State v. Dist. Court of Ninth Judic ( 1981 )

No. 81-12
I N THE SUPREME COURT OF THE STATE OF MONTANA
1981
STATE O F MONTANA, ex r e l . , CROCKETT
S. HARRY,
Petitioner,
D I S T R I C T COURT OF THE NINTH J U D I C I A L
D I S R I C T O F THE STATE OF MONTANA, I N
AND FOR THE COUNTY O F GLACIER, e t a l . ,
Respondents.
O R I G I N A L PROCEEDING:
C o u n s e l of R e c o r d :
For P e t i t i o n e r :
John P. M o o r e a r g u e d , C u t B a n k , M o n t a n a
For R e s p o n d e n t :
J a m e s C. N e l s o n argued, C o u n t y A t t o r n e y , C u t B a n k ,
Montana
M a r k Murphy a r g u e d , A s s t . A t t y . G e n e r a l , H e l e n a ,
Montana
Submitted: A p r i l 20, 1981
Decided : 1AR/ 2 6 1981
Filed:
MAY 2 6 1961
Mr. Justice Gene B. Daly delivered the Opinion of the Court.
This is an original proceeding wherein the petitioner
seeks a writ of prohibition or other appropriate relief.
Petitioner requests the relief from this Court in an attempt
to vacate and annul certain orders of the respondent,
Glacier County District Court, made and entered on November
17, 1980, in the case of State v. Crockett S. Harry,
District Court Cause No. DC 80-24. After a hearing on the
petition, the Court issues the following opinion.
In September 1979 petitioner Crockett S. Harry was
injured in an industrial accident, entitling him to workers'
compensation benefits. A lump sum settlement was eventually
received from the State Workers' Compensation Division by
petitioner on June 10, 1980. The proceeds of the
settlement, amounting to $7,000, were deposited with the
First National Bank in Cut Bank, Montana. The money has
remained on deposit with the bank throughout this proceeding
and has never been commingled with any other funds.
On November 2, 1980, petitioner was arrested and
charged with deliberate homicide. He appeared with court-
appointed counsel for arraignment on November 5, 1980. Upon
interviewing petitioner, the District Court learned of the
$7,000 certificate of deposit and, as a result, found that
petitioner was not indigent and could employ his own
attorney. The court advised petitioner to retain private
counsel and that, if he chose to keep his court-appointed
attorneys, he would be required to defray the costs of their
appointment .
Petitioner, on November 17, 1980, again appeared with
appointed counsel and advised the District Court that he was
unable to find an attorney who would take his case. The
District Court at this time allowed for petitioner's
continued representation by appointed counsel but with the
proviso that he utilize the $7,000 certificate of deposit to
reimburse Glacier County, Montana, for the fees and costs
incurred in his defense. The court then issued an order
directing the Cut Bank First National Bank not to cash the
$7,000 certificate of deposit and ordering petitioner not to
assign, hypothecate, pledge or in any manner liquidate the
certificate without further order of the court.
On December 15, 1980, petitioner filed a motion to
quash. The grounds for the motion were: (1) the order was
made without any notice or opportunity to be heard; and (2)
the $7,000 workers' compensation settlement is totally
protected from any attachments, garnishments, assignments or
debts. The District Court denied the motion, and the
petition for relief was filed with this Court. Petitioner
now seeks to vacate and annul the District Court's order
seeking the $7000 certificate of deposit to be used to
reimburse Glacier County for the costs of his appointed
counsel.
The main thrust of petitioner's argument is that
workers' compensation funds are exempt from being held
liable in any manner for the debts of the recipient.
Section 39-71-743, MCA, is pertinent in this regard and
provides as follows:
"Assignment or attachment of payments. No
payments under this chapter [the Workers'
Compensation Act] shall be assignable,
subject to attachment or garnishment, or be
held liable in any way for debts."
This section has yet to be interpreted by this Court.
We now c o n c l u d e , however, that t h e provided exemption is
absolute, allowing a blanket protection a g a i n s t claims of
e v e r y k i n d , i n c l u d i n g t h e one a t i s s u e .
The underlying purpose and objective of workers'
compensation legislation is to insure the injured worker
that he will be compensated for disabilities caused by
industrial accidents which, when added to his remaining
e a r n i n g a b i l i t y , w i l l e n a b l e him t o f u n c t i o n w i t h o u t b e i n g a
burden t o o t h e r s . S e e Mahlum v . Broeder ( 1 9 6 6 ) , 1 4 7 Mont.
386, 412 P.2d 572; 1 Larson, T h e Law o f W o r k m e n ' s
C o m p e n s a t i o n , B 2.50 a t 11 ( 1 9 7 8 ) .
I n a c c o r d a n c e w i t h t h i s o b j e c t i v e and t o a s s u r e i t s
maximum benefit for the injured worker, the Montana
legislature has specifically provided that payment of a
workers' c o m p e n s a t i o n award s h a l l b e exempt f r o m a l l f o r m s
of seizures. If this exemption is to now b e liberally
construed i n favor of t h e worker, a s mandated by section
39-71-104, MCA, i t m u s t b e g i v e n e f f e c t a s w r i t t e n , and t h e
e x e m p t i o n m u s t be deemed c o m p l e t e .
Respondent a r g u e s t h a t t h e exemption does n o t extend
t o governmental e n t i t i e s s e e k i n g t o r e c o v e r p u b l i c monies
expended t o s u p p o r t t h e i n j u r e d worker. W e acknowledge t h a t
t h i s p o s i t i o n h a s b e e n u p h e l d i n o t h e r j u r i s d i c t i o n s on t h e
r a t i o n a l e t h a t g o v e r n m e n t a l e n t i t i e s s h o u l d be g r a n t e d t h e
s t a t u s of an "extraordinary" creditor so as to keep the
i n j u r e d w o r k e r f r o m becoming a p u b l i c c h a r g e . See S t a t e v.
Coburn ( I o w a 1 9 8 0 ) , 294 N.W.2d 5 7 ; McDougald v , N o r t o n ( D . C .
Conn. 1 9 7 3 ) , 361 F. Supp. 1325. The c i t e d c a s e s , however,
a r e not controlling, and w e r e j e c t t h e i r application. We
h o l d t h a t t h e s t a t u t o r y e x e m p t i o n i s t o t a l as t o a n y and a l l
creditors, including a county governmental entity seeking to
recover funds expended for a defendant's appointed counsel.
A writ of prohibition is hereby granted, and the
District Court's order seizing the proceeds of the
petitioner's workers' compensation award is vacated.
We concur:
Chief Justice
Mr. Chief J u s t i c e Frank I. Haswell, s p e c i a l l y c o n c u r r i n g :
I concur i n the r e s u l t .
I n my v i e w t h e o r d e r o f t h e D i s t r i c t C o u r t d i r e c t i n g t h e
F i r s t N a t i o n a l Bank n o t t o c a s h t h e $ 7 , 0 0 0 c e r t i f i c a t e of d e p o s i t
and o r d e r i n g r e l a t o r n o t t o a s s i g n , h y p o t h e c a t e , p l e d g e o r
l i q u i d a t e t h e c e r t i f i c a t e m u s t be v a c a t e d and s e t a s i d e . Relator
was d e n i e d p r o c e d u r a l due p r o c e s s by e n t r y o f t h i s o r d e r w i t h o u t
n o t i c e and an o p p o r t u n i t y t o a p p e a r and c o n t e s t t h e o r d e r .
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Chief J u s t i c e