NO. 87-324
IN THE SUPREME COURT OF THE STATE OF MONTANA
1988
KENNETH K. KOMEOTIS,
Claimant and Appellant,
-vs-
WILLIAMSON FENCING, Employer,
and
STATE COMPENSATION INSURANCE FUND,
Defendant and Respondent.
APPEAL FROM: The Workers' Compensation Court, The Honorable
Timothy Reardon, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Bottomly Law Offices; Joe Bottomly, Great Falls,
Montana
For Respondent :
Marra, Wenz, Johnson & Hopkins; Thomas A. Marra,
Great Falls, Montana
Submitted on Briefs: March 18, 1988
Decided: June 16, 1988
Filed:
Uurr 1 6 1988
Clerk
Mr. Justice R. C. McDonough delivered the Opinion of the
Court.
This case appears before us for the second time. The
first appeal involved the Workers' Compensation Court's
improper application of 5 39-71-741, MCA, as amended in 1985.
This Court reversed the lower court in the former appeal
holding that the statute could not be applied retroactively.
Komeotis v. Williamson Fencing (Mont. 1987), 736 P.2d 93, 44
St.Rep. 298. The case was remanded for a determination of
the lump sum issue applying the law as it existed at the time
of the injury. Komeotis, 736 P.2d at 93.
On remand the Workers' Compensation Court applied the
correct law and denied the lump sum request as well as the
claimant's request for attorney fees on the issue of
disability. The claimant appeals this decision. We affirm.
The issues may be stated as follows:
(1) Did the Workers' Compensation Court err in denying
the claimant's request for a partial conversion of his
benefits to a lump sum?
(2) Did the Workers' Compensation Court err in denying
the claimant's request for attorney fees for prevailing on
the issue of disability?
The claimant, Mr. Komeotis, worked for Williamson
Fencing for thirteen years before degenerative arthritis in
his elbows rendered him incapable of performj-ng his former
job duties. The State Compensation Insurance Fund (Fund)
provided temporary total disability benefits to Mr. Komeotis,
b u t contested conversion of the entitlement to permanent
disability benefits. Mr. Komeotis petitioned for
determination of the disability issue by the Workers'
Compensation Court. Prior to adjudication of the disability
issue the Fund conceded liability.
Mr. Komeotis also petitioned for partial conversion of
weekly disability benefits to a lump sum of $120,000. Mr.
Komeotis planned to spend $110,000 of that amount for the
purchase and operation of rental property, and the remaining
$10,000 to cover medical expenses for needed surgery, and for
the purchase of a reliable vehicle. The petition also
requested attorney fees. These issues were heard before the
hearings examiner.
Expert testimony taken at the hearing revealed that Mr.
Komeotis's plan to buy rental property was financially
feasible. Experts also testified that having responsibility
for the rental property would lessen the severe depression
Mr. Komeotis had begun to experience since the onset of his
disability. However, expert testimony also revealed that Mr.
Komeotis's physical and educational deficits would hamper his
ability to care for the rentals, and that other vocational
options might ease his depression. The impact of Mr.
Komeotis's vocational problems was lessened by testimony
showing that friends and family would help him manage the
rental enterprise.
After the hearing the Workers' Compensation Court
reviewed the transcript, exhibits, and depositions. The
lower court also considered the parties' proposed Findings of
Fact and Conclusions of Law and supporting briefs. The lower
court then ruled that Mr. Komeotis was entitled to a lump sum
of at least $10,000 to have surgery and to purchase a
vehicle, but denied Mr. Komeotis's lump sum request of
$110,000 for the purchase and operation of the rental
property. The lower court also granted attorney fees for the
resolution of the $10,000 lump sum, but refused attorney fees
for resolution of the disability issue.
ISSUE I.
Mr. Komeotis contends that the Workers' Compensation
Court erred in its findings on the severity of his
depression. Mr. Komeotis also contends that the lower court
misapplied the best interest test to the financial facts of
the case.
First, in regard to Mr. Komeotis's depression, the
Workers' Compensation Court found that:
Both Dr. Wagner and Jeff Baker testified as to
claimant's depression and need for some sort of
constructive outlet, reasoning that this need stems
from claimant's strong work ethic and deep-rooted
sense that in order to "feel good about himself as
a man" he needs to be the primary bread winner in
his family.
From this finding the lower court concluded:
The claimant here has not presented any
probative evidence of age or health reasons
sufficient to override the preference for periodic
payments. Testimony was presented as to claimant's
depression and need to maintain his "manhood" by
again becoming the primary breadwinner in his
family. Despite Mr. Baker's attempt to
characterize this depression as "suicidal," the
Court found no evidence that this depression
reached proportions beyond what any normal
hard-working person would feel when they are no
longer able to provide for themselves by their own
efforts. .. . [C]ounseling and rehabilitation would
seem more appropriate [to alleviate the depression]
than simply setting claimant up as an apartment
house owner.
Mr. Komeotis contends that we should reverse because the
lower court's characterization of his depression is not
supported by the record.
The essential conclusion here is that the evidence
presented was insufficient to override the preference for
periodic payments. See Polich v. Whalen's O.K. Tire (Mont.
1981), 634 P.2d 1162, 1165, 38 St.Rep. 1572, 1575. A review
of the record reveals that the lower court may have
understated the severity of the depression. However,
substantial evidence supports the lower court's finding that
rehabilitation and counseling could provide Mr. Komeotis with
the type of activity which would help to alleviate his
depression. Given this finding, and the evidence of Mr.
Komeotis's vocational deficits, we hold that the Workers'
Compensation Court acted within its discretion by concluding
that Mr. Komeotis failed to overcome the presumption for
periodic payments.
We also hold that the lower court acted within its
discretion by refusing to follow the results reached in
Polich and Legowik v. Montgomery Ward (1971), 157 Mont. 436,
486 P.2d 867, cases where this Court affirmed the decision to
grant lump sum benefits for health reasons. Unlike Legowik
and Polich, we are asked here to reverse the finder of fact
on a lump sum issue even though the lower court is more
favorably situated than this Court to familiarize itself with
the circumstances surrounding the applicant, to consider his
or her needs, and the results which probably will follow
action granting or denying the application. See Polich, 634
P.2d at 1164. Furthermore, in addition to the immediate
health needs of the claimant, the lower court must consider
the best interests of the claimant generally, as well as the
best interests of his family, and the public. Utick v. Utick
(1979), 181 Mont. 351, 355, 593 P.2d 739, 741. In weighing
these interests, the presumption favors periodic benefits.
Utick, 593 P.2d at 741.
In this case, other factors weighed against granting the
lump sum request. Thus, we hold that the lower court acted
within its discretion by refusing to follow Legowik, and
Polich. We also hold Utick inapplicable as that case is
limited to the particular cirmustances which appear therein,
and we affirm as to this contention in issue 1.
Mr. Komeotis also argues that the lower court
misinterpreted the dictates of the financial best interest
test. Specifically, Mr. Komeotis argues that the evid.ence he
presented disclosing that inflation will lower the value of
his benefits in the future should have been accorded more
weight.
The lower court's decision to not grant the lump sum
because inflation would cause a future "pressing need" is
consistent with this Court's previous dispositions where
similar arguments were made. See Relton v. Carlson Transport
(Mont. 1986), 714 P.2d 148, 43 St.Rep. 286; LaVe v. School
District No. 2 (Mont. 1986), 713 P.2d 546, 43 St.Rep. 165.
Mr. Komeotis asserts that where a sound business
praposal is coupled with evidence demonstrating health
benefits from a lump sum conversion, the rule against
inflation as justification for granting a lump sum does not
apply However, in addition to finding the lack of a
pressing financial need, the lower court considered the
claimant's physical and mental disabilities before concluding
that the rationale from Belton and Lave provided authority
for rejecting the lump sum request. Thus, we are convinced
the lower court acted within its discretion by refusing to
distinguish Belton and LaVe, and the balance of issue 1 is
affirmed.
ISSUE 11.
Mr. Komeotis contends that the lower court erred by not
granting his request for attorney fees for resolution of the
disability issue. The lower court found that this Court's
previous decisions in Lasar and Yearout controlled this issue
because liability for permanent disability was conceded here
prior to trial. See Yearout v. Rainbow Painting (Mont.
1986), 719 P.2d 1258, 43 St.Rep. 1063; Lasar v. Oftedal &
Sons (Mont. 1986), 721 P.2d 352, 43 St.Rep. 1239. We agree
with the lower court that there must be an issue on
disability benefits later judged compensable for an award on
such benefits pursuant to S 39-71-612, MCA. Lasar, 721 P.2d
at 354.
However, Mr. Komeotis contends that the rationale from
Krause v. Sears Roebuck (1982), 197 Mont. 102, 641 p.2d 458,
applies and distinguishes the instant case from Lasar and
Yearout. The Fund responds that Krause should be
distinguished from the instant case because it was only
shortly before the hearing that discovery revealed the facts
which compelled the Fund to concede the disability issue, and
Mr. Komeotis was not required to submit proof on the
disability issue. We agree and affirm the lower court's
application of Lasar. Thus, both issues are affirmed.
We concur: H
ief Justice
Justice
Mr. Justice William E. Hunt, Sr., dissenting:
I dissent from the majority's conclusion that the
District Court did not abuse its discretion when refusing to
award partial lump sum payments to Mr. Komeotis. While
periodic payments are favored over lump sum payments when
granting Workers' Compensation benefits, this Court expressly
recognizes that lump sum benefits should be awarded without
hesitancy when it is in the claimant's best interest. See,
e.g., Polich v. Whalen's O.K. Tire Warehouse (~ont. 1981),
634 P.2d 1162, 1164, 38 St.Rep. 1572, 1574; Willoughby v.
Arthur G. McKee & Co. (1980), 187 Mont. 253, 257, 609 P.2d
700, 702; Utick v. Utick (1979), 181 Mont. 351, 355, 593 P.2d
739, 741.
The record clearly indicates, through the testimony of
experts, that a lump sum payment is in Mr. Komeotis's best
interest. Specifically, these expert witnesses testified
that Mr. Komeotis was severely depressed as a result of his
inability to work and to provide a living for his family.
When considering Mr. Komeotis's background and his previous
rehabilitative experiences, these experts testified that the
plan for Mr. Komeotis to purchase rental property would
greatly help to relieve his severe depression.
The majority recognizes that the lower court may have
understated the severity of Mr. I