Evens v. State Fund ( 1996 )

No. 96-329
IN THE SUPREME COURT OF THE STATE OF MONTANA
1996
JOSEPH EVANS,
Petitioner and Appellant,
v.
STATE COMPENSATION INSURANCE FUND,
Respondent and Respondent,
ROSCOE STEEL & CULVERT COMPANY,
Employer.
APPEAL FROM: Workers' Compensation Court
The Honorable Mike McCarter, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Brad L. Arndorfer, Billings, Montana
For Respondent:
Ann E. Clark, State Compensation Insurance Fund,
Helena, Montana
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.,>,$ Submitted on Briefs: October 10, 1996
Justice William E. Hunt, Sr., delivered the Opinion of the Court.
Pursuant to Section I, Paragraph 3(c), Montana Supreme Court
1988 Internal Operating Rules, this decision shall not be cited as
precedent and shall be published by its filing as a public document
with the Clerk of the Supreme Court and by a report of its result
to Montana Law Week, State Reporter and West Publishing Company.
Appellant Joseph Evans (Evans) appeals the findings of fact,
conclusions of law, and judgment of the Workers' Compensation Court
denying Evans' claim for a lump sum conversion of his future
entitlement to permanent total disability benefits; denying Evans'
request that the State Compensation Insurance Fund (State Fund) be
ordered to recoup an earlier lump sum advance from benefits payable
after Evans reaches the age of 65; denying attorney fees and costs;
and dismissing Evans' petition.
We affirm.
We review the following issues:
I. Did the Workers' Compensation Court abuse its discretion
when it denied Evans' request for lump sum conversion?
2. Did the Workers' Compensation Court correctly conclude
that the I994 contract for lump sum advance is clear and
unambiguous?
FACTS
In 1980, Evans suffered a shoulder injury while working as a
laborer for Roscoe Steel in Billings, Montana. State Fund, Roscoe
Steel's insurer, accepted liability for the injury and paid Evans
both medical and wage loss benefits. In 1993, State Fund
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determined that Evans was permanently totally disabled and
converted his benefits to permanent total status.
On February 17, 1993, Evans requested a lump sum conversion of
his remaining permanent total disability benefits. State Fund
indicated in a letter to Evans' attorney that while it would not
convert all of Evans' remaining benefits to a lump sum payment, it
would be willing to "offer a lump sum if Mr. Evans can show the
need for financial assistance. That lump sum would then be
recovered on a biweekly basis until Mr. Evans reaches age 65."
Evans and State Fund agreed upon a lump sum advance of
$68,750. Evans' primary purpose in pursuing the advance was to
purchase a small home in Bridger, Montana. Evans believed that he
was putting his life, and his fiance's life, in danger by remaining
in his Billings neighborhood. Evans had apparently been involved
as an informant in a Billings drug bust, had been the intended
victim of a drive-by shooting, and was anxious to leave the city.
Evans' 1994 "Petition For Lump Sum Advance Of Permanent Total
Disability Benefits" provided in relevant part:
I therefore petition the Department of Labor and
Industry for a lump sum advance on any compensation in
the amount of SIXTY-EIGHT THOUSAND AND SEVEN HUNDRED
FIFTY AND NO/lOOTH DOLLARS ($68,750.00).
I understand the insurer may recoup this lump sum
advance from any type of biweekly benefits or any type of
award or settlement I receive in the future.
I UNDERSTAND:
The above amount will be recovered by age SIXTY FIVE
(65).
Evans' petition was approved by State Fund and by the Department of
Labor and Industry. The order of approval issued by the Department
of Labor and Industry stated that the amount of Evans' advance
"will be recovered by age SIXTY-FIVE !65)."
After receiving his advance, Evans purchased the house in
Bridger. The purchase price was initially $55,000, but Evans
successfully renegotiated a lesser price after certain structural
defects were discovered. Evans purchased the house for $35,000,
intending to use the $20,000 savings for repairs.
After State Fund issued Evans the lump sum advance, it reduced
Evans' biweekly benefits by $134.66, an amount calculated to recoup
the advance by the time Evans reaches age 65. Evans' attorney
wrote to State Fund protesting this method of recoupment,
indicating in the letter that it was his understanding that State
Fund would recoup the amount of the advance "from the backside of
the contract as had been discussed." Evans' attorney explained in
the letter that by age 65 Evans would be eligible for social
security benefits and would be better able to withstand a decrease
in workers' compensation benefits. Evans' attorney requested that
the entire case be settled so that Evans could purchase an annuity
to provide himself future income. State Fund rejected this
request, and Evans thereafter filed the action in the Workers'
Compensation Court that we are reviewing here.
Evans' petition to the Workers' Compensation Court sought a
lump sum conversion of the entire amount of benefits due him during
his lifetime. Evans also requested that the court order State Fund
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to recoup its 1994 advance from the distal end of Evans' benefits,
after he reaches age 65. After a hearing, the court denied Evans'
requests and dismissed his petition. It is from this judgment that
Evans appeals.
ISSUE ONE
Did the Workers' Compensation Court abuse its discretion when
it denied appellant's request for lump sum conversion?
Evans contends that the court should have considered his best
interests before ruling on his request for lump sum conversion.
Evans argues that because his biweekly.benefits checks are subject
to recoupment his monthly income is well below his monthly
expenses. Evans explains that the $68,750 he was advanced in 1994
has been depleted by the purchase of the Bridger house, the
unexpectedly high cost of repairing that house, and attorney fees.
Evans contends that it is undoubtedly in his best interests to
receive a lump sum rather than biweekly payments: with a lump sum,
he can finish the repairs to make his Bridger home habitable; pay
off debts incurred as a result of the repairs already made on the
Bridger house; and purchase an annuity to provide himself future
income. On the other hand, Evans argues, the biweekly payments are
simply insufficient for monthly necessities, let alone house
repairs or the purchase of an annuity.
We have stated that "Workers' Compensation Court decisions
denying lump sum settlements will not be interfered with on appeal
unless there is an abuse of discretion." Sullivan v. Aetna Life &
Casualty (1995), 271 Mont. 12, 15, 894 P.2d 278, 280 (citing Byrd
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v. Ramsey Engineering (1985), 217 Mont. 18, 21-22, 701 P.2d 1385,
1387; Kent v. Sievert (1971), 158 Mont. 79, 81, 489 P.2d 104, 105).
Our deferential standard of review reflects our holdings that lump
sum payments are the exception to the rule of biweekly payments,
Stanley Structures v. Scribner (19921, 253 Mont. 236, 240, 833 P.2d
166, 169 (citing Phelps v. Hillhaven Corp. (1988), 231 Mont. 245,
252, 752 P.2d 737, 741-42), and that the claimant has the burden of
proving that a lump sum conversion of his future permanent total
disability benefits is in his best interests, Sullivan, 894 P.2d at
280; Stanlev Structures, 833 P.Zd at 169.
Here, Evans failed to meet his burden of proof. While he
testified that his income from his reduced biweekly benefits checks
was insufficient to meet his own needs and pay his debts, he
neglected to provide the court with any documentary evidence to
support this contention. As well, Evans did not present to the
court an investment plan with any degree of detail. Furthermore,
as noted by the court, Evans' annuity quote which was presented at
trial was flawed in that its computations included as benefit
monies due him the $68,750 Evans was advanced in 1994. The court
concluded:
In this case, I am not satisfied that a lump sum
advance to pay indebtedness is in the claimant's best
interest. His explanation of his expenditures is
undocumented, wholly unsatisfactbry, and not credible.
If he is to be believed, he has expended almost as much
($28,000 to $29,000) on his house in Bridger as its
entire purchase price ($35,000), and still needs $30,000
to finish repairs. If he is believed, necessary repairs
will cost almost twice as much as the original cost of
the house.
According to claimant, his run-up of his credit card
balances included money for his living expenses. Adding
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that money to his biweekly benefits and the $5,000 he
says he used from the 1994 lump sum advance to pay for
living expenses, the money he has had available for
monthly living expenses over the last 18 months has been
far in excess of his monthly income prior to the 1994
advance, thus indicating an inability to manage money.
His undocumented, perfunctory and superficial
presentation concerning his expenditures over the last 18
months and the need for additional house repairs, also
raises series [sic1 questions about his ability to manage
money.
. . . .
There is also no basis for awarding claimant a lump
sum to purchase an annuity. Claimant's assertion that he
will be better off with an annuity is identical to the
argument made and rejected in LaVe v. School Dist. No. 2,
220 Mont. 52, 55, 713 P.2d 546, 547-48 (Mont. 1986).
In the instant case, appellant advances two
principle reasons for requesting a lump sum payment.
They are: (1) appellant and her husband have
outstanding debts, and (2) appellant and her husband
wish to invest the money and receive a return which
would be greater than the weekly benefits. Neither
appellant nor her husband have proposed a concrete,
specific plan of investment. Neither of the two
have personally contacted an investment or financial
counselor. An investment counselor did testify for
appellant on the return that appellant could expect
if she was granted, and invested, a lump sum award.
In Kent v. Sievert (1971), 158 Mont. 79, 81, 489
p.2d 104, 105, this Court held that where a claimant
requested a lump sum payment proposing "to put it
'on interest,"' that proposed use was insufficient
to warrant a lump sum payment. Kent is still the
law and appellant's desired investment is not
reason, by itself, to award her a lump sum payment.
Otherwise, any claimant desiring a lump sum award
could secure one by proposing to invest it. This
would defeat the statutory intent of Montana's
Workers' Compensation scheme, as lump sum awards are
to be the exception. Section 39-71-741, MCA.
(Emphasis added.)
The record shows that with the exception of Evans' testimony, which
the court did not find particularly credible, the court was not
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presented with any evidence which would have prompted it to grant
Evans' request for a lump sum conversion. The court did not abuse
its discretion when it denied Evans' request for a lump sum
conversion.
ISSUE TWO
Did the Workers' Compensation Court correctly conclude that
the 1994 contract for lump sum advance is clear and unambiguous?
Evans argues that the provision in his signed petition for
lump sum advance which states his understanding that the amount
advanced to him would be recovered by age 65 is ambiguous. Evans
contends that the provision is susceptible to the interpretation
and understanding he had when he signed the petition, that recovery
of the advanced amount would not begin until he neared age 65.
Evans claims that State Fund concurred with this understanding
during preliminary negotiations. The.provision states:
I understand the insurer may recoup this lump sum
advance from any type of biweekly benefits or any type of
award or settlement I receive in the future:
I UNDERSTAND: The above amount will be recovered by
age SIXTY FIVE (65).
The court concluded that "[tlhe agreement expressly provides
'that the State Fund shall recoup the advance from claimant's
biweekly benefits and that recoupment shall be completed by the
time claimant reaches age 65." The court refused to allow
testimony on the matter, and denied Evans' request that the court
order State Fund to recoup its 1994 advance from the distal end of
his benefits, after he reaches age 65.
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The court's conclusion that the provision is unambiguous is a
conclusion of law. We must determine if that conclusion was
correct. Stanley Structures, 833 P.2d at 169. The provision
expressly allows State Fund to recoup the amount of the advance in
a number of ways: from Evans' biweekly benefits; from a future
award; or, from a future settlement. The provision expressly
requires that the amount of the advance be recovered by age 65.
Evans has apparently confused clearly expressed alternatives
with ambiguity. There is nothing ambiguous about any of the
recovery options available to State Fund under this provision of
Evans: petition. Evans' contention that State Fund was not
required to recoup its advance from his biweekly benefits is not
relevant to the issue of ambiguity. The court correctly concluded
that the provision clearly and unambiguously allows State Fund to
recoup its advance from Evans' biweekly benefits. The court's
subsequent decisions to disallow testimony regarding the provision
and to deny Evans' request to order State Fund to recoup its
advance after Evans reaches age 65 were also correct. "The rule
has long been that where no ambiguity exists in the written
documents, no parol evidence may be taken, and the duty of the
court is simply to apply the language as written." Montana Bank of
Circle v. Ralph Meyers & Son, Inc. (1989), 236 Mont. 236, 243, 769
P.2d 1208, 1212 (citation omitted).
Affirmed.
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-we concur :
Justices
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