No. 85-370 INTHE SUPREME COURT OF THE STATEOF MONTANA 1986

WILLIAM STELLING,JR., ClaimantandAppellant,

RIVERCREST RANCHES, INC., Employer, and STATE COMPENSATION INSURANCE FUND, Defendantand Respondent and Cross-Appellant.

APPEAL FROM: TheWorkers' CompensationCourt, TheHonorable Timothy Reardon,Judgepresiding. COUNSEL OF RECORD: ForAppellant: Lloyd E. Hartford argued,Billings,Montana For Respondent: Hughes, Alke,Kellner & Sullivan; Mike McCarter argued, Helena,Montana ForAmicus Curiae: Milodragovich,Dale & Dye;Lon J. Dale argued for Gary Larson, Missoula,Montana Rossbach & Whiston; JohnWhiston argued forRubye Kauffman, Missoula,Montana

Submitted: July 24, 1986 Decided: December 12, 1986

Filed:

ClerkMr. Justice Frank B. Morrison, Jr. delivered the Opinion of the Court. Claimant, William Stelling, Jr., appeals the June 27, 1985, judgment of the Workers' Compensation Court which awarded him only a small portion of the lump-sum advance he had requested. We affirm the lump-sum advance and dismiss the remainder of Stelling's appeal for lack of standing. Stelling was injured January 5, 1981, in the scope and

course of his employment with Rivercrest Ranches, Inc. He continued to work through June 8, 1981,entered the hospital June 10, 1981,and underwent back surgery June 15, 1981. A second operationwasperformed November 1, 1982. The State Compensation Insurance Fund commenced paying Stelling workers' compensation benefits June 9, 1981. It also paid all of his related medical expenses. Thereafter, the Fund requested permission to relieve itself of liability by purchasing an annuity to provide Stelling with the expected benefits towhich he would be entitled. On December 6, 1984, Stelling filed a petition for hearing with theWorkers' CompensationCourt,asking that the Fund's requestbe denied and thathe be awarded a substantial lump-sum advance. A pre-trial conference was held February 15, 1985. The hearing was held March 20, 1985. After the taking of a post-trial deposition and the filingofbriefs by all parties, the matter was submitted to the Workers' Compensation Judge onMay 31, 1985. Meanwhile, on April 15, 1985, the Montana Legislature enacted Senate Bill 281 in response to this Court's decision in Willis v. Long Construction Co. (Mont. 1984), 690 P.2d 434, 41 St.Rep. 2050. Willis forbid discounting to present value lump-sum awards 

### to workers' compensation claimants.The bill amended 

### 5 39-71-741, MCA, by (1) creating new criteria for establishing the need for a lump-sum award; and

(2) requiring that lump-sum payments of permanent total disability benefits be discounted at 7% for each year of the estimated compensationperiod. Thereafter, with the permission of the Workers' Compensation Judge, Stelling amended his pre-trial order to include Contract Clause, due process and equal protection challenges to the application of S.B. 281 tohis case. Findings of fact,conclusionsof law and a judgmentwere entered June 27, 1985, finding claimant to be permanently totally disabled and entitled to $219 in weekly benefits and a partial lump-sum payment sufficient to satisfy the balance due on his 1984 pickup truck. The judge denied claimant's request for a lump-sum award sufficient to purchase an annuity paying $1297 amonth for twentyyears and topurchase a $65,000 house and $12,000 in furnishings. The Workers' Compensation Judge also held constitutional retroactive application of that portion of S.B. 281 establishing procedures for proving entitlement to a lump-sum payment. However,he found retroactive application of the discounting provision tobe unconstitutional. Stelling challenges the constitutionality of S.B. 281 again on appeal and raises the following issues: 1. Whether the application of 39-71-741, MCA, as amended by Ch. 471, Laws of Montana (1985), in the determination ofworkers' compensation benefits to be awarded toworkers injured before April 15, 1985, (theeffective date of the amendment):

### A. violates the Contract Clauses found in art. 1,S 10 of the United States Constitution and art. 11, § 31 of the 1972 Montana Constitution? B. denies due process guaranteed by the Fourteenth Amendment to the United States Constitution and by art. 11, § 17of the 1972 Montana Constitution? C. denies equal protection of the laws guaranteed by the Fourteenth Amendment to the United States Constitution and by art. 11,S 4 of the 1972Montana.Constitution? 2. Whether, under the test in effect at the time ofhis injuries 

## - best interests of the claimant, Stelling is entitled to the conversion of his biweekly benefits to a lump-sum payment? The State Fund cross-appeals, raising the following issue: 1. Whether the Workers' Compensation Judge erred in refusing to retroactively apply that portion of S.B. 281 requiring that lump-sum payments to permanently totally disabled claimantsbe discounted to present value? The issue raised on cross-appeal is addressed in another

case decided this same day, Buckman v. Montana Deaconess Hospital, Slip Opinion #85-530,the casewithwhich this case

was consolidated for oral argument. In Buckman, supra, we held that the procedures of S.B. 281merely expand themethodsby which a claimant proves entitlement to a lump-sum award. The threshold test remains that of the best interests of the claimant. Here, the Workers' Compensation Judge held that Stelling failed to prove that a lump-sum award would be in his best interests.



# .. . Claimant has requested a sum to purchase an annuity which will pay him a sum certain 

### for therest of his life. An annuity purchase does not rise to the standard ofbest interests

# ..

# .

. ..Under case law precedent claimant is equally unsuccessful in demonstrating that it is in his best interests that he be awarded a sum sufficient to purchase a home 

# .

# .. Claimant has established that his current housing situation, in the back of his pickup, is intolerable. This alone does not establish that the cash purchase of a home is in his best interests. Claimant offered no evidence establishing an inability to live on his biweekly benefits in the rental market in Missoula. The file is equally bereft of other financing options for claimant's proposed home purchase other than cash. Claimant has not demonstrated that the cash purchase of a home with new furnishings is in his best interests. Claimant has established that his monthly truck payment is a significant drain on his budget. Claimant is awarded a lump sum sufficient to pay off the balance due on his 1984 pickup. This will decrease his monthly expenses and allow him to obtain decenthousing. Judgment,p. 27. Because the trial judge failed.to find that Stelling's best interests would be met by conversion of his biweekly benefits to a lump-sum payment, Stelling lacks standing to contest the constitutionality of S.B. 281 and S 39-71-741, MCA

# . Standing of parties to bring their claims is a threshold question a court must face before reaching the substantive issues of a case. Traditionally, courts require that a plaintiff have a. "personal stake" in the outcome of a case, "to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutionalquestions." Bakerv. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663 (1962). Stoianoffv. State ofMontana (9thCir. 1983), 695 F.2d 1214, 1223. If Stelling is not entitled to a lump-sum at all,then he cannot challenge the constitutionalityof themethodology computation. There is substantial credible evidence to support the trial judge's determination that the purchase of a home isnot sufficient basis for awarding a lump-sum to this claimant. As noted in the trial judge's opinion, once Stelling is no longer making truck payments, he will have

more money with which to provide himself housing. In addition, there is no evidence that Stelling 

### is unable to livewithin Missoula's rentalmarket. The lower court judgment is af

/ 

### We concur:Mr. Justice L. C. Gulbrandson,dissenting.

I respectfully dissent to that portion of the majority opinion affirming the Workers' Compensation Court's determination that retroactive applicationof the discounting provisions of § 39-71-741,MCA, isunconstitutional. I have set forth the basis for this dissent in my dissent filed in Buckman v. Montana Deaconess Hospital and State Compensation Insurance Fund, filed simultaneously with this opinion.

Mr. Chief Justice J.

### A. Turnage: 

### I concur in the dissent 

### ofMr. Justice Gulbrandson.