State, Dept. of Health & Welfare ex rel. Lisby v. Lisby

• Citation: 890 P.2d 727,126 Idaho 776
• Decision Date: 16 February 1995
• Docket Number: No. 20794,20794
• Court: United States State Supreme Court of Idaho
• Parties: STATE of Idaho, DEPARTMENT OF HEALTH & WELFARE, ex rel. Tammy LISBY, Plaintiff-Appellant/Cross Respondent, v. Michael LISBY, Defendant-Respondent/Cross Appellant. Boise, December 1994 Term

Page 727

890 P.2d 727

126 Idaho 776

STATE of Idaho, DEPARTMENT OF HEALTH & WELFARE, ex rel. Tammy LISBY, Plaintiff-Appellant/Cross Respondent, v. Michael LISBY, Defendant-Respondent/Cross Appellant.

No. 20794.

Supreme Court of Idaho,

Boise, December 1994 Term.

Feb. 16, 1995.

Larry Echohawk, Atty. Gen., Margaret C. Lawless, Deputy Atty. General, Boise, for appellant. Margaret Lawless argued.

Lawrence E. Kirkendall, Boise, for respondent.

McDEVITT, Chief Justice.

I. BACKGROUND AND FACTS

The facts in this case are undisputed. Michael Lisby (Lisby) owed child support and arrearages for his children from two marriages. Lisby also owed child support, arrearages, and paternity testing costs for another child later determined to be his. On February 1, 1989, judgment was entered against Lisby, in the amount of $23,899.10, for child support arrearages. On August 8, 1988, Lisby injured his back in an industrial accident. On November 16, 1992, Lisby entered into an agreement with his employer, Masco, Inc., and the Idaho State Insurance Fund (S.I.F.). Under the agreement, Lisby was awarded a lump sum settlement of worker's compensation benefits for his injuries. The settlement award totalled $39,456.13, from which previously paid disability payments were deducted. After those deductions, the settlement totalled $27,000.00. The parties released attorney fees, advanced costs, and outstanding medical costs from the Before the settlement award was paid to Lisby, the Department of Health and Welfare, Bureau of Child Support Enforcement (the Department) garnished the settlement for payment of child support arrearages. At the time of garnishment, Lisby was in arrears in his child support payments in the amount of $33,130.90. The total amount of back child support exceeded the amount due Lisby under the lump sum settlement agreement.

[126 Idaho 778] $27,000.00 lump sum settlement award, leaving $16,799.69 as the net amount due Lisby.

Lisby filed a claim of exemption under Idaho Code §§ 11-603 and 11-207 on November 24, 1992 against Debbie Lisby, Lisby's second wife. Lisby filed a second claim of exemption on December 4, 1992 against the Department asserting the same exemptions. The cases against Lisby for child support arrearages were consolidated on December 31, 1992 to determine Lisby's exemption claims. The matter was submitted to the magistrate court.

In its memorandum decision and order, the magistrate court held that Lisby was not entitled to exemption from garnishment of the lump sum workers' compensation settlement pursuant to I.C. §§ 7-1203 and 72-802. The magistrate court held that the portion of the lump sum settlement award allocated for future medical benefits was not subject to exemption under I.C. § 11-603(5) because nothing in the settlement agreement required that Lisby actually spend the money on medical expenses. The magistrate court also determined that I.C. § 11-207 was not applicable because that provision allows for exemptions from garnishment of weekly wages and Lisby was awarded a lump sum settlement.

Lisby appealed the decision of the magistrate court. On appeal, the district court reversed the magistrate court's decision and ruled that I.C. § 7-1204(7) limited the amounts subject to garnishment. The district court held that deductions of the attorney fees must be added back in to the settlement amount to arrive at the total amount due under the settlement. From that sum, the district court determined that, pursuant to I.C. 11-207(2), only fifty-five percent (55%) of the full amount of the settlement award was available for past due child support. The district court agreed with the magistrate court to the extent that the portion of the award allocated for future medical benefits was not exempt from garnishment. The Department appealed the decision of the district court. On appeal, the Department argues that Lisby was not entitled to exemption from execution and garnishment on the workers' compensation lump sum settlement and that the district court erred in limiting garnishment of the settlement to fifty-five percent (55%). The Department also argues that the district court erred in not extending judicial deference to the S.I.F.'s interpretation of I.C. § 11-207 as it applies to a lump sum payment of workers' compensation benefits.

Lisby cross-appeals and contends that the district court erred in failing to exempt from garnishment the portion of the workers' compensation settlement award for future medical benefits as provided in I.C. § 11-603. Lisby also argues that the district court erred in holding that attorney fees deducted from the lump sum settlement should be included in the sum used to calculate the percentages under I.C. § 11-207. There are no disputed issues of fact on appeal.

II. STANDARD OF REVIEW

When this Court reviews issues decided by the magistrate court, which are then presented to the district court on appeal, this Court reviews the magistrate court's decision independently of, but with due regard for, the district court's appellate decision. Ireland v. Ireland, 123 Idaho 955, 957-58, 855 P.2d 40, 42-43 (1993). This Court will uphold the findings of the magistrate court if the findings are supported by substantial and competent evidence. McNelis v. McNelis, 119 Idaho 349, 351, 806 P.2d 442, 444 (1991). However, issues of law are freely reviewed by this Court. In re Mundell, 124 Idaho 152, 153, 857 P.2d 631, 632 (1993). No questions of fact are presented on appeal, so this Court may freely review the issues on appeal.

III. ONLY FIFTY-FIVE PERCENT (55%) OF THE LUMP SUM WORKERS' COMPENSATION SETTLEMENT AWARD MAY BE GARNISHED FOR PAYMENT OF PAST DUE CHILD SUPPORT PAYMENTS, AS LIMITED BY IDAHO CODE § 11-207

This Court has not addressed the issue of whether and to what extent a lump sum award of workers' compensation benefits may be garnished to pay past due child support obligations. The magistrate court held that Lisby's lump sum workers' compensation settlement award was not exempt from garnishment for payment of past due child support, pursuant to I.C. §§ 7-1203 and 72-802. The magistrate court determined that I.C. § 11-207 was not applicable because that provision only contemplated garnishment of weekly wages, and Lisby was awarded a lump sum payment.

Statutory interpretation begins with an examination of the literal words of the statute. Grand Canyon Dories v. Tax Comm'n, 124 Idaho 1, 5, 855 P.2d 462, 466 (1993). The language of the statute is to be given its plain, obvious and rational meaning. Id. Where statutes are in pari materia (relating to the same subject matter), they should be construed together to give effect to legislative intent. Dewey v. Merrill, 124 Idaho 201, 204, 858 P.2d 740, 743 (1993).

Title 72 of the Idaho Code outlines the laws governing workers' compensation law. I.C. § 72-101 to 1472. Idaho Code 72-802 exempts all workers' compensation awards from creditors' claims. I.C. § 72-802. Excepted from the exemption rule are claims for the enforcement of a support order under Idaho Code Title 7, Chapter 12. Id.

Title 7, Chapter 12 of the Idaho Code sets forth the remedies available to the Department for the enforcement of child support orders. I.C. § 7-1203. Idaho Code § 7-1203(5) grants the Department the authority to "attach, garnish, or intercept and withhold a portion of any workmen's compensation benefits which are payable to an obligor pursuant to Title 72, Idaho Code." Id. Idaho Code 7-1204, which provides for the withholding of income for the enforcement of child support orders, limits the amount an obligor's income may be garnished to the amount specified in I.C. § 11-207. I.C. § 7-1204(7). Idaho Code § 11-207 limits the amount subject to garnishment to fifty-five percent (55%) of the aggregate disposable weekly earnings, where the obligor is supporting a dependent child and the garnishment is to enforce a support order that is twelve weeks past-due. I.C. § 11-207.

From the language of I.C. § 7-1203 standing alone, it is unclear what "portion" of the benefits payable to the obligor is subject to garnishment. Under a plain reading of the combined statutes, workers' compensation benefits are subject to garnishment for payment of child support obligations, but the amount which may be garnished is limited to fifty-five percent (55%) of the benefits. I.C. §§ 7-1203, 7-1204(7), 11-207. Although I.C. § 11-207 speaks in terms of weekly aggregate disposable earnings, I.C. § 7-1204 provides for the withholding of "income." Income is defined as any form of payment to an individual, including workers' compensation awards. Under I.C. 7-1204(7), the amount of "income" which may be withheld may not exceed the amount specified I.C. § 11-207. The amount specified in that provision is fifty-five percent (55%). Thus, fifty-five percent (55%) of the workers' compensation benefits payable to Lisby is the "portion" of the workers' compensation settlement which is subject to garnishment.

IV.

THIS COURT NEED NOT EXTEND JUDICIAL DEFERENCE TO THE IDAHO STATE INSURANCE FUND'S INTERPRETATION OF IDAHO CODE § 11-207.

The Department argues that judicial deference should be extended to the S.I.F.'s interpretation of workers' compensation law. We disagree.

The Department urges the application of a four-prong test to determine the amount of deference to be given an agency's construction of a statute: (1) whether the agency has The S.I.F. fails to meet the first prong of the Simplot test because the agency is not authorized to administer the statutes governing the enforcement of child support orders or the statutes governing the workers' compensation laws. The bureau of child support enforcement, department of health and welfare of the State of Idaho has the responsibility of enforcing child support orders. I.C. §§ 7-1202 to 1206. The Industrial Commission has exclusive jurisdiction over claims for injuries arising out of and in the course of employment. See I.C. §§...