                                  No.    89-612

              IN THE SUPREME COURT OF THE STATE OF MONTANA
                                        1991



J & L TIRE AND ALIGNMENT
CENTER and STATE
COMPENSATION INSURANCE
FUND,
             Defendants and Appellants,


JAMES R. PEAK,
             claimant and Respondent.



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


COUNSEL OF RECORD:
            For Appellant:
                    Norman C. Peterson, Agency Legal Services Bureau,
                    Helena, Montana; Nancy Butler, State Insurance
                    Fund, Department of Labor, Helena, Montana
            For Respondent:
                    R. V. Bottomly, Bottomly Law Offices, Great Falls,
                    Montana


                                 Submitted on Briefs:         December 20, 1 9 9 0
                                                   Decided:   February 6, 1991
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Justice William E. Hunt, Sr. delivered the Opinion of the Court.

     Appellant State compensation Insurance Fund         (State Fund)
appeals from an order of the Workerst Compensation Court granting
claimant attorney fees on the full amount of his final award.
     We affirm.
     The sole issue raised on appeal is whether the defendants made
a firm offer of settlement prior to the final award.
     In October of 1984, James Peak sustained a back injury while
employed at J   &   L Tire and Alignment Center.   He retained counsel
and counsel began negotiating with the State Fund.      The State Fund
made several settlement proposals to claimant between 1985 and
1987.     None of these proposals were accepted by claimant.
        A hearing was held in October of 1988.     As a result of this
hearing, claimant was found to be permanently partially disabled.
He was awarded 500 weeks of permanent partial disability benefits
of $143.00 per week under the authority of     §   39-71-703, MCA, and
was also awarded reasonable costs and attorney fees under authority
of 5 39-71-612, MCA.
     On November      14, 1988, claimantts counsel submitted his
petition to the court for the agreed fee between counsel and
claimant.   He alleged that there had been no offers of settlement
available at the time of the adjudication, and that all previous
offers had been withdrawn.      The Workerst Compensation Court held
an evidentiary hearing to determine attorney fees.       It found that
the fees were due and ordered the State Fund to pay attorney fees
in the amount of the contract agreement between the claimant and
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his attorney, less the amount the State Fund had been willing to
pay as a lump sum.    It is from this order that the State Fund
appeals.
     section 39-71-612, MCA (1983), reads:
     (1) If an employer or insurer pays or tenders payment
     of compensation under chapter 71 or 72 of this title, but
     controversy relates to the amount of compensation due and
     the settlement or award is greater than the amount paid
     or tendered by the employer or insurer, a reasonable
     attorney's fee as established by the division or the
     workerst compensation judge if the case has gone to a
     hearing, based solely upon the difference between the
     amount settled for or awarded and the amount tendered or
     paid, may be awarded in addition       to the amount of
     compensation.
     (2)   When an attorney's fee is awarded against an
     employer or insurer under this section there may be
     further assessed against the employer or insurer
     reasonable costs, fees, and mileage for necessary
     witnesses attending a hearing on the claimant's behalf.
     Both the necessity for the witness and the reasonableness
     of the fees must be approved by the division or the
     workerst compensation judge.
     The State Fund maintained that there were offers to settle for
a lesser amount made to the claimant before the disability hearing.
The last proposal made by the State Fund prior to the Workers'
Compensation Court's disposition of the disability claim was
contained in a June 1987 letter that included the following
language:
     ...   authorized to make the following settlement offer.
     State Fund will pay Mr. Peak the sum of $47,000 over a
     period of time. Such sum includes attorney's fees and
     costs. If you should choose to accept this offer but
     prefer a lump sum arrangement, please feel free to reply
     with a proposal and I will take it to the State Fund for
     their consideration.
The following month, the State Fund corrected the dollar amount in
a letter stating:
     This letter is to correct our earlier settlement offer
     of $47,000. Due to a mathematical misunderstanding the
     correct amount should be $48,910. Again, the State Fund
     would be willing to advance a reasonable lump sum to pay
     off any debt obligations which Mr. Peak may have
     incurred.
The claimant did not respond to this proposal.
     A review of the record shows that the State Fundls proposal
of $48,910 was but one of many in a series of proposals and
counterproposals between the State Fund and the claimant.           The
record shows that at least in June, July, August, and December of
1985; October of 1986; June and December of 1987; and January and
March of 1988, correspondence or telephone conference memoranda
indicate that the parties were trying to negotiate a settlement.
Many of those offers were accompanied by proposed conditions,
including time conditions.
     The proposal made by the State Fund cannot be considered a
firm offer because it leaves open the manner of payment with the
words    ". . . the sum of   $47,000 over a period of time."    It also
leaves   open   the   possibility   of   a   lump   sum   settlement of
undetermined amount.    To be an offer contemplated by the statute
nothing must be left to negotiate.
    Affirmed.


                                                      Justice
We Concur:
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