No. 12591
I N THE SUPREME COURT O THE STATE OF M N A A
F OTN
1974
WILLIAM KUEHN,
Claimant and A p p e l l e e ,
NATIONAL FARMERS UNION PROPERTY
and CASUALTY COMPANY,
Defendant and A p p e l l a n t .
Appeal from: D i s t r i c t Court o f t h e Seventh J u d i c i a l D i s t r i c t ,
Honorable L. C . Gulbrandson, Judge p r e s i d i n g .
Counsel of Record :
For Appellant :
H u t t o n , Sheehy and Cromley, B i l l i n g s , Montana
B~ent Cromley a r g u e d , B i l l i n g s , Montana
F o r Respondent :
McDonough and Cox, G l e n d i v e , Montana
Dale Cox a r g u e d , G l e n d i v e , Montana
Submitted: March 22, 1974
Decided :
APR 2 6 1974
Filed :
APR 2 6 1974
Mr. Justice Gene B. Daly delivered the Opinion of the Court.
Defendant and appellant, National Farmers Union Property
and Casualty Company, brings this appeal from an order of the
district court of Dawson County which affirmed an order of the
Workmen's Compensation Division granting claimant and respond-
ent William Kuehn, hereinafter referred to as claimant, a partial
lump sum award of benefits.
On June 28, 1971, claimant Kuehn sustained an injury in
the course of his employment with the Farmers Union Grain Ter-
minal Association at Glendive, Montana. Claimant was 59 years
of age, married, with no children and had less than a complete
elementary school education. His injury necessitated extensive
back surgery for a disc condition and he was informed by his
physician that the probabilities of reoccurrence of injuries were
substantial if claimant attempted any job requiring heavy use of
his back.
Claimant's award was:
" * * * permanent partial disability benefits
commencing June 27, 1972 in the amount of
fifty-five (55%) per cent of the difference
between his weekly wage at the time of his
injury [$121.44] and any amount he may earn in
the future, not to exceed forty ($40.00) dollars
per week for a period not to exceed four hundred
sixty-seven (467) weeks in accordance with the
provisions of Section 92-703, R.C.M. 1947.
(Payment for twenty-nine (29) weeks temporary
total disability and four (4) weeks permanent
partial disability having been previously paid.
500 less 33 = 467.) "
Claimant has had no employment since his back surgery,
although it appears he has made some effort to find nonstrenuous
work. In addition to the $40 per week workmen's compensation
disability benefits, claimant receives monthly Social Security
diability benefits.
In January 1973 he petitioned the Workmen's Compensation
Division for a partial lump sum payment sufficient to pay out-
standing personal indebtedness then amounting to about $2,700.
The division awarded a lump sum payment of $3,200, representing
80 weeks at the rate of $40 per week, to be taken from the last
80 payments of the total award granted. The insurer appealed
this award to the district court. From the order of the dis-
trict court sustaining the award the insurer brings this appeal,
assigning the following issues:
(1) Whether the Division of Workmen's Compensation had
the authority to grant a partial lump sum award to an employee,
with that lump sum deducted from the last 80 payments of a 500
week award for partial disability.
(2) Whether the Division of Workmen's Compensation had
the authority to grant a lump sum award of deferred payments
without determining the estimated value of the present worth of
such payments, and
(3) Whether the Division of Workmen's Compensation acted
unreasonably and arbitrarily in granting a partial lump sum award
of $3,200 to claimant.
The first and third issues relate to section 92-715,
R.C.M. 1947, which provides:
"Biweekly payments converted into a lump sum.
The biweekly payments provided for in this act
may be converted, in whole or in part, into a
lump-sum payment, which lump-sum payment shall
not exceed the estimated value of the present
worth of the deferred payments capitalized at the
rate of two per centum (2%) per annum. Such con-
version can only be made upon the written applica-
tion of the injured workman, his beneficiary, or
major or minor dependents, as the case may be,
and shall rest in the discretion of the board,
both as to the amount of such lump-sum payment
and the advisability of such conversion. The
Board is hereby vested with full power, authority,
and jurisdiction to compromise claims and to
approve compromises of claims under this act; and
all settlements and compromises of compensation
provided in this act shall be absolutely null and
void without the approval of the board. Any ap-
proval of the board must be in writing and set
forth specifically the reasons for such lump-sum
or compromise payment."
The terms of the statute seem plain and unambiguous--
"The biweekly payments provided for in this act" would certainly
include the permanent partial disability benefits awarded claim-
ant herein, "may be converted, in whole or in part, into a lump-
sum payment".
Appellant insurer argues that the application of the
partial lump sum payment in the instant case to the final 80
weeks, or "rear end" of the total award, engages in speculation
that the claimant will not find work, die, or otherwise lose
entitlement to his final 80 weeks of compensation. While this
argument is correct, it could also be argued that any workmen's
compensation disability award, whether permanent or temporary,
total or partial, weekly or lump sum, engages in the same or
similar speculation. In our opinion, the proper place for these
arguments is before an appropriate legislative committee rather
than before this Court. It is not within the province of this
Court to judicially impose a restriction upon the Workmen's
Compensation Division which is contrary to the express provisions
of a legislative enactment.
Concerning the scope of appellate review, this Court
stated in the case of Kent v. Sievert, 158 Mont. 79, 81, 489
"Commutation of periodic benefit payments to lump
sum settlements is authorized by section 92-715,
R.C.M. 1947. This section vests wide discretion
in the Board as to the amount of such lump sum pay-
ment and the advisability of such conversion.
"That the Board's discretion in granting or denying
lump sum settlements will not be interfered with on
appeal unless there is an apparent abuse of discretion
is ' likewise well established. Sullivan v.
Anselmo Mining Corp., 82 Mont. 543, 268 P. 495;
Landeen v. Toole County Refining Co., 85 Mont. 41,
277 P. 615."
A review of the Montana precedent on this point indicates
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that conversion of weekly to either partial or total lump sum
payments is the exception rather than the rule. This is, as it
should be, in the best interests of the injured workman, whose
paycheck is generally better substituted for by a weekly benefit
check rather than a lump sum windfall. The criteria determinative
of the advisability of conversion to a total or partial lump sum
award have generally been held to be '
I * * * the best interests
of the claimant, his family, and for the best interests of the
public * * *." Kustudia v. Ind. Acc. Brd., 127 Mont. 115, 123,
258 P.2d 965. See also Legowik v. Montgomery Ward, 157 Mont.
436, 486 P.2d 867. The existence of a "pressing need" and/or
"outstanding indebtness" has likewise been held to be relevant
criterion, Kent v. Sievert, supra.
The appellate record indicates that claimant Kuehn's age,
abbreviated education, somewhat limited literacy, lack of clerical
work experience, inability to perform manual labor and increased
vulnerability to back injury combined to render his employment
prospects negligible. His past due indebtedness involved install-
ments on his home and pickup truck and miscellaneous bills, in-
cluding attorney fees. It could also be reasonably inferred that,
if he were aided in becoming current on these various debts, his
prospects of sustaining himself on his Workmen's Compensation and
Social Security disability benefits would be improved.
Accordingly we find, as did the district court, that the
Workmen's Compensation Division based its determination on sub-
stantial credible evidence properly before it and entered an award
that was within its discretion to grant and which would serve the
best interests of the claimant.
The second issue concerns the provision of section 92- 715,
R.C.M. 1947: " * * * Ithe] lump-sum payment shall not exceed the
estimated value of the present worth of the deferred payments
capitalized at the rate of two per centum (2%) per annum." Larson
on Workmen's Compensation, Vol. 3, 582.70, p. 354.30-31 (1971),
states the general principle:
" * * * Lump-sum settlements, when they are author-
ized by statute, are not compromises in the usual
sense; that is, they do not assume concessions
and adjustments in the amount of payment because of
the existence of a disputed issue. Rather, they are
essentially commutations, and should be calculated
on a sound annuity basis in accordance with any stat-
utory rules provided. * * * " (See also Cogdillv. Aetna
Life Insurance Co., 90 Mont. 244, 255-56, 2 P.2d 292.
(1931)
We find that this provision of the statute was not com-
plied with, that the Division did not convert the lump sum to
estimated present worth capitalized at 2% per year.
This cause is therefore remanded to the Workmen's Compen-
sation Division for modification of the award in conformance
k-s-%
with this opinion.
Wed concur :
7 Justice
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:
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"Chief Justice