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STATE COMPENSATION INSURANCE FUND
CATTIN'S FAMILY DINING
Summary: Permanently totally disabled claimant sought conversion of her future PTD benefits to a lump sum. Claimant is 37 years old, married, and has a history, with her husband, of poor financial management. For instance, although with limited finances, claimant and her husband purchased two snowmobiles and entered into a contract for deed on a house, with a monthly payment over twice as large as their prior rent.
Held: Request for lump sum of PTD benefits denied. Under section 39-71-741, MCA (1991), the conversion of PTD benefits to a lump sum on the basis of financial need "must be the exception," which the WCC interprets to incorporate the historical best-interests test applicable to lump-sums. See, Sullivan v. Aetna Life & Cas. , 271 Mont. 12, 16, 894 P.2d 278, 280 (1995). Debt alone cannot be the basis for lump-summing where debt is pervasive in our society. Lump-summing is not in claimant's best interest be because her monthly PTD benefits are the only income she has in her own right; she has twenty-years before she reaches retirement age; she and her husband have proven themselves unable to wisely manage their finances; and they have other means to extricate themselves from their current monthly shortfall, selling their snowmobiles and the house purchased in Missoula.
Constitutions, Statutes, Regulations and Rules: Montana Code Annotated: section 39-71-741, MCA (1991). 37-year old claimant sought conversion of her future PTD benefits on the allegation of financial need. Under section 39-71-741, MCA (1991), the conversion of PTD benefits to a lump sum on the basis of financial need "must be the exception," which the WCC interprets to incorporate the historical best-interests test applicable to lump-sums. See, Sullivan v. Aetna Life & Cas. , 271 Mont. 12, 16, 894 P.2d 278, 280 (1995). Lump-summing is not in claimant's best interest be because her monthly PTD benefits are the only income she has in her own right; she has twenty-years before she reaches retirement age; she and her husband have proven themselves unable to wisely manage their finances; and they have other means to extricate themselves from their current monthly shortfall.
¶1 The trial in this matter was held on April 2, 1998, in Great Falls, Montana. Petitioner, Darcee Bennett (claimant), was present and represented by Mr. Richard J. Martin. Respondent, State Fund Compensation Fund (State Fund), was represented by Mr. Thomas E. Martello.
¶2 Exhibits: Exhibits 1 through 17 were admitted without objection.
¶3 Witnesses and Depositions: Claimant and her husband, Raymond J. Bennett, were sworn and testified at the trial. In addition, the parties agreed that the Court may consider the depositions of claimant and her husband.
¶4 Issues: Claimant requests that her future permanent total disability benefits be converted, in their entirety, to a lump sum.
¶5 Bench Ruling: At the conclusion of trial, the Court denied the lump-sum request. The following findings of fact and conclusions of law repeat and elaborate on the reasons for the Court's ruling.
¶6 Having considered the Pretrial Order, the testimony presented at trial, the demeanor and credibility of the witnesses, the depositions and exhibits, and the arguments of the parties, the Court makes the following:
¶7 Claimant is permanently totally disabled on account of an industrial injury she suffered on June 26, 1993, while working for Cattin's Family Dining (Cattin's).
¶8 At the time of her industrial injury, Cattin's was insured by the State Fund, which accepted liability. The State Fund agrees that claimant is permanently totally disabled and is currently paying claimant biweekly permanent total disability benefits.
¶9 Claimant's biweekly permanent total disability rate is $254.88, which is approximately $554.00 monthly.
¶10 Claimant is presently 37 years of age. Thus, it will be approximately 28 years until she reaches normal retirement age. She is not entitled to social security disability benefits since she failed to work enough quarters to qualify. Her sole income is from her workers' compensation benefits.
¶11 Claimant has been married to Raymond J. Bennett for 10 years. The Bennetts have two young children.
¶12 In 1992 the Bennetts declared bankruptcy.
¶13 Between 1994 and 1996 claimant sought and received lump-sum advances totaling $20,000. (Exs. 14 and 17.)
¶14 Between 1994 and 1996 the Bennett's monthly expenses approximately doubled.
¶15 Since 1991 the Bennetts have spent $21,000 on snowmobiles.
¶16 In April 1996, the Bennetts purchased a house in Great Falls for $45,000. They sold the house in 1997 for $33,000, a loss of $12,000, after renters trashed it. While this may constitute an exceptional circumstance, it adds to the overall impression of the Court that the Bennetts are poor financial managers and make poor financial decisions.
¶17 In the late summer of 1996, the Bennetts moved from Great Falls, where they had lived for a number of years, to Missoula because Mr. Bennett believed he had greater job opportunities in Missoula. However, Mr. Bennett is now earning less than he was earning in Great Falls in April 1996, when he reported monthly income of $1,500. (Ex. 15 at 5.) His current monthly income is $1,477.
¶18 Mr. Bennett has historically had periods of unemployment. Even though he expected better job opportunities in Missoula, he was recently off work for two weeks.
¶19 In April 1996, the Bennetts were paying $399.00 a month for rent. (Ex. 15 at 5.) Since moving to Missoula they have purchased a home on a contract for deed which requires monthly payments of $930.93. (Ex. 2 at 1.) The increase in the cost of housing is the equivalent of a $500.00 a month pay cut from what Mr. Bennett was earning in Great Falls in April 1996.
¶20 Claimant requests a lump-sum conversion to enable her to pay her indebtedness, including a significant portion of the remaining balance on the house in Missoula and attorney fees. The total amount of debts and attorney fees she would pay is approximately $68,000. The amount available for a lump-sum conversion is approximately $85,000. Claimant provided no justification for lump summing the $17,000 difference. Thus, at best, she has provided evidence for a partial lump-sum advance.
¶21 In any event, a lump-sum conversion or advance is not in the claimant's best interest because:
¶22 Since claimant was injured on June 26, 1993, the 1991 version of the Workers' Compensation Act applies to her lump-sum request. Buckman v. Montana Deaconess Hospital, 224 Mont. 318, 321, 730 P.2d 380, 382 (1986).
¶23 Section 39-71-741, MCA (1991), governs her request. It provides in relevant part:
¶24 Claimant's request initially fails because it exceeds the $20,000 limit on partial lump-sum advances. Claimant has already received $20,000 in advances. She failed to present evidence for a lump-sum conversion of the entire balance due her. At best she presented evidence for another partial lump-sum advance. (In light of this resolution, the Court need not determine whether the $20,000 limit applies to lump-sum conversions of all future benefits.)
¶25 A further reason exists for denying the claimant's petition. Section 39-71-741, MCA, expressly provides that lump summing "must be the exception" to the general scheme of biweekly benefits and that the claimant must demonstrate "financial need." I interpret that language as incorporating the historical best-interests tests applicable to lump-sums. Sullivan v. Aetna Life & Cas., 271 Mont. 12, 16, 894 P.2d 278, 280 (1995); Willoughby v. Arthur G. McKee & Co., 187 Mont. 253, 257, 609 P.2d 700, 702 (1980). If the legislature did not intend to incorporate the historical best interests test, and the statute is interpreted to allow lump-summing based on any financial need, then lump summing would become the rule, biweekly benefits the exception. Debt, which is one of the stated grounds for lump summing, is prevalent in our society. If that is the only criteria to be satisfied, lump sums would be routine, a result which flies in the face of the basic principle of statutory construction requiring that all the words of a statute be given meaning and effect, if possible. Groves v. Clark, 277 Mont. 179, 184, 920 P.2d 981, 984 (1996).
¶26 1. Claimant is not entitled to a lump-sum conversion of her permanent total disability benefits or to a partial lump summing of such benefits.
¶27 2. The petition in this matter is dismissed with prejudice.
¶28 3. Claimant is not entitled to costs.
¶29 4. This JUDGMENT is certified as final for purposes of appeal pursuant to ARM 24.5.348.
¶30 4. Any party to this dispute may have 20 days in which to request a rehearing from these Findings of Fact, Conclusions of Law and Judgment.
DATED in Helena, Montana, this 22nd day of April, 1998.
c: Mr. Richard J. Martin
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