July 22 2008
DA 06-0741
IN THE SUPREME COURT OF THE STATE OF MONTANA
2008 MT 254
RODNEY A. BARNARD,
Petitioner and Appellee,
v.
LIBERTY NORTHWEST INSURANCE CORP.,
Respondent, Insurer and Appellant.
APPEAL FROM: Workers’ Compensation Court, State of Montana
Honorable James Jeremiah Shea, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Larry W. Jones, Attorney at Law, Missoula, Montana
For Appellee:
Richard J. Martin, Linnell, Newhall, Martin & Schulke, P.C., Great Falls,
Montana
Submitted on Briefs: August 15, 2007
Decided: July 22, 2008
Filed:
__________________________________________
Clerk
Justice John Warner delivered the Opinion of the Court.
¶1 Rodney Barnard petitioned the Workers’ Compensation Court (WCC) for a lump sum
conversion of his permanent total disability benefits. The WCC granted his petition. The
insurer, Liberty Northwest Insurance (Liberty), appeals the decision of the WCC.
¶2 We restate and address the issues on appeal as follows:
¶3 Issue 1: Does § 39-71-741(1)(c), MCA (2003), limit the Department of Labor and
Industry (DLI) to $20,000 lump sum conversions of permanent total disability benefits?
¶4 Issue 2: Did the WCC err in determining that Barnard was entitled to a lump sum
payment because the money would be used for his necessities of life?
BACKGROUND
¶5 Barnard was injured at work on June 22, 2004. His employer was insured by Liberty,
which accepted workers’ compensation liability under its policy. On May 9, 2005, Liberty
agreed to convert Barnard’s benefits to permanent total disability benefits. On December 30,
2005, Barnard petitioned the WCC to convert the entire amount of his future benefits to a
lump sum settlement. Liberty opposed his petition, arguing that the law prohibits a lump
sum payment greater than $20,000 and that he had not shown that he needed the money for
necessities of life.
¶6 On March 31, 2006, the WCC held a trial on Barnard’s petition. He and his wife
testified. The WCC entered findings of fact based on the evidence produced at the trial. It
found that Barnard receives slightly less that $900/month in workers’ compensation benefits.
As of March 2006, the present net value of Barnard’s benefits was $80,893.43. He also
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receives just over $1200/month in Social Security benefits. His wife earns approximately
$12,000 to $15,000 annually as a housekeeper.
¶7 Barnard and his wife own 120 acres of land west of Great Falls. They own the
property outright and have no debts. Barnard testified that he is strongly opposed to
borrowing money, particularly since he lives on a fixed income. He does not want to sell the
property and move into town because he pays less tax on his current property and because he
uses the property to generate income by raising cattle, as discussed below.
¶8 Barnard and his wife reside in a 1966 mobile home and have been unable to insure the
home because of its age. The mobile home is on blocks, not a foundation, and there are three
steps that Barnard must climb to get into the home. It also has narrow hallways and a small
bathroom. Barnard has difficulty entering and moving about the home because it does not
accommodate his wheelchair. The property also includes a building Barnard uses as a shop
and an office. He walks from his residence to the shop, where he is able to use a wheelchair.
Barnard testified that he wants to use part of the lump sum payment to purchase a new home
that is easier for him to get into and use. He anticipates that he would need to purchase a
custom-built mobile home.
¶9 Barnard raises cattle on his property. Each year he buys and sells cattle, keeping any
profits to buy more cattle the following year. Some years Barnard has lost money on the
cattle business, particularly during periods of drought. In other years he has made a profit.
He wishes to use part of the lump sum payment to buy additional cattle.
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¶10 The Barnards own several vehicles. One truck no longer runs, and another is a 1987
pick-up with 200,000 miles on it. They have a diesel truck they use for towing stock trailers
and an unlicensed pick-up used as a farm vehicle. Their newest vehicle is a 2001 Subaru
which Mrs. Barnard uses to go to work. Barnard has difficulty getting in and out of these
vehicles. He plans to use part of the lump sum payment to buy a newer, reliable car that he
can more easily and comfortably use.
¶11 The driveway to the Barnards’ property is a half-mile long, and it has a steep grade
and a gumbo shale surface. It is difficult to navigate in bad weather and requires the use of
chains in the winter. Barnard intends to use part of the lump sum payment to gravel the
driveway.
¶12 After considering the evidence presented, the WCC found that Barnard and his wife
were credible, that he had established that the lump sum payment of the whole of his
permanent total disability benefits was for necessities of life, and that he was entitled to
receive the requested lump sum payment of the entire amount of his benefits. Liberty filed a
timely appeal.
STANDARD OF REVIEW
¶13 We review the WCC’s findings of fact to determine if they are supported by
substantial credible evidence, and we review its conclusions of law to determine if they are
correct. Hiett v. Missoula Co. Pub. Schs., 2003 MT 213, ¶ 15, 317 Mont. 95, ¶ 15, 75 P.3d
341, ¶ 15.
DISCUSSION
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¶14 Issue 1: Does § 39-71-741(1)(c), MCA (2003), limit the DLI to $20,000 lump sum
conversions of permanent total disability benefits?
¶15 The applicable workers’ compensation statutes are those in effect at the time of an
injury. Buckman v. Mont. Deaconess Hosp., 224 Mont. 318, 321, 730 P.2d 380, 382 (1986).
Barnard was injured in 2004, so the 2003 statutes in effect at that time apply to his claim.
¶16 Section 39-71-741, MCA (2003),1 permits the conversion of workers’ compensation
benefits to a lump sum in certain circumstances:
(1) By written agreement filed with the department, benefits under this chapter
may be converted in whole or in part into a lump sum. . . . The department
may approve an agreement to convert the following benefits to a lump sum
only under the following conditions:
....
(c) permanent total disability benefits if the total of all lump-sum conversions
in part that are awarded to a claimant do not exceed $20,000. The approval or
award of a lump-sum permanent total disability payment in whole or in part by
the department or court must be the exception. . . .
The WCC concluded that this section permits lump sum payments greater than $20,000 if it
is a lump sum conversion of the whole of a permanent total disability benefit. The WCC
concluded that the $20,000 limitation in § 39-71-741(1)(c), MCA, refers only to lump sum
conversions of a part of an injured worker’s permanent total disability benefits. DLI has
employed a like interpretation of this statute for years. Liberty challenges the WCC and DLI
interpretation of the statute.
¶17 When the Court interprets a statute, “our goal is to ascertain and give effect to the
legislative intent.” Fliehler v. Uninsured Employers Fund, 2002 MT 125, ¶ 13, 310 Mont.
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99, ¶ 13, 48 P.3d 746, ¶ 13. We first attempt to construe a statute according to its plain
meaning. If the language of the statute is unambiguous, no further interpretation is
necessary. Rausch v. State Compensation Ins. Fund, 2002 MT 203, ¶ 33, 311 Mont. 210,
¶ 33, 54 P.3d 25, ¶ 33. We read all parts of a statute as a whole and strive to give effect to all
of its provisions. Section 1-2-101, MCA; Fliehler, ¶ 13. Our task is “simply to ascertain
and declare what is in terms or in substance contained therein, not to insert what has been
omitted or to omit what has been inserted.” Section 1-2-101, MCA. When there is a
longstanding agency interpretation of a statute, we will give that interpretation “respectful
consideration.” Glendive Med. Ctr., Inc. v. Mont. Dept. of Pub. Health & Human Servs.,
2002 MT 131, ¶ 14, 310 Mont. 156, ¶ 14, 49 P.3d 560, ¶ 14 (quotation omitted).
¶18 We have not previously addressed the meaning § 39-71-741(1), MCA, to determine if
it strictly limits lump sum conversions of permanent total disability benefits to $20,000. As
both parties note, we have addressed the issue in passing. See Martin v. The Hartford, 2004
MT 57, 320 Mont. 206, 86 P.3d 569. However, this precise issue was not before us in
Martin, and our statements in that case regarding the interpretation of § 39-71-741(1), MCA,
were not part of our holding. As we expressly stated in Martin, we did not “rule on the
correctness of the Department’s . . . interpretation” that a lump sum conversion in whole can
exceed $20,000. Martin, ¶ 6, n. 1.
¶19 We conclude that the WCC and DLI have correctly interpreted § 39-71-741(1), MCA.
When the statute is read in its entirety, it limits lump sum conversions to $20,000 only if the
1
Any references hereafter to the workers’ compensation statutes refer to the 2003 version unless otherwise
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requested conversion to a lump sum constitutes a part of the permanent total disability
benefit. Section 39-71-741(1)(c), MCA, does not limit to $20,000 a lump sum payment of
the whole of a permanent total disability benefit.
¶20 The language of § 39-71-741(1), MCA, specifies that there may be lump sum
payments “in whole or in part.” The portion of the statute referring to the $20,000 limitation
on lump sum payments refers only to “the total of all lump-sum conversions in part.” The
Legislature has thus distinguished between a lump sum payment of the whole amount of
benefit payments and a lump sum payment of a part of a benefit. We must give effect to this
distinction. Section 1-2-101, MCA; Fliehler, ¶ 13. The plain language of the statute,
coupled with a respectful consideration of the longstanding interpretation by DLI, means that
§ 39-71-741(1)(c), MCA, limits only the total of partial lump sum payments to $20,000. The
WCC correctly concluded that it had authority to order a lump sum payment of the entire
amount of Barnard’s permanent total disability payment.
¶21 Issue 2: Did the WCC err in determining that Barnard was entitled to a lump sum
payment because it would be used for necessities of life?
¶22 In order to receive a lump sum conversion of permanent total disability benefits, the
employee must demonstrate that he has a financial need that relates to one of several things,
one of which is the “necessities of life.” Section 39-71-741(1)(c)(i)(A), MCA. To determine
whether a lump sum should be awarded, the primary factor courts must consider is the
claimant’s best interest. Sullivan v. Aetna Life & Casualty, 271 Mont. 12, 17, 894 P.2d 278,
noted.
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281 (1995). Other factors to be considered include the interests of the claimant’s family and
the general public, pressing need, and outstanding debt. Sullivan, 271 Mont. at 16, 894 P.2d
at 280. We accord the WCC wide latitude to determine when a lump sum conversion is
appropriate, and we will not substitute our judgment for that of the WCC. Sullivan, 271
Mont. at 18, 894 P.2d at 282. The claimant has the burden to show that a lump sum
conversion is in his best interest. Martin, ¶ 4.
¶23 The WCC found, based on evidence and testimony properly introduced, that it is very
difficult for Barnard to get in and out of his house and that it is impossible for him to use his
wheelchair in the house. The WCC then found that the inability to comfortably and safely
move around his house is a justification for granting his petition for the lump sum payment
so that he could purchase a new home. Likewise, the WCC found that the lump sum
conversion was justified so that Barnard could purchase a new vehicle and gravel his
driveway. The WCC did not err in finding that it was in Barnard’s best interest to grant the
lump sum so he could use it to expand his cattle business. Contrary to Liberty’s assertion
that Barnard’s ranching activities are a speculative venture that usually loses money, the
record contains substantial evidence, which was deemed credible by the WCC, that Barnard
carefully manages his money and the cattle often produce a profit. The WCC properly
exercised its wide discretion when it found that Barnard would use a lump sum payment for
the necessities of life and concluded that it was in his best interest to convert his benefits to a
lump sum. We will not interfere.
CONCLUSION
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¶24 We conclude that § 39-71-741, MCA (2003), permits lump sum payments of the
whole of permanent total disability benefits, even though such conversions may result in a
payment that exceeds $20,000. The WCC did not err in finding that Barnard had met the
requirements of § 39-71-741, MCA, and that the lump sum payment he requested would be
used for the necessities of life.
¶25 Affirmed.
/S/ JOHN WARNER
We Concur:
/S/ PATRICIA COTTER
/S/ BRIAN MORRIS
Chief Justice Karla M. Gray, specially concurring.
¶26 I join in the result the Court reaches in this case. I write separately to address what
appears to me to be a disconnect between §§ 39-71-741(1)(c) and (4), MCA (2003), the facts
of this case and our existing jurisprudence on the issue of lump-sum conversions. I do so in
hopes that, in a future case where these matters are raised and argued, the Court might more
clearly resolve the disconnect, and the Legislature might revisit the statutes and provide more
clarity about its intent.
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¶27 As I read § 39-71-741(1)(c), MCA, it applies only to a written agreement between a
claimant receiving permanent total disability benefits and the carrier regarding a lump-sum
conversion. Such an agreement is filed with the DLI and may be approved under the
circumstances set forth in detail in § 39-71-741(1)(c), MCA, which include “the necessities
of life[.]” As I read it, this portion of the statute sets limits on the DLI’s ability to approve
such a conversion. Section 39-71-741(4), MCA, however, provides that “[a] dispute
between a claimant and an insurer regarding the conversion of biweekly payments into a
lump sum” is a matter entrusted to the jurisdiction of a mediator and the WCC.
¶28 In the present case, no written agreement between Barnard and Liberty was filed with
the DLI. Instead, Barnard filed his “dispute” with Liberty over the conversion in the WCC.
Our jurisprudence, including Sullivan, then authorized the WCC to apply the “best interest”
test, rather than the statutory “necessities of life” test which constrains the DLI in approving
conversion agreements.
¶29 I recognize the instant case was not presented to either the WCC or this Court under
the approach I suggest. I also recognize that this approach has not been utilized in our earlier
jurisprudence. I submit, however, that it is the only harmonious construction of two very
different subsections of § 39-71-741, MCA. Moreover, it seems to me an appropriate
rationale under which the WCC and this Court properly can substitute the “best interest” test
for the somewhat more restrictive “necessities of life” test imposed on the DLI in § 39-71-
741(1)(c), MCA.
¶30 For these reasons, I join the Court’s result. I, too, would affirm the WCC.
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/S/ KARLA M. GRAY
Justice Jim Rice joins in the foregoing specially concurring opinion.
/S/ JIM RICE
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