect that fund, then that party 1s cnt~tlcd rc~mbursement to ol'h~s her reasonable attorncy fecs fion: or the proceeds of the fund rtsclf.
q36 To be awarded attorney fees based on the common fund doctrine, a party must satisfy
three clemcnts. First, a party (or multjplc parties in the case of a consolidated case) must
create, rescrte, increase, or presertc a common fund. This party is typically referred to as
the actite beneficiary. Second, tlre actice beneficiary must incur legal fecs in establishing
the common fund. Third, the common fund must benefit ascertainable, non-participating
beneficiaries. hfoulztnirz Vest, ti7 15-16, 18.
7,47 In hlzireu. clannants engaged in complex, lengthy, and expensive litigation that
resulted in a legal precedent which d~rectlybenefitted a substantial number of workers'
coinpensation claimants tvho were neither parties to nor directly in~olved the blurer in
ltt~gatton.283 Mont. at 223, 942 P.2d at 76. In addition, "claimants established a tested
right on behalf of the absent claimants to directly receive immediate monetary payments of
past due benefits underpayments; . . . ." ~tlu~*e.er, hlont. at 223.942 P.2d 76-77. We held: 283
[\nilhen a part>, through actibe litigation, creates a common fund whtch directly benefits an ascertainable class-ofnon-participating beneficiaries, those non-participating beneficiaries can be required to bear a portion of the litigation costs, including reasonable attorney fees. Accordingly, thc party who creates the common ftind is entitled, pursuant to the common fund doctrine, to reimbursement of his or her reaso~lable attorney fees from that fund. 348 P ~ ~ r s u a n t;\h4rer7 we conclude that ciairnants' attorneys in this case are entitled to to
cornrnon fund attorney fecs. The attomoys representing Rausch, Fisch and Frost all engaged
in acti~velitigation which prescncd the benefit of irnrnediate impaim-rent awards to
pernlanently totally disabled claimants. The attorneys incurred legal costs and fees in thc
preservation of that right, and the common fund will benefit an ascertainable class of workers
who were denied irnrnediate payment of an impairment award by the State Fund which they
were legally entitled to receive. Those absent claimants will receive the benefit "even though
they were not required to intervene, file suit, risk expense, or hire an attorney." ;Mzuer, 283
Mont. at 223, 942 P.2d at 77.Accordingly, claimants' attorneys are entitled to reasonable
attorney fees for the creation or preservation of a common fund, and those fees should be
divided among the three firms involved in this ease. This case is remanded to the Workers'
Coinpensation Court for a determination of a reasonable fee.
4 9 Finally, claimilnts request this Court to award a twenty percent penalty against the
State Fund for its unreasonable initial denial of benefits and delay in p a p e n t of their
impairment awards. However, we conclude that unreasonable conduct has not been
established and, therefore, decline to assess a penalty.
7,:50 Accordingly, we conclude that permanently totally disabled claimants are entitled to
inrpairtnent awards, which are due upon the receipt of the undisputed impairment rating.
Furthermore, impairment awards of permanently totally disabled claimants should be
characterized as a permanent total disability benefit. Finally, we conclude that claimants' attorneys are entitled to reasonable attorney fees pursuant to the common h n d doctrine, but
that clairnairts are not entitled to a tkventy percent penalty.
"11 LVe reverse the order of the Workers' C:on~pcnsationCourt and remand for further
proc-cdii~gsconsistent \%iththis Opinion
Wc Concur:
~~~-~~
Chief Justice
Justices Jizstlce Jim H ~ c e speciall~ . concurring
7/52 1 concur with the holding of the Court hereii~, offer the f01iowi1:g comments in and
regard to lssuc I .
753 The CiTorl\ers' Compens:ttion Court was hced with the unenviabic duty ofcontruing,
not just one statute. but the cntlret) of the statutory fiamcuork surrorind~ngimpa~nnent
a\%ards. As ex idenced by the opinions herein of both the Workers' Compensation Court and
this Court, determining the proper interpretation of the statutes was a difficult task; even w~ith
application of maxims of statutory construction. IZ reading of the statutes gives the distinct impression that the impairmelit award is a benefit provided in all disability cases. However,
a closer re\ i e rc\eals that such an cntctlement is not expIicitiy created. The situation IS ~
something akin to a group of people talking about an absent comrade. They all know he
exists. He just isn't there.
f,54 Yonetheless, I b e l t e ~ e conclusion drawn by the Court from the l~rnited the drrectlon
provided by the statutes is the correct one, and mould offer the follo\~ing addltioiial reasons
tllerefor. I diverge from the Workers' Corllpensation Court's rationale at 20 of its opinion,
wherein it states:
Cla~mants argue that. failure to tnterprct sectlon 30-71-737. MCA. as entitling permanently totally disabled claimants to impairment awards would - render the section's reference to impairment awards meaninrrless. If that were so, the Court might have to deem the statute ambiguous and eonslder the maxim of statutoi-y interpretation that coul-ts should attempt to construe a statute in a manner which docs not render it meaningless, Alhriglit v. State By und 7hroug11 Sfnte, 28 1 'l4ont. i Yb.206,933 P.2d 8 I S , 82 1 (19%'). I-Iowever, failure to adopt claimants' interpretation does not render the language ,- meaningless. I here are other bcncfits which a claimant mlght receive concurrently with an impairnient award, specifically, an a\\-ard fhr disfigurement, 4 39-71-508 (1991; i947jl MCA. andrehabilitation benefits 39-71-1006, MCA (lt197), 39-71-2001, klCA (1991).
The LVorkers' Compensation Court thtls found that its interpretation would not render
meaningless the provision of $ 39-71 -737; MCA, which authorized payment of in~pairtnent
awards "with other classcs," because there were "othcr benefits" which a claimant might
receive concurrently with an impairment award, namely, rehabilitation or disfigurement
benefits H o u e ~ e rour ease law construes "classcs" of benefits in a manner \ t h ~ c h , supports
the claimants' argument.
625. the Court: citing Iloseil v. East Butte Copper .bfinit~gCotrzp~z~iy9271, 'Ilont. 579, (1 78
254 P. 880 (oven-uled on other grounds), hcld that:
[Tlhis Court observed that [$39-71-71?, MCA, ofthe Workers' Compensation Act], as it existed in 1927, contemplated the possibility of four resulting conditions from an injury: (1) temporary total disability; (2) per~nanent total disability; (3) temporary partial disability; and (4) permanent partial disability. The Court hcld that the tenn "classes" mentioned in this predecessor to 5 -737 referred to the different types of disability benefits which cotrld potentially be received for a single injury. LVe held that they had to be paid successively in the order provided for in the statute, and that payment for two different classes e o ~ ~not be made ovcl- tlie same period of time. ld
Thus, the tern1 "class of henefits" is restrictcd by t h ~ s interpretation to the four referenced
disability classes. Given this longstanding interpretation, the provision of $ 3'1-71-737,
MCA, which now authorizes payment of an itnpairment award ""with othcr classes" cannot
be satisfied by the payment of rehabilitation or disfigurement benefits, as held by the LVorkers*C;ompensation Court. 1.11~s~ bcneiits arc not considered "disability" bcnciiis othcr
authorizing statutes and do nor constitute ""ciasses7' of benefits, Consequently, i find by ii~cir
that t!x interpretation offered b > the Workers' Compensation Court would render 5 34-7i-
737, MCA. meaningless, and I x1:ould construe the statute to hold illat in~psimenia\vards arc
to be paid concurrently with permanent total disability benefits.
756 1 disagree with the Court's rationale set forth in 7 2") wherein it reasons that the
Workers' Compensation Court's conclusion that apcma~lently partially disabled worker can
receive an impairment award while a permanently totally disabled worker is deprived of the
award. is based upon a statutory interpretation which lcads to an absurd result. While this
result may be thought to lack reason from a policy point of view, 1 do not belicve this to be
an absurd result that compels a different statutory interpretation. The Legislature may very
bvell decide to restrict impairment awards to partially disabled workers, but for the reasons
set forth above, I do not believe it has donc so.
757 For these reasons, I concur with the C:ourt. Clzief Justice Karla M. Gray, concurriilg in par-t and disscntii~g parr. in
758 I agree with the Court's statutory analysis at 77 25 through 27, hut disagree with the
remainder of its discussion on issue one. I would affirm the Workers' Compensation Coi~rt's
conclusion that permanently total11 disabled Lvorkers are not entitled to receive impairment
awards under the 1991 and 1997 Acts. As a result, I would not reach the remaining issues.
759 The Workers' Compensation Court's statutory analysis, and this Court's statutory
analysis at 77 25 through 27, can be summarized relatively briefly. Both courts determined 2
that, pursuant to $ 39-71-703(1), MCA (1991), a worker who suffered a permanent partial
d~sability, was no longer entitled to either temporary total or permanent total drsab~lity but
benefits, was entitled to a permanent partial disability award. No stand-alone "impalrmcnt
a ~ a r dwas available to such an injured worker; rather, an "impanment rattngn--basedinpart "
on the amount of uage loss--mas calculated and used in determ~ning ifmount of the the
permanent partial disability award. See i;. 39-71-703(2) and (3), MCA (1991). Both courts
also determined, on the other hand, that 5 39-71-703(2), MCA (1 997), provided for a stand-
alone "impaitnlent a v ard" for an injured worker who recelved an impaitment rating but had
no actual wage loss. Such a worker receited only the impairment award; he or she d ~ not d
receive permanent partial disability benefits because no actual wage loss occurred. See 5 39-
71-703(1) and (21, MCA (1997). 1 agree with tk~ese analysts.
'160 ?'he Workers' Compensation Court then proceeded to address $8 39-71-737, MCA (1991) and (I")"), which are identical with respect to the provision under which thc
clain~ants this case asser? cntjtlen~ent an inlpainnent atvard in? addition to permanent in to
total disability benefits. Both statutes provide generally that compensation is to run
consecutively, and that payment shall not be made for two classes of disability over the same
period; the language at issue then states, as an exception, "that impairment awards . . . may
be paid concurrently with other classes of benefits." See $$ 39-71-737, MCA (1991) and
(1997). The Workers' Compensation Court rejected the claimants' arguments thereunder,
concluding that "[nleither version creates any entitlement to an impairment award. . . . It
only prescribes when different classes ofbenefits which are authorized in other sections may
be paid concurrently. TJze cluiinurzt must be due the ben~fits tlzeJirstplacefor the section in
to apply." (Emphasis added.) I agree with the Workers' Compensation Court's analysis.
761 That court also addressed both the 1991 and 1997 versions of 5 39-71-710, MCA, on
which the claimants relied. While the statutes differ in detail, they generally address
termination of certain benefits on retirement and remaining liability for other benefits;
specifically, $5 39-71-710, MCA (1991) and (1997), both state that, on a claimant's
retirement, "the insurer remains liable for. . . any impairnlent award. . . ." As with 5 39-71-
737, MCA, the Workers' Compensation Court concluded that the latter language "can only
bc construed as indicating that liability for the award must exist in the first instance,"
independently of 5 39-71-710, MCA, and does not create any entitlement to benefits nor otherwise created in the Workers' Compensation Act. Again, I agree with the Workers' 762 it is not altogether clear whether this Coun has determined directly that the Workers'
Compensation Court erred in its statutory analysis of $ 3 39-71-710 and 39-71-737, MCA, since its opinion does not expressly address those analyses. Instead of doing so. the Court
moves to a "final eonsideraf on" as a necessary part of its "statutorj analysis." and accepts
the claimants' argument that to disallow an impairment award to permanently totally disabled
claimants. when such an award is statutorily provided to permanently partially disabled
claimants, "would lead to an absurd result, and contravene the intent underlying the Workers'
Compensation Act." The Court offers no authority in this regard, but relies on .John,sotz for
the general principle that "[wlhen more than one interpretation is possible, u c will reject an
interpretation that leads to an unreasonable result in fa~ror another that will lead to a of
reasonable result." It is my Licw that the Court ens in these regards.
1/63 First, the Court does not state how "more than one interpretation is possible" of the
statutes and language at issue here. While it obsenes that impairment awards are
"recognized" in $3 39-71-710 and 39-71-737, MCA, that observation does not explain how
"recognition" of thc existence of impairment awards else~vhere in the Workers'
Compensation Act properly results in a determination that some statute provides an
entitlement to an impaiment award. Our first rule in ascertaining legislative intent is to
construe the plain language of the statutes at issue. ,Tee, e.g., Lalzgenio v. A'fontrirztr Rail Link,
Inc., 2001 MT 273, 7 22, 307 Mont. 2 9 3 , l 22, 38 P,3d 782, qi 22 (citations omitted). The 1 plain language of these statutes does notsupport the Court's implicit determination that more
than one interpretation is possible here under any ordinary rules of statutory constl-u-uction.
164 Nor do I believe the Court's somewhat blithe statement that the result produced by a
proper statutory analysis would bc "unreasonable and cannot have been the Legislature's
intentH--withoutany legal ai~alysis--is sufficient to create a right to an impairment award
when no statute does so. The job of courts "is simply to ascertain and declare what is in
terms or in substance" contained in a statute, "not to insert what has been omitted. . . ." Section 1-2-101, MCA. The Court here is inserting into a purely statutory scheme an
entitlement to a right not provided therein. I cannot agree,
765 1 would affirm the Workers' Compensation Court's conclusion that these permanently
totally disabled claimants are not legally entitled to an impairment award in addition to their
other benefits.