                                No. 86-486

                IN THE SUPREME COURT OF THE STATE OF MONTANA
                                       1987



JEROME JOHNSON,
                 Claimant and Respondent,
         -vs-
J.W. GIBSON, Employer,
         and
FIDELITY   &   CASUALTY COMPANY OF NEW YORK,
                  Defendants and Appellants.




APPEAL FROM:      The Workers' Compensation Court, The Honorable
                  Timothy Reardon, Judge presiding.
COUNSEL OF RECORD:
         For Appellant:
                 Herndon, Harper   &   Munro; Donald R. Herndon, Billings,
                 Montana
         For Respondent:
                  Keefer Law Firm; Gene R. Jarussi, Billings, Montana


                                       -
                                       Submitted on Briefs:   April 3, 1987
                                         Decided:   July 23, 1987
           23
Filed:



                                       Clerk
Mr. Justice L .   C. Gulbrandson delivered the Opinion of the
Court.

      Fidelity & Casualty Company of New York (the insurer)
appeals a Workers' Compensation Court order which grants a
lump sum advance to the claimant, Jerome Johnson. Johnson
cross-appeals contending the court should have increased his
award by 20% for insurer unreasonableness.     The issues on
appeal are (1) whether the court erred in granting a lump
sum advance to claimant to pay a debt which he had incurred
in anticipation of a settlement of his claim, which
settlement did not occur; (2) whether the court erred in
awarding attorney's fees and costs to claimant; and (3)
whether the court erred in refusing to impose a 20% penalty
upon the insurer for unreasonably refusing the lump sum
advance. We affirm.
      In April 1981, claimant. suffered a severe injury while
working for J.W. Gibson.     The injury was compensable for
workers' compensation purposes. As a result of the injury,
claimant is a paraplegic and is confined to a wheelchair.
The insurer accepted liability for claimant's injury and has
paid, and apparently continues to pay, temporary total
disability benefits to claimant.
      In the fall of 1982, claimant bought a new vehicle as
his old car was unreliable on snow and ice.       The insurer
provided claimant with a $9,100 lump sum advance settlement
to enable him to buy a new two-door car, a Dodge 400.
Because of his disability, claimant had difficulties with his
new vehicle.    To get in and out of the car, he had to
disassemble his wheelchair, place it on the seat next to him
and assemble the chair again to get out.       In taking the
wheelchair in and out of the car, claimant tore up the car's
interior with the chair's frame. Moreover the chair was very
difficult to disassemble in cold wea-ther. The car was also
unsatisfactory in that claimant could not effectively strap
his legs down to the car seat. Claimant suffers occasionally
from leg spasms. Without being able to strap his legs down,
claimant suffered bruises on his legs from having leg spasms
while driving.
      Beginning at least in 1984, claimant was aware that his
attorney was conducting settlement negotiations with the
insurer.   Claimant's attorney informed him of at least one
settlement proposal whereby the insurer would pay claimant
$50,000 "upfront" and monthly payments. Claimant had regular
discussions with his attorney about a possible settlement of
the workers' compensation claim.      The parties apparently
exchanged several different proposals.
      In July 1984, claimant traded his Dodge 400 car in on a
new 1984 GMC van because of his difficulties with the car.
He could enter and exit the van without disassembling his
wheelchair. He could also strap his legs down in the van so
as to avoid bruising his legs when he suffered leg spasms.
Prior to the purchase, claimant made no request to the
insurer to provide him with a lump sum advance to pay for the
van nor did he notify the insurer of his intentions of
purchasing the van. Claimant received trade-in value for his
car and signed a one year promissory note obligating him to
make one approximately $21,000 payment in July 1985 in full
payment for the van. Claimant testified that he signed the
promissory note with the idea that his attorney and the
insurer were close to a settlement agreement and would settle
his claim within one year.
      Eventually, the settlement negotiations broke down and
no final settlement was reached. Claimant requested that the
insurer provide him with a lump sum advance sufficient to pay
off his debt on the van.    The insurer refused to make that
lump sum advance.    In March 1985, however, the insurer did
make a lump sum advance of $1,285 to claimant for tuition for
a correspondence course in gemology. In June 1986, claimant
filed a petition with the Workers' Compensation Court
requesting a lump sum advance to pay off the debt on his van.
In September 1986, the court filed its judgment ordering the
insurer to pay to claimant a lump sum advance sufficient to
pay off the debt plus accrued interest. The court refused to
impose the 20% penalty upon the insurer but did award
claimant his costs and attorney's fees.          This appeal
followed.
      The first issue is whether the court erred in granting
the lump sum award to claimant.      Section 39-71-741, MCA,
provides the Workers' Compensation Court with general
authority to grant lump sum awards. The date of claimant's
injury predates the 1985 amendments to § 39-71-741, MCA, and,
therefore, those amendments are not applicable to this case.
Buckman v. Montana Deaconess Hosp. (Mont. 19861, 730 P.2d
380, 43 St.Rep. 2216; Odenbach v. Buffalo Rapids Project
(Mont. 1987), 731 P.2d 1297, 44 St.Rep. 67. The applicable
law was stated in Byrd v. Ramsey Engineering (Mont. 19851,
701 P.2d 1385, 1387, 42 St.Rep. 991, 993-994; quoting in part
from Willoughby v. Arthur G. McKee & Co. (19801, 187 Mont.
253, 256-257, 609 P.2d 700, 701-702;
           "The general rule concerning the award or
           denial of lump sum settlements under the
           Workers' Compensation Act is well settled
           in this state. Lump sum settlements are
           only      granted     in      exceptional
           circumstances. Where the best interests
           of the claimant are generally served by
           paying compensation in regular periodic
           installments, the conversion of benefits
           to a lump sum settlement has been
           recognized as the exception rather than
           the rule."     (Citations omitted)  ...
          "Lump sum settlements are only granted
          where     there     is     'outstanding
           indebtedness,' 'pressing need,' or where
           'the best interests of the claimant, his
           family and the general public will be
                     ...
           served. ' "     the decision to award or
           deny a lump sum settlement will not be
           interfered with on appeal unless there
           has   been   an   abuse  of discretion.
           (Citations omitted. )
The Byrd case is similar to the situation presented by this
appeal.      There, the claimant purchased a house in
anticipation of his workers' compensation award.          The
Workers' Compensation Court declined to award Byrd a lump sum
advance to pay off his house loan. We reversed and held that
Byrd was entitled to receive the remainder of his benefits in
a lump sum.
      Similarly, we now hold that the court did not abuse its
discretion in awarding claimant Johnson a lump sum award to
pay for his van. Claimant has shown a pressing need for the
van.   The bank will repossess the van if claimant does not
receive a lump sum advance to pay for it and he could also be
liable for a deficiency judgment. It is his only automobile
and he lives seven miles out of town.      We also note the
severe difficulties which claimant had with his previous
vehicle and handling his wheelchair.     Finally, it appears
that claimant sincerely believed that a settlement would be
reached enabling him to pay for the van. The best interests
of claimant, his family and the general public will be served
by a lump sum award sufficient to pay off this outstanding
indebtedness.
      The second issue is whether the lower court erred in
refusing to impose the $ 39-71-2907, MCA, 20% penalty upon
the insurer for unreasonable delay or refusal to pay.
           Whether an action is "unreasonable" under
            this statute is a question of fact which
            is subject on appeal to the limited
           review of the substantial evidence test.
            (Citation omitted. )      If  there   is
           substantial evidence to support a finding
           of "unreasonableness," this Court cannot
           overturn the finding.
Wight v. Hughes Livestock Co., Inc. (Mont. 1981), 634 P.2d
1189, 1192, 38 St.Rep. 1632, 1636. The Workers' Compensation
Court held that the insurer was not unreasonable and, as part
of its reasoning behind that holding stated;
           The Court is aware of the defendant's
           predicament and agrees in principal.
           This debt was incurred by the claimant
           without any authorization or approval by
           the defendant. Defendant had no voice in
           the making of a debt for which it is now
           held responsible ...
          The claimant has acted irresponsibly.
          Yet given the claimant's earnings when
          injured, his age and the severity of his
          injury, it is no surprise that he has
          little expressed appreciation for the
          financial predicament he has created.
           ...  We caution counsel to advise their
          clients to not spend money that does not
          exist  ...  In fairness to all parties,
          it is appropriate that the repayment of
          the advance begin immediately by reducing
          the current biweekly benefits being paid
          to the claimant.
Substantial evidence supports the court's determination that
the insurer was not unreasonable and we defer to that
finding.   We note that previously the insurer had freely
provided two lump sum advances to claimant, one of those
being for the purchase of a vehicle.
      The last issue is whether the court erred in awarding
attorney's fees and costs to the claimant under § 39-71-612,
MCA.    Appellant argues that this section is not authority
for a grant of attorney's fees where the sole controversy is
the propriety of a lump sum advance. We disagree. In Polich
v. Whalen's O.K. Tire Warehouse (Mont. 1981), 634 P.2d 1162,
38 St.Rep. 1572, we held that attorney's fees may be awarded
under this section where a dispute over a lump sum advance is
resolved in the claimant's favor. Appellant also argues that
Lasar v. Oftedal & Sons (Mont. 1986), 721 P.2d 352, 43
St.Rep. 1239, mandates that no attorney's fees can be
awarded.   That case is inapplicable.     There, the insurer
conceded permanent total disability three weeks before trial
and, therefore, "no controversy existed at trial and the
amount awarded was the same as that agreed upon as due."
Lasar, 721 P.2d at 354.    Here, there was a controversy at
trial which was resolved in claimant's favor and, therefore,
the award was proper.
      Affirmed.                                .
                                               ,
                                               /
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                                        .   .
                                  Justice

We concur:       A


/chief Justice




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