                              No.    91-499

            IN THE SUPmME COURT OP TFIE STATE OF MONTANA
                                    1993



WILLIAM T. CHAGNON,
            Claimant and Appellant,
     -vs-
TILLEMAN MOTOR COMPANY,
            Employer,
     and
THE TRAVELERS INSURANCE COMPANY,
            Defendant and Respondent




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


COUNSEL OF RECORD:
            For Appellant:
                 Randall 0 Skorheim; Overfelt Law Firm, Great Falls,
                          .
                 Montana
            For Respondent:
                 Thomas A. Marra; Marra, Wenz, Johnson     &   ~opkins,
                 Great Falls, Montana


                                Submitted on Briefs:   April 15, 1992
                                              Decided: March 2, 1993
Justice Karla M Gray delivered the Opinion of the Court.
               .


    William Chagnon appeals from the judgment of the Workers'
Compensation Court awarding him permanent partial disability
benefits and attorney's fees and costs, and creditingthe Travelers
Insurance Company for previous overpayment of temporary total
disability benefits. The Travelers Insurance Company cross-appeals
the award of attorney's fees and costs.      We affirm.
     We phrase the issues on appeal as follows:
     1.     Did the Workers1 Compensation Court err in refusing to
utilize Chagnon's first post-injury full-time wage in calculating
his permanent partial disability benefits under 5 39-71-703, MCA
(l985)?

     2.     Did the Workerst Compensation Court err in crediting
Travelers for benefits paid while Chagnon was working?
     3.     Did the Workers' Compensation Court err in awarding
attorney's fees and costs?
     William Chagnon (Chagnon) worked for twelve years in the
autobody repair business.      In March of 1985, he began working for
Tilleman Motor Company (Tilleman) in Havre, Montana.       He worked up
to seventeen hours a day and spentmost of his time spray painting
vehicles.     On October 22, 1985, he stopped working at Tilleman,
claiming     that   he   had   developed   respiratory    and   physical
neurological problems from exposure to paint fumes. Chagnon was 30
years old at the time and earned approximately $500 per week.
     Chagnon filed his claim for compensation on November 4, 1985.
Tilleman was enrolled in Plan I1 of the Workersr Compensation Act
and   insured by    the Travelers Insurance Company       (Travelers).
Shortly after Chagnon filed his claim, Travelers began weekly
payments of $276.39 per week, reserving all rights under 5 39-71-
608, MCA (1985).
      In February of 1988, Travelers petitioned the Division of
Workers* Compensation to request an examination of Chagnon by a
medical panel and for authorization to terminate occupational
disease benefits.    In March of 1988, Chagnon filed a petition with
the Workerst Compensation Court for benefits under the Workersr
Compensation Act.         The Workers'   Compensation Court     granted
Travelers* motion to stay proceedings there until the Division had
ruled on its petition under the Occupational Disease Act.
      After   receiving    medical   information   from   two   doctors
indicating that Chagnon could return to work, Travelers terminated
Chagnontsbenefits on August 25, 1988, pursuant to 5 39-71-609, MCA
(1985). Chagnon petitioned for, and received, disability benefits
for an additional 49 days pending the hearing before the Division.
      The Division hearing was held on December 2, 1988.           The
Division subsequently issued an order determining that Chagnonts
disability was compensable under the Occupational Disease Act and
that Travelers was not entitled to retroactive reimbursement for
benefits paid prior to August 25, 1988.     The Division also denied
Chagnonrs request for attorney's fees and costs.
      Chagnon worked during two periods of time while receiving
total disability benefits from Travelers.     From July 15, 1986, to
December 15, 1986, he workad sporadically for Hi-Line Glass,
earning $5.00 per hour. Beginning July 9, 1988, Chagnon worked for
Montana Sign Company and earned $5.25 per hour.     He did not notify
Travelers he was working on either occasion. Chagnon returned to
work at Hi-Line Glass in July of 1989; he started at $5.25 per hour
and was earning $7.00 per hour at the time of trial.
        In July of 1989, Chagnon moved for summary judgment in the
Workers' Compensation Court on the issue of whether he had suffered
an industrial injury compensable under the Workersr Compensation
Act.     In granting his motion, the Workers' Compensation Court
determined that he had developed reactive airway disease from
exposure to chemicals on October 22, 1985.        Travelers did not
appeal.
        Chagnon petitioned the Workers' Compensation Court again on
July 6, 1990, for a determination of the amount of benefits to
which he was entitled.    The case proceeded to trial on October 3,
1990.      A hearings examiner heard the case and submitted his
Findings of Fact and Conclusions of Law which subsequently were
adopted by     the Workers'   Compensation Court.      The Workers'
Compensation Court's Order adjudged Chagnon permanently partially
disabled and entitled to permanent partial disability benefits of
$88.60 per week for 500 weeks; it also awarded him attorney's fees

and costs. The Workers' Compensation Court then credited Travelers
$9,397.26 for benefits it paid while, unknown to Travelers, Chagnon

worked at Hi-Line Glass and Montana Sign Company. Chagnon appeals
the amount of permanent partial disability benefits awarded and the
credit received by Travelers. Travelers appeals only the award of
attorney's fees and costs.


     Did the Workers' Compensation Court err in refusing to utilize
Chagnon's first post-injury full-time wage in calculating his
permanent partial disability benefits under 5      39-71-703, MCA


     Initially, we note that the statute in effect at the time of
the injury sets the standard by which a claimant's benefits are to
be computed.   Watson v. Seekins (1988), 234 Mont. 309, 312, 763
P.2d 328, 331.   For his claim of permanent partial disability,
Chagnon consistently has elected to proceed under 5 39-71-703, MCA
(1985), which calculates permanent partial disability benefits
based on an actual loss of earning capacity.       At the time of
Chagnon's injury, 5 39-71-703, MCA (1985), read in pertinent part:
     (1) Weekly compensation benefits for injury producing
     partial disability shall be 66 2/3% of the actual
     diminution in the worker's earning capacity measured in
     dollars, subject to a maximum of 1/2 the state's average
     weekly wage.
     (2) The compensation shall be paid during the period of
     disability, not exceeding, however, 500 weeks in cases of
     partial disability.  ...
     It is well established that loss of earning capacity under 5
39-71-703, MCA, is the permanent diminution of the ability to earn
money in the future. Hurley v. Dupuis (1988), 233 Mont. 242, 246,
759 P.2d 996, 998. In addition to the permanent aspect of loss of
earning capacity, we have determined that:
     [elarning capacity is not only determined by a comparison
     of pre-injury and post-injury wages, but also by age,
     occupational skills, education, previous health,
     remaining number of productive years and degree of
     physical or mental impairment.
Hurley, 759 P.2d at 999 (citations omitted).
     Here, the Workers' Compensation Court determined that Chagnon
was permanently partially disabled and entitled to permanent
partial disability benefits for 500 weeks.     The court went on to
address the earning capacity factors and determined:
       Chagnon is relatively young;
       his only vocational restriction is a requirement to avoid
       paint fumes;
       he has a solid job earning $7.00 per hour with potential for
       promotion;
       his previous health was good; and,
       he has approximately thirty years left to work.
     The Workers' Compensation Court then calculated Chagnon's
weekly benefits at $88.60 per week.    To reach this figure, the
court subtracted Chagnon's post-injury earning capacity of $7.00
per hour from his pre-injury earning capacity of $10.32 per hour,
resulting in a diminution of $3.32 per hour.       Multiplying the
hourly wage loss by 40 hours to reach a weekly wage loss of
$132.80, the court then multiplied the weekly figure by .667,
pursuant to 5 39-71-703, (1985) MCA, to reach a permanent partial
disability award of $88.60 per week for 500 weeks.
     Chagnon contends that he is entitled to permanent partial
disability benefits   in excess of those awarded.         His only
specification of error in this regard is his claim that the
Workers' Compensation Court erred by using $7.00 per hour, the wage
he was earning at the time of trial, as his post-injury earning
capacity. He argues that the wage he earned in his first full-time
job after his injury, $5.25 per hour at Montana Sign Company, is
the proper measure of his post-injury earning capacity.         we
disagree.
      The record is clear that the $5.25 per hour wage is not
Chagnonls post-injury earning capacity; he was earning $7.00 per
hour at the time of trial.     To accept Chagnonvs argument would
necessitate ignoring the well-established rule that 5 39-71-703,
MCA   (1985), contemplates a permanent     diminution    in earning
capacity.   Hurley, 759 P.2d at 998 (emphasis added).
      Chagnon also argues that our recent decision in Anderson v.
Hammer (1992), 252 Mont. 73, 826 P.2d 931, supports his argument
that $5.25 per hour, the wage earned closest in time to his injury,
best reflects post-injury earning capacity.      Chagnon misreads
Anderson.
      In Anderson, we restated the principle first set forth in
McDanold v. B.N. Transport, Inc. (l984), 208 Mont. 470, 679 P.2d
1188, that a meaningful comparison of pre-injury and post-injury
earning capacities can be made only if the figures are adjusted to
reflect the same time period.    We recognized the unfairness of
comparing, for example, 1981 dollars to 1990 dollars when computing
loss of earning capacity.   Anderson, 826 P.2d at 934.
      Anderson addresses the proper updating of pre-injury earning
capacity: it does not support or, indeed, relate to Chagnonvs
contention that the wages earned at his first post-injury job
reflect post-injury earning capacity because they are "closest in
time to his injury." Thus, Anderson simply is inapplicable here.
    Finally, Chagnon claims that the Workers8 Compensation Court
erroneously concluded that the "parties agree that $7.00 per hour
is a reasonable measure of post-injury earning capacity."    While
Chagnon technically may be correct in that there appears to be no
evidence of such an agreement on the record, the Workersf
Compensation Court's use of $7.00 per hour to reflect Chagnonls
post-injury earning capacity has ample record support.     We hold
that, based on the record before it, the Workers' Compensation
Court did not err in refusing to utilize $5.25 per hour as
Chaqnon's post-injury earning capacity when calculating permanent
partial disability benefits under 5 39-71-703, MCA (1985).


     Did the Workers' Compensation Court err in crediting Travelers
for benefits paid while Chagnon was working?
     Travelers paid Chagnon $276.39 per week from October 22, 1985,
through October 20, 1988.    From July 15, 1986, until December 15,
1986, Chagnon worked for Hi-Line Glass, and from July 9, 1988 to
June 23, 1989, he worked for Montana Sign Company.    The Workers'
Compensation Court reviewed Chagnon's work history and determined
that he had worked a total of 35 weeks while receiving temporary
total disability benefits.   He did not report his 1986 employment
at Hi-Line Glass to Travelers until March of 1988, long after that
employment had ceased and he had received the benefits paid by
Travelers.   Travelers did not learn of his 1988 employment with
Montana Sign Company until the Division hearing in December of
1988.   The Workers' Compensation Court determined that the
temporarytotal disability benefits of $276.39 per week paid during
those 35 weeks should have been permanent partial disability
benefits of $88.60 per week.    The court credited the difference
($9,397.26) against the 500 weeks of permanent partial disability
benefits to which it determined Chagnon was entitled under t h e
Workers' Compensation Act.
     Chagnon asserts two principal arguments regarding the credit
to Travelers.   First, he argues that the decision of the Division
of Workers1 Compensation that Travelers did not qualify for a
credit renders the issue res judicata.         Second, he argues that
Travelers1 initial    acceptance    of   his   disability   under   the
Occupational Disease Act precludes retroactive application of
Workerst Compensation Act definitions to the time period he
received the benefits. We address each contention in turn, noting
that Chagnon does not dispute the repayment of benefits for the
49-day period pending the Division hearing.
     Chagnon is correct that the Division's ruling concludes that
Travelers was obligated to pay benefits under the ~ccupational
Disease Act from October 22, 1985, through August 25, 1988, with no
credit allowed to Travelers.       That decision does not, however,
render the credit issue res judicata in the Workers' Compensation
Court.
     The necessary requisites for applying the doctrine of res
judicata are:
     1)   the parties or privies must be the same;
     2)   t h e subject matter of the action must be the
          same ;
     3)   the issues must be the same and relate to
            the same subject matter; and
     4)     the capacities of the persons must be the same
            in relation to the subject matter and issues
            between them.
Poppleton v. ~ollins,Inc. (1987), 226 Mont. 267, 270, 735 P.2d
286, 288.    In Po~~leton, Division initially paid the claimant
                         the
occupational disease benefits.    After she petitioned the Workers1
Compensation Court for workers1 compensation benefits, the insurer
argued that res judicata barred her claim because she had received
occupational disease benefits. We concluded in P o ~ ~ l e t o n
                                                             that the
issues     involved in claims for benefits under the Workersv
Compensation Act and the Occupational Disease Act were not the
same, and therefore, the third requirement for res judicata was
lacking.    Popoleton, 735 P.2d at 288.   As in Poppleton, the issue
of Travelersi credit is analyzed differently under each Act.
     proceeding before the ~ivision,Travelers argued that it was
due a credit for      benefits paid after October of 1986, based on
a 1986 letter from Dr. James Elliot.      Travelers claimed that this
letter indicated that Chagnon could return to work if he avoided
paint fumes,therefore precluding altogether Chagnontsentitlement
to total disability benefits under the Occupational Disease Act.
The Division concluded that it was Travelers' duty to manage its
claims and that it was not entitled to retroactive reimbursement of
benefits when it failed to terminate Chagnonlsbenefits pursuant to
Dr. Elliot's 1986 letter.
     Before the Workers1 Compensation Court, Travelers argued that
it was due a credit based on Chagnonls failure to report his work
activities during the time he received temporary total disability
                                 10
benefits.   The Workers1 compensation Court applied the Workerst
Compensation Act's requirement of a "total loss of wagesftB
                                                          under      §

39-71-116(19),    MCA      (1985), and concluded that Travelers was
entitled to a credit for the weeks Chagnon worked and continued to
receive temporary total disability benefits.        Clearly, the issue
before the Division was distinct from that presented to the
Workers1 Compensation Court.        Travelers claimed the credit for
different time periods and on different legal grounds under the
Occupational Disease Act and the Workerst Compensation Act.         We
hold that the doctrine of res judicata does not bar Travelers'
claim for a credit under the Workerst omp pens at ion Act.
     Chagnon then argues that the Workers1 Compensation Court
cannot apply Workers1 Compensation Act definitions to the period of
time he received temporary total disability benefits because
Travelers originally accepted liability under the Occupational
Disease Act and labeled the benefits as such.              He contends
specifically that under the Occupational Disease Act, total
disability payments do not require a "total loss of wagesM and,
therefore, he could work without informing Travelers and without
losing his occupational disease benefits.       Chagnon concludes that
the Workers1 Compensation Court cannot impose retroactively the
lftotalloss of   wagestt   requirement of the Workers1 Compensation Act
to his claim for Workers' Compensation Act benefits. We disagree.
     Once a claimant invokes the jurisdiction of the Workers'
Compensation Court, that court has exclusive jurisdiction to
determine whether the claimant is entitled to workersf compensation
benefits.   Cocking v. Hillhaven Corp. (1987), 225 Mont. 369, 372,
732 P.2d 1333, 1335.       From the outset, Chagnon consistently has
asserted his right to proceed and to secure disability benefits
under the Workers' Compensation Act.       We have held that when a
claimant's condition qualifies for benefits under the Workers1
Compensation Act and the Occupational Disease Act, the claimant can
elect his or her remedy under either Act.           Ridenour v. Equity
Supply Co. (1983), 204 Mont. 473, 477, 665 P.2d 783, 786; Bremer v.
Buerkle (1986), 223 Mont. 495, 501, 727 P.2d 529, 533.
     Chagnon8s claim for workers' compensation benefits requires
the Workers' Compensation Court to apply the Workers' Compensation
Act and its definitions to his claim.       Indeed, only the Workers'
Compensation Court can decide questions of disputed benefits under
the Workers' Compensation Act.      Section 39-71-2905, MCA (1985).
Chagnon cannot receive the best of both worlds; if he seeks
workers'    compensation     benefits,   Workers'    Compensation   Act
definitions apply; if he seeks occupational disease benefits,
Occupational Disease Act definitions apply.
     Chagnon has maintained consistently that he suffered an
industrial injury, not an occupational disease.         He elected to
petition the Workers' Compensation Court for a determination of
benefits, asserting that he had been paid            "temporary total
disability benefits" beginning October 22, 1985. He also asserted
that he continued to be totally disabled as a result of his
industrial injury and that, in the future, he would be entitled to
permanent   partial    disability    benefits   under    the   Workers1
Compensation     Act.     Chagnonls petition       indisputably    claims
eligibility for temporary total benefits, to be followed by
permanent partial benefits, under the Workers1 Compensation Act.
     In workers1 compensation cases, the person who asserts the
right has the burden of proceeding and proving the claim by a
preponderance of the evidence. Ricks v. Teslow Consol. (1973), 162
Mont. 469, 483, 512 P.2d 1304, 1312.         In his petition, Chagnon
stated that he had received temporarytotal disability payments and
continued to     suffer total disability.          Under the Workers1
Compensation Act, temporary total disability is defined as "a
condition resulting from an injury as defined in this chapter that
results in a total loss of wages and exists until the injured
worker is as far restored as the permanent character of the
injuries will permit.I1 Section 39-71-116(19), MCA (1985).
     To prove entitlement to temporary total disability benefits as
alleged his petition, Chagnon had the burden of establishing that:
     1)     he suffered an injury resulting in a total
            loss of wages; and
     2)     he had reached less than maximum medical
            healing.
Baldwin v. Orient Express Restaurant (1990), 242 Mont. 373, 375,
791 P.2d 49, 50. In this case, Chagnon failed to carry his burden.
Chagnon did not, and, indeed, could not prove that he was entitled
to   temporary    total   disability    benefits   under   the    Workers1
Compensation Act for the periods of time he worked.          The phrase
"total loss of wages1I precludes the receipt of any wages by the
claimant.    See Ryles v. Springhill Ranch Eggs (1991), 247 Mont.
276, 282, 806 P.2d 525, 528.    Chagnonlswage stubs illustrate that
                                   13
he did not suffer a total loss of wages for the weeks in question.
     We refuse to limit the Workers' Compensation Court's ability
to decide all issues properly before it merely because an insurer
labels initial benefits paid under a reservation of rights as
occupational disease benefits, especially when          the     claimant
consistently maintains he suffers from an industrial injury and
proceeds pursuant to the Workers' Compensation Act.      The Workers'
Compensation Court correctly applied Workers1 Compensation Act
definitions and determined that Chagnon was not eligible for
temporary total disability benefits during the time periods he
worked.
     Chagnon also argues that because Travelers did not effectively
terminate benefits pursuant to 5 39-71-609, MCA (1985), when it
learned of Chagnon's return to work, it is precluded from claiming
a credit for the periods of time Chagnon worked.      We disagree.
     Chagnon is correct in stating that an insurer's termination of
benefits without the statutorily-required 14         days notice is
ineffective.   See Clark v. Hensel Phelps Constr. Co. (1977), 172
Mont. 8, 11, 560 P.2d 515, 517.      In this case, Travelers did not
terminate payments without notice, but carefully followed the
requirements of 5 39-71-609, MCA (1985), in terminating Chagnon's
benefits in August of 1988.       It did not terminate or attempt to
terminate   benefits   earlier;    thus,   the   consequences    of   an
ineffective termination by an insurer, as covered by 5 39-71-609,
MCA (1985), are not relevant to the situation before us.

     As discussed above, the Workers1 Compensation Court has
exclusive jurisdiction over-all disputes arising from workers'
compensation claims.      Section 39-71-2905, MCA    (1985); Vigue v.

Evans Prod. Co. (l98O), 187 Mont. 1, 4 , 608 P.2d 488, 489. Section
39-71-609, MCA (1985), does not prevent the Workerst Compensation
Court from inquiring into Chagnonfs eligibility for Workers'
Compensation benefits.       Regardless of Travelers' failure to
terminate     benefits   after   learning   of   Chagnonls employment
activities, the Workers1 compensation Court properly determined
that Chagnon simply was not eligible for or entitled to temporary
total disability benefits for the time periods in which he worked.
We hold that the Workers1 Compensation Court did not err in
crediting Travelers for benefits paid while Chagnon was working.


     Did the Workers' Compensation Court err in awarding attorney's
fees and costs?
     Applying I § 39-71-611 and -612, MCA (19851, the Workers1
Compensation Court awarded Chagnon reasonable attorneyf$ fees and
costs, On cross-appeal, Travelers argues that attorney's fees and
costs were inappropriately awarded because the court also concluded
that Chagnon deceptively concealed his return to work in 1986 and
1988.    Travelers cites no authority for a denial of attorney s fees
under these circumstances.
        The relevant statute states:
        (1) If an employer or an insurer pays or tenders payment
        of compensation under chapter 71 or 72 of this title but
        controversy relates to the amount of compensation due,
        the case is brought before the workersf compensation
        judge for adjudication of the controversy, and the award
        granted by the judge is greater than the amount paid or
     tendered by the emplayer or insurer, a reasonable
     attorney's fee as established by the workers'
     compensation judge if the case has gone to a hearing may
     be awarded by the judge in addition to the amount of
     compensation.
Section 39-71-612, MCA (1985).   Notwithstanding use of the word
"may," the statute does not leave an award of attorney's fees
totally up to the discretion of the Workers' Compensation Court.
Lamb v. Missoula Imports, Inc. (1988), 230 Mont. 183, 188, 748 P.2d
965, 968. We have stated many times that, under 5 39-71-612, MCA
(1985), if a dispute in the amount owed is resolved in favor of the
claimant, this Court inevitably finds that an award of attorney's
fees is appropriate. Buckman v. Montana Deaconess Hospital (1989),
238 Mont. 516, 521, 776 P.2d 1210, 1213 (citations omitted).

     Although the Workers' Compensation Court's conclusions, and
the supporting record, regarding the actions of Chagnon and his
attorney raise concerns with this Court, the attorney's fees
provision of the Workers'     Compensation Act does not permit
consideration of equitable arguments. Under the statute, Chagnon
is entitled to recover attorney's fees and costs.     There is no
dispute that the amount of compensation remained in controversy and
that the amount ultimately awarded exceeded the amounts paid or
tendered. Although the parties disagree over the settlement amount
Travelers offered before the hearing, Chagnonlspermanent partial
disability award exceeded all of the amounts asserted by the
parties. Because the specific statutory language is met, we cannot
hold that the Workers' Compensation Court erred in awarding Chagnon
attorney's fees and costs.
     Affirmed   .


We concur:




Justice Terry N. Trieweiler specially concurring.
     Based on the proof that w a s offered, I concur in the result of
the majority opinion.   However, I do not agree with all that is
said therein.
                                     March 2, 1993

                             CERTIFICATE OF SERVICE

I hereby certify that the following order was sent by United States mail, prepaid, to the
following named:
                                                   1




Randall 0. Skorheim
OVERFELT LAW FIRM, P.C.
121 4th St. N., Suite 2E
Great Falls, MT 59401

Thomas A. Marra
Attorney at Law
P.O. Box 1525
Great Falls, MT 59403-1525

                                                ED SMITH
                                                CLERK OF THE SUPREME COURT
