Jimenez v. Liberty Nw. Ins. Corp.

• Decision Date: 22 December 2016
• Docket Number: WCC No. 2015-3667
• Citation: 2016 MTWCC 17
• Parties: JOSE "LEO" JIMENEZ Petitioner v. LIBERTY NORTHWEST INSURANCE CORPORATION Respondent/Insurer EMPLOYMENT RELATIONS DIVISION, DEPARTMENT OF LABOR AND INDUSTRY Intervenor.
• Court: Montana Workers Compensation Court

2016 MTWCC 17

JOSE "LEO" JIMENEZ Petitioner v. LIBERTY NORTHWEST INSURANCE CORPORATION Respondent/InsurerEMPLOYMENT RELATIONS DIVISION,DEPARTMENT OF LABOR AND INDUSTRY Intervenor.

WCC No. 2015-3667

WORKERS' COMPENSATION COURT OF THE STATE OF MONTANA

December 22, 2016

ORDER GRANTING IN PART AND DENYING IN PART RESPONDENT'S MOTION TO DISMISS

Summary: Respondent moved to dismiss Petitioner's Petition for Hearing, wherein Petitioner asks this Court to award him a lump sum of his PTD, medical, and domiciliary care benefits, the total of which is approximately $3.5 million. Respondent argued that the Workers' Compensation Act does not allow for a lump-sum conversion of medical and domiciliary care benefits on a claimant's demand, and Petitioner failed to adequately plead the statutory requirements for a lump-sum conversion of PTD benefits.

Held: The Workers' Compensation Act does not allow this Court to grant Petitioner a lump-sum conversion of his medical and domiciliary care benefits on his demand and those claims are dismissed. However, Petitioner sufficiently pleaded his demand for a lump-sum conversion of his PTD benefits, which the Workers' Compensation Act allows under certain circumstances. Respondent's Motion to Dismiss is therefore granted in part and denied in part.

¶ 1 Respondent Liberty Northwest Insurance Corporation (Liberty) moves to dismiss the Petition for Hearing, in which Petitioner Jose "Leo" Jimenez seeks a lump sum of his medical, domiciliary care, and permanent total disability (PTD) benefits under § 39-71-741, MCA (2003). Liberty contends that the Petition for Hearing fails to state a claim upon which relief may be granted because § 39-71-741, MCA (2003), does not allow a claimant to obtain a lump sum conversion of medical and domiciliary care benefits on his demand, and because Jimenez did not adequately plead the facts under which he claims entitlement to a lump sum of his PTD benefits. Jimenez opposes Liberty's motion, arguing that § 39-71-741, MCA (2003), allows him to obtain a lump sum of all benefits on his demand and that his Petition for Hearing gives Liberty sufficient notice of his claims. Jimenez also argues that if he can obtain a lump sum of his medical and domiciliary care benefits only with Liberty's agreement, then § 39-71-741, MCA (2003), contains an unconstitutional delegation of legislative authority. The Department of Labor and Industry (DLI) has intervened regarding Jimenez' constitutional claims.

STATEMENT OF FACTS

¶ 2 Because this case is before this Court on a motion to dismiss for failure to state a claim upon which relief may be granted, this Court accepts the allegations in Jimenez' Petition for Hearing, including the documents incorporated, as true.¹ As alleged in Jimenez' Petition for Hearing, the facts are as follows:

¶ 3 On December 10, 2003, Jimenez suffered an industrial injury. Although Liberty accepted liability for his claim, they have had several disputes over the last 13 years.

¶ 4 By letter dated September 15, 2015, Jimenez demanded that Liberty pay his PTD, medical, and domiciliary care benefits in a lump sum, pursuant to § 39-71-741, MCA (2003). Jimenez maintains that it is in his best interest to convert his benefits to a lump sum because Liberty has harmed him by treating him "arbitrarily and unfairly." Liberty denied Jimenez' demand for a lump-sum payment.

¶ 5 Jimenez calculated the present value of his PTD benefits to be $188,462.02, the present value of his medical benefits to be $465,366.48, and the present value of his domiciliary care benefits to be $2,930,428.64. Thus, he seeks a total award of approximately $3.5 million.

LAW AND ANALYSIS

¶ 6 A motion to dismiss for failure to state a claim upon which relief may be granted requires this Court to determine whether a claim has been adequately stated in the Petition for Hearing.² This Court may consider only the Petition for Hearing and the documents it incorporates by reference.³ All a petitioner need show to survive a motionfor judgment for failure to state a claim is that a set of facts exists under which he could recover.⁴

Preliminary Issues

¶ 7 On January 15, 2016, Jimenez filed a Notice of Constitutional Challenge to a Statute regarding § 39-71-741, MCA (2003). The DLI subsequently intervened on behalf of the Montana Attorney General. The parties thereafter briefed the issue of the constitutionality of § 39-71-741, MCA (2003). The DLI raised two arguments that the parties did not raise in their initial briefing on Liberty's Motion to Dismiss that this Court must address at the outset.

¶ 8 First, the DLI argues that the parties are applying the wrong version of § 39-71-741, MCA. Since Jimenez' industrial accident occurred on December 10, 2003, his case would typically be governed by the 2003 version of the Workers' Compensation Act (WCA) since that was the law in effect at the time of his industrial accident.⁵ However, the DLI contends that the 2011 version of § 39-71-741, MCA, applies in this matter because the 2011 Legislature amended this statute and expressly declared the amendments to be retroactive.⁶ Jimenez maintains that the 2011 amendments are not retroactive, arguing that the language purporting to apply the amendments retroactively was not part of the statute, and further arguing that retroactive applicability violates the rule that the statutes in effect on the date of injury control in workers' compensation cases. Liberty has not taken a position on this issue.

¶ 9 Notwithstanding, this Court need not resolve the dispute over the applicable statute because it would reach the same result regardless of which version of the statute applies. The 2011 Legislature made only one substantive change to the statute: it added subsections allowing a claimant and an insurer to agree to settle medical benefits on an accepted claim when the "settlement is in the best interest of the parties."⁷ However, Jimenez is not seeking a settlement and does not contend that these additions allow him to obtain a lump sum of his medical benefits on his demand. The 2011 Legislature's other amendments to § 39-71-741, MCA, were minor stylistic changes that do not affect its meaning. Thus, the 2003 subsections on which Jimenez relies to support his argumentthat a claimant can obtain a lump-sum conversion of all benefits on his demand are indistinguishable from the 2011 subsections.⁸

¶ 10 Second, the DLI argues that this Court need not address Jimenez' argument that § 39-71-741, MCA (2003), is unconstitutional because Jimenez cannot obtain his domiciliary care benefits in a lump sum due to a settlement agreement he reached with Liberty in 2006. However, neither Liberty nor Jimenez interpret the 2006 agreement as precluding Jimenez from seeking a lump sum of his domiciliary care benefits. Furthermore, the 2006 agreement is silent as to whether Jimenez could obtain a lump sum of his domiciliary care benefits, and when a settlement of workers' compensation benefits is silent on a point, the agreement incorporates the applicable provisions of the WCA.⁹ Thus, this Court must determine whether Jimenez can lump sum his domiciliary care benefits under the WCA.

Jimenez' Claims for a Lump-Sum Conversion of his Medical andDomiciliary Care Benefits

¶ 11 The WCA favors the periodic payments of benefits.¹⁰ However, § 39-71-741, MCA (2003), states that the DLI may approve a lump-sum payment of benefits, and this Court may award a lump sum, in delineated circumstances. That statute states, in relevant part:

(1) By written agreement filed with the department, benefits under this chapter may be converted in whole or in part into a lump sum. An agreement is subject to department approval. If the department fails to approve or disapprove the agreement in writing within 14 days of the filing with the department, the agreement is approved. The department shall directly notify a claimant of a department order approving or disapproving a claimant's compromise or lump-sum payment. Upon approval, the agreement constitutes a compromise and release settlement and may not be reopened by the department. The department may approve an agreement to convert the following benefits to a lump sum only under the following conditions:

(a) all benefits if a claimant and an insurer dispute the initial compensability of an injury and there is a reasonable dispute over compensability;(b) permanent partial disability benefits if an insurer has accepted initial liability for an injury. The total of any permanent partial lump-sum conversion in part that is awarded to a claimant prior to the claimant's final award may not exceed the anticipated award under 39-71-703. The department may disapprove an agreement under this subsection (1)(b) only if the department determines that the lump-sum conversion amount is inadequate.

(c) permanent total disability benefits if the total of all lump-sum conversions in part that are awarded to a claimant do not exceed $20,000. The approval or award of a lump-sum permanent total disability payment in whole or in part by the department or court must be the exception. It may be given only if the worker has demonstrated financial need that:

(i) relates to:

(A) the necessities of life;

(B) an accumulation of debt incurred prior to the injury; or

(C) a self-employment venture that is considered feasible under criteria set forth by the department; or

(ii) arises subsequent to the date of injury or arises because of reduced income as a result of the injury; or

(d) except as otherwise provided in this chapter, all other compromise settlements and lump-sum payments agreed to by a claimant and insurer.

. . . .

(4) A dispute between a claimant and an insurer regarding the conversion of biweekly payments into a lump-sum is considered a dispute for which a mediator and the workers' compensation court have jurisdiction to make a determination. If an insurer and a claimant agree to a compromise and release settlement or a lump-sum payment but the department

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