Christenson v. Billings Livestock Commission Co.

No. 82-141
IN THE SUPREME COURT OF THE STATE OF XONTANA
1982

VICKI R. CHRISTENSON,
Claimant and Appellant,
VS.

BILLINGS LIVESTOCK COM1\IISSION
COMPANY, Employer, and STATE
COMPENSATION INSURANCE FUND,
Defendant and Respondent.

Appeal from: Workers' Compensation Court of the State of Montana,
In and for the Area of Billings
Honorable Timothy W. Reardon, Judge presiding.
Counsel of Record:
For Claimant:
Herndon, Harper & Munro, Billings, Montana
For Defendant:
Allen B. Chronister, Helena, Montana

Submitted on briefs: July 15, 1982
Decided: November 9, 1982

Filed: !dOV 9 " 2982
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Clerk
Mr. Justice Daniel J. Shea delivered the Opinion of the
Court.

Claimant, Vicki R. Christenson appeals from a judgment
in Workers' Compensation Court which held that a settlement
agreement negotiated with a claims examiner did not create a
Sinding contract between claimant and the liability carrier,
State Insurance Fund (State Fund).

Claimant contends that the claims examiner was authorized
to negotiate a binding settlement agreement and that a

binding agreement was in fact created. We affirm the
Workers' Compensation Court.
Claimant was injured at work in 1973. Claimant's
employer, Billings Livestock Commission Company was enrolled
under Workers' Compensation Plan 111. State Fund accepted
liability and paid all of claimant's medical bills and

compensation of $32.67 per week.

From late in 1979 until spring of 1981, State Fund

negotiated with claimant to arrive at some final settlement
of claimant's disability benefits. Claimant was represented
by counsel and negotiations were conducted through a claims
examiner with State Fund. The State Fund bureau chief
supervised the work of the claims examiner.
In March of 1981, the parties reached a tentative
settlement. Claimant and her attorney signed a petition
for full and final compromise settlement. Under the terms
of the proposed settlement, claimant would receive a lump
sum payment of $13,000 and payments of $860 per month for

one year, during which time claimant was to undergo a
rehabilitation program. In addition, State Fund would pay
claimant's medical expenses during her lifetime.
When the signed petition was presented to the State
Fund bureau chief he rejected it as excessive and beyond the
-2-
liability of State Fund as an insurer. The bureau chief

offered instead a single lump sum final settlement of
$6,000.
At this point, claimant brought the matter before the
Workers' Compensation Court, insisting that through the
negotiations between her attorney and the State Fund claims
examiner, she had entered into a binding final settlement

agreement with State Fund. After a trial on September 22,
1981, Workers' Compensation Court entered a judgment that
the preponderance of evidence established that the proposed
settlement agreement did not create a binding contract between
claimant and State Fund because State Fund had not consented
to its terms. No penalties were awarded.
Claimant argues that consent of the bureau chief was not
necessary, that the State Fund claims examiner had either
actual or apparent authority to negotiate a final settlement
and that the State Fund was bound by the settlement that

the claims examiner had negotiated. We agree with the

Workers' Compensation Court holding that the claims examiner
did not have either actual or apparent authority to enter
into a binding final settlement on behalf of the State Fund.
Actual authority is defined at section 28-10-402, MCA:
"Actual authority is such as the principal
intentionally confers upon the agent or
intentionally or by want of ordinary care
allows the agent to believe himself to possess."
The Workers' Compensation Court found that the bureau
chief was the only person authorized to bind State Fund to a
settlement contract, that the claims examiners were con-
tinually reminded of their limited authority, and that this
claims examiner was aware that her authority was limited to
negotiating proposed settlements. Negotiated proposed
settlements were regularly submitted to the bureau chief for
approval. The heading of the document which claimant asserts
is a binding contract is "Petition for Full and Final Com-
promise Settlement." (Exhibit 2.) The heading alone
suggests that it was not the final agreement between the
parties. The record supports the Workers' Compensation
Court's finding that the claims examiner did not have actual
authority.
Nor did the claims examiner have ostensible authority

to bind the State Fund. Ostensible authority is defined at
section 28-10-403, MCA:
"Ostensible authority is such as a principal,
intentionally or by want of ordinary care,
causes or allows a third person to believe
the agent to possess."
Unrefuted testimony at trial established that the claims
examiner never told claimant's attorney that she had authority

to bind State Fund and that she always told claimant's
attorney that she would have to submit any proposed settlement
to the bureau chief for approval. From this evidence,
Workers' Compensation Court correctly concluded that the
claims examiner did not have ostensible authority.
There can be no binding contract without mutual consent
of the parties. Section 28-2-102(2), MCA. The proposed

settlement was never approved by the bureau chief of State
Fund. &sent the bureau chief's approval, claimant had no
right to rely on the petition for full and final compromise
settlement as a binding agreement.
The Workers1 Compensation Court judgment was based on
substantial evidence and we therefore will not overturn the
decision.
The judgment is affirmed.
We C o n c u r :