IN THE WORKERS' COMPENSATION COURT OF THE STATE OF MONTANA
2001 MTWCC 24
WCC No. 2000-0222
STATE COMPENSATION INSURANCE FUND
SALISH KOOTENAI COLLEGE
DECISION AND JUDGMENT
AFFIRMED in Part, REVERSED & REMANDED in Part 12/5/02
Summary: Claimant requests that the offset for social security disability (SSD) benefits he receives be reduced by the amount of attorney fees he expended in obtaining the SSD benefits. After frustrating the insurer from securing any recoupment of an overpayment due to his receipt of retroactive SSD benefits, he also seeks a penalty because the insurer recently reduced his biweekly benefits on account of the overpayment, arguing that he must agree to any reduction.
Held: The statutes concerning the social security offset are clear and do not allow attorney fees to be considered. The common fund doctrine adopted in Murer v. State Fund, 282 Mont. 210, 942 P.2d 69 (1997), is inapplicable and does not overrule Stahl v. Ramsey Const. Co., 248 Mont. 271, 274-276, 811 P.2d 546, 547 (1991). A claimant cannot frustrate recoupment of a social security disability (SSD) overpayment by refusing to agree to a reduction in biweekly benefits. There is nothing in the offset statutes precluding the insurer from reasonably reducing benefits to recoup an SSD overpayment. A subsequent statute authorizing termination of all benefits to effect recoupment is not inconsistent with this holding.
¶1 This matter is submitted for decision on an Agreed Statement of Facts, a copy of which is attached to this decision. Not all of the agreed facts are necessary for the decision.
¶2 Paraphrased, the essential facts are as follows:
¶3 The parties have phrased the issues as follows:
(Statement of Issues at 1-2.)
¶4 The claimant's occupational disease was diagnosed in June 1993 and the parties agree that the 1991 version of the Workers' Compensation Act must be applied in determining benefits owed to the claimant, Buckman v. Montana Deaconess Hospital, 224 Mont. 318, 321, 730 P.2d 380, 382 (1986).
¶5 At issue in this case is the social security offset provided in section 39-71-701(5), MCA (1991), with respect to TTD benefits, and in section 39-71-702(4), MCA (1991), with respect to PTD benefits. The offset language in the two sections is identical. Subsection (5) of section 39-71-701, MCA, and subsection (4) of section 39-71-702, MCA, provide:
¶6 Claimant urges that the attorney fees he incurred in pursuing his SSD benefits should be taken into consideration in computing the social security offset since the award of SSD benefits benefit the State Fund.
¶7 Neither section 39-71-701(5), MCA, nor section 39-71-701(4), MCA, provide for reduction of the offset on account of attorney fees expended in pursuing and securing SSD benefits. Court's are precluded from inserting additional terms into statutes. § 1-2-101, MCA. The very same arguments made by claimant herein were rejected in Stahl v. Ramsey Const. Co., 248 Mont. 271, 274-276, 811 P.2d 546, 547 (1991). In Stahl the Court held:
¶8 Claimant argues that Stahl is no longer good law in light of Murer v. State Compensation Ins. Fund, 282 Mont. 210, 942 P.2d 69 (1997). Murer held that where a claimant brings an action on his own behalf and others similarly situated to establish an entitlement to benefits under the Montana Workers' Compensation Act, and succeeds in that action, the attorney for the claimant bringing the action is entitled to collect attorney fees from benefits he or she has established as due other benefitting claimants. At issue in Murer was the common fund doctrine. That doctrine has no application here. Claimant is not seeking attorney fees for others who may benefit by this decision, rather he is seeking attorney fees with respect to his own entitlement. Moreover, statutes control over common law doctrine. "Where a conflict arises between the common law and a statute, the common law must yield." ISC Distributors, Inc. v. Trevor, 273 Mont. 185, 202, 903 P.2d 170, 180 (1995). Claimant is not entitled to a reduction in the offset based on the attorney fees he incurred in obtaining SSD benefits.
¶9 Claimant argues that the State Fund may not recoup overpayments absent his agreement or an order of this Court. In effect, he argues that he can obstruct recoupment and force the State Fund to petition the Court.
¶10 Nothing in the statutes governing the social security offset speak to the issue. The statutes do not establish any procedure or formula for taking the offset in cases where SSD benefits are awarded retroactively.
¶11 Claimant argues that this Court's decision in Mackney v. State Compensation Mutual Ins. Fund, WCC No. 9211-6622 (June 18, 1993), precludes the State Fund from unilaterally reducing claimant's benefits to recoup overpayments. The decision in that case lends no support whatsoever to the claimant's position. There is nothing in the decision stating that an insurer cannot unilaterally reduce a claimant's benefits to recoup a SSD offset. The portion of the decision quoted by claimant concerns payment of an undisputed impairment award. The insurer failed to pay the award, offsetting the social security overpayment. Even if the decision were to be read as precluding an insurer from taking an offset absent a claimant's agreement, I would overrule such a holding. The law is clear that an insurer is entitled to offset SSD benefits. That law puts claimants on notice that if they receive retroactive benefits, the offset will apply. Claimant in this case was represented by competent counsel, who surely knows the offset rule. If the claimant ignored the offset and spent the portion due the insurer he cannot claim surprise when the insurer seeks to recoup the overpayment. A claimant cannot frustrate the insurer's recovery of an overpayment by rejecting the insurer's every proposal for recoupment and insisting that the insurer can take no offset unless it goes to Court.
¶12 Legislation effective July 1, 1993, expressly authorized the insurer to suspend benefits altogether to recoup overpayments. As amended, sections 39-71-701(6) and 39-71-702(7), MCA (1993) provide:
The statute does not apply to this case since it became effective after the claimant's occupational disease. Claimant, however, urges that it shows an insurer lacked authority prior to July 1, 1993, to unilaterally reduce benefits to recoup the offset. The argument is without merit. The new section sanctions suspension of all benefits to recoup the offset, which is the most extreme possible method of recoupment. There is nothing in the adoption of the section indicating that the legislature believed that insurers were prohibited from lesser measures of recoupment, and nothing in the prior statutes which precluded such lesser measures.
¶13 An insurer has an obligation to act reasonably with regard to payment of benefits. §§ 39-7I-611, -612, -2907, MCA. I do not determine that an insurer's unilateral offset for overpayments is in every case reasonable. I only determine that it is not per se unreasonable for an insurer to recoup overpayments despite a claimant's objections. In this case, claimant has not presented sufficient evidence to persuade me that the State Fund's offset for recoupment was unreasonable. I note that claimant has frustrated recoupment altogether for over five years. His own proposal to allow the State Fund to recoup the overpayment beginning May 2001 is an admission that the State Fund is entitled to some recoupment on a biweekly basis, yet he insists the State Fund should recoup nothing unless he agrees on a specific amount and the specific time period. His position is unreasonable and without legal support.
¶14 The claimant is not entitled to relief and his petition is dismissed with prejudice.
¶15 This decision is certified as final for purposes of appeal.
¶16 Any party to this dispute may have twenty (20) days in which to request a rehearing from this Decision and Judgment.
DATED in Helena, Montana, this 18th day of May, 2001.
c: Mr. Rex Palmer
1. The parties have not informed the Court whether the SSD amounts are correct. Presumably they are since the briefs do not indicate any dispute over the amounts involved in the controversy.
2. The parties have not bothered to inform the Court as to claimant's age, so the amount and duration of the claimant's proposed recoupment is unknown.
3. Agreed Statement of Fact ¶ 26.
Ann E. Clark, Legal Counsel
IN THE WORKERS' COMPENSATION COURT OF THE STATE OF MONTANA
WCC No. 2000-0222
MONTANA STATE FUND
SALISH KOOTENAI COLLEGE
AGREED STATEMENT OF FACTS
COME NOW the parties, by and through their counsel of record, and stipulate that the following statements are true.
1. That prior to and on June 23, 1993, Claimant suffered an occupational disease arising out of and in the course of his employment with Salish Kootenai College in Lake County, Montana. Claimant injured his arms/hands while performing repetitive activities.
2. At the time the occupational disease arose and progressed, Claimant's employer was enrolled under Compensation Plan 111 of the Workers' Compensation Act and its insurer is State Compensation Insurance Fund [State Fund].
3. State Fund has accepted Claimant's claim
and has paid both medical and temporary total disability benefits. Claimant
has been continuously totally disabled since the summer of 1993 and
State Fund has paid total
4. The parties have complied with any mediation
procedure required in the Workers' Compensation Act. The Department
of Labor, Employment
5. On June 23, 1993, R. D. Marks, MD, diagnosed
Claimant with carpal
6. Also on June 23, 1993, Lennard Wilson, MD, a neurologist, performed nerve conduction studies and diagnosed Claimant with bilateral carpal tunnel syndrome.
7. On July 7, 1993, Rory Wood, MD, an orthopedic
8. On August 24, 1993, Claimant presented State
Fund with his Claim for Compensation, wherein he stated "Beginning
during the last three months of 19921 noticed gradually increasing pain,
numbness and loss of control in my hands. This developed into continual
tingling and restricted motion and loss of grip strength." He listed
the cause of his condition as
9. On November 4, 1993, Claimant presented State Fund with a "Claimant's Travel Expense Voucher wherein he claimed travel expenses for 14 separate trips for medical care related to his carpel tunnel syndrome. The first claimed trip was for 140 miles on June 23, 1993, and described as "went to Dr. Marks and Dr. Wilson."
10. On May 4, 1994, State Fund agreed to pay for
the claimed travel
11. On February 8, 1996, State Fund wrote to Claimant
that since Social
12. On February 19,1996, Claimant wrote to State
Fund and asked that his benefits not be suspended, stated that he would
prefer a monthly
13. On March 26, 1996, State Fund wrote that "on
February 28, the State
14. State Fund suspended biweekly benefits effective April 3, 1996.
15. On April 5,1996, State Fund wrote, (confirming an April 3,1996, phone conversation) regarding the attorney fees Claimant paid to obtain his Social Security benefits, "There is no statute which requires the State Fund to take those attorney fees into consideration."
16. On May 29, 1996, Claimant wrote (confirming
a phone conversation of the same day) requesting that State Fund reinstate
his total disability
Claimant advised that if an agreement could not be reached, State Fund could take the matter to court but could not unilaterally initiate recoupment.
17. On May 31, 1996, State Fund notified Claimant
that it would reinstate
State Fund also wrote that:
State Fund paid Claimant the sum of $793.44 shortly after this letter.
18. On June 11, 1996, Claimant notified State Fund
that he did not agree
19. On July 3, 1996, State Fund wrote to Claimant
agreeing to pay the
20. On July 10, 1996, Claimant wrote State Fund reiterating
his wish that
21. On September 26, 2000, State Fund wrote to Claimant
confirming that his occupational disease "was diagnosed on June
23, 1993," and
State Fund also wrote that it had calculated the overpayment
22. On October 6,2000, Claimant notified State Fund by telephone and letter that he did not want his benefits "terminated or reduced unless and until an agreement has been reached between him and the State Fund as to the exact method and amount."
Claimant reminded State Fund that "the law which permits unilateral reduction of benefits to accomplish offset for any Social Security overpayment was not enacted until 1993. Although arising in 1993, Mr. Flynn's claim occurred under the 1991 law; i.e., before July 1, 1993."
Claimant expressed his concern that "we do not think the State Fund can reap the full benefit of Mr. Flynn's expenses incurred to obtain the Social Security award without also paying some of those expenses. If you have any legal authority to the contrary, it would certainly speed up the negotiation process to determine the proper and acceptable amount of reduction in order to permit recoupment of the Social Security overpayment."
23. On October 11, 2000, State Fund responded to
Claimant's October 6, 2000, communication and invited Claimant to make
24. On October 18, 2000, Claimant wrote to State
Fund that he still did not want his benefits terminated or reduced unless
and until an agreement
Finally, Claimant pointed out that waiting until spring would allow State Fund and Claimant to work out the attorney fee issue. Claimant pointed out that his counsel's efforts in establishing and collecting Social Security benefits created a common fund from which he and the State Fund both benefited. Claimant concluded this communication by again reminding State Fund that, "there is no just reason why the State Fund should not share in the cost of that benefit. Again, if you have any authority, legal or otherwise, to the contrary, please provide it to me."
25. On October 24, 2000, State Fund wrote Claimant
that it would cease the unilateral reductions in his biweekly payments
(of which there were two,
26. On November 2, 2000, Claimant wrote State Fund
once again advising that he, "does not agree that you may reduce
his benefits next spring or any other time until we resolve our differences
concerning the State Fund's pro rata share of attorney fees. We stand
by our position and
27. At all times relevant to the issues and funds in dispute, there has been no court order or agreement between the parties authorizing State Fund to recoup any portion of the alleged overpayment.
Rex Palmer Ann E. Clark,
\s\ Rex Palmer \s\ Ann E. Clark