Garmann v. E.R. Fegert Co.

• Court: Montana Supreme Court
• Writing for the Court: GULBRANDSON; TURNAGE
• Citation: Garmann v. E.R. Fegert Co., 736 P.2d 123, 226 Mont. 432, 44 St.Rep. 781 (Mont. 1987)
• Decision Date: 21 April 1987
• Docket Number: No. 86-387,86-387
• Parties: Lavern GARMANN, Claimant and Appellant, v. E.R. FEGERT CO., Employer, and Employers Insurance Company of Wausau, Defendant and Respondent.

Page 123

736 P.2d 123

226 Mont. 432

Lavern GARMANN, Claimant and Appellant, v. E.R. FEGERT CO., Employer and Employers Insurance Company of Wausau, Defendant and Respondent.

No. 86-387.

Supreme Court of Montana.

Submitted on Briefs Feb. 19, 1987.

Decided April 21, 1987.

Lloyd E. Hartford, Billings, for claimant and appellant.

L. Randall Bishop, Billings, for defendant and respondent.

GULBRANDSON, Justice.

Claimant appeals a Workers' Compensation Court decision denying a lump sum award of benefits and refusing to impose a 20% penalty on the insurance company. Two issues are presented on appeal:

(1) whether the Workers' Compensation Court erred in refusing to order a lump sum award of future benefits to claimant;

(2) whether the Workers' Compensation Court erred in refusing to impose the statutory 20% penalty on the insurance company for its actions.

We affirm.

On March 21, 1981, claimant suffered multiple injuries while working for E.R. Fegert Co. in Zortman, Montana, including fractures of the pelvis, ribs and lumbar spine. Claimant also suffered nerve injury to the upper right extremity. Employer's Insurance Company of Wausau (hereinafter insurance company), the workers' compensation insurer, paid claimant temporary total disability benefits from the date of injury, March 21, 1981 to September 10, 1982, and again from September 11, 1982 to December 6, 1982. Claimant was paid permanent partial disability benefits from December 7, 1982 through April 28, 1983, whereupon the insurance company suspended the payment of benefits after learning that claimant had been working as a front-end alignment mechanic. Upon receiving notice that claimant was not physically able to continue the work, the insurance company on January 27, 1984 reinstated permanent partial disability benefits and then upgraded payments to permanent total disability in December 1984. Claimant was paid lump sum advances on five separate occasions from December 1981 to August 1984. Claimant's treating physician opined that maximum healing was achieved by April 1982. An orthopedic surgeon rated claimant's impairment at 25% of the lower extremity, and a neurologist added a 20% impairment rating for the upper extremities and cervical region. Rehabilitation tests revealed that claimant's optimal work setting would be a gross manual task requiring only light lifting. The rehabilitation counselor recommended that claimant find work as a driver/operator of some type of "smooth riding construction vehicle." Claimant subsequently received three and one-half days of training and worked as a front-end alignment mechanic, but as was previously stated, claimant elected to quit because of back and leg problems. Claimant did not attempt to find other work.

Further assessment of claimant's limitations in August 1983 revealed that claimant could only lift 10-15 pounds and was restricted to occasional squatting and no climbing or bending. A vocational specialist concluded that claimant's severe physical restrictions required future job placement in "light duty work," defined as "frequent lifting of ten pounds with no bending, lifting, pushing, stooping, or climbing." Claimant requested a lump sum award of future benefits for the purchase of a home, automobile and furniture. With any remaining award, claimant proposed to purchase an annuity. Claimant also requested that a 20% statutory penalty be imposed on the insurer for its actions.

The Workers' Compensation Court reviewed the evidence and found claimant to be permanently totally disabled from the date of injury, exclusive of the time in which he worked as a mechanic. However, the court said claimant was not entitled to a lump sum award because the record was virtually barren of any evidence to support such an award under the "best interests" test or the "financial sustenance" test. The court also refused to impose the statutory 20% penalty on the insurance company, holding that the suspension of benefits for the time claimant worked as a mechanic was not unreasonable. The court said a valid dispute existed as to whether claimant was permanently totally disabled.

As to the lump sum award issue, Sec. 39-71-741, MCA, provides that such an award is within the discretion of the Workers' Compensation Court. The standard of review is clear:

"Lump sum settlements are granted in exceptional circumstances. Outstanding indebtedness, pressing need, or circumstances in which the best interests of the claimant, his family and the general public are served justify such a settlement. [Citations omitted.] The decision to award or deny a lump sum settlement will not be interfered with on appeal unless there has been an abuse of discretion. The Workers' Compensation Court will be presumed correct and affirmed if supported by substantial evidence, and reversed only if the evidence clearly preponderates against its findings. [Citations omitted.] Wide discretion will be afforded the Workers' Compensation Court in its determination. (Citations omitted.)"

LaVe v. School Dist. No. 2 (Mont.1986), 713 P.2d 546, 547, 43 St.Rep. 165, 167; Hock v. Lienco Cedar Products (Mont.1981), 634 P.2d 1174, 1178-79, 38 St.Rep. 1598, 1603-04.

Section 39-71-741 was amended by the 1985 legislature and we interpreted the legislative action as a means of codifying existing law. See Buckman v. Montana Deaconess Hosp. (Mont.1986), 730 P.2d 380, 43 St.Rep. 2216. We quote the following passage from Buckman:

[c]ase law has required claimants to submit financial plans when outstanding or delinquent debt is the basis for a conversion request. Kuehn v. National Farmers Union Property and Cas. Co. (1974), 164 Mont. 303, 521 P.2d 921. Furthermore where the court has found the outstanding debt was not so significant as to necessitate a lump-sum conversion, it has been denied. Ruple v. Bob Peterson Logging Co. (Mont.1984), 679 P.2d 1252, 41 St.Rep. 704. This prior law is directly reflected in the language of Sec. 39-71-741(2)(c).

Subsection 2(d) of that same statute likewise codifies prior case law requiring that a claimant show the worthiness of her business venture plan and the adequacy of her business acumen. See Bundtrock v. Duff Chevrolet (1982), 199 Mont. 128, 647 P.2d 856; Krause v. Sears, Roebuck and Co. (1982), 197 Mont. 102, 641 P.2d 458.

Finally, Sec. 39-71-741(3) allows the division to order "financial, medical, vocational, rehabilitation, educational or other evaluative studies to determine whether a lump-sum conversion is in the best interest of the worker or his beneficiary." These tests reflect the historical ways in which a claimant could assert that a conversion was in her best interests other than by showing strict financial necessity. Prior case law has held a conversion to be in the best interests of a claimant where medical considerations required that the claimant and his family move to a different climate. Polich v. Whalen's O.K. Tire Warehouse (1983), 203 Mont. 280, 661 P.2d 38. Prior case law has held it to be in the best interest of the claimant where diagnosed mental instability made the award of a lump sum necessary to relieve the claimant's abnormal anxiety. Legowik v. Montgomery Ward and Co. (1971), 157 Mont. 436, 486 P.2d 867.

The legislative use of the term "best interest" further convinces us that Sec. 39-71-741(3), MCA, reflects the intent of the legislature to make explicit in the statutory language the previously used best interest test for the conversion of biweekly benefits.

Buckman, 730 P.2d at 383.

Stelling v. Rivercrest Ranches, Inc. (Mont.1986), 730 P.2d 388, 390, 43 St.Rep. 2212, 2214, decided the same day as...