No. 86-364
IN THE SUPREME COURT OF THE STATE OF MONTANA
1986
MAREE S. HUNTER,
Claimant and Respondent,
GIBSON PRODUCTS OF BILLINGS HEIGHTS,
INC. ,
and
GLACIER GENERAL ASSURANCE COMPANY,
and WESTERN GUARANTY SERVICES FUND,
Defendant and Appellant.
APPEAL FROM: The Workers' Compensation Court of the State of
Montana, The Honorable Timothy Reardon, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Mulroney, Delaney & Scott; P. Mars Scott, Missoula,
Montana
For Respondent:
Neil S. Keefer, Billings, Montana
Submitted on Briefs: Oct. 23, 1986
Decided: December 30, 1986
Filed: DEC 3 0 1986
Clerk
Mr. Justice Frank R . Morrison, Jr. delivered the Opinion of
the Court.
Defendant Glacier General Assurance Company appeals the
summary judgment awarded by the Workers' Compensation Court
in favor of claimant Maree Hunter. We affirm.
In 1983, claimant elected to begin receiving social
security monthly retirement benefits prior to reaching age 65
as provided for by the Social Security Act. In 1984,
claimant obtained a part-time job at Gibson's Garden Center
in Billings Heights, Montana. On May 29, 1984, claimant
severely injured her back while working at Gibson's.
Claimant filed a claim for workers compensation. Glacier
General Assurance Company (Glacier) accepted the claim and
began paying temporary total disability benefits from the
date of injury in the amount of $64.49 per week.
On February 6, 1986, claimant's attorney wrote a letter
to one of Glacier's adjusters stating that he believed
Glacier was liable for 500 weeks of permanent partial
disability benefits upon claimant's reaching age 65. Glacier
responded that it would cease paying benefits on September
23, 1986, the date claimant reached 65. Glacier's position
was that when a claimant who is receiving temporary or
permanent total disability benefits reaches the age of 65 and
social security benefits are converted by law to retirement
benefits, the claimant is considered to be retired and no
longer entitled to such disability benefits.
Claimant filed a petition for hearing with the Workers'
Compensation Court on April 16, 1986. Claimant requested
that the court convert her temporary total disability
benefits to permanent partial benefits commencing September
23, 1986, award a lump sum, plus costs and attorneys' fees,
and increase the award by 20% for Glacier's refusal to pay.
Claimant moved for summary judgment on all issues except the
lump sum. The court granted summary judgment in favor of
claimant and found that Johnson v. Peter Kiewit & Sons, Inc.,
WCC No. 8411-2704 (1985) controlled. In Johnson, the court
ruled that § 39-71-710, MCA, entitles a claimant who has been
receiving permanent total disability benefits to receive
permanent partial disability benefits once the claimant
reaches the age of 65.
The court noted that the 20% penalty was appropriate in
this instance because Glacier chose to ignore the holding in
Johnson, supra. Glacier filed a motion for reconsideration
which was denied by order dated July 25, 1986. Glacier
appeals the decision of the Workers' Compensation Court. We
address the following issues:
1) Did the Workers' Compensation Court correctly
interpret $ 39-71-710, MCA, in awarding claimant permanent
partial disability benefits upon reaching age 65 when she had
been receiving temporary total disability benefits prior to
that time and had also been receiving reduced social security
retirement benefits?
2) Did the Workers' Compensation Court abuse its
discretion in awarding a twenty percent penalty to claimant
pursuant to 5 39-71-2907, MCA?
Glacier asserts Johnson, supra, is distinguishable from
the present case and the Workers' Compensation Court has
stretched construction of .
§ 39-71-710, MCA, beyond its
breaking point. Section 39-71-710, MCA, provides:
If a claimant is receiving total disability
compensation benefits and the claimant receives
retirement social security benefits or disability
social security benefits paid to the claimant are
converted by law to retirement benefits, the
claimant is considered to be retired and no longer
in the open labor market. When the claimant is
considered retired, the liability of the insurer is
ended for payment of such compensation benefits.
This section does not apply to permanent partial
disability benefits. Medical benefits are
expressly reserved to the claimant.
In Johnson, the claimant was 67 years of age at the time
of injury and was receiving social security retirement
benefits. Claimant began receiving temporary total
disability benefits but the insurance company terminated
payments on the basis that claimant was not entitled to
benefits pursuant to § 39-71-710, MCA, because she was
receiving social security retirement benefits and thus
considered retired. The Workers' Compensation Court
disagreed, stating:
A plain reading of MCA § 39-71-710, coupled with a
review of the legislative history of this statute,
persuades the Court that the legislature fully
intended to provide that a person receiving social
security retirement benefits would not be entitled
to receive permanent total disability benefits
under the Workers' Compensation Act.
It is equally clear that the legislature intended
to leave temporary total and partial disability
benefits in place "to properly compensate a worker
for temporary disability and for physical
impairment that may exist. " (Memora.ndum by the
Workers' Compensation Division regarding Senate
Bill No. 64, submitted by Laury Lewis on January
29, 1985.)
... [Elquity demands that individuals in the
claimant's situation be compensated to some degree
for injuries suffered while working. Otherwise, a
nonsensical result would follow: A "retired"
individual who is only slightly injured would
qualify for workers' compensation benefits, while a
"retired" individual who suffers a permanently
totally disabling injury would not.
. . . If §39-71-710, MCA, were strictly construed,
[claimant's] injury would be completely
noncompensable.
To avoid this unjust result, this Court concludes
that the permanently totally disabled claimant is
entitled to receive permanent partial disability
benefits pursuant to MCA § 39-71-710. The Court is
aware that it is stretching its mandate of liberal
construction, but it has not stretched it to the
breaking point.
In the present case, cl-aimant was 62 years of age at the
time of her injury. She received approximately 2 4 years of
temporary total benefits prior to reaching age 65. Glacier
contends that while the result in Johnson was fair, the
present case is distinguishable because claimant was injured
prior to being "retired" under S 39-71-710, MCA, and did
receive compensation for the injury. Further, that the
legislative intent of S 39-71-710, MCA, was to terminate
total disability benefits at age 65 because social security
retirement benefits would thereafter be adequate income for
the retired worker.
Claimant contends S 39-71-710, MCA, does not address the
specific facts of this case. However, liberal construction
of the statute, as mandated by § 39-71-104, MCA, results in
the conclusion claimant is entitled to an award of permanent
partial benefits upon reaching the age of 65.
Section 39-71-710, MCA, explicitly provides: "This
section does not apply to permanent partial disability
benefits." In the present case, claimant, who had been
receiving temporary total disability benefits, petitioned the
Workers1 Compensation Court for an award of permanent partial
benefits commencing on her 65th birthday.
As noted by the Workers' Compensation Court in Johnson,
supra, strict construction of S 39-71-710, MCA, would result
in an absurdity: A worker injured past the age of 65 may
recover compensation if partially disabled but not if totally
disabled. We agree with the court's interpretation of
S 39-71-710, MCA, allowing for payment of permanent partial
disability benefits to a permanently totally disabled
claimant who has reached the age of 65.
The next issue raised by Glacier is whether the Workers'
Compensation Court abused its discretion in assessing a 20%
penalty against Glacier. Pursuant to S 39-71-2907, MCA, the
workers' compensation judge may increase the award to the
claimant by 20% upon a finding of unreasonable delay or
refusal to pay by the insurer. In this instance, the judge
assessed the penalty against Glacier because it chose to
litigate an issue which had been clearly decided in Johnson,
supra, and Glacier's attorney was aware of that decision
since he represented the claimant in Johnson.
Whether the insurer's action is unreasonable is a
question of fact and on appeal a finding of unreasonableness
will not be overturned if supported by substantial evidence.
Coles v. Seven Eleven Stores (Mont. 1985), 704 P.2d 1048, 42
St.Rep. 1238. Glacier contends the award was not proper
because the present case is distinguishable from Johnson,
supra. While the issue is a close one, we find substantial
evidence to uphold the penalty assessment. Though the facts
in Johnson were slightly different than the present case, the
court's interpretation of S 39-71-710, MCA, in Johnson, was
clearly applicable in this instance and there is evidence to
support the Workers' Compensation Court finding that Glacier
should not have contested the award of permanent partial
disability benefits.
Judqment for claimant is affirmed.
We concur:
ief 3Cstice
Mr. Justice Fred J. Weber dissents as follows:
My dissent is aimed primarily at our Montana Legisla-
ture. I hope the Legislative Council and the Legislature
itself may be able to address the contradictions present in
$5 39-71-710, MCA. That contradictory statute is set forth in
full in the majority opinion.
Section 39-71-710, MCA, provides that if a claimant is
receiving total disability compensation benefits and attains
65 years of age so that he becomes entitled to receive re-
tirement social security benefits, then his total disability
compensation benefits stop, and the liability of the insurer
is ended for payment of such benefits. The statute does not
explain the reasoning behind the complete elimination of a
right to receive total disability compensation benefits. The
succeeding sentence provides that the section does - apply
not
to permanent partial disability benefits. These provisions
contradict each other. If a claimant is totally disabled so
that the claimant becomes entitled to receive total disabili-
ty benefits for the rest of his life, on what theory can that
totally disabled person be found no longer entitled to bene-
fits, while a partially disabled person may still receive
disability benefits?
The section accords unequal treatment to those who are
totally disabled and those who are partially disabled. As
this case demonstrates, it suggests a legislative policy
which would prohibit any type of disability benefits to a
person who is totally disabled when working after he attains
65 years of age. As an example, if a 66 year old person
receiving social security retirement benefits becomes totally
disabled while working, that person is apparently not
entitled to total disability benefits. I cannot imagine that
was the intention of the legislature at the time of the
adoption of this section. I therefore request the legisla-
ture to consider the inequalities and contradictions con-
tained in the present section.
In the majority opinion, the defendant is charged a 20%
penalty because of a claimed unreasonable delay in the making
of payment. As I read 5 39-71-710, MCA, the facts of the
present case come precisely within the wording of the first
two sentences of that section. Those sentences provide that
if a claimant is receiving total disability compensation
benefits (as was the claimant here) and the claimant then
receives retirement social security benefits (as the claimant
was about to receive) then the claimant is considered to be
retired and the liability of the defendant insurer is ended
for the payment of such compensation benefits. If that
section were construed to mean what it says, upon attaining
age 65, claimant was no longer entitled to receive his com-
pensation benefits from the defendant. The majority has
chosen to accept the Workers' Compensation Court's decision
which disregarded the express wording of the statute and
concluded that it would be unfair to so terminate a totally
disabled claimant. Without the benefit of statutory authori-
ty, both the Workers' Compensation Court and the majority
have concluded that a claimant who is totally disabled can
seek permanent partial disability benefits and obtain the
same even in the absence of any statutory authority for doing
so. The rationale is that such partial disability benefits
are presumably less expensive than total disability benefits
so the Workers' Compensation Court can award the same. I
admire the concern for the claimant which has resulted in
this construction. Clearly it is more fair than a termina-
tion of all benefits. On the other hand, I find it totally
inappropriate to charge a penalty of 20% against an insurer
who read the statute to mean what it says.