No. 91-489 

TN THE SUPREME COURT OF THE STATE OF MONTANA 

STANLEY STRUCTURES, 

Employer, 

and 

AETNA LIFE AND CASUALTY COMPANY, 

Insurer and Respondent, 

-vsCHESTER SCRIBNER, 

Claimant and Appellant. 

APPEAL FROM: The Workersf Compensation Court, 

The Honorable Timothy Reardon, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

R. Russell Plath; Halverson, Sheehy & Plath, 

Billings, Montana 

For Respondent: 

Brendon J. Rohan; Poore, Roth & Robinson, Butte, 

i-r - Montana 

Submitted on Briefs: February 6, 1992 

Decided: June 4, 1992 
Justice John Conway Harrison delivered the Opinion of the Court. 

Claimant, Chester Scribner (Scribner), appeals from a judgment 

of the Workers' Compensation Court issued on September 16, 1991, 

which ruled in favor of the insurer (Aetna). The order entitled 

Aetna to recoup lump sum advances and social security overpayments 

by reducing Scribnerls weekly workers' compensation benefits. 

Further, Scribner was not entitled to an additional lump sum 

advance. We affirm. 

On May 16, 1979, Scribner suffered an injury arising out of 

and in the course of his employment. Scribner was injured when the 

650 pound wheelbarrow he was pushing tipped over, resulting in torn 

muscles in his lower back. At the time of Scribnerls injury, his 

employer was insured under Plan I1 of the Workers' Compensation 

Act. Aetna accepted liability for Scribner's injury. In addition 

to paying medical, temporary total, and permanent total disability 

benefits, Aetna advanced Scribner three lump sum payments. 

On April 2, 1984, the Social Security Administration 

determined that Scribner was eligible for social security 

disability benefits as of May 17, 1979.' Therefore, on April 2, 

1984, Aetna decreased Scribner's workers1 compensation benefits to 

the social security offset rate provided for in § 39-71-702 (2), MCA 

(1978) . Aetna also determined that, prior to April 2, 1984, it 

' Claimant received social security disability benefits from 

November 1, 1979, through November 1, 1982, while he was receiving 

full workers1 compensation permanent total disability benefits. 

Thereafter, he started receiving social security disability 

benefits on June 1, 1983, continuing to present until he reaches 

age 65, at which time he will receive social security retirement 

benefits for which no offset exists in the Workers' Compensation 

Act. 
overpaid Scribner approximately $7,702 due to the social security 

offset . 

Additionally, with court approval, Aetna advanced Scribner 

three lump sum payments from June 6, 1980, through June 2, 1982, 

totalling approximately $17,779. 

Aetna petitioned the Workers' Compensation Court for an order 

allowing Aetna to reduce Scribner's benefits to recoup overpayments 

and lump sum advances previously made to him. Scribner crosspetitioned requesting an additional lump sum payment for debt 

management. Subsequently, the parties commenced settlement 

negotiations which resulted in a tentative settlement. When 

Scribner refused to sign the settlement agreement, Aetna moved the 

court to enforce the settlement agreement. On June 20, 1991, 

Hearings Examiner, David J. Patterson, heard Aetnals motion to 

enforce the settlement agreement as well as all other matters 

raised by the parties. 

The hearings examiner issued proposed findings of fact and 

conclusions of law on September 12, 1991, denying Aetna's motion to 

enforce the settlement agreement and Scribner's request for an 

additional lump sum advance. The hearings examiner determined that 

Aetna could reduce Scribner's weekly benefits to recoup the amount 

Aetna overpaid Scribner. The Workers' Compensation Court adopted 

the hearings examiner's proposed findings and conclusions on 

September 16, 1991, from which Scribner appeals. 

Scribner presents the following issues for our review: 

1. Did the Workers' Compensation Court err in allowing Aetna 

to recoup social security overpayments and lump sum advances from 
Scribner by reducing his weekly workersf compensation benefits? 

2. Did the Workersf Compensation Court err in denying 

Scribner's request for an additional lump sum advance to implement 

a debt management plan? 

I. 

From the time of his injury until April 2, 1984, Scribner 

received full workerst compensation benefits and social security 

disability benefits. section 39-71-702(2), MCA (1978), allows an 

offset against workersv compensation benefits when the injured 

worker receives social security disability benefits. Belton v. 

Carlson Transport (19861, 220 Mont. 194, 196, 714 P.2d 148, 149. 

Aetna did not take the offset until April 2, 1984, at which time it 

reduced Scribnervs compensation to the offset rate. Aetna 

determined that it overpaid Scribner approximately $7,702. 

Scribner does not dispute the amount or Aetnals entitlement to 

recoup the social security overpayments; Scribnerts argument 

focuses on the manner in which Aetna proposed, and the Workers1 

Compensation Court adopted, to realize the recoupment. 

In addition to recoupment of the overpayments due to the 

social security offset, the Workerst Compensation Court concluded 

that Aetna is entitled to recoup the lump sum advances previously 

made to Scribner, totalling approximately $17,779. Scribner 

contends that Aetna is only entitled to recoupment of the lump sum 

advances when a final settlement is reached between the parties. 

We disagree. 

A claimant is not entitled to double recovery of both a 

lump sum advance and the biweekly payments. Since a lump 

sum advance is merely the whole or partial conversion of 

a claimant's biweekly payments, the insurer is entitled 
to recover the advance. 

Hedegaard v. Knife River Coal Mining Co. (1989), 238 Mont. 290, 

293, 776 P.2d 1225, 1227. 

The appropriate standard of review for reviewing conclusions 

of law by the Workersg Compensation Court is to determine whether 

the lower court Is interpretation of the law is correct. Raf fety v. 

Kanta Prod., 1nc. (Mont. lggl), 819 P.2d 1272, 1273, 48 St.Rep. 

926. In the case at bar, the parties essentially agree on the 

facts. They disagree as to the Workers' Compensation Court's 

determination of what the law requires for an insurer to recoup 

overpayments. Here, case law indicates that insurers are entitled 

to recover lump sum advances. Since the Workers1 Compensation 

Court interpreted the law correctly, it did not err in concluding 

that Aetna was entitled to recoupment of the social security 

overpayments and the lump sum advances. 

11. 

Scribner maintains that if this Court finds that Aetna was 

entitled to recover the overpayments, the Workersf Compensation 

Court erred in allowing Aetna to reduce Scribnerfs weekly benefits 

because with the reduction, Scribnergs expenses exceed his income. 

Scribner contends that he is entitled to an additional lump sum 

advance to implement his proposed debt management plan before the 

court can reduce his weekly benefits. 

Scribner sought a lump sum advance of $88,000 to reimburse 

Aetna for its prior overpayments and to pay off Scribnerrs home 

mortgage, automobile expenses, and miscellaneous debts. Paying 

these debts in full would leave Scribner with monthly income in 
excess of his monthly expenses even with an offset to his weekly 

benefits. 

On May 16, 1979, the date of Scribner's injury, the statute 

controlling lump sum advances stated in part: 

The biweekly payments provided for in this chapter may be 

converted, in whole or in part, into a lump-sum payment. 

Such conversion can only be made upon the written 

application of the injured worker or the worker's 

beneficiary and shall rest in the discretion of the 

division, both as to the amount of such lump-sum payment 

and the advisability of such conversion. The division is 

hereby vested with full power, authority, and jurisdiction to compromise claims and to approve compromises 

of claims under this chapter. All settlements and 

compromises of compensation provided in this chapter are 

void without the approval of the division. . . . 

Section 39-71-741, MCA (1978) . Lump sum settlements are granted in 

situations in which outstanding indebtedness exists, a pressing 

need is shown, or the best interests of the claimant, his family 

and the general public will be served. Willoughby v. Arthur G. 

McKee & Co. (1980), 187 Mont. 253, 257, 609 P.2d 700, 702. 

Generally, the best interests of the claimant are served by 

compensating the claimant in regular periodic installments; lump 

sum conversions of periodic benefits are the exception rather than 

the rule. Phelps v. Hillhaven Corp. (1988), 231 Mont. 245, 252, 

752 P. 2d 737, 741-42 (citation omitted) . However, if the best 

interests of the parties will be served by lump sum conversions, 

the Workersg Compensation Court should award them without 

hesitation. Crittendon v. Terriis Restaurant & Lounge (1991), 247 

Mont. 293, 295, 806 P.2d 534, 536. 

Scribner possessed the burden of proving that a lump sum 

conversion was in his best interest. Phel~s, 231 Mont. at 252, 752 

P.2d at 742. He failed to meet this burden. An additional lump 
sum would benefit Scribner by reducing his monthly expenses at the 

present time. However, the fact that Scribnerls debts exceed his 

income does not require conversion of ~cribner's weekly benefits 

into a lump sum settlement. Ruple v. Bob Peterson Logging Co. 

(1984), 209 Mont. 276, 281, 679 P.2d 1252, 1254. 

The Workers' Compensation Court is the proper forum for 

determining how an insurer can recover overpayments. In this case, 

the court denied Scribnerls lump sum request because Scribnerls 

tax-free yearly income does not justify such a result. Further the 

court found that a reduction in ~cribner's weekly benefits (by $25 

per week until the overpayments are repaid) is fair and reasonable. 

The court's findings of fact are undisputed and the court made 

correct conclusions of law. Therefore, we will not disturb its 

ruling . 

AEf irmed. 

We concur: / 

Justices 
Justice William E. Hunt, Sr., dissenting. 

3: dissent. The benefits received by the claimant are 

insufficient to cover his living expenses, and the fact that this 

Court finds that reducing his income by $25 per week until 

overpayments are repaid is fair and reasonable does not mean that 

it is enough for claimant and his family to live on. 

In its majority opinion, this Court states that lump sum 

settlements are granted in situations in which outstanding 

indebtedness exists, a pressing need is shown, or the best 

interests of the claimant, his family, and the general public will 

be served. Willoughby v. Arthur G. McKee and Co. (1980) , 187 Mont. 

253, 609 P.2d 700. The Court further states that the fact that 

claimant's debts exceeded his income does not require conversion of 

his weekly benefits into a lump sum settlement. As a matter of 

law, it does. While a carrier is entitled to receive its 

overpayments, a Lump sum advance would be in the best interest of 

the claimant, his family, and the general public, and therefore, 

the reduction of his income to below his obligations is contrary to 

the statement of law as set forth in Willouqhbv. I dissent.