Rausch v. State Compensation Ins. Fund, 03-615.

• Decision Date: 07 June 2005
• Docket Number: No. 03-615.,03-615.
• Citation: 327 Mont. 272,114 P.3d 192,2005 MT 140
• Parties: Kevin RAUSCH, Charles Fisch, and Thomas Frost, Petitioners and Appellants, v. STATE COMPENSATION INSURANCE FUND, Respondent and Respondent.
• Court: Montana Supreme Court

114 P.3d 192

2005 MT 140

327 Mont. 272

Kevin RAUSCH, Charles Fisch, and Thomas Frost, Petitioners and Appellants, v. STATE COMPENSATION INSURANCE FUND, Respondent and Respondent.

No. 03-615.

Supreme Court of Montana.

Argued March 24, 2004.

Submitted April 27, 2004.

Decided June 7, 2005.

For Appellants: Lon J. Dale (argued), Missoula, Montana (Rausch) Stephen D. Roberts (argued), Bozeman, Montana (Frost) Monte Beck and John Richardson, Beck, Richardson & Amsden, Bozeman, Montana (Fisch).

For Respondent: Bradley J. Luck (argued), Garlington, Lohn & Robinson, Missoula, Montana Greg E. Overturf, Helena, Montana.

For Intervenor: Geoffrey C. Angel, Angel Law Firm, Bozeman, Montana.

Justice JIM RICE delivered the Opinion of the Court.

¶ 1 Kevin Rausch, Charles Fisch and Thomas Frost (Appellants) appeal from the judgment entered in the Workers' Compensation Court, holding that permanently totally disabled (PTD) claimants injured between July 1, 1987, and June 30, 1991, are not entitled to an impairment award, and denying Appellants' request to issue a subpoena compelling the Department of Labor and Industry to furnish information identifying PTD claimants covered by Plan 1 and Plan 2 insurers. Additionally, Appellants argue that denial of an impairment award to PTD claimants violates the equal protection clause. We affirm.

¶ 2 We restate the issues on appeal as follows:

¶ 3 1. Did the Workers' Compensation Court err by holding that the 1987 and 1989 versions of the Workers' Compensation Act do not expressly or implicitly authorize payment of an impairment award to permanently totally disabled claimants?

¶ 4 2. Does the denial of an impairment award to permanently totally disabled claimants pursuant to the 1987 and 1989 versions of the Workers' Compensation Act violate equal protection?

¶ 5 3. Did the Workers' Compensation Court err in denying Appellants' request for a subpoena compelling the Department of Labor and Industry to provide information identifying claimants covered under Plan I self-insureds and Plan II carriers who may be eligible to receive an impairment award under Rausch I?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 6 The issues herein rise from our holding in Rausch v. State Comp. Ins. Fund, 2002 MT 203, 311 Mont. 210, 54 P.3d 25 (Rausch I). In Rausch I, Appellants argued that, as PTD claimants, they were entitled to payment of an impairment award under the 1991 and 1997 versions of §§ 39-71-710(1) and -737, MCA. See Rausch I, ¶ 10. Further, they asserted that the delay in payment of the impairment award until they were eligible for Social Security benefits violated their right to equal protection of the law and substantive due process, as guaranteed by the Montana Constitution. Rausch I, ¶ 10. Lastly, they sought payment of attorney fees, both individually and pursuant to the common fund doctrine for similarly situated claimants. Rausch I, ¶ 10. The Workers' Compensation Court had denied Appellants' impairment award claim, holding that Appellants, and all PTD claimants insured under the 1991 and 1997 versions of Workers' Compensation Act statutes, were not entitled to an impairment award. Further, the Workers' Compensation Court held that the denial of an impairment award to PTD claimants did not violate the equal protection clause. Rausch I, ¶ 12. On appeal, we concluded that PTD claimants were entitled to an impairment award for the loss of physical functioning resulting from a work-related injury under the 1991 and 1997 versions of the Act, Rausch I, ¶ 30; that the award was payable upon receipt of an undisputed impairment rating, Rausch I, ¶ 35; and that Appellants' attorneys were entitled to reasonable fees pursuant to the common fund doctrine, Rausch I, ¶ 50. We then remanded the case back to the Workers' Compensation Court for further proceedings consistent with our opinion.

¶ 7 On remand, Appellants then sought a declaratory judgment that PTD claimants insured under the 1987 and 1989 versions of the Workers' Compensation Act were also entitled to an impairment award, arguing the same result under those provisions was required under Rausch I. Further, Appellants requested a subpoena requiring the Department of Labor and Industry to provide information identifying all PTD claimants entitled to an impairment award from a Plan 1 self-insured or a Plan 2 carrier pursuant to Rausch I.

¶ 8 However, the Workers' Compensation Court held that PTD claimants injured between July 1, 1987, and June 30, 1991, were not entitled to an impairment award. Further, the court denied Appellants' request for a subpoena. From this order, Appellants appeal.

STANDARD OF REVIEW

¶ 9 We review a workers' compensation court's conclusions of law to determine whether the court's conclusions are correct. Rausch I, ¶ 14.

DISCUSSION

¶ 10 Did the Workers' Compensation Court err by holding that the 1987 and 1989 versions of the Workers' Compensation Act do not expressly or implicitly authorize payment of an impairment award to permanently totally disabled claimants?

¶ 11 Appellants argue that because the 1987 and 1989 versions of §§ 39-71-710(1) and -737, MCA, are identical to the 1991 and 1997 versions of these provisions, our rationale in Rausch I that PTD claimants were entitled to an impairment award under the 1991 and 1997 statutes is equally applicable to the 1987 and 1989 statutes at issue here. They contend that had the Legislature intended to preclude PTD claimants from receiving an impairment award, it would have included language to that effect within § 39-71-702, MCA, which addresses PTD benefits.

¶ 12 Appellants are correct in noting that the versions of §§ 39-71-710(1) and -737, MCA, at issue here are identical to the versions at issue in Rausch I. However, in Rausch I, we also interpreted the 1991 and 1997 versions of § 39-71-703, MCA, in conjunction with §§ 39-71-710(1) and -737, MCA. Our holding in Rausch I that PTD claimants were entitled to an impairment award under the 1991 and 1997 statutes resulted from our reading §§ 39-71-710(1), -737, and -703, MCA, together, harmonizing these provisions in order to give consistent effect to legislative policy, and concluding that the 1991 and 1997 versions of § 39-71-703, MCA, did not limit impairment awards to permanently partially disabled (PPD) claimants only. Rausch I, ¶ 28. However, unlike the 1991 and 1997 versions of § 39-71-703, MCA, which we reasoned in Rausch I were not authority for limiting impairment awards to partially disabled claimants, Rausch I, ¶ 28, the 1987 and 1989 versions of this statute expressly classify impairment awards as a partial disability benefit, and thus, are distinctly different than the versions of § 39-71-703, MCA, at issue in Rausch I.

¶ 13 Section 39-71-703, MCA (1987 and 1989), states as follows:

Compensation for permanent partial disability — impairment awards and wage supplement. (1) The benefits available for permanent partial disability are impairment awards and wage supplements. A worker who has reached maximum healing and is not eligible for permanent total disability benefits but who has a medically determined physical restriction as a result of a work-related injury may be eligible for an impairment award and wage supplement benefits as follows:

(a) The following procedure must be followed for an impairment award:

. . .

(iv) If a worker becomes eligible for permanent total disability benefits, the insurer may recover any lump-sum advance paid to a claimant for impairment, as set forth in XX-XX-XXX(5). [Emphasis added.]

¶ 14 The first sentence of this provision defines an impairment award as a benefit available to PPD claimants. The second sentence then provides that a claimant must have reached maximum healing, have a medically determined, work-related physical restriction, and be ineligible for PTD benefits as conditions for entitlement to an impairment award. Thus, this provision defines an impairment award as a PPD benefit, and further, specifically prohibits any claimant who is eligible for PTD benefits from receiving an impairment award. Such mandatory language was not present in the statutes at issue in Rausch I. Further support for this interpretation is provided in subsection (1)(a)(iv), which allows an insurer to recover any lump-sum advances made for impairment purposes if the PPD claimant later becomes PTD. Thus, any reasonable reading of the statute requires us to conclude that the 1987 and 1989 versions of § 39-71-703, MCA, limits impairment awards to PPD claimants only.

¶ 15 While the Legislature did not expressly prohibit payment of an impairment award to PTD claimants under § 39-71-702, MCA (1987 and 1989), which addresses PTD compensation, it defined eligibility for an impairment award, including the requirement that a claimant be ineligible for PTD benefits, sufficiently within § 39-71-703, MCA, to make clear that PTD claimants are not eligible for the award. Therefore, we conclude that the Workers' Compensation Court did not err in its determination that PTD claimants are not entitled to an impairment award under the 1987 and 1989 versions of the Workers' Compensation Act.

¶ 16 Does the denial of an impairment award to permanently totally disabled claimants pursuant to the 1987 and 1989 versions of the Workers' Compensation Act violate equal protection?

¶ 17 Appellants argue that PPD and PTD claimants are similarly situated, and therefore, denying impairment awards to PTD claimants violates the equal protection clause.

¶ 18 Under the Fourteenth Amendment to the United States Constitution, and Article II, Section 4, of the Montana Constitution, no person shall be denied the equal protection of the laws. Powell v. State Comp. Ins. Fund, 2000 MT 321, ¶ 16, 302 Mont. 518, ¶ 16, 15 P.3d 877, ¶ 16. The basic rule of equal protection is that persons similarly situated with respect to a legitimate governmental purpose of the law must receive like treatment. Powell, ¶ 22. However, the equal...