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, 1992Justice John Conway Harrison delivered the Opinion of the Court. Claimant,ChesterScribner (Scribner), appeals froma 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 sumadvances and social security overpayments by reducing Scribnerlsweekly 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 inthe course of his employment. Scribnerwas injuredwhen the 650pound wheelbarrowhewaspushing tipped over,resulting intorn muscles inhis lower back. At the time of Scribnerlsinjury,his employer was insured under Plan I1 of the Workers' Compensation Act. Aetna accepted liability for Scribner's injury. In addition topayingmedical, temporary total,andpermanent 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'sworkers1compensation benefits to the social security offset rateprovided 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,throughNovember 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 theWorkers' CompensationCourt for an order allowingAetna toreduce Scribner's benefitstorecoup 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 Aetnalsmotion to enforce the settlement agreement as well as all other matters raised by the parties. The hearings examiner issued proposed findings of fact and conclusionsof lawon September 12, 1991, denyingAetna'smotion to enforce the settlement agreement and Scribner's request for an additional lump sumadvance. Thehearings examiner determined that Aetna could reduce Scribner'sweeklybenefits to recoup the amount Aetna overpaid Scribner. The Workers' Compensation Court adopted the hearings examiner's proposed findings and conclusions on September 16, 1991, fromwhich Scribner appeals. Scribnerpresents the following issues for our review: 1. DidtheWorkers' Compensation Court err inallowingAetna to recoup social security overpayments and lump sum advances fromScribner by reducing his weekly workersfcompensation benefits? 2. Did the Workersf Compensation Court err in denying Scribner'srequest 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 disabilitybenefits. 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 offsetuntil 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 WorkerstCompensation Court concluded that Aetna is entitled to recoup the lump sum advancespreviously made to Scribner, totalling approximately $17,779. Scribner contends thatAetna 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 

### sumadvance and thebiweekly payments. Since

### a lump sum advance ismerely the whole or partial conversionof a claimant's biweekly payments, the insurer is entitledto 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 WorkersgCompensation Court is to determinewhether the lower courtIsinterpretationof the law is correct. Raffetyv. 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 allowingAetna 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 implementhis 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 Scribnerrshome mortgage, automobile expenses, and miscellaneous debts. Paying 

### these debts in full would leave Scribner 

### with monthly income 

### inexcess 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: Thebiweeklypaymentsprovided for inthis chaptermay be converted, inwhole or inpart, into a lump-sumpayment. 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 advisabilityof suchconversion. 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 compensationprovided 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. Crittendonv. 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 

### inhisbest interest. Phel~s, 231Mont. at 252, 752 P.2d at 742. He failed to meet this burden. An additional lumpsum would benefit Scribnerby reducing hismonthly expenses at the present time. However, the fact that Scribnerlsdebts 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 insurercanrecover overpayments. Inthis case, the court denied Scribnerlslump sum request because Scribnerls tax-freeyearly incomedoes not justify sucha result. Further the court found that a reduction in ~cribner's weekly benefits (by $25 perweek until the overpaymentsare repaid) is fairand reasonable. The court's findings of fact are undisputed and the court made correct conclusions of law. Therefore, we will not disturb its 

### ruling

# . AEfirmed.

We concur: 

## /

JusticesJustice 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. Willoughbyv. Arthur G. McKee and Co. (1980)

### , 187Mont. 253, 609 P.2d 700. The Court further states that the fact that claimant'sdebtsexceeded his incomedoes

### not require conversionof 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, thereductionof his income tobelowhis obligations is contrary to the statement of law as set forth in Willouqhbv. I dissent.