No. 14558 

IN THE SUP^ COUHT OF THE STATE OF rnNTANA 

1979 

ANDREW J. UTICK, 

Claimant and Appellant, 

-VSANDFEW J. UTICK d/b/a CAPITAL MXEL AND 

SEFWICE STATION, Drployer, 

and 

STATE COMPrnsATION INSuRANa FUND, 

Defendant and Respondent. 

Appeal £ram: Workers' Canpensation Court 

Hon. William E. Hunt, Judge presiding. 

Counsel of Record: 

For Appellant: 

Hoyt and Lewis, Great Falls, bbntana 

John C. Hoyt argued, Great Falls, Wntana 

For Respondent: 

Tim Reardon argued, Helena, mntana 

Submitted: March 14, 1979 

Decided: APR20 1979 

~ild: APR E 0 19n -. 
Mr. Chief Justice Frank I. Haswell delivered the Opinion of 

the Court. 

Claimant Andrew J. Utick appeals from an order of the 

Workers' Compensation Court denying his request for a lump sum 

advance payment of total disability benefits due him from the 

State Compensation Insurance Fund. 

Andrew J. Utick was the owner of the Capital Motel & 

Service Station in Helena, Montana, which he had operated and 

managed for the past 30 years. He had elected coverage for 

himself with the State Compensation Insurance Fund. Utick sustained two separate industrial accidents; the first on July 11, 

1974, and the second on August 26, 1975. In the first accident, 

he sustained a fracture of the left ankle and foot. The second 

accident occurred when his weak left ankle collapsed and he fell 

and injured his back. At the time of the second accident, Utick 

was 63 years old. 

As to Utick's first injury, the State Fund accepted liability and medical benefits were paid. Disability payments, 

however, were denied because Utick had allegedly lost no wages 

due to that injury. On the second injury, the State Fund denied 

the claim entirely on the grounds that Utick allegedly failed to 

file some required forms. 

On June 21, 1977, Utick filed a petition for hearing 

with the Workers' Compensation Court, alleging that the State 

Fund had wrongfully failed and refused to pay the compensation 

due him. The petition asked that he be awarded temporary total 

disability compensation for the appropriate periods of time as 

a result of both industrial accidents; that his medical expenses 

be paid; that he be awarded a permanent partial disability award 

as a result of his injuries; that the award be paid in a lump 

sum; that he be awarded reasonable attorney fees and costs; and 

that the State Fund be assessed the statutory ten percent penalty 
for unreasonable refusal to pay the claims. 

A hearing was held on the petition on December 22, 1977, 

at which time the State Fund acknowledged that it had accepted 

payment of premiums from Utick in regard to the second accident 

and that therefore coverage as to that accident would be conceded despite his alleged failure to file the required forms. 

Findings of fact, conclusions of law, and judgment subsequently 

entered determined, among other things, that Utick was entitled 

to temporary total benefits for only a portion of what he had 

requested; that he was suffering a permanent partial disability 

of 50%; and that he was entitled to the 10% penalty increase on 

the award. 

Utick filed notice of appeal from the judgment, but the 

notice was subsequently withdrawn when the State Fund's petition 

for rehearing was granted by the Workers' Compensation Court. 

The petition for rehearing was based on the fact that the Workers' Compensation Court's order was not clear as to whether 

Utick's permanent partial 50% disability was to be paid biweekly 

or in a lump sum, and on an alleged miscalculation of the rate of 

compensation. Utick concurred in the petition for rehearing, 

alleging that a new hearing was necessary because the court, 

contrary to the evidence, had not found that he was totally permanently disabled. 

Prior to the second hearing, Utick filed an affidavit 

with the court again requesting that his benefits be converted 

to a lump sum settlement. The affidavit showed that if he could 

receive the present value of his future benefits in a lump sum, 

he would lend the money to a family corporation which in turn 

would finance expansion of a restaurant on property owned by the 

corporation. By so doing, the affidavit alleged, Utick would be 

guaranteed an income of $20,500 per year as his share of lease 

payments to the corporation, whereas compensation benefits paid 
to him on a weekly basis would amount to only $7,923.76 per year. 

At the rehearing, the Division of Workers' Compensation 

conceded the permanent total disability of Utick. The only 

issue contested was whether his request for a lump sum settlement should be granted. The Division resisted Utick's request 

for a lump sum award, but stated no reasons in support of its 

position. Both the Division and the Workers' Compensation Court 

acknowledged that the investment plan submitted by Utick in his 

affidavit in support of his request for a lump sum settlement 

would work. Nonetheless, the court found that while a lump sum 

settlement would be in Utick's best interests, the request would 

be denied since there was no real need shown. In its order of 

denial, the Workers' Compensation Court reasoned that payment 

under the plan proposed by Utick was "not in keeping with the 

spirit of the Act which is to pay compensation for loss of wages 

rather than indemnity payments for establishment of a claim." 

The court found that in Utick's case periodic payments best 

complied with the purpose and intent of the law. From the order 

denying his request for a lump sum settlement, Utick has brought 

this appeal. 

Statutory authority for the conversion into a lump sum 

of biweekly payments provided for under the orkmen's Compensation 

Act is found in section 92-715, R.C.M. 1947, now section 39-71-741 

MCA. The grant or denial of a lump sum settlement will not be 

interfered with on appeal unless there is an apparent abuse of 

discretion. Kent v. Sievert (1971), 158 Mont. 79, 489 P.2d 104; 

Kuehn v. National Farmers Union Property & Cas. Co. (1974), 164 

Mont. 303, 521 P.2d 921. Thus, the only issue for our determination on this appeal is whether there was an apparent abuse of 

discretion by the Workers' Compensation Division in resisting, 

and the Workers' Compensation Court in denying appellant's request for a lump sum settlement under the circumstances present 
here. 

The general rule is that payments under the Workmen's 

Compensation Act are periodic. Lump sum settlements are an 

exception to the general rule. Malmedal v. Industrial Accident 

Board (1959), 135 Mont. 554, 342 P.2d 745; Laukaitis v. Sisters 

of Charity of Leavenworth (1959), 135 Mont. 469, 342 P.2d 752; 

Legowik v. Montgomery Ward (1971), 157 Mont. 436, 486 P.2d 867; 

Kent v. Sievert, supra; Kuehn v. Nat. Farmers Union Property & 

Cas. Co., supra. This does not mean, however, that lump sum 

awards are looked on with disfavor. They should be awarded without hesitancy "where the best interests of the parties demand it." 

Laukaitis, 135 Mont. at 474, 342 P.2d at 755, citing Landeen v. 

Toole County Refining Co. (1929), 85 Mont. 41, 47, 277 P. 615, 

617. Each case for a lump sum payment stands or falls on its 

own merits. Codling v. Aztec Well Servicing Co. (1976), 89 N.M. 

The most recent Montana case discussing the question of 

lump sum settlements is Kuehn, supra, wherein the guiding principles are summarized as follows: 

"A review of the Montana precedent on this point 

indicates that conversion . . . to . . . lump sum 

payments is the exception rather than the rule. 

This is, as it should be, in the best interests of 

the injured workman, whose paycheck is generally 

better substituted for by a weekly benefit check 

rather than a lump sum windfall. The criteria 

determinative of the advisability of conversion to . . . a lump sum award have generally been held to 

be '. . . the best interests of the claimant, his 

family, and for the best interests of the public . . .'. (Citations omitted.) The existence of a 

'pressing need' and/or 'outstanding indebtedness' 

has likewise been held to be relevant criteria; 

(Citation omitted.)" Kuehn, 164 Mont. at 307, 

521 P.2d at 923-924. 

This discussion in Kuehn recognizes what is adopted by 

the authorities generally as the reasoning behind the rule that 

payments under the Workmen's Compensation Acts should be made 

periodically rather than in a lump sum; that is, that the average 
workman for whose protection the acts are intended would be incapable of handling a single large sum of money, would soon 

dissipate it, and would then be in as poor straits as if Workmen's Compensation had never existed. See 3 ÿ arson's Workmen's 

Compensation Law 582.71. 

While this underlying rationale may hold true in the 

majority of cases, it clearly does not apply here. On the contrary, it was demonstrated by Utick without dispute by the Workmen's Compensation Division or the Workers' Compensation Court 

that Utick could utilize a lump sum award to assure a substantial 

source of regular income for himself. Applying the criteria 

spelled out in Kuehn, supra, we hold that Utick's request for a 

lump sum settlement should have been granted. 

We recognize that in this case there is absent the "pressing need" or "outstanding indebtedness" factor customarily relied 

on in lump sum settlement cases. Nonetheless, we find that because of the circumstances involved in this case the general 

criteria of "the best interests of the claimant, his family, and 

the best interests of the public" are better fulfilled if the lump 

sum award is ordered. 

The circumstances that influence our decision in this 

case are not limited merely to the clear demonstration by Utick 

of what his best interests were from the economic or financial 

perspective. We are also persuaded by what appears to us as 

arbitrary and unfair treatment of Utick by the Workmen's Compensation Division from the very outset in handling his claim. Counsel for Utick stated during oral argument of this appeal that at 

no time during the pendency of the claim, including the time after 

which the Workers' Compensation Court had specifically ordered 

the Division to make certain payments to Utick, had the payments 

due him been current. Counsel for the Division conceded that 

 tick's claim had been badly mishandled and offered an apology to 
Utick for any resulting hardship or inconvenience. Because 

Utick clearly demonstrated what his best interests were and 

the Division established no countervailing interests, because 

the Division gave no reasons for not allowing the lump sum 

award but merely relied on its unbridled discretion, and because 

a lump sum award here will finally put an end to the conflict 

between Utick and the Division and allow him to "put behind 

him" the arbitrary treatment he has suffered (see Legowik v. 

Montgomery Ward, supra), we conclude that the denial of the lump 

sum settlement was an abuse of discretion. 

We do not by this decision alter in any way the general 

rule or the principles established in our prior opinions regarding that rule, viz. that lump sum settlements are an exception 

to the usual mode of payment contemplated by the Workmen's Compensation Act. We hold only that the circumstances of this case 

give rise to an occasion on which the exception should be applied. 

The order of the Workers' Compensation Court denying 

appellant's request for a lump sum advance payment of benefits 

due him from the State Compensation Insurance Fund is reversed. 

As to the amount of the lump sum award, neither party to this 

appeal has supplied us with sufficient information to calculate 

the proper figure. The amounts appellant has already received 

under the periodic payments being made to him up to the time of 

oral argument of this appeal and the method of discounting to 

present value the total due him for a lump sum settlement are 

referred to obliquely in the briefs, but the record is insufficient for us to undertake the calculation ourselves. The claim 

is therefore remanded to the Workmen's Compensation Division with 

instructions to award appellant a lump sum settlement as it should 

have been calculated according to the usual lawful procedures of 

the Division as of October 23, 1978, the date the Workers' 
Compensation Court erroneously denied the lump sum award, taking into account and adjusting for whatever amounts appellant 

was paid by the Division in periodic payments subsequent to 

that date. The 10% penalty increase ordered by the Workers' 

Compensation Court for the failure of the Division to pay Utick 

at the time the money was due shall also apply to the lump sum 

award ordered herein and the calculation shall be adjusted 

accordingly. That portion of the Workers' Compensation Court's 

order allowing reasonable attorney fees to Utick is affirmed. 

Each party shall bear its own costs and attorney fees on appeal. 

Reversed in part and remanded. 

. Chief Justice