                                No. 85-124
                IN THE SUPREME COURT OF THE STATE OF MONTANA
                                    19e5




DEE SHEPARD,
                 Claimant and Appellant,
         -vs-
MIDLAND FOODS, INC., Employer,
         and
GLACIER GENERAL ASSURANCE COMPANY,
                 Defendant and Respondent.




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

COUNSEL OF RECORD:

         For Appellant:
                  Kelly & Halverson, P.C.; Sheehy, Prindle   &   Finn;
                  Patrick L. Prindle, Billings, Montana

         For Respondent:
                  Crowley Law Firm; L. Randall Bishop, Billings,
                  t'lontana




                                    Submitted on Briefs: Aug. 22, 1985
                                                Decided: December 18, 1985



Filed:   DEC181985



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

         Dee Shepard appeals a Workers' Compensation Court order
awarding him disability benefits.              The issues on appeal are
whether the lower court erred by               (1) refusing to increase
Shepard's    award under S 39-71-2907, MCA, for unreasonable
delay or refusa.l to pay;         (2) holding defendant insurer not

liable     for   medical     expenses   paid    by    other    health   care
providers who have not sought reimbursement from Shepard.                We
af firm.
      The parties have been before this Court in a related
proceeding;      Shepard v. Midland Foods, Inc. (Mont. 1983), 666
P.2d 758, 40 St.Rep. 1177.           We set out the case history in

some detail in the first Sheward case.            The resolution of the
instant case requires on.ly a perfunctory                outline of the
facts.
         In 1972, a doctor diagnosed Shepard as suffering from
degenerative arthritis and chondrocalcinosis in his knees.
In February 1980, Shepard injured his knee while working at
his job for Midland Foods, Inc.          He received temporary total
disability payments for ten days after the injury.                   Shepard
returned. to his job in February 1980 but retired in April of
that year due to knee difficulties and on the advice of his
doctor.     He sought permanent total disability benefits after
his retirement and was denied the same.               Shepard petitioned
the Workers' Compensation Court for a hearing on his right to
disability       benefits.      In   September       1982,    the   Workers'
Compensation Court denied permanent total disability benefits
to Sheparc7,.
      The court concluded that Shepard had retired because of
his knees, which had deteriorated for other than work related
reasons.     The court ruled that Shepard's injury at work was
not the cause of his disability.
       Shepard appealed that decision and in July 1983, this
Court reversed the Workers' Compensation Court, holding that
there was not substantial evidence that Shepard's knees had
deteriorated for other than work related reasons.                 This Court
remanded the case for a determination of the compensation,
costs, fees and penalties, if any, to which Shepard was
entitled.
       In October 1983, the Workers' Compensation Court again
held a hearing on Shepard's claim for disability benefits.
At   that hearing, Shepard's            counsel stated that Shepard's
total medical expenses to that time amounted to $23,160.42.
Counsel    stated    that,   of    that amount, Medicare           had   paid
$19,273.85, Banker's Mutual, Shepard's insurance carrier, had
paid $1,156.96, and Shepard ha.d paid $407.60.
       During the course of the proceedings, counsel for the
insurer     delivered   a    check       for     $11-,870.60 to   Shepard's
counsel.       The   insurer's         counsel    stated   in   court    that
Shepard's cashing of that check was not meant to be a release
or compromise of any of Shepard's claims or rights.                        On
October 11, 1983, insurer's counsel filed an affidavit with
the Workers' Compensation Court.               The affidavit stated, (1)
that the check delivered to Shepard's counsel stated on the
back that the endorsement of the check would be a release and
receipt in full payment;          (2) that the affiant did not know
this language was on the check at the time the check was
offered; (3) that the affiant only learned of this language
after the October 6, 1983 hearing; (4) that the affiant then
delivered another check           to    Shepard, which     check had     the
endorsement and release language crossed out and initialed;
and (5) that it was not the intent of the insurer's counsel
that the cashing of the check would be a release of Shepard's
claims.     The record also contains a letter from insurer's
counsel to Shepard's counsel which supports the veracity of
the affidavit.
      At     the     October      6,   1.983     hearing,   the     Workersr
Compensation Court granted counsel approximately sixty days
(until November 30, 1983) to complete the two anticipated
depositions    for    the   case.         The   depositions were      to   be
submitted as part of the record upon which the Workersf
Compensation Court would make its decision.              Counsel for both
parties requested and received an extension for the filing of
depositions until January 30, 1984.
      The insurer completed its deposition by that deadline.
Shepard requested and received - further extensions for the
                               two
completion    of     depositions.          Shepard   finally      filed    his
completed deposition with the lower court on April 30, 1984.
Thereafter,    counsel      for    both    parties    submitted     proposed
findings of fact and conclusions of law in August 1984.
      On December 24, 1984, the Workers' Compensation Court
issued its decision.           The court awarded to Shepard total
disability benefits from February 1980, medical benefits for
treatment and surgery on his knees, and reasonable costs and
attorney's    fees.      The      court   held    that   Shepard    was    not
entitled to be paid for benefits paid by other health care
insurers.     The court refused to impose a twenty percent
penalty on the insurer under 5 39-71-2907, MCA.
      In January 1985, Shepard's counsel filed a petition for
rehearing and request for order nunc pro tunc.               The petition
again requested the lower court to impose a twenty percent
penalty on the insurer.             The petition also requested the
lower court to order the defendant insurer to                      reimburse
Medicare and Shepard's health care insurer for the amounts
they had paid for Shepard's medical expenses.                The petition
states:
            . ..  Claimant is primarily liable to
            Medicare and his health insurance company
            for benefits paid through those policies
            which are the Workers' Compensation
            insurer's responsibility. Upon discovery
            of nonreimbursement, Medicare and the
                health insurance provider will sue the
                Claimant, not the insurer.
          The   lower court issued an order refusing Shepard's

requests and stating:
                If, at a future date, claimant is sued
                for medical costs which should have been
                paid by defendant, claimant may file a
                Petition asking for a ruling on the
                matter. ..  If the claimant is held
                responsible, it is clearly the insurer's
                obligation to pay medical benefits; thus,
                litigation of that issue seems unlikely.
Shepard appeals the rulings of the District Court.
          The first issue is whether the lower court erred in
refusing to increase the award to Shepard under S 39-71-2907,
MCA   .     That     section   allows     a    court    to    increase   the
compensation benefits due a claimant by twenty percent where

the insurer has unreasonably delayed or refused. payment of
compensation.        A decision to increase the award under this
section is within the discretionary power of the Workers'
Compensation Court.          Putnam v. Castle Mountain Corp.         (Mont.
1985), 702 P . 2 d     333, 42 St.Rep.        833.    This Court will not
overturn a decision of the Workers' Compensation Court where
there is substantial evidence to support the findings and
conclusions of the lower court.           Nielsen v. Beaver Pond, Inc.
(Mont.      1983), 661 P.2d 47, 40 St.Rep. 489.
          The first issue arises from appellant's contention that
the lower court erred in refusing to impose a twenty percent
penalty upon the insurer for unreasonable delay or refusal to

Pay         Appellant    argues    that       until    Janua.ry 1985,    the
respondent insurance company refused payment of benefits.
Appellant later concedes that respondent offered a check for
$11,870.60 on October 6, 1983 but contends that cashing the
check would        have prejudiced his rights.               He ignores the
record and the affidavit of respondent's counsel which show

that the check was not offered as a final settlement of the
claim and that respondent did not intend the cashing of the
check to be a release of appellant's claims or rights.
        The record also shows that much of the delay in this
case was due to appellant's repeated requests for extensions
of time in which to complete depositions.                 The record further
shows    that,    generally, respondent was               reasonable in          the
negotiations      and    conduct     of    the    case.        Respondent        did
initially deny its liability to Shepard for permanent total
disability      benefits    but    this        action   was    not       in   itself
unreasonable.         In fact, the lower court at first agreed that
respondent was not          liable    for permanent total disability
benefits.      We uphold the lower court's decision to not impose

a twenty percent penalty upon respondent.
        The second issue is whether the lower court erred in
holding respondent not liable for medical expenses paid for
by   other     health      care    providers       who       have    not      sought
reimbursement from appellant.
        Appellant's       argument       on     this     issue      is     somewhat
confusing.        Appellant appears to argue at one point that
respondent is liable to appellant for medical expenses paid
by other health care providers.                   Before the lower court,
however, appellant requested that respondent be required to
reimburse the health care providers.               Appellant cites no case
law for either proposition.
        Neither       Medicare     nor     Ranker's       Mutual,        Shepard's
insurance carrier, was a party to this action.                           The lower
court    had     no    jurisdiction       to    adjudicate       any     right    to
reimbursement which those entities had.                   See Spiker v. John
Day Co. (Neb. 1978), 270 N.W.2d 300.
        Section 39-71-704, MCA, entitled Payment of medical,
hospital, and. related services, states that,
             . . . the . . . insurer shall furnish,
             without   limitation. . .    reasonable
             services by a physician or surgeon,
             reasonable    hospital    services and
             medicines when needed, and such other
             treatment as may be approved.              ..
Contrary    to        appellant's   assertion,       this       statute      is   not
authority       for     ordering    respondent      to    pay        appellant    for
medical expenses already paid by other health care providers.
The     statute       requires   the    insurer     to    furnish       reasonable
services, medicine and treatment.                 To order the insurer to
pay   appellant        for medical       expenses    already          paid   is not
furnishing services nor is it reasonable.                        In Spiker, the
Nebraska Supreme Court held that the pla.intiff had no valid
claim     for     reimbursement        for   services      furnished         by   the
Veterans Administration and Medicare.                    The Nebraska statute
controlling in Spiker is similar to             §   39-71-704, MCA.
        Appellant Shepard is here asking for a windfall.                          The
lower court ruled that if Shepard were sued for medical
expenses, he could petition the Workers' Compensation Court
for relief.            That ruling is logical, equitable and                      can
provide Shepard with prompt relief.                 We hold that the lower
court did not err in its ruling on this issue.
                                                                    7
        Affirmed.                                                ,/?
                                                                 ,




We concur-             --   /
  flA       <
            ' ,
              /
                  r
  ief Justice




Mr. Justice John C. Sheehy did not participate.
