                                No. 8 8 - 3 9 6


               IN THE SUPREME COURT OF THE STATE OF MONTANA
                                        1989



GLORIA RIGHTNOUR,
                Claimant and Respondent,
       v.
KARE-MOR, INCORPORATED,

     Employer and Appell.ant,
     and
INTERMOIJPJTAIN INSURANCE COMPANY,
     Defendant and Appellant.



APPEAL FROM:    The Workers' Compensation Court of the State of Montana,
                The Honorable Timothy Reardon, Judge presiding.
COUNSEL OF RECORD:
       For Appellant:
         Larry W. Jones, Esq.; Garlingt.on, Lohn         &   Robinson,
         Missoula, Montana
       For Respondent:
         R. Lewis Brown, Jr., Esq., Butte, Montana
         David L. Holland, Esq., Butte, Montana


                                        Submitted on Briefs: December 16, 1 9 8 8
                                          Decided:   February 9 ,   1989
                                               0




                                   ' Clerk
                                    r
Mr. Justice John Conway Harrison delivered the Opinion of the
Court.

      This case was originallv before this Court in Rightnour
v. Kare-Mor, Inc. (Mont. 1987), 732 P.2d 839, 44 St.Rep. 141,
where we concluded that claimant Gloria Rightnour was
entitled to medical benefits which were reserved from the
settlement agreement.      IJpon Rightnour ' s petition, the
Workers'   Compensation Court then      reopened   the  final
settlement and awarded claimant permanent total disability
benefits. This appeal arises from that order and judgment.
We affirm.
      The facts of this case are well set forth in Rightnour,
supra, but simply stated, the facts are these:      Rightnour
suffered a compensable injury to her lower back while
employed by the defendant employer in January, 1983.
Appellant accepted liability, and after Rightnour reached a
state of maximum healing, a settlement agreement between the
parties was reached. In March, 1984, Rightnour tripped and
fell while caring for children in her home and re-injured
her lower back. New to the facts of this appeal, however, is
the appellant's revelation that Rightnour was self-employed
when the 1984 injury occurred.
      Appellant raises two issues for our review:
      1. Was the Workers' Compensation Court correct in
concluding that good cause existed to reopen the final
settlement?
      2. Was the Workers' Compensation Court correct in
concluding that, based on this Court's prior decision,
Rightnour was entitled to disability benefits?
      The parties agree that a final settlement may be
reopened by the Workers' Compensation Court within four years
from the date the settlement was accepted by that court, if
there was either a mutual mistake of a material fact, a
change in disability, or good cause shown.           Section
39-71-204, MCA, (1983) provides in part:
                  (1) Except     as   provided    in
           subsection (2), the division shall have
           continuing jurisdiction over all its
           orders, decisions, and awards and may, at
           any   time, upon     notice, and    after
           opportunity to be heard is given to the
           parties in interest, rescind, alter, or
           amend any such order, decision, or award
           made by it upon good cause appearing
           therefor.
                (2) The division or the workers'
          compensation judge shall not have power
          to rescind, alter, or amend any final
          settlement or award of compensation more
          than 4 years after the same has been
          approved by the division.    Rescinding,
          alterinq, or amending a final settlement
          within the 4-vear period shall be bv
          agreement between the claimant and the
          insurer. If the claimant and the insurer
          cannot agree, the dispute shall be
          considered a dispute for which the
          workers '   compensation    judge    has
          jurisdiction to make a determination.

     Section 39-71-2909, MCA, (1983) provides:
                The judge may, upon the petition o f
          a claimant or an insurer that the
          disability of the claimant has changed,
          review,   diminish,   or   increase,    in
          accordance with the law on benefits as
          set forth in chapter 71 of this title,
          any benefits previously awarded by the
          judge or benefits received by a claimant
          through settlement agreements. However,
          the judge may not change any final
          settlement or award of compensation more
          than 4 years after the settlement has
          been approved by the division or any
          order   approving   a   full and     final
          compromjs~ settlement o f compensation.
      The hearing examiner found Rightnour had presented
sufficient medical evidence that her disability has increased
since the settlement was entered. Dr. Murphy concluded that
Rightnour's impairment rating increased from 20% to 35%;
Rightnour has been restricted to a five to eight pound weight
restriction on repetitious lifting; and a rehabilitation
consultant concluded that Rightnour is no longer able to
engage in any occupation in her normal labor market. We find
sufficient   evidence   existed   to  enable   the   Workers'
Compensation Court to reopen the settlement agreement.
      Appellant next contends the Workers' Compensation Judge
erroneously concluded that, because the insurer was liable
for Rightnour's medical benefits, it logically follows that
the insurer is also liable for her disability benefits. As
stated in Rightnour, the Workers' Compensation Court
concluded:
           [Tlhe claimant has proven to a reasonable
           degree of medical certainty that the
           original compensable injury of January
           19, 1982 and the two subsequent surgeries
           weakened her back, and combined with the
           fall in her home in March, 1984, resulted
           in a third surgery being required. Such
           surgery and other medical bills related
           to that fall are the natural consequence
           of the original injury.
Rightnour, 732 P.2d at 831.         We agree the Workers'
Compensation Court has not reached an erroneous conclusion.
      Appellant argues that, under the facts as it now knows
them, i.e., that Rightnour was self-employed when the 1984
injury occurred, it is not liable for the disability
benefits.   In other words, now that it has conducted proper
discovery, appellant wants to relitigate or contest the same
liability issue.     However, it is of no benefit to the
                                           '
appellant that it failed ta take F.i.qhtnour s deposition and
therefore did not learn that she was self-employed.        As
stated in 4 6 Am.Jur.2dI Judgments, 5 443:
            Clearly, the enforcement of the rule of
            res judicata may not be avoided by the
            discovery of new evidence bearing on a
            fact or issue involved in the original
            action,    as   distinguished   from   a
            subsequent fact or event which creates a
            new legal situation, even though the
           newly discovered evidence might have been
            sufficient to justify a new trial in the
            first case. . .
        Furthermore, 4 6 Am.Jur.2dI Judgments,   474, reads in
part:
            [Tlhe operation of a judgment as res
            judicata is not affected by a showing
            that the unsuccessful partv might have
            prevailed if he had been sufficiently
            diligent. Hence, the application of the
            rul-e does not depend upon whether the
            case    was    as   comprehensively    or
            pursuasivelv presented at the first trial
            as at the second. In accord with these
            principles, a litigant may not avoid the
            effect of the doctrine, as to an issue
            presented for determination in the prior
            action, by failing to offer proof of it.
      Appellant failed to bring this evidence before the
court during the initial litigation and is now bound by that
determination. Also of interest is the appellant's actual or
constructive knowledge that Rightnour was self-employed.
Rightnour wrote to the insurer prior to the execution of the
settlement agreement and informed them she was going to open
a "Children's Day Care Home" to earn a living. Appellant
was, or should have been, well aware that Rightnour was
self-employed and the failure to raise this defense does not
prevent the appl.ication of res judicata to the initial
judgment.
      Finally, appellant's suggestion that it is excused from
adequately developing this defense because the law has
changed is also unpersuasive.      Whatever the appellant's
interpretation may be of our decision in Guild v. Bigfork
Convalescent Center (Mont. 1987), 747 P.2d 217, 44 St.Rep.
2139, its understanding of the law as it stood at the time of
the initial litigation included the defense of injury during
other employment.   Belton v. Carlson Transport (1983), 202
Mont. 384, 658 P.2d 405. There is no excuse for failing to
raise Rightnour's other employment as a defense.
      The judament of the Workers' Compensation Court is
affirmed.




We concur:

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