                               NO. 84-500
               IN THE SUPREME COURT OF THE STATE OF MONTANA
                                   1985




RONALD TIEDEMAN,
                Claimant and Respondent,


COOPER LOGGING, INC.,
                Employer,
         and
STATE COMPENSATION INSURANCE FUND,
                Defendant and Appellant.




APPEAL FROM:    Workers' Compensation Court, The Honorable Timothy
                Reardon, Judge presiding.

COUNSEL OF RECORD:

         For Appellant :
                Hughes, Kellner, Sullivan      &   Alke; Mike McCarter argued.,
                Helena, Montana

         For Respondent:
                Utick & Grosfield; Norman Grosfield argued, Helena,
                Montana




                                   Submitted:        September 25, 1985
                                     Decided:        October 2 9 , 1955



Filed:   OCT 3.9 1985



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Mr. Justice William E. Hunt, Sr. , delivered the Opinion of
the Court.


     The    appellant,    State   Compensation   Insurance   Fund,
appeals from a decision that the respondent, Ronald Tiedeman
i s entitled to a lump sum a.dvance of a potential partial
 .
disability a.ward without      reduction for permanent partial
disability payments made as a result of a prior in-jury to the
same body part.
    We affirm.
     The issue presented is whether the Workers' Compensation
Court erred in holding that the claimant is entitled to
permanent partial d-isability benefits without any deduction
of a previous permanent partial disability award as a result
of a prior injury to the same body part.
     The respondent, Ronald Tiedeman, has had a history of
left knee problems.       He underwent knee surgery in 1973 or
1974.   On March 20,     1980, he suffered a work-related injury
to his left knee when he was butted by a cow.            He then
underwent   two   knee    operations.   The   State Compensation
Insurance Fund accepted liability for the 1980 injury and
paid temporary total disability benefits until February 1982
when the parties entered into a full and final compromise
settlement agreement.       A portion of this settlement amount
was for permanent partial disability benefits.      A portion was
for retraining in college.
     The claimant did not complete college.       He returned to
work in early 1983.      He first fell trees, then drove a truck,
and finally began logging for Cooper Logging, Inc.      On August
25, 1983, he reinjured his knee when he fell off a log while

cutting limbs.
     The State Fund accepted liability and commenced paying
respondent temporary total disability benefits.            In February
1984 respondent underwent surgery to fuse his left knee.          The
respondent requested. a lump sum advance on a prospective
entitlement.     The State Fund resisted.         One of the grounds
upon which the State Fund resisted was that in computing any
prospective     indemnity   award   the   prior     full   and   final
compromise settlement indemnity award must be deducted.           The
Workers' Compensat.ion Court held that no consideration is to
be given to the prior indemnity award.
     Section 39-71-738, MCA, provides:
     39-71-738. Adjustment of compensation in case of
     further injuries. Should a further accident occur
     to a worker who is already receiving compensation
     hereunder or who has been previously the recipient
     of a payment under this chapter, his further
     compensation is adjusted according to the other
     provisions of this chapter and with regard to his
     past receipt of compensation.
     In Pietz v. Industrial Accident Board (1953), 127 Mont.
316, 264 P.2d 709, this Court stated:
    The capacities of a human being cannot be
    arbitrarily and finally decided and written off by
    percentages. The fact that a man has once received
    compensation, as for example, where he has
    previously received 250 weeks or half the statutory
    amount, does not mean that forever after he is in
    the eyes of the compensation law but half a man, so
    that he can never again receive a compensation
    award going beyond the other fifty percent of
    total. After having received his prior payment, he
    may, in future years, as in the present case, be
    physically able to and does resume full gainful
    employment for several years, and if he does, there
    is no reason or logic why a disability from an
    unscheduled industrial accidental injury, which
    would bring anyone else total permanent disability
    benefits, should. yield him only half as much. We
    think the legislature ha.d no such intention in
    dra-ftingthis Act.
Pietz, 264 P.2d at 712-713.
     In Pietz the prior injury was "to a different segment of
his Sody."     Pietz, 264 P.2d at 712.     The issue in Pietz was
whether payment for an injury should be reduced by payments
made for the prior injury.        The Court in Pietz had before it
the predecessor to the statute in issue here.                Except for
minor    rewording the statute is identical to the present
version.    In Pietz this Court said that Workers' Compensation
statutes are      to be    liberally construed, section            92-838,
R.C.M.    (1947), now 5 39-71-1-04, MCA, and that the employer
takes the employee subject to his physical condition at the
time he enters employment.        Pietz, 264 P.2d at 712.      Based. on
these reasons, the Pietz Court held that there would be no
reduction of prior awards in successive disabilities.
       Appellant, on the other hand, cites McDaniel v. Eagle
Coal Company (1935), 99 Mont. 309, 43 P.2d 655 in support of
its position.         McDaniel also interpreted what is now             §

39-71-738, MCA.       In McDaniel the claimant previously lost one
eye.     He received 200 weeks of compensation.            He then lost
the     other   eye   becoming    totally     d-isabled.     His    total
disability was 500 weeks.         The Court applied what is now         §

39-71-738, MCA, and        reduced the award by        the    200 weeks
already    received.      Pietz   did   not    specifically    overrule
McDaniel or even mention it.
       The appellant, State Compensation Insurance Fund, argues
that       39-71-738, MCA,       requires   that   permanent       partial
disability payments for the 1980 knee injury be deducted from
any final permanent partial disability award for the 1983
knee injury.      It cites McDaniel as the proper approach when
dealing with 5 39-71-738, MCA.          The appel-lant urges us to
overrule the Pietz decision, or, if it is not overruled,
limit it to the specific facts in the case and apply it only
to temporary and permanent total disability cases and not
restrict the application of S 39-71-738, MCA, to adjustment
in partial disability cases.
    We hold that Pietz is the controlling 1a.w in this state
regarding the application of S                  39-71-738, MCA.         To give
effect to the rule of liberal construction and the rule that
the employer takes the employee subject to the employee's
physical condition at the time of employment, 5 39-71-738,
MCA, can only apply to individual injuries, a. particular
injury from a particular accident, not to separate injuries
in separate accidents.             Pietz is the enlightened approach.
     Pietz holds that where a claimant, some three years
before, had suffered an industrial accident to a different
segment of     his    body    and        drew   compensation for two        and
one-half months, that compensation paid would not be deducted
from a present claim.         It is in line with the humane purpose
of the compensation act.           It is based on liberal construction
and the established concept that the employer takes the
employee as found.      It also recognizes that an injured worker
should not be forever reduced in capacity by some percentage
in the eyes of the Law.
    Tiedeman was injured to his left knee in March 1980.                     He
received $198 per week until February 1982 as temporary total
disability.    At that time he entered into a full and final
compromise settlement agreement.                 Part of that settlement
included    143 weeks        of    payments      at    $99 per   week    as an
indemnity claim for partial disability.                 Tiedeman returned to
work in January 1983.         He was injured again to his left knee
in August     1983.     He        then    received     $168.23   per week    as
temporary total disability benefits.                  Tiedeman then requested
a lump sum advance on his future potential awa.rd.                          The
insurer,    State     Fund,       resisted      on    the   ground   that   any
calculation would necessitate reduction for the prior award.
The Compensation Court, relying on Pietz, held that there
would be no reduction.               It said that each new cornpensable
injury, though successive, begins a new benefit consideration
beginning at zero.
               We agree.     Pietz presents the correct approach and we
reaffirm the holding contained therein.               Insofar as McDaniel
is inconsistent, it is hereby overruled.
               Affirmed.
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                                                      Justice




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We Concur:


                   Chief Justice




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