NO. 85-40
IN THE SUPREME COURT OF THE STATE OF MONTANA
1985
RALPH V. RELTON,
Claimant and Appellant,
-vs-
CARLSON TRANSPORT, Employer,
and
HARTFORD ACCIDENT & INDEMNITY CO.,
Third-Party Defendant and Respondent,
and
RICE TRUCK LINE, Employer,
and
TRANSPORT INDEMNITY COMPAIU,
Defendant and Respondent,
APPEAL FROM: Workers' Compensation Court, The Honorable Timothy
Reardon, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Kelly & Halverson, P.C.; Sheehy, Prindle & Finn;
Victor Halverson, Billings, Montana
For Respondent:
Garlington, Lohn & Robinson; Larry E. Riley, Missoula,
Montana
Crowley Law Firm; L. Randall Bishop, Rillings, Montana
Submitted on briefs: December 20, 1985
Decided: February 13, 1986
fLbi
Filed: i'g@?
Mr. Justice William E. Hunt, Sr., delivered the Opinion of
the Court.
The appellant, Ralph Belton, appeals the judgment of the
Workers' Compensation Court. That court ordered a recoupment
of an overpayment related to a social security offset.; denied
a requested total lump sum conversion; granted a partial lump
sum conversion; denied penalty for unreasonable payment of
medical expenses; and ordered payment of medical expenses.
We affirm in part and remand with instructions.
Three issues are presented for review:
1. Whether it was error to permit recoupment of
overpayments.
2. Whether it was error to deny a total lump sum
conversion.
3. Whether it was error to deny penalty for insurer
medical payments.
The appellant, Ralph Eelton, is now 61 years old. He
suffered a back injury in 1 9 7 7 while working for Carlson
Transport. Carlson Transport's compensation insurer was
Hartford Accident and Indemnity. Hartford accepted liability
and made payments to the appellant.
The appellant suffered injury to his back again in 1 9 7 9 .
This time he was working for Barker Trucking. Barker was
uninsured, but under contract with Rice Truck Line, insured
by the respondent, Transport Indemnity.
The issue of which insurer was liable for successive
injury in this case was decided in Belton v. Carlson
Transport, et al. (Mont. 1983), 658 P.2d 405, 40 St.Rep. 158.
Pursuant to the opinion in Belton the Workers' Compensation
Court ordered the respondent, Transport Indemnity, to pay the
appellant's compensation benefits and accident-related
m.edical costs incurred since the 1979 injury.
The issues in this case, as it is presently before this
Court, developed in 1984 when the appellant petitioned for a
hearing before the Workers1 Compensation Court requesting a
total lump sum payment, an order requiring the respondent to
pay medical costs, and a statutory penalty for insurer
unreasonableness. The respondent answered, requesting a
denial and a termination of benefits until an existing
overpayment related to the social security offset was repaid.
The Workers' Compensation Court denied a total lump sum
conversion, but it did grant a partial lump sum advance. It
ordered the respondent to pay the medical expenses, but it
denied invoking the statutory penalty for insurer
unreasonableness. It then ordered recoupment on behalf of
the respondent for overpayment. This recoupment was to be
paid from the partial lump sum advance.
The first issue is whether the Workers' Compensation
Court erred in permitting recoupment of overpayments made by
the insurers, Hartford and Transport Indemnity. In addition
to appellant's biweekly compensation payments he received
social security disability payments. Montana law allows an
offset against compensation when an injured worker is also
receiving social security disability. See, § S 39-71-701 (2)
and 39-71-702(2), MCA. The insurers did not take this offset
and by the time of the hearing on this matter overpayments
equalled $18,461.58. Hartford had overpaid $14,630.81 of
this amount and the respondent had overpaid the balance.
We hold that the insurers are entitled to the offset as
found by the Workers1 Compensation Court.
The second issue is whether the Workers' Compensation
Court erred in denying a total lump sum conversion. The
appellant sought a lump sum conversion because he had unpaid
debts, an inefficient automobile, and costly monthly rent.
One of the appellant's theories was that an outright purchase
of a house would help eliminate his financial problems. The
FJorkers' Compensatjon Court determined that it was in the
appellant's best interest to award a partial. Iump sum to
allow discharge of debt and to purchase a fuel efficient
automobile. However, it determined that the appellant did
not submit substantial credible evidence that it was in his
best interest to purchase a home. We agree.
The Montana Workers' Compensation Act provides for lump
sum payment. See, § 39-71-741, MCA. The Montana Legislature
has recently amended this code section. See, Act of April
1.5, Ch. 471, Laws of Montana (1985). The effective date of
the amendment followed the hearing on this matter and the
amendment does not apply in this case.
The law in effect and applicable to the case presented
here is that each case for a lump sum payment stands or falls
on its own merits. Utick v. Utick (1979), 181 Mont. 351,
355, 593 P.2d 739, 741. The denial of a lump sum settlement
will not be reversed on appeal unless the Workers'
Compensation Court is shown to have abused its discretion.
Ruple v. Peterson Logging Company (Mont. 1984), 679 P.2d
1252, 1254, 41 St.Rep. 704, 706. The general rule is that
payments under the compensation act are periodic. Lump sum
settlements are an exception to this rule. Utick (1979), 181
Ilont. 351, 354, 593 P.2d at 741. Lump sum settlements are
only granted where there is "outstanding indebtedness,"
"pressjng need," or where "the best interests of the
claimant, his family and the general public will be served."
Willoughby v. Arthur McKee & Co. (1980), 187 Mont. 253, 257,
609 P.2d 700, 702.
The appellant here demonstrated outstanding indebtedness
in the amount of over $5,000 in addition to the $18,000 due
the insurers for overpayment of benefits. He also
demonstrated a pressing need for a better automobile. The
Workers' Compensation Court granted a lump sum payment for
the debts and the automobile hut denied a total sum that
would enable the appellant to purchase a house. We hold that
this denial was a proper exercise of the court's discretion.
The appellant did not introduce evidence which showed he
had age or health reasons which necessitated the purchase of
a home. Testimony by appellant that he wished to avoid
future escalation of rent payments is not adequate to meet
the burden of advancing substantial credible evidence, Dumont
v. Mickens Bros. Construction Co. (1979), 183 Mont. 190, 201,
598 P.2d 1099, 1105, that there was "pressing need" for him
to purchase a house. Therefore, we hold the partial lump sum
advance was proper.
The third issue presented is whether the Workers'
Compensation Court erred in denying the appellant penalty for
respondent's unreasonable treatment of the medical cost
payment. The respondent was obligated to pay the appellant's
medical costs but it had refused to make these payments. The
Workers' Compensation Court found that this refusal was
unreasonable. The Workers' Compensation Court determined
that no statutory penalty applied, however, because the
statute spoke of compensation and not medical benefits.
This Court recently addressed this issue in Carlson v.
Cain (Mont. 1985), 700 P.2d 607, 42 St.Rep. 695. We decided