39-71-741, MCA

MONTANA SUPREME COURT DECISIONS
Barnard v. Liberty Northwest Ins. Corp., 2008 MT 254, 345 Mont. 81, 189 P.3d 1196 In § 39-71-741(1), MCA, the Legislature has distinguished between a lump sum payment of the whole amount of benefit payments and a lump sum payment of a part of a benefit.
Barnard v. Liberty Northwest Ins. Corp., 2008 MT 254, 345 Mont. 81, 189 P.3d 1196 When § 39-71-741(1), MCA, is read in its entirety, the statute limits lump sum conversions to $20,000 only if the requested conversion to a lump sum constitutes a part of the permanent total disability benefit. Section 39-71-741(1)(c), MCA, does not limit to $20,000 a lump sum payment of the whole of a permanent total disability benefit.

[1997] Martin v. The Hartford, 2004 MT 57 Lump sum distributions of permanent total disability benefits have always been the exception to the rule that favors periodic payments. Amendments to the Workers’ Compensation statutes requiring discount of lump sum conversions to present value, relieving an insurer of liability when claimant becomes eligible for social security retirement benefits, and general availability of social security disability benefits to disabled workers does not justify changing the general rule.

[1997] Martin v. The Hartford, 2004 MT 57 Supreme Court does not reach, but questions, whether subsection (c) permits lump sum distribution of permanent total disability benefits in excess of $20,000.

[1995] Siaperas v. State Fund [01/15/04] 2004 MT 264N Attorneys fees are not necessities of life under section 39-71-741(1)(c), MCA (1995), to allow claimant to demand lump sum payment from insurer to cover attorneys fees. (Note: Siaperas is a non-citeable opinion.)
 
MONTANA WORKERS' COMPENSATION COURT DECISIONS
Murphy v. Montana State Fund [03/09/10] 2010 MTWCC 6 The Court concluded a lump sum conversion of PTD benefits was in a claimant’s best interests where the Court was persuaded that the claimant could successfully operate the business he wished to purchase and that the claimant would not only earn more annually than he currently received in bi-weekly benefits, but would also have a saleable asset upon retirement.
Murphy v. Montana State Fund [03/09/10] 2010 MTWCC 6 The Court granted a lump sum conversion of PTD benefits to a claimant who planned to use the funds to purchase a feedlot.  The Court found that the claimant came to trial fully prepared, having identified a specific business to purchase, sought financial backing, and formulated a reasonable business plan.  The Court further found that the claimant had the expertise and ability to run the business he sought to purchase, that the claimant had provided sufficient information to satisfy the requirements of ARM 24.29.1202, and that the lump sum conversion would be in the claimant’s best interests.

Benhart v. Liberty Northwest [01/25/08] 2008 MTWCC 6 While the “necessities of life” may include more than mere food and shelter, Petitioner did not demonstrate a financial need relating to the necessities of life where Petitioner’s monthly payments for the purchase of a recreational boat and 4-wheeler exceeded his monthly household shortfall.

Benhart v. Liberty Northwest [01/25/08] 2008 MTWCC 6 Although Petitioner asserted that a lump-sum payment of his PTD benefits would be in his best interests because the rental property where he resides has changed ownership and may be sold, the new property owner testified that he has no immediate plans to sell the property. Where Petitioner’s search for a suitable home to purchase consisted only of looking through real estate flyers at the urging of his counsel, the Court was unconvinced that Petitioner would actually purchase a home with a lump-sum payment if one were granted.

Benhart v. Liberty Northwest [01/25/08] 2008 MTWCC 6 Where Petitioner’s debts consist of monthly payments on a truck, boat, and 4-wheeler which were all purchased subsequent to his industrial injury, and where the monthly payment on the boat alone exceeds his household budget’s monthly shortfall, Petitioner does not meet the statutory criteria of § 39-71-741(1)(c), MCA, which would entitle him to convert his PTD benefits to a lump-sum payment.
Sanchez v. Montana State Fund [06/22/07] 2007 MTWCC 25 Where Petitioner’s statement of financial condition shows a modest monthly surplus and the Court concluded that Petitioner could financially sustain himself with his present income and assets, and could reasonably tighten his budget to work toward elimination of debts, Petitioner has not demonstrated the financial need for a lump sum conversion of his PTD benefits.
Barnard v. Liberty Northwest [10/20/06] 2006 MTWCC 35 Section 39-71-741(1)(c), MCA, limits partial conversion transactions to a total of $20,000. Beyond the $20,000 limit, only conversions in whole are available, thus limiting the administrative and transactional merry-go-round.
[1991] Hand v. UEF [2/13/04] 2003 MTWCC 9 Where a claimant gives a comprehensive release to the uninsured employer, the effect of the release is not limited by the requirement that any settlement between the UEF and the petitioner be approved by the Department. Section 39-71-741, MCA (1991), simply has no application to the release.

[1995] Siaperas v. State Fund [1/15/04] 2004 MTWCC 4 Attorney fees are not a "necessity of life" for which a lump-sum advance can be made. 39-71-741(3), MCA (1995).

[2001] Liberty Mutual Fire Ins. v. Warner [3/9/04] 2004 MTWCC 24 Lump summing of impairment awards is subject to the discounting requirement of section 39-71-741(2), MCA (1997-2003).

[1997] Liberty Mutual Fire Ins. v. Warner [3/9/04] 2004 MTWCC 24 Requests to lump-sum impairment awards are subject to section 39-71-741, MCA (1997-2003), but fall under permanent partial disability provisions for purposes of that statute whether or not payable to a permanently partially disabled or permanently totally disabled claimant.

[1995] Sharp v. Montana Municipal Ins. Authority [3/17/00] 2000 MTWCC 13 In the 1995 WCA, section 39-71-741, MCA, provides the only statutory authority for lump summing a settlement. The section does not grant the WCC authority to order a lump-sum payment of an impairment award, discounted or undiscounted, to a permanently totally disabled claimant.
[1991] Bennett v. State Fund [4/22/98] 1998 MTWCC 33 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.  
[1985] Blowers v. Montana Insurance Guaranty Association [4/25/97] 1997 MTWCC 24 (WCC No. 9412-7192 Under Willoughby v. Arthur G. McKee & Co., 187 Mont. 253, 257, 609 P.2d 700, 702 (1980), lump-sum settlements may be granted in cases of outstanding indebtedness or pressing need, or where the best interests of petitioner, her family, and the general public will be served. The best interest component is the "primary criterion." Sullivan V. Aetna Life & Cas., 271 Mont. 12, 16, 894 P.2d 278, 280 (1995). While the best interests of a claimant are ordinarily served by regular periodic installments, making lump-sums the exception rather than the rule, lump-sum advances are not looked upon with disfavor and will be awarded without hesitancy in appropriate cases. In this case, while the Court has approved the modest advance to which the employer/insurer has already agreed, widow with 11-year old child did not convince the Court that an additional lump-sum is warranted where her income is presently more than her family would be receiving if her husband had not been killed and had continued in his same job and where she has not shown that her present situation is not adequate or that the problems of which she complains would be best served by the requested lump-sum advance.
[1985] Blowers v. Montana Ins. Guaranty Association [10/15/96] 1996 MTWCC 64 While section 39-71-721, MCA (1985), provides that a lump sum of two years of benefits must be paid to a widow who remarries, with no further benefit entitlement, that section does not limit the conversion of benefits corresponding to more than two years in a situation where remarriage has not occurred. Section 39-71-741(1), MCA (1985), provides that "biweekly benefits . . . may be converted, in whole or in part, into a lump-sum payment." However, in considering the widow's request for an order that benefits be converted, the Court will consider the rule of section 39-71-721, MCA (1985), and the possibility of remarriage.