No. 90-254
IN THE SUPREME COURT OF THE STATE OF MONTANA
\-
CAROL CRITTENDON,
Claimant and Respondent,
TERRIIS RESTAURANT & LOUNGE
and STATE COMPENSATION MUTUAL
INSURANCE FUND,
Employer/Defendant and
Appellant.
APPEAL FROM: Workers1 Compensation Court,
The Honorable Timothy Reardon, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Thomas E. Martello, Special Assistant Attorney
General, Helena, Montana
For Respondent:
'James P. Harrington, Butte, Montana
-- Submitted on Briefs: August 30, 1990
:'.ad
I L 3 19 19911
. ~ecided: February 19, 1991
Filed:
a E R K OF SUPREMECaum
srAre of! yOi4TAM .
tClerk ,r
t 1 b ' ,
Justice William E. Hunt, Sr., delivered the opinion of the Court.
Appellant State Compensation Mutual Insurance Fund appeals
from an order of the Workers1 compensation Court granting the
claimant Carol ~rittendona lump sum award for the purchase of an
apartment house.
We affirm.
The issues presented on appeal are:
1. Was the decision of the Workers1 Compensation Court
granting claimant a lump sum award in claimantlsbest interest?
2. Was the State Compensation Mutual Insurance Fund denied
its right to a fair and impartial hearing?
Carol ~rittendon(claimant) injured herself on March 17, 1984,
while employed at TerrilsRestaurant and Lounge in Butte, Montana.
She began receiving disability benefits shortly thereafter. In
April of 1989, claimant filed a petition for hearing with the
Workers1 Compensation Court. The substance of the relief sought
by the claimant was a conversion of future permanent total
disability benefits into a single lump sum to be used for the
purchase of an apartment complex in Helena, Montana.
Trial was held on June 15, 1989. On January 9, 1990, the
hearing examiner issued Findings of Fact, Conclusions of Law, and
an "Interim Ordert1
tentatively granting claimant the requested lump
sum but directing the claimant to submit within 15 days an
appraisal of the apartment building and written reports concerning
heating, plumbing, and electrical systems. The State Compensation
Mutual Insurance Fund (State Fund) then filed a motion asking the
2
Workers' Compensation judge to exercise supervisory control,
alleging that the issuance of the proposed findings had been sewed
on the parties prematurely, that the order allowing post-trial
appraisals violated the State Fund's due process right to cross-
examine opposing witnesses, and generally opposing the hearing
examiner's decision. The court reviewed the file and briefs and,
based on its review, denied the request on February 22, 1990. On
April 5, 1990, the court adopted the Findings of Fact and
Conclusions of Law of the hearing examiner, and entered judgment.
From that judgment the State Fund appeals.
The first issue is whether the decision to grant claimant a
lump sum award to purchase an apartment building is in her best
interest.
The Workers1 compensation laws in effect at the time of a
claimant's injury are controlling. Buckman v. Montana Deaconess
Hospital, 224 Mont. 318, 321, 730 P.2d 380, 382 (1986). On March
17, 1984, the date of the claimant's injury, the Workers'
Compensation statute regarding lump sum awards stated:
The biweekly payments provided for in this chapter may
be converted, in whole or in part, into a lump-sum
payment. Such conversion can only be made upon the
written application of the injured worker or the worker's
beneficiary, with the concurrence of the insurer, and
shall rest in the discretion of the division, both as to
the amount of such lump-sum payment and the advisability
of such conversion. The division is hereby vested with
full power, authority, and jurisdiction to allow and
approve compromises of claims under this chapter. All
settlements and compromises of compensation provided in
this chapter are void without the approval of the
division. Approval of the division must be in writing.
The division shall directly notify every claimant of any
division order approving or denying a claimant's
settlement or compromise of a claim. A controversy
between a claimant and an insurer regarding the
conversion of biweekly payments into a lump sum is
considered a dispute for which the workers' compensation
judge has jurisdiction to make a determination.
5 39-71-741, MCA (1983).
This statute has been interpreted to mean that "[llump sum
settlements are only granted where there is loutstanding
indebtedness,' \pressing need,' or where \the best interests of the
claimant, his family and the general public will be served.'"
Willoughby v. General Accident Fire and Life, 187 Mont. 253, 257,
609 P.2d 700, 702 (1980) (citations omitted). While the
presumption is in favor of periodic payments, where the best
interests of the parties will be served by lump sum conversions,
"they should be awarded without hesitancy ... Utick v. Utick,
181 Mont. 351, 355, 593 P.2d 739, 741 (1979). Appellant argues
that because the apartment house investment is a "passive
investmentu and because the investment puts the balance of
claimant's lifetime benefits at risk, it is not in her best
interest and is therefore contrary to Montana law.
Decisions regarding "activeN and "passivev investments are,
as pointed out by the Workers' Compensation Court, made on a case-
by-case, fact-by-fact basis. The State Fund maintains that the
facts of Daniels v. Kalispell Regional Hospital, 230 Mont. 407, 750
P.2d 455 (1988), and Komeotis v. Williamson Fencing, 232 Mont. 340,
756 P.2d 1153 (1988), both denying lump sums, are so similar to the
facts before us that this request should also be denied. A review
of those facts, twice by the Workerst compensation Court and now
by us, yields a different conclusion.
In Daniels, the claimant requested a lump sum conversion in
order to set up an excavation business in which she would do the
office work and her husband would run the backhoe. The Court held
that Ms. Daniels1 role was too remote and the business was too
risky (her husband had only limited backhoe experience and had
never bid on an excavation job) to justify investing a large
portion of her benefits. In Komeotis, the claimant requested a
partial lump sum conversion for the purchase and operation of
rental property. This Court held, however, that the lower court
had properly determined that the claimant's need was not pressing
enough and his physical and mental disabilities were such that a
lump sum was not in his best interest.
Here there are none of the drawbacks of Daniels or Komeotis.
This will not be a llpassivell
investment as evidenced by the
extensive list of tasks claimant will perform in managing the
building. These include handling accounts, coordinating
maintenance, performing bookkeeping, and meeting with tenants.
While it is true she will receive help from family members, she
will still be the chief overseer of the rentals and will take
responsibility for the work of her employees. Although she may
only need to be "on siteN for a few hours a month, most of her
labor will be "behind the scenes. That fact, however, does not
diminish her role as owner/manager. The claimant has also
demonstrated a pressing need and her physical limitations are not
debilitating. Thus her situation is not similar to those presented
by the State Fund and no abuse of discretion by the Workers1
Compensation Court is evidenced.
The second issue is whether the State Fund was denied its
right to a fair and impartial hearing.
The State Fund claims that by requesting appraisals on the
heating, plumbing, and electrical systems of the apartment building
after the trial, the court deprived the Fund of its right to cross-
examine opposing witnesses, and allowed the claimant to prove her
case after trial. Citing the court's order denying motion for writ
of supervisory control:
The Court has granted lump sum conversions when specific
documentation was unclear at the time of trial as to the
exact nature or extent of the debt and directing the
parties to obtain that information post-hearing, and if
consistent with the claim and allegations made at the
time of trial, has awarded such benefits.
The Workers1 Compensation Court reviewed claimant's evidence
for the hearing and again for the defendants1 motion for the Writ
of Supervisory Control. We find nothing in the record to show the
court abused its discretion in finding overwhelming support for
the feasibility of the claimant's proposal. It reached this
conclusion without benefit of the post-trial appraisals and
therefore did not deprive the State Fund of its right to a fair
hearing.
Affirmed.
We Concur: