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1995 MTWCC 105
AETNA CASUALTY & SURETY COMPANY
FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT
Summary: Claimant, who is receiving permanent total disability benefits, sought lump-sum advance in amount of $28,328.85 to build heated garage and to purchase sleeper sofa, nightstands, and new gas stove, and to insulate the floor of his house. Insurer had already agreed to advance money for floor insulation and new stove, to be recouped from benefits at rate of $15 per week.
Held: Where court found claimant wholly incredible, and was not convinced he would spend lump-sum advance as he claims, request is denied, except for those amounts to which insurer already agreed.
The trial in the above-entitled matter came on Tuesday, December 12 , 1995, at 10:04 a.m., in Courtroom 1, Flathead County Justice Center, Kalispell, Montana. The Honorable Mike McCarter, Judge of the Workers' Compensation Court, presided. Petitioner, George Boharski, was present and represented by Ms. Laurie Wallace. Respondent was represented by Mr. Charles E. McNeil. The court reporter in this matter was Ms. Beth Gilman.
Opening statements were made by counsel. Exhibit 1 was admitted by stipulation. Judge McCarter asked for Exhibits 2 through 4, which were admitted. Ms. Wallace asked that the Court take judicial notice of Exhibit 5, which it did. The parties agreed that the deposition of claimant can be considered part of the record. Petitioner, George Boharski, was sworn and testified.
1. Claimant is 62 years of age and lives alone.
2. On July 17, 1980, he suffered an industrial injury while working for Mathews McCracken. McCracken was insured by Aetna Casualty & Surety Company at the time of the injury. Aetna accepted liability for the claim submitted on account of the injury.
3. The parties agree that claimant is permanently totally disabled. He is receiving permanent total disability benefits on a biweekly basis.
4. According to a financial statement prepared by the claimant, he currently has the following income and expenses:
Pre Lump Sum Statement of Financial Condition
(Ex. 1 at 1.)
5. Claimant owes $26,000 to his parents to repay a loan made to him to purchase an existing house, which he then moved to property owned by his son. The loan also financed a foundation for the house and the erection of an addition to the house. This debt is being amortized at $222 per month. Claimant resides in the house.
6. Claimant's only other indebtedness is for a 1993 pickup truck. He owes $15,000 for the truck. His monthly payment, as reflected in his financial statement, is $386.72.
7. Claimant testified at trial that he has had no other unusual expenses over the past two years and that his financial statement accurately reflects his income and expenses during those two years.
8. However, claimant also testified that he has no savings despite his financial statement showing that his monthly income exceeds his monthly expenses by $157.19.
9. Claimant also testified that he has no other indebtedness. However, claimant's answers to further questions on cross-examination and to questions by the Court, and as shown by certified documents from In re the Marriage of Margaret H. and George Boharski, Cause No. DR-89-442(B), Montana Eleventh Judicial District Court, Flathead County (Exs. 3 and 4), establish that he still owes his ex-wife approximately $7,500 in Court ordered maintenance. Claimant's assertion that he understands that he has no further obligations is disingenuous and I find his explanation unbelievable. He spent 150 days in jail in 1993 and 1994 for contempt of court on account of his refusal to make the maintenance payments, and he has not voluntarily paid one cent on account of the judgment against him. The only credits against the judgment were the result of a court ordered withholding of biweekly workers' compensation and social security benefits. That withholding was dissolved by the Montana Supreme Court on November 23, 1993, Cause No. 93-507, because disability benefits are exempt from an execution for amounts due for maintenance. (Ex. 5.) Claimant's own testimony establishes that he still owes approximately $7,500 and that he does not intend to pay it.
10. Claimant's residence (house) is located on land owned by his son. He testified that he is leasing the land with an option to purchase the land. In response to a query by the Court concerning any written lease agreement, he produced a written agreement which was then admitted as Exhibit 2. That agreement is for the lease/purchase of an unsurveyed parcel of land purportedly owned by his son. The parcel is part of a larger piece of land owned by the son. The agreement states that the land is leased to claimant for $50.68 per month for a term of 25 years, and that if all payments are made then the parcel shall be deeded to claimant. Any breach of the agreement, including non-payment, permits the lessor, so called, to terminate the agreement.
11. The agreement is not notarized. There is no evidence it has ever been recorded. The parcel in question has not been surveyed and no certificate of survey has been prepared.
12. Claimant is seeking a lump-sum advance in the total amount of $28,328.85.
13. At the commencement of trial, counsel for Aetna advised the Court that Aetna had already agreed to advance $412.00 for the insulation and $689.95 for a new stove, to be recouped at a rate of $15.00 biweekly from claimant's benefits. The Court therefore informed the parties that it would not consider those items.
14. Claimant has failed to show any need, much less pressing need, for any of the items other than insulation and the stove. The amounts he says he intends to pay for the garage, sofa and night stands are extraordinary. He provided no justification whatsoever for wiring and heating the garage, and he did not demonstrate why any of the items are essential to his health or welfare.
15. If the money for the garage is advanced and a garage is built, there is no assurance that claimant will have any security in it. Claimant did not demonstrate to the Court that he has a recorded interest in the property. A default in payments on the property could result in forfeiture of any interest he may have in the property.
16. Claimant has no checking account. He doesn't believe in banks. In his own financial statement, he shows an ability to make monthly payments toward the outstanding court judgment but he refuses to do so. If he testified truthfully, then he should have savings but he claims to have none. He deals only in cash and his financial dealings are within his immediate family. His financial dealings are calculated to preclude collection of the judgment against him.
17. I am unpersuaded that claimant intends to spend the money as he claims he will. I found claimant wholly incredible. The expenditures do not make sense.
18. There is no basis for awarding him a partial lump sum in any amount.
1. The law in effect at the time of claimant's injury applies. Buckman v. Montana Deaconess Hosp., 224 Mont. 318, 321, 730 P.2d 380, 382 (1986). Therefore the 1979 version of the Workers' Compensation Act applies.
2. At the time of claimant's injury, the Act provided for biweekly payment of permanent total disability benefits. Section 39-71-702, MCA (1979). Conversion of biweekly benefits to a lump sum was governed by section 39-71-741, MCA (1979), which provided:
3. The insurer in this case agreed to advance $412 for the insulation and $689 for a new stove, to be recouped at a rate of $15 biweekly from claimant's benefits. That agreement, in open court, is binding and the insurer shall comply with it. The remainder of his request, however, is disputed and is therefore a matter over which the Court has jurisdiction.
4. Even under 1979 law, biweekly benefits were favored and lump summing considered an exception to the general rule. LaVe v. School Dist. No. 2, 220 Mont. 52, 55, 713 P.2d 546, 548 (1986). The general standard for such conversion is set out in Hock v. Lienco Cedar Products, 194 Mont. 131, 139, 634 P.2d 1174, 1178 (1981).
In Belton v. Carlson Transport, 220 Mont. 194, 197, 714 P.2d 148, 150 (1986), the Supreme Court rejected a request for an advance to pay for the purchase of a house:
In Garmann v. E.R. Fegert Co., 226 Mont. 432, 436, 736 P.2d 123, 125 (1987), the Supreme Court affirmed this Court's denial of a lump-sum award "for the purchase of a home, automobile and furniture," pointing out that claimant's "age, health, or other pressing needs have not been shown to necessitate the purchase of the requested items."
In this case, claimant has not shown any need for the garage, new kitchen appliances, sleeper sofa bed, or nightstands. Not only has he failed to demonstrate a need for the items, the items are extravagant.
Moreover, there is a public interest, Hock at 139, 634 P.2d at 1178, which must be considered in reviewing the request. That interest is in preserving the integrity and enforceability of the outstanding judgment against him. Claimant's stated need for the lump-sum advance is trivial in comparison to the obligation he owes under the outstanding judgment. Indeed, the only need claimant has shown for a lump-sum advance is to pay the outstanding judgment against him. He has not requested such an advance and the Court cannot order it. On the other hand, the Court is not obliged to order the insurer to make an advance for less pressing and unnecessary items; and, the Court will not assist claimant in dodging his legal obligations.
Finally, the Court simply disbelieves claimant when he states that he intends to use the money for the purposes stated.
The lump-sum request is denied.
5. The insurer's denial of the lump-sum request was reasonable. The shoe is on the other foot here: it was claimant's request that was unreasonable, indeed it was outrageous.
6. Claimant is not entitled to attorney fees since he has not prevailed.
1. Claimant's request for a lump-sum advance of benefits is denied. However, the insurer's agreement to advance $412.00 for the insulation and $689.95 for a new stove, to be recouped at a rate of $15.00 biweekly from claimant's future benefits, is deemed binding and enforceable.
2. The claimant is not entitled to attorney fees, costs or a penalty.
3. This judgment is certified as final for purposes of appeal.
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 15th day of December, 1995.
c: Ms. Laurie Wallace
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