No. 82-141 

IN THE SUPREME COURT OF THE STATE OF XONTANA 

1982 

VICKI R. CHRISTENSON, 

Claimant and Appellant, 

VS. 

BILLINGS LIVESTOCK COM1\IISSION 

COMPANY, Employer, and STATE 

COMPENSATION INSURANCE FUND, 

Defendant and Respondent. 

Appeal from: Workers' Compensation Court of the State of Montana, 

In and for the Area of Billings 

Honorable Timothy W. Reardon, Judge presiding. 

Counsel of Record: 

For Claimant: 

Herndon, Harper & Munro, Billings, Montana 

For Defendant: 

Allen B. Chronister, Helena, Montana 

Submitted on briefs: July 15, 1982 

Decided: November 9, 1982 

Filed: !!'dOV 9 " 2982 

, & .< ,w&.+; 

Clerk 
Mr. Justice Daniel J. Shea delivered the Opinion of the 

Court. 

Claimant, Vicki R. Christenson appeals from a judgment 

in Workers' Compensation Court which held that a settlement 

agreement negotiated with a claims examiner did not create a 

Sinding contract between claimant and the liability carrier, 

State Insurance Fund (State Fund). 

Claimant contends that the claims examiner was authorized 

to negotiate a binding settlement agreement and that a 

binding agreement was in fact created. We affirm the 

Workers' Compensation Court. 

Claimant was injured at work in 1973. Claimant's 

employer, Billings Livestock Commission Company was enrolled 

under Workers' Compensation Plan 111. State Fund accepted 

liability and paid all of claimant's medical bills and 

compensation of $32.67 per week. 

From late in 1979 until spring of 1981, State Fund 

negotiated with claimant to arrive at some final settlement 

of claimant's disability benefits. Claimant was represented 

by counsel and negotiations were conducted through a claims 

examiner with State Fund. The State Fund bureau chief 

supervised the work of the claims examiner. 

In March of 1981, the parties reached a tentative 

settlement. Claimant and her attorney signed a petition 

for full and final compromise settlement. Under the terms 

of the proposed settlement, claimant would receive a lump 

sum payment of $13,000 and payments of $860 per month for 

one year, during which time claimant was to undergo a 

rehabilitation program. In addition, State Fund would pay 

claimant's medical expenses during her lifetime. 

When the signed petition was presented to the State 

Fund bureau chief he rejected it as excessive and beyond the 

-2- 
liability of State Fund as an insurer. The bureau chief 

offered instead a single lump sum final settlement of 

$6,000. 

At this point, claimant brought the matter before the 

Workers' Compensation Court, insisting that through the 

negotiations between her attorney and the State Fund claims 

examiner, she had entered into a binding final settlement 

agreement with State Fund. After a trial on September 22, 

1981, Workers' Compensation Court entered a judgment that 

the preponderance of evidence established that the proposed 

settlement agreement did not create a binding contract between 

claimant and State Fund because State Fund had not consented 

to its terms. No penalties were awarded. 

Claimant argues that consent of the bureau chief was not 

necessary, that the State Fund claims examiner had either 

actual or apparent authority to negotiate a final settlement 

and that the State Fund was bound by the settlement that 

the claims examiner had negotiated. We agree with the 

Workers' Compensation Court holding that the claims examiner 

did not have either actual or apparent authority to enter 

into a binding final settlement on behalf of the State Fund. 

Actual authority is defined at section 28-10-402, MCA: 

"Actual authority is such as the principal 

intentionally confers upon the agent or 

intentionally or by want of ordinary care 

allows the agent to believe himself to possess." 

The Workers' Compensation Court found that the bureau 

chief was the only person authorized to bind State Fund to a 

settlement contract, that the claims examiners were continually reminded of their limited authority, and that this 

claims examiner was aware that her authority was limited to 

negotiating proposed settlements. Negotiated proposed 
settlements were regularly submitted to the bureau chief for 

approval. The heading of the document which claimant asserts 

is a binding contract is "Petition for Full and Final Compromise Settlement." (Exhibit 2.) The heading alone 

suggests that it was not the final agreement between the 

parties. The record supports the Workers' Compensation 

Court's finding that the claims examiner did not have actual 

authority. 

Nor did the claims examiner have ostensible authority 

to bind the State Fund. Ostensible authority is defined at 

section 28-10-403, MCA: 

"Ostensible authority is such as a principal, 

intentionally or by want of ordinary care, 

causes or allows a third person to believe 

the agent to possess." 

Unrefuted testimony at trial established that the claims 

examiner never told claimant's attorney that she had authority 

to bind State Fund and that she always told claimant's 

attorney that she would have to submit any proposed settlement 

to the bureau chief for approval. From this evidence, 

Workers' Compensation Court correctly concluded that the 

claims examiner did not have ostensible authority. 

There can be no binding contract without mutual consent 

of the parties. Section 28-2-102(2), MCA. The proposed 

settlement was never approved by the bureau chief of State 

Fund. &sent the bureau chief's approval, claimant had no 

right to rely on the petition for full and final compromise 

settlement as a binding agreement. 

The Workers1 Compensation Court judgment was based on 

substantial evidence and we therefore will not overturn the 

decision. 

The judgment is affirmed. 
We Concur: