Stahl v. Ramsey Const. Co.

• Court: Montana Supreme Court
• Writing for the Court: WEBER; TURNAGE
• Citation: Stahl v. Ramsey Const. Co., 248 Mont. 271, 811 P.2d 546 (Mont. 1991)
• Decision Date: 16 May 1991
• Docket Number: No. 90-181,90-181
• Parties: Jerry STAHL, Petitioner and Appellant, v. RAMSEY CONSTRUCTION CO., Employer, and State Compensation Mutual Insurance Fund, Insurer, Defendant and Respondent.

Page 546

811 P.2d 546

248 Mont. 271

Jerry STAHL, Petitioner and Appellant, v. RAMSEY CONSTRUCTION CO., Employer and State Compensation Mutual Insurance Fund, Insurer, Defendant and Respondent.

No. 90-181.

Supreme Court of Montana.

Submitted on Briefs March 28, 1991.

Decided May 16, 1991.

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

Laurence Hubbard, State Comp. Mut. Ins. Fund, Helena, for insurer, defendant and respondent.

WEBER, Justice.

Claimant, Jerry Stahl, appeals from an order of the Workers' Compensation Court granting summary judgment to State Compensation Mutual Insurance Fund (State Fund). We affirm.

The issues are:

1. Is State Fund entitled to offset auxiliary social security disability benefits paid to Mr. Stahl's minor child when the benefits are paid directly to the minor child's mother?

2. Is State Fund entitled to offset a portion of Mr. Stahl's retroactive social security disability benefits which are paid to his attorney as an authorized attorney's fee for legal services rendered in obtaining those benefits?

3. Should State Fund be required to bear an equal share of costs and attorney's fees incurred by Mr. Stahl to establish his social security claim?

In 1985, Mr. Stahl suffered a compensable injury to his back and began receiving workers' compensation benefits. Subsequently he filed an application for social security disability benefits. The social security claim was denied, and Mr. Stahl retained legal counsel to pursue his claim. Following litigation, the Social Security Administration determined that Mr. Stahl was entitled to retroactive social security disability benefits in the amount of $31,744.00 with $23,800.03 paid directly to him and $7,943.97 withheld for direct payment of attorney's fees. Mr. Stahl's minor son was determined to be entitled to retroactive benefits in the amount of $16,656.00 with $12,668.00 paid directly to the minor child's mother and $3,968.00 withheld for direct payment of attorney's fees.

State Fund determined that it was entitled under Sec. 39-71-701, MCA, to an offset against the retroactive social security payments as well as future weekly social security benefits. Mr. Stahl challenges State Fund's right to offset for the auxiliary benefits that go directly to his minor child's mother, and to the portion of the retroactive benefits that go directly to the attorney who litigated the social security claim. In addition, Mr. Stahl asserts that since State Fund receives an offset benefit from the litigation against Social Security, State Fund should be required to help pay for the costs of litigation.

I

Is State Fund entitled to offset auxiliary social security disability benefits paid to Mr. Stahl's minor child when the benefits are paid directly to the minor child's mother?

Section 39-71-701(2), MCA, provides:

In cases where it is determined that periodic disability benefits granted by the Social Security Act are payable because of the injury, the weekly benefits payable under this section are reduced, but not below zero, by an amount equal, as nearly as practical, to one-half the federal periodic benefits for such week, which amount is to be calculated from the date of the disability social security entitlement. (Emphasis added.)

Mr. Stahl argues that since the social security disability benefits for his child go directly to the child's mother, he receives no economic benefit from those payments. He cites McClanathan v. Smith (1980), 186 Mont. 56, 606 P.2d 507, for the proposition that because he does not personally receive the funds there is no duplication of benefits and therefore no basis for the offset. Mr. Stahl acknowledges that McClanathan affirms the insurer's right to offset auxiliary benefits; however he attempts to distinguish McClanathan because the opinion does not directly address whether Sec. 39-71-701(2), MCA, entitles the State Fund to take an offset where auxiliary benefits are payable to the dependent at a different address than the claimant's.

Section 39-71-701(2), MCA, does not distinguish between primary and auxiliary benefits. The statute applies to all benefits "payable because of the injury". In McClanathan, the claimant's dependents also lived with someone other than the claimant. Mr. Stahl cannot reasonably argue that he receives no economic benefit from auxiliary benefits that go to a dependent for whom he is legally...