Connery v. Liberty Northwest Ins. Corp., 97-630
| Decision Date | 26 May 1998 |
| Docket Number | No. 97-630,97-630 |
| Parties | Colleen CONNERY, Petitioner and Respondent, v. LIBERTY NORTHWEST INSURANCE, CORP., Respondent, Appellant and Insurer for Winter Sports, Inc., Employer. |
| Court | Montana Supreme Court |
Larry W. Jones, Missoula, for Appellant.
David W. Lauridsen, Columbia Falls, for Respondent.
¶1 In this action, the Workers' Compensation Court declared unconstitutional the benefit reduction provision of § 39-71-416(1), MCA. The employer's insurer, Liberty Northwest Insurance Corporation (Liberty), appeals. We affirm.
¶2 The issue is whether the Workers' Compensation Court erred in ruling that § 39-71-416(1), MCA, violates a worker's right to full legal redress under Article II, Section 16 of the Montana Constitution.
¶3 Colleen Connery was injured on December 10, 1995, when a co-employee, Mark Roy, collided with her on the Big Mountain Ski Hill. The injury occurred within the course and scope of Connery's employment. Connery v. Liberty Northwest Ins. Corp. (1996), 280 Mont. 115, 929 P.2d 222.
¶4 In addition to filing for workers' compensation benefits, Connery filed a claim against Roy's homeowner's insurance carrier. The elements of the claim against Roy's insurer were past medical expenses of $3,451.27; future medical expenses of $500; past wage loss of $2,280; pain and suffering of$25,255; and loss of enjoyment of an established course of life of $25,255. In February 1997, Connery settled her claim with Roy's insurer for $27,500.
¶5 Liberty has paid Connery wage loss benefits of $1,352.34 and medical benefits of $2,570.95 and $376.57. The parties agree that Connery has a 7 percent impairment rating as a result of her injury, entitling her to permanent partial disability benefits of $1,354.12. However, Liberty has refused to pay Connery's impairment rating on the basis that an offset under the 30 percent reduction of benefits pursuant to § 39-71-416(1), MCA, relieves it of that liability.
¶6 Section 39-71-416(1), MCA, provides:
If an employee is injured or dies and obtains a third-party recovery, settlement, or award, an insurer may reduce by 30% the benefits paid or that are required to be paid to the employee or beneficiary pursuant to chapter 71 or 72 as a result of the injury or death. The reduction applies to any recovery, settlement, or award regardless of the form of action or the nature of damages. The total of any reductions may not exceed 30% of any third-party recovery, settlement, or award.
Liberty asserts that Connery in fact owes it $340.08 if the full 30 percent reduction is taken.
¶7 The Workers' Compensation Court reviewed this case on an agreed statement of facts. The court ruled that on its face, § 39-71-416(1), MCA, ignores a worker's right to full legal redress as guaranteed under Article II, Section 16, Mont. Const. It declared § 39-71-416(1), MCA, unconstitutional and void, and concluded that Liberty was liable to Connery for the full amount of benefits otherwise due her under the Workers' Compensation Act without reduction on account of § 39-71-416(1), MCA.
¶8 Did the Workers' Compensation Court err in ruling that § 39-71-416(1), MCA, violates a worker's right to full legal redress under Article II, Section 16 of the Montana Constitution?
¶9 Our standard of review of a trial court's conclusions of law is simply whether the lower court's interpretation of the law is correct. Francetich v. St. Comp. Mut. Ins. Fund (1992), 252 Mont. 215, 218 827 P.2d 1279, 1281. When the constitutionality of a statute is challenged, we begin with the presumption that the statute is constitutional, and the party attacking it has the burden of proving it unconstitutional. Francetich, 252 Mont. at 218-19, 827 P.2d at 1282.
¶10 Liberty points out that this Court has previously endorsed the legislature's elimination of certain types of work-related injuries from coverage under the Workers' Compensation Act. In Stratemeyer v. Lincoln County(1993), 259 Mont. 147, 855 P.2d 506, the Court affirmed the exclusion of mental-mental and mental-physical claims from workers' compensation coverage. In Watson v. Seekins (1988), 234 Mont. 309, 763 P.2d 328, we upheld a statute requiring an insurer to reduce its payment of total disability benefits to partially offset social security benefits, which result, as the concurring opinion pointed out, was dictated by federal law limiting total social security and workers' compensation benefits. And, in Murer v. State Compensation Mut. Ins. (1994), 267 Mont. 516, 885 P.2d 428, the Court upheld a temporary cap on maximum permanent and temporary total disability benefit amounts. Liberty maintains that like the laws approved in those cases, the 30 percent statutory reduction results in an insurer's decreased liability for the payment of benefits without invading a claimant's third-party recovery.
¶11 Unlike the provisions upheld in the cases cited by Liberty, the statute here at issue does not create a new class of benefits or eliminate any benefits, nor is it dictated by federal law. Instead, the statute gives the insurer a separate right to reduce benefits whenever an injured worker has obtained a third-party settlement or award. Article II, Section 16, Mont. Const., provides:
Courts of justice shall be open to every person, and speedy remedy afforded for every injury of person, property, or character. No person shall be deprived of this full legal redress for injury incurred in employment for which another person may be liable except as to fellow employees and his immediate...
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