The "Socials" column of the newspaper in this small Northern Neck town on the Chesapeake Bay wished Katy Upton "a speedy recovery from her injuries." But it gave no hint of the gruesome details.

It did not tell how-while grinding fish in a laboratory at the Zapata Haynie Corp. plant here-she accidentally caught her left hand in the grinder, how she screamed as all four fingers instantly were severed at the palm.

The accident changed Kathy Upton's life and horrified her coworkers. Today, nearly a year later, it has left the 27-year-old mother of two in a complex legal controversy.

Disfigured and handicapped for life, Upton faces additional operations in the future. The nerve endings keep growing to the surface of her hand stump "and it feels like an electrical shock," she said. Correcting her condition means new surgery.

She and her husband, Jim, assumed that the accidental death and dismemberment policy available to Zapata Haynie employes would provide some financial relief. They were wrong.

Her insurance claim through Prudential would not be honored, she was told, because "you didn't lose your hand all the way up to your wrist."

Next, turning to the state's workmans's compensation program for help, Upton discovered that while her initial medical costs would be covered, her weekly disability allowance would be only $74 a week for 100 weeks. And, though her fingers are gone for life, the best settlement offer under the program has been $17,500.

Finally, after being told by several coworkers that the grinder machine she used should have been equipped with a safety tray device, she decided to sue Zapata Haynie for negligence. It was then that she learned to her distress that no employe covered by workman's compensation can sue an employer.

Spokesman for Houston-based Zapata Haynie say they at first prevailed upon the insurance companies involved "because we want to see Kathy get everything she's entitled to" and because "the accident was very traumatic to her and to the company."

The case has yet to be resolved to their employe's satisfaction. Today, Kathy and Jim Upton and their children, aged 9 and 7, live in an old house they rent for $50 a month and do without a phone because they cannot afford the deposit.

The couple moved to Reedville from Alexandria two years ago, and Kathy Upton had been at the fish plant for about five months when the accident happened.

She worked in a lab, regularly testing fish for protein levels and possible contamination. On the day of the accident, last May 30, she was showing a new employe how to grind whole fish in preparation for the tests but was having trouble making the fish go through the grinding machine head first.

"I grabbed four or five fish tails to push them in and suddenly my whole hand just went in the machine," recalled Upton, a slim blonde who spoke of the accident in a quiet, tense voice. "I had to grab my arm to keep it from going in, too."

In the split second before the pain, Upton said she "could feel the pressure and was so freaked out when I couldn't get my hand out that I didn't think to turn off the machine."

When she finally freed what was left of her hand, she ran screaming to the sink. Coworkers rushed to her aid, put a tourniquet on the hand, numbed the pain with ice and drove her to the hospital.

At the hospital, where Upton spent two weeks of initial surgery, the hand became infected. This complicated the injury, and doctors couldn't close the wound for several days.

Later, according to Kathy Upton, the enduring physical and emotional stress of the accident and its aftermath so depressed her that she attempted suicide three times. This, too, complicated her case because the company's regular workman's compensation insurer, the Hartford Insurance Co., balked at paying new hospital and psychiatric care costs.

The workman's compensation program provides nationwide mandatory insurance that all but the smallest of employers must carry for workers. Originally set up about 60 years ago as "a trade off" for employers and those they hire, it guarantees disability and death benefits for the workers but prohibits them from suing the company they work for if they are injured on the job.

The Upton case was among some 278,000 workemen's compensation cases reported nationally in 1978. Benefits to the injured vary from state to state.

Workmans's compensation has paid for all of the hospital and surgical bills resulting from Upton's hand injury, an estimated $15,000 to $20,000 to date. The program is paying her $74.24 a week for 100 weeks, about two-thirds of the roughly $113 a week she earned as a clerk/technician for Zapata Haynie. The benefits are tax free.

Kathy and Jim Upton had been struggling financially even before the accident. She was a waitress at a nearby restaurant on weekends to help supplement the $110-a-week salalry her husband earned building pleasure yacht's for a boat company.

Now, without her full Zapata Haynie income, times are even tougher. She very recently took a part-time job as a nurse's aide, but her $2.95-an-hor salary soon will mean a decrease in her disability benefits since she has found some employment.

In the District of Columbia and in Maryland, Kathy Upton's injury would have been compensated at a higher level, according to benefit schedules. The minimum weekly payment in Virginia is $46.75, while those in D.C. and Maryland are $99.20 and $50, respectively. Virginia pays a maximum weekly benefit of $187 for 500 weeks compared to $396.78 for D.C. and $147 in Maryland payments, however are for life.

Ira Lechner, a former state legistlator and now an Arlington attorney who is familiar with workman's compensation law, said Virginia's injury benefits have improved greatly over the years but still fail to adequately compensate employes in several types of injury cases.

"On balance, the workman's compensation laws help the employes," he said. "They give up the right to sue the employer, but they get their benefits quicker and are more assured of getting them than if they tried to prove negligence against a company."

There have been glaring gaps in insurance coverage under the program, he said, particularly in Virginia where the state Industrial Commission which oversees the program, "is very conservative" in awarding certain benefits.

"It's a very tough if not virtually impossible" to get payment for medical treatmetnt not directly related to the injury, Lechner said. In addition to questioning psychiatric costs, "Virginia is murder on back injuries. They just don't believe in paying for them."

Coverage finally was broadened to include surgery for disfigurement on parts of the body other than the face, he said, "after I threatened to bring in three people who had been terribly burned and have them take off their shirts."

Upton's attorney, J. Hunt Brasfield, is challenging the insurance firm's refusal to pay psychiatric and hospital costs associated with her suicide attempts. He says there is "a definite relationship" between the accident and his client's subsequent emotional problems, and he plans to seek a hearing on the matter before the Industrial Commission.

The workman's compensation insurance carrier, Hartford offered Upton a lump settlement payment of $17,500 at one point to close out her case, but that has been rejected.

"The offers of settlement have not been adequate because in return for several thousands dollars the claimant would be giving up her right to receive future medical payments, and that could be disasterous," Brasfield said.

Katy Upton, who said she might as well have lost her whole hand for all the good it is to her now, is equally dubious about accepting any lump sum payment.

"They're trying to cut out all medical expenses that might come up in the future, especially if I need another operation, and they want to stop me from seeing my psychiatrist," she complained.

Hartford officials declined comment.

While anguishing over her disfigurement and the accompanying financial and personal adjustments, Upton kept a journal during her hospital stays. In one entry she described how the accident seemed so "unreal" - until she looked at her hand.

"I went into the bathroom," she wrote, "and saw my unbandaged hand for the first time in the mirror. I don't know how it's possible, but it seemed to me to look much worse with my body next to it than just looking at it laying next to me in bed. I guess it just seemed less attached to me in bed than it did in the mirror."

Now taking antidepressants and tranquilizers, Upton said she has felt much better since starting to work part-time. "But I don't want to be a nurse's aide the rest of my life." said Upton, a high school graduate who has a one semester of college.

Zapata Haynie, a subsidiary of an offshore oil drilling firm that has construction and fishing plants around the country and overseas, has denied any responsibility for Upton's accident. The safety device she spoke of, a company official said, "is only a feed tray, and that would not have prevented the accident."

In addition, said Zapata Haynie president Pat Doody, "Kathy had always been instructed to use the wooden plunger to push the fish through the machine and I don't think anyone could have imagined someone sticking their hand into a meat grinder without turning it off."

Upton, who said she thought her emlopyer's policy covering dismemberment "meant losing part of my body," was offered her old job back. "But I didn't want to go back there ever again," she said.

"If I've got to live with something like this, I thought that at least if we could make our life somewhat easier, then it wouldn't be all bad," said Upton, who said she is bewildered and angry at her inability to recover more money under her various insurance policies.

A Prudential spokesman, Dan Person, was sympathetic but steadfast in the policy interpretation that defines dismemberment as loss of the hand to the wrist.

"I wish under circumstances like this, we could pay all the money in the vault, but we have to go by the policy," he said. CAPTION: Picture, Kathy Upton displays her damaged hand. By Gerald Martineau-The Washington Post