                              NO.    93-043
            IN THE SUPREME COURT OF THE STATE OF MONTANA
                                    1993


MICHELLE CHAPMAN,
            Claimant and Appellant,
     -vs-
RESEARCH COTTRELL,
            Employer,
     and
NATIONAL UNION FIRE LOSS OF PITTSBURGH,
            Defendant and Respondent.




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


COUNSEL OF RECORD:
            For Appellant:
                 Don Edgar Burris,     Attorney at Law, Billings,
                 Montana
            For Respondent:
                 William J. Mattix; Crowley, Haughey, Hanson, Toole
                 & Dietrich, Billings, Montana


                                     Submitted on Briefs:   May 27, 1993
                                                 Decided:   July 13, 1993
Filed:
Justice John Conway Harrison delivered the Opinion of the Court.

      This is an appeal from an order of the Workers' Compensation

Court, denying appellant's claims for medical payments, statutory

penalties, costs,, and attorney's fees.                 We affirm.

      Appellant Michelle Chapman (Chapman) was injured on May 16,

1989, while in the course and scope of her employment as a laborer
for Research Cottrell at Colstrip, Montana.                     She fell twelve feet

from a cooling tower and sustained injuries to her right arm and

shoulder and to her neck and back.                  The insurer has paid temporary

total disability benefits to Chapman since May 25, 1989.                         At the

time this appeal was filed she was 24 years old and had not

returned to work.

      In June 1989, Dr. Richard Nelson, a neurologist, diagnosed

Chapman's injuries as cervical and lumbosacral sprain.                        At first,

the insurer refused to pay for Dr. Nelson's services, on the

grounds that it had not authorized this treatment.                     Chapman    filed

a   petition   with   the    Workers’   Compensation      Court,    which     determined

that the insurer was not liable for services rendered by Dr.

Nelson.     We reversed the Workers' Compensation Court because the

evidence    demonstrated      that      Dr.       Nelson should be recognized as

Chapman's treating physician,                 pursuant to A.R.M.            24.29.1403.

Chapman v. Research Cottrell (1991), 248 Mont. 353, 811 P.2d 1283.

      Dr.   Nelson    is    still    Chapman's       treating    physician.      He has

referred her to other specialists, including Drs. Thomas Johnson

and Robert Snider, orthopedic             surgeons.        These    doctors     referred

Chapman for physical therapy in January 1990.                   She was evaluated at


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the Physical Therapy and Sports Medicine Center in Billings on
January 10, 1990, and for the next eight months was treated at the
Center with moist heat, ultrasound,           and   resistance    exercises.
Therapy was administered by Susan Zimmerman,              an occupational
therapist.
     In August 1990, Chapman began an independent exercise program
at the Billings YMCA.           Zimmerman testified that Chapman had a
prescription for this program, though she could not recall who had
written it, and that she had designed the exercise program, which
consisted    of    water   exercises,   free weights,   and some Nautilus
equipment.        In September and October, 1990, Zimmerman testified,
Chapman visited the Physical Therapy and Sports Medicine Center to
use an "upper body ergometer" prescribed by Dr. Snider. Zimmerman
had no records showing that Chapman had visited the Center or used
the upper body ergometer between October 1990 and July 1991.              The
insurer paid all the costs of Chapman's therapy during this period,
including the cost of her YMCA membership.
     In July 1991,         Chapman moved briefly to Florida, where her
mother lived.       Her lawyer notified the insurer's adjusting agent,
Crawford and Company (Crawford) in June that Chapman was moving to
Florida.      He     enclosed   a prescription from Dr.          Nelson   for
continuation of her swim therapy.           In September 1991, Chapman's
lawyer wrote again to Crawford, stating that Chapman had not been
able to continue her therapy because "there has been no approval
for use of gym facilities in Florida." Later that month, Crawford
received a bill from a health club in Crystal River, Florida, for
four months membership for Chapman.           Crawford paid this bill in

                                        3
November 1991, but by then Chapman had returned to Montana without
using the health club.
      Dr. Nelson saw Chapman on November 21, 1991, and reported in
his notes that she had not been doing well, due to increasing
stiffness of her neck and shoulder.          He stated that she needed
"about six months therapy with a program of exercise" and wrote a
new   prescription    for    water    exercise,   mentioning    the   YMCA
specifically. The Billings YMCA, however, refused to give Chapman
a membership without six months payment in advance.             Chapman's
lawyer forwarded the prescription to Crawford for authorization and
payment,    but without specifying the amount due.       In December he
sent Crawford the YMCA's bill for $290,            covering    six months
membership.    Crawford responded by stating that the insurer would
pay for a physical therapy program only if it were supervised by a
registered physical therapist.
      Dr. Nelson examined Chapman again on January 31, 1992.           His
notes indicate that she "has not had any swimming or physical
therapy programs . . . at the Y which we had previously asked for,"
and that she was still experiencing pain and a restricted range of
motion with her right arm.      He concluded that "the patient requires
a formal and active program of intervention with swim therapy,
walking,    stretching,    whirlpool and jacuzzi and a deep massage
program."
      On March 5, 1992, Chapman filed a petition for hearing in the
Workers'    Compensation    Court,   complaining that the insurer had
unreasonably refused payment for her therapy at the health club in
Florida and at the Billings YMCA after she returned from Florida.

                                      4
A hearing was held on May 12, 1992, on the issues of what
constitutes reasonable medical treatment in terms of physical
therapy and whether the insurer was liable for the 20 percent
penalty authorized by 3 39-71-2907, MCA (1987),    and for costs and
attorney's fees.      Occupational therapist Susan Zimmerman was the
only witness who testified.         The hearing examiner eventually
decided all three issues in favor of the insurer.
        In the meantime, Chapman returned to Zimmerman on March 13,
1992.    Zimmerman provided eight treatments and then enrolled her in
a swim therapy program at Rocky Mountain College, prescribed by Dr.
Nelson on April 2,      1992.   The insurer paid the costs of the
treatment and the swim therapy program.
        On July 2, 1992, the insurer advised Chapman that it would pay
for a "structured, monitored physical therapy program" and that
such a program was available through Health Partners, which is
sponsored jointly by the Billings YMCA and the Deaconess Medical
Center of Billings.    Apparently in response to this letter, Chapman
enrolled in Health Partners in July,       but without notifying the
insurer.     In September, Health Partners notified the insurer that
Chapman had completed two months of therapy and would no longer
need the supervision of a physical therapist.     The insurer paid the
cost of the supervised therapy with Health Partners and authorized
an extended conditioning program that would allow Chapman to work
more     independently but with periodic      review by    a physical
therapist.
        The Workers' Compensation Court adopted the hearing examiner's
findings of fact and conclusions of law and entered judgment on

                                    5
December 24, 1992.      It determined that Chapman was not entitled to

medical payments for the YMCA membership prescribed by Dr. Nelson
in   November   1991,   and that she was not entitled to statutory

penalties or to costs and attorney's fees.       Chapman appealed.

      The issues raised by Chapman on appeal are the same as those

addressed by the Workers ' Compensation Court in May 1992.       We have

restated them as follows:

      1. Whether Chapman's proposed exercise at the health club in
      Florida and at the Billings YMCA constituted reasonable
      physical therapy, compensable as a reasonable and necessary
      medical expense under 5 39-71-704, MCA (1987).
      2 . Whether the Workers' Compensation Court erred in denying
      Chapman a 20 percent penalty under § 39-71-2907, MCA (1987).

      3 . Whether the Workers' Compensation Court erred in denying
      Chapman costs and attorney's fees.

      Two standards of review govern our decision in this case.

First,     we will not overturn factual findings of the Workers'

Compensation Court if they are supported by substantial, credible
evidence in the record.        Field v. Sears, Roebuck & Co.      (Mont.

1993),     847 P.2d 306, 310, 50 St.Rep.   166, 168.   Second,   we will

uphold the court's conclusions of law if its interpretation of the

law is correct.      Plooster v. Pierce Packing Co. (Mont. 1993),    846

P.2d 976, 978, 50 St. Rep. 59, 60; Steer, Inc. v. Dep't of Revenue

(1990) I 245 Mont. 470, 474-75, 803 P.2d 601, 603.


         Did Chapman's proposed exercise at the health club in Florida

and at the Billings YMCA constitute reasonable physical therapy,

compensable as a reasonable and necessary medical expense under §

39-71-704, MCA?


                                    6
     The Workers' Compensation Court concluded that as the insurer
eventually paid for a health club membership in Florida, the only
dispute between the parties was whether the "two month unsupervised
YMCA membership" prescribed by Dr. Nelson was "reasonable physical
therapy"   for which the insurer should pay.        The court also
concluded that Chapman was not entitled to a medical payment for
the "two months of unsupervised YMCA membership prescribed by her
physician on November 21, 1991, which [Chapman] failed to use."
These conclusions were based on the following findings of fact:
     7.   Claimant returned to Billings from Florida and on
     November 21, 1991, she was again examined by Dr. Nelson.
     . . . D r . Nelson gave claimant a prescription for six
     months of exercise therapy at the Billings YMCA. . . .
     8.  Dr. Nelson examined claimant again on January 31,
     1992. He noted that she had not carried out his request
     for an unsupervised exercise program at the YMCA, so he
     prescribed a formal and active physical therapy program.
     Claimant was not deposed and she failed to appear at
     trial which made it difficult to judge her credibility or
     to fully understand why she failed to appear at the YMCA
     for the exercise program prescribed by Dr. Nelson on
     November 21, 1991. After her January 31, 1992 visit, she
     did participate in the supervised program of occupational
     therapist Susan Zimmerman, which defendant accepted and
     paid.
     The Workers' Compensation Court apparently misread the record
in characterizing the case as a dispute between Chapman and the
insurer over "two months of unsupervised YMCA membership.1'   Chapman
requested payment for a six-month YMCA membership in December 1991.
This membership presumably would have provided therapy for her
through June 1992,    but the insurer refused to pay for that
membership and did not pay for any therapy until March 1992, when
Chapman resumed treatment under Zimmerman's supervision.      Chapman
therefore had no access to the prescribed water exercise or to any
                                  7
therapeutic program from the        time       Dr. Nelson saw her in November
1991 until she went back to Zimmerman on March 13, 1992, a period
of   almost   four months.
        Moreover,   it is    not   clear that Dr.           Nelson    intended the
"program of exercise" he prescribed                  in November 1991 to be
unsupervised, as       the Workers'            Compensation     Court     inferred.
Zimmerman testified that to her,                 "program    of exercise" meant
treatment supervised by a therapist.               She also testified that she
would not recommend unsupervised exercise for a person in Chapman's
condition who had had no therapeutic exercise for several months.
Dr. Nelson did not testify.        Thus, the question is not whether the
insurer should have paid for therapy that Chapman never attempted,
but whether unsupervised exercise at the YMCA was reasonable
physical therapy, compensable as a reasonable and necessary medical
expense under 5 39-71-704, MCA.
        We conclude that substantial, credible evidence supports the
insurer's view that unsupervised exercise was                        not reasonable
physical therapy for Chapman after she returned from Florida in
November 1991.       We hold, therefore, that the insurer did not act
unreasonably in refusing to pay for it.
                                       II
        Did the Workers' Compensation Court err in denying Chapman a

20 percent penalty under § 39-71-2907, MCA?
        Section 39-71-2907(l),     MCA (1987) (emphasis added) provides
that:
        When payment of compensation has been unreasonably
        delayed or refused by an insurer . . . the full amount of
        the compensation benefits due a claimant between the time

                                           8
     compensation benefitswere delayed or refused and the
     date of the order granting a claimant       compensation
     benefits may be increased by the workers' compensation
     judge by 20%.    The auestion of unreasonable delav or
     refusal shall be determined by the workers' compensation
     iudae . . . ,
The Workers'    Compensation Court concluded that Chapman was not
entitled to     statutory penalties     because   the    insurer     acted
reasonably   throughout.
     Chapman argues that she is entitled to the 20 percent penalty
because the insurer's refusal to pay for unsupervised exercise in
January 1992 was unreasonable in view of the fact that it had paid
for unsupervised exercise at the YMCA in 1991.        She contends that
the insurer's four-month delay        in paying for her health club
membership in     Florida during the      summer of      1991 also     was
unreasonable,   for the same reason.
     Unreasonable delay or refusal is a question of fact to be
determined by the Workers' Compensation Court: we will not reverse
its decision on awarding a penalty if the decision is supported by
substantial, credible evidence.   Field, 847 P.2d at 310; Jaenish v.
Super a Motel (1991), 248 Mont. 383, 389-90, a12 P.2d 1241, 1245.
Here, the court determined, based on the record, that the insurer
paid for Chapman's health club membership in Florida within a
reasonable time after it received the club's bill;            it found,

therefore, that the delay was not unreasonable.         This decision is

supported by substantial evidence.
     Having concluded under the first issue that the insurer's
refusal to pay for Chapman's YMCA membership in January 1992 also
was not unreasonable, we hold that the Workers' Compensation Court


                                  9
did not err in denying penalties under F, 39-71-2907, MCA (1987).
                                  III
     Did the Workers' Compensation Court err in denying Chapman
costs and attorney's fees?
     Section 39-71-611, MCA (1987),          requires an insurer to pay a
claimant's reasonable costs and attorney's fees if the insurer
unreasonably     denies   liability        for   a   claim    later   adjudged
compensable by the Workers' Compensation Court.              As the claims for
which the insurer denied liability in this case were not later
adjudged compensable by the Workers' Compensation Court, this
statute does not apply.      The Workers' Compensation Court did not
err in denying Chapman costs and attorney's fees.
     AFFIRMED.




We concur:
                 -            w
                              -




                                      10
                                      July 13, 1993

                             CERTIFICATE OF SERVICE

I hereby certify that the following order was sent by United States mail, prepaid, to the
following named:


Don Edgar Burris
Attorney at Law
P.O. Box 2344
Billings, MT 59103

William J. Mattix
Attorney at Law
P.O. Box 2529
Billings, MT 59103-2529


                                                ED SMITH
                                                CLERK OF THE SUPREME COURT
                                                STATE OF~MONTANA
