Krause v. Sears Roebuck & Co.

• Court: Montana Supreme Court
• Writing for the Court: SHEA
• Citation: Krause v. Sears Roebuck & Co., 641 P.2d 458, 197 Mont. 102, 39 St.Rep. 394 (Mont. 1982)
• Decision Date: 25 February 1982
• Docket Number: No. 81-92,81-92
• Parties: John W. KRAUSE, Claimant and Appellant, v. SEARS ROEBUCK & COMPANY, Employer, and Sears Roebuck & Company, Defendant and Respondent.

Page 458

641 P.2d 458

197 Mont. 102

John W. KRAUSE, Claimant and Appellant, v. SEARS ROEBUCK & COMPANY, Employer and Sears Roebuck & Company, Defendant and Respondent.

No. 81-92.

Supreme Court of Montana.

Submitted on Briefs Aug. 6, 1981.

Decided Feb. 25, 1982.

Regnier & Lewis, Great Falls, for claimant and appellant.

Jardine, Stephenson, Blewett & Weaver, Great Falls, for defendant and respondent.

SHEA, Justice.

The claimant appeals a judgment of the Workers' Compensation Court in which he was denied the conversion of permanent total disability benefits into a lump sum award and denied his attorney fees and costs.

The claimant, John W. Krause, Sr., is presently 62 years old and resides with his wife in Augusta, Montana. He had been employed in Great Falls at the Sears warehouse since March 1960 and worked there continuously until May 13, 1976, when he injured his lower back while delivering a washing machine to a Sears customer. Sears is enrolled under Plan No. 1 of the Workers' Compensation Act as a self-insurer. Sears accepted liability for the claimant's injury and has paid benefits at the temporary total disability rate of $138.67 per week since the date of the accident.

After his accident, the claimant was examined by four doctors and underwent a myelography which revealed a herniated intravertebral disc in the lower back. Sears had the claimant examined by Dr. Melvin, an orthopedic surgeon, who recommended that the claimant undergo a type of surgery known as a laminotomy. The claimant's own physician, Dr. Popnoe, also an eminently qualified orthopedic surgeon, did not recommend surgery. Testimony conflicted as to the effectiveness and risks associated with this type of surgery. The claimant is generally opposed to surgery because he feels there is a risk that he could be further crippled by the surgery. He believes his fears are justified because after his daughter was hospitalized for a similar type of lower back surgery, her condition worsened.

Before the hearing in the Workers' Compensation Court, Sears took the position that the claimant was not permanently totally disabled because he would not submit to the type of surgery recommended by Dr. Melvin. Sears, however, for the first time, conceded in its opening statement at the hearing that the claimant was permanently totally disabled.

The claimant's petition for a lump sum award was based upon his plan to construct a small mobile home park, laundromat, and car wash on a two-acre plot of land in Augusta already owned by the claimant and his wife. He testified that he could not engage in any significant physical activity, but that his wife and son were available to assist him with the construction, operation, and maintenance of the project. Based upon a cursory inquiry and upon information furnished by the claimant, an appraiser testified that it was his conclusion that the project had only a limited chance for economic success.

The court refused to convert the claimant's disability benefits into a lump sum award because the claimant did not prove by a preponderance of the credible evidence that he had a pressing need for a lump sum settlement or that the project would be in his best interests. The claimant also contends that the trial court committed reversible error by allowing Sears to present the appraiser's opinion because he was not qualified as an expert and because he relied solely on hearsay evidence to reach his conclusion. The claimant asks this Court to reverse and remand the case for a determination of the amount of the lump sum award and the reasonable attorney fees and costs to be paid to the claimant.

The claimant's first contention is that the court erred by admitting opinion testimony by an appraiser who was not qualified as an expert in the field in which he testified. He argues that the record is totally devoid of any evidence which establishes that the appraiser was qualified to provide expert opinion testimony regarding the feasibility of a project of this nature, as is required by Rule 702, Mont.R.Evid.

We conclude that the court did not err by permitting this witness to give opinion testimony. The Workers' Compensation Court is not bound by either common law or the statutory rules of evidence, including the prohibition against hearsay evidence. Section 39-71-2903, MCA. The record reveals that the Workers' Compensation judge clearly understood his role in admitting and weighing hearsay evidence. He stated at one point in the hearing that hearsay evidence would be allowed "... for whatever it is worth ...." It is equally clear that the judge recognized that the appraiser's conclusions were based upon only a cursory investigation. The court stated in its findings:

"25. Mr. Joe Tredik, an MAI appraiser and witness for the defendant, testified he had not done a complete feasibility study, but based upon a preliminary inquiry, he questioned the economic feasibility of all three projects.

"26. Mr. Tredik testified that the data prepared by the claimant's son was not adequate to make a determination as to the economic feasibility of the projects.

"27. Mr. Tredik testified that he viewed property in Augusta, Montana which he thought to be the land upon which the claimant proposed to construct his projects. It is clear from the evidence that Mr. Tredik was looking at the wrong property at the time he formed his opinions as to whether the projects would succeed or fail. Mr. Tredik conceded during cross examination that he did not know at the time he was testifying at the trial whether he had even seen the two acre parcel of land upon which the claimant proposed to put his projects. Mr. Tredik also testified that he had never previously performed an appraisal, a feasibility study or done anything connected with his appraisal work where he did not look at the particular parcel of land involved before he provided an opinion."

These findings adequately demonstrate that the court did not place any undue reliance upon the appraiser's testimony. In addition, there were no conclusions of law expressly or impliedly relating to the appraiser's testimony.

The claimant's second contention is that the court erred by refusing to convert the claimant's permanent total disability benefits into a lump sum award as authorized by section 39-71-741, MCA.

The general rule is that disability payments under the Workers' Compensation Act are biweekly. They may, however, at the discretion of the Workers' Compensation Division, be converted into a lump sum settlement. While lump sum settlements are an exception to the general rule, they are not looked upon with disfavor and should be awarded without hesitancy where the claimant's interest would be best served. Willoughby v. Arthur G. McKee & Co. (1980), Mont., 609 P.2d 700, 702, 37 St.Rep. 620; Utick v. Utick (1979), Mont., 593 P.2d 739, 741, 36 St.Rep. 799; Laukaitis v. Sisters of Charity of Leavenworth (1959), 135 Mont. 469, 472-73, 342 P.2d 752, 755. The denial of a lump sum settlement will not be reversed on appeal unless the Workers' Compensation Court is shown to have abused its discretion. Willoughby, supra; Utick, supra; Kuehn v. National Farmers Union Property and Casualty Co. (1974), 164 Mont. 303, 521 P.2d 921; Kent v. Sievert (1971), 158 Mont. 79, 489 P.2d 104; Legowik v. Montgomery Ward (1971), 157 Mont. 436, 486 P.2d 867.

The court's conclusions of law reveal that it denied the request for a lump sum settlement because the claimant, being permanently totally disabled, was unable to perform physical tasks in connection with his proposed project. The claimant argues, however, that the evidence clearly shows that he at no time planned to handle the physical demands of...