Gaither, Matter of
| Decision Date | 21 August 1990 |
| Docket Number | No. 89-293,89-293 |
| Parties | In the Matter of the Workers' Compensation Death Benefits of Richard GAITHER. |
| Court | Montana Supreme Court |
John B. Whiston (argued), Rossbach & Whiston, Missoula, for appellant.
Larry W. Jones (argued), Garlington, Lohn & Robinson, Missoula, Michael Hoff, Seattle, Wash., for respondent.
This case involves the rights to benefits under the Workers' Compensation Law where the decedent who died in the course of his employment is survived by two children of a prior marriage, and by the widow of a second marriage through whom he had no children. We determined here that the surviving widow may waive or abandon her right to benefits; and that upon such waiver the surviving children are entitled to no more than their proportionate share of the benefits provided by law. In so holding we affirm in part and reverse in part the judgment of the Workers' Compensation Court.
Richard M. Gaither married Donna L. Paulson in Maryland on December 8, 1973. Two children were born of the marriage, Heather, on December 24, 1976, and Heidi on January 30, 1978.
On December 31, 1979, Richard and Donna were divorced in Maryland, custody of the children being awarded to their mother, with Richard obligated for their support. However, on December 9, 1981, with the consent of both Richard and Donna, the two children were adopted by their then stepfather, George A. Yorkston, to whom Donna had remarried. Substitute Certificates of Birth were issued by the State of Maryland for each of the children.
On December 24, 1984, Richard married Laurie K. Baugher at Seattle, Washington, a marriage that was in effect at the time of his death.
Richard and Laurie maintained a home in Edmonds, Washington, though Richard spent most of the six months preceding his death in Helena, Montana. He was employed as a pilot by Corporate Air of Billings, Montana. While acting in the course and scope of his employment on February 3, 1988, and subject to the benefits and obligations of the Workers' Compensation Law of Montana, Richard was killed in the crash of an airplane owned by Minuteman Aviation, a Montana corporation.
No litigation ensued respecting the liability of Minuteman or others, relating to Richard Gaither's death. However his insurer and others with potential liability for death claims settled with the widow, Laurie, in a structured settlement for substantial sums, which have been paid and are to be paid in escalating amounts monthly until May 15, 2009. The approximate accumulation of funds should she live to that date will be in the sum of $758,800.00. After that date, and for the remainder of her life, she will receive the sum of $3,000 per month.
Heather and Heidi are not parties to the structured settlement, and derived no benefit therefrom. Laurie, as the surviving widow never filed a claim for Workers' Compensation benefits, though one was prepared and filed by Corporate Air, Richard's employer. Travelers Indemnity Insurance Company, the compensation carrier for Corporate Air, upon such filing, began paying one-third ( 1/3) of the compensation benefits to Laurie, as Richard's widow and beneficiary, and reserved two-thirds ( 2/3) of the benefits pending final determination of the children's status as beneficiaries. Laurie advised Travelers, on April 25, 1988 that she did not wish to receive any Workers' Compensation benefits and returned those she had previously been issued by Travelers. Since April 28, 1988, all benefits have been held in reserve pending the final ruling of the courts in these proceedings.
Travelers petitioned the Workers' Compensation Court for a declaratory ruling on August 23, 1988. The issues before the Workers' Compensation Court were (1) whether the widow could legally renounce her benefits entitlement, and (2) whether the adoption of the children by the mother's second husband terminates their entitlement to death benefits, thereby mandating 100 percent of the benefits to be payable to the widow. Jurisdiction of the petition was properly before the Workers' Compensation Court by virtue of its authority to issue declaratory rulings within the subject jurisdiction of the Workers' Compensation Laws of Montana. State ex rel. Uninsured Employees' Fund v. Hunt (1981), 191 Mont. 514, 625 P.2d 539.
On March 24, 1989, the Workers' Compensation Court determined that the widow could not waive death benefits as a matter of public policy, and that the children's interest in the benefits would vest only if the widow died or remarried prior to the passing of 500 weeks after the death of Richard Gaither.
The children filed a request for rehearing on April 11, 1989. In its order of April 25, 1989, the Workers' Compensation Court modified its earlier order, finding the children to be the stepchildren of the surviving widow, and the three therefore entitled to death benefits, to be equally divided between all parties.
The children appeal to this Court the determination that the surviving spouse is compelled to receive benefits she did not claim or intended to waive and contend that the children should each receive one-half of all the benefits available; Travelers cross-appeals the determination that the children are proper beneficiaries.
On this appeal the issues raised by the children are:
1. Did the Workers' Compensation Court err in holding that the surviving spouse's right to Workers' Compensation death benefits was not barred by the statute of limitations?
2. Did the Workers' Compensation Court err in holding that the surviving spouse could not waive Workers' Compensation death benefits?
The issue raised by the respondent Travelers Indemnity Insurance Company on appeal is:
Did the Workers' Compensation Court err in holding that the Workers' Compensation death benefits should be equally divided among the surviving spouse and the decedent's two children?
Section 39-71-601, MCA, states in part:
(1) In case of personal injury or death, all claims must be forever barred unless presented in writing to the employer, the insurer, or the department, as the case may be, within 12 months from the date of the happening of the accident, either by the claimant or someone legally authorized to act for him in his behalf.
In this case, the claim for benefits was filed not by the surviving widow, nor by the beneficiaries, but by the employer, Corporate Air. The children contend that this filing by Corporate Air means nothing, that Sec. 39-71-601, MCA, has not been complied with, and that therefore the claim was not properly filed under the mandatory provisions of the statute.
The children also argue that this Court has interpreted the filing requirement under Sec. 39-71-601, MCA, to be mandatory. They cite Miller v. City of Billings (1976), 171 Mont. 91, 96, 555 P.2d 747, 752, in which this Court stated that "[t]he filing requirements of section 92-601, R.C.M. 1947 (now Sec. 39-71-601), are mandatory in nature and compliance is essential to the existence of a right to have proceedings to compel payment of compensation." See also Devlin v. Galusha, Higgins & Galusha (1982), 202 Mont. 134, 655 P.2d 979.
The children also cite Ricks v. Teslow Consolidated (1973), 162 Mont. 469, 483, 512 P.2d 1304, 1312, for this Court's determination that "the duty is upon the claimant to file his claim, not upon the insurer to solicit claims." Children maintain that the employer or insurer took the initial step of soliciting a claim on behalf of the widow, when the widow voluntarily chose not to pursue a claim. They assert that Travelers is not a party legally authorized to file a claim on behalf of the widow in this instance, as set out in the statute.
Travelers contends that Sec. 39-71-601 in no way prohibits the filing of a claim by a non-beneficiary. For support, Insurer cites Scott v. Utility Line Contractors (1987), 226 Mont. 154, 734 P.2d 206, and Weigand v. Anderson-Meyer Drilling Co. (1988), 232 Mont. 390, 758 P.2d 260. In both Scott and Weigand, the issue relating to Sec. 39-71-601 was whether claimants initiated the filing procedure in a manner sufficient to give adequate notice of the claimant's injury. In both cases this Court determined that the claimants substantially complied with the statute by notifying employers and insurers of the injury, resulting in a written notification, ruled to be acceptable as a claim. That claimants in most cases initiated the filing process was a focal point in this Court's determination that the requirements of Sec. 39-71-601 will be broadly applied as to the sufficiency of notice.
None of these cases interprets Sec. 39-71-601 adequately and addresses the issue at hand. We have a unique situation, in that the claimant and the insurer are arguing the reverse of their customary positions. The children argue that the claim did not meet the guidelines of the statute, and no benefits should be paid to the widow, while the insurer argues the claim met the statutory standard, and the insurer is obligated to pay the death benefits to the widow.
The Workers' Compensation Court, faced with no clear guidelines in this unique situation, held the statute of limitations defense to be available only to the insurer. The court stated:
What effect, if any, does the widow's rejection of benefits have? We believe none. The children argue that since the widow did not file a "claim" for benefits within one year of death, she is not entitled to benefits because the statute of limitations precludes payment. However, the statute of limitations is a defense available to an insurer, not to other potential claimants. In this case, the insurer commenced payment of benefits immediately upon the death of Mr. Gaither.
The generally accepted underlying policy and objective of statutes of limitations is to "compel the exercise of a right of action within a reasonable time so that the opposing...
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