NO. 85-40 IN THE SUPREME COURT OF THE STATEOF MONTANA 1985

RALPH V. RELTON, ClaimantandAppellant,

-vsCARLSON TRANSPORT,Employer, and HARTFORDACCIDENT & INDEMNITYCO., Third-PartyDefendantand Respondent, and RICE TRUCK LINE,Employer, and TRANSPORT INDEMNITYCOMPAIU, Defendant and Respondent,

APPEAL FROM: Workers' CompensationCourt,TheHonorable Timothy Reardon,Judgepresiding. COUNSEL OF RECORD: ForAppellant: Kelly & Halverson,P.C.; Sheehy,Prindle & Finn; Victor Halverson, Billings, Montana For Respondent: Garlington,Lohn & Robinson; Larry E. Riley,Missoula, Montana Crowley Law

### Firm;L. Randall Bishop,Rillings,Montana

Submitted on briefs: December 20, 1985 Decided: February 13, 1986 

# fLbi Filed: 

## i'g@?Mr. Justice William E. Hunt, Sr., delivered the Opinion of the Court.

The appellant,Ralph Belton, appeals the judgmentof the Workers' Compensation Court. That court ordered a recoupment of an overpayment related to a social security offset.;denied

a requested total lump sum conversion;granted apartial lump

sum conversion; denied penalty for unreasonable payment of medical expenses; and ordered payment of medical expenses. We affirm inpart and remandwith instructions. Three issues arepresented for review: 1. Whether it was error to permit recoupment of overpayments. 2. Whether it was error to deny a total lump sum conversion. 3. Whether it was error to deny penalty for insurer medical payments. The appellant, Ralph Eelton, is now 61 years old. He suffered a back injury in 1977 while working for Carlson Transport. Carlson Transport's compensation insurer was Hartford Accident and Indemnity. Hartford accepted liability andmade payments to the appellant. The appellant suffered injury to his back again in 1979. This time he was working for Barker Trucking. Barker was uninsured, but under contractwith Rice Truck Line, insured by the respondent,Transport Indemnity. The issue of which insurer was liable for successive injury in this case was decided in Belton v. Carlson Transport, et al. (Mont. 1983),658 P.2d 405, 40 St.Rep. 158. Pursuant to the opinion in Belton the Workers' Compensation Court ordered the respondent,Transport Indemnity,topay theappellant's compensation benefits and accident-related m.edical costs incurred since the 1979 injury. The issues in this case,as it 

### is presently before this Court, developed in 1984when the appellant petitioned for a hearing before the Workers1 Compensation Court requesting a total lump sum payment, an order requiring the respondent to pay medical costs, and a statutory penalty for insurer unreasonableness. The respondent answered, requesting a denial and a termination of benefits until an existing overpayment related to the social security offsetwas repaid. The Workers' Compensation Court denied a total lump sum conversion,but it did grant a partial lump sum advance. It ordered the respondent to pay the medical expenses, but it denied invoking the statutory penalty for insurer unreasonableness. It then ordered recoupment on behalf of the respondent for overpayment. This recoupment was to be paid from thepartial lump sum advance. The first issue is whether the Workers' Compensation Court erred in permitting recoupment of overpayments made by the insurers,Hartford and Transport Indemnity. In addition to appellant's biweekly compensation payments he received social security disability payments. Montana law allows an offset against compensation when an injured worker is also receiving social security disability. See, §S 39-71-701(2) and 39-71-702(2),MCA. The insurersdid not take this offset and by the time of the hearing on this matter overpayments equalled $18,461.58. Hartford had overpaid $14,630.81 of this amount and the respondent had overpaid the balance. We hold that the insurers are entitled to the offset as foundby theWorkers1CompensationCourt.The second issue is whether the Workers' Compensation Court erred in denying a total lump sum conversion. The appellant sought a lump sum conversion because he had unpaid debts, an inefficient automobile, and costly monthly rent. One of the appellant's theorieswas that an outright purchase of a house would help eliminatehis financialproblems. The FJorkers' Compensatjon Court determined that it was in the appellant's best interest to award a partial. Iump sum to allow discharge of debt and to purchase a fuel efficient automobile. However, it determined that the appellant did not submit substantial credible evidence that it was in his best interest to purchase a home. We agree. The Montana Workers' Compensation Act provides for lump sum payment. See, § 39-71-741,MCA. TheMontana Legislature has recently amended this code section. See,Act of April 1.5, Ch. 471, Laws of Montana (1985). The effective date of the amendment followed the hearing on this matter and the amendmentdoesnot apply in this case. The law in effect and applicable to the case presented here is that each case for a lump sumpayment stands or falls

on its own merits. Utick v. Utick (1979), 181 Mont. 351, 355, 593 P.2d 739, 

### 741. The denial of a lump sum settlement will not be reversed on appeal unless the Workers' Compensation Court is shown to have abused its discretion. Ruple v. Peterson Logging Company (Mont. 1984), 679 P.2d 1252, 1254, 41 St.Rep. 704, 706. The general rule is that payments under the compensation act are periodic. Lump sum settlements are an exception to this rule. Utick (1979),181 Ilont. 351, 354, 593 P.2d at 741. Lump sum settlements are only granted where there is "outstanding indebtedness," "pressjng need," or where "the best interests of theclaimant, his family and the general public will be served." Willoughby v. Arthur McKee & Co. (1980), 187Mont. 253, 257, 609 P.2d 700, 702. The appellant here demonstrated outstanding indebtedness in the amount of over $5,000 in addition to the $18,000 due the insurers for overpayment of benefits. He also demonstrated a pressing need for a better automobile. The Workers' Compensation Court granted a lump sum payment for the debts and the automobile hut denied a total sum that would enable the appellant topurchase a house. We hold that this denial was a proper exercise of the court's discretion. The appellant did not introduce evidence which showed he had age or health reasons which necessitated the purchase of

a home. Testimony by appellant that he wished to avoid future escalation of rent payments is not adequate to meet the burden of advancing substantial credible evidence,Dumont

v. Mickens Bros. ConstructionCo. (1979), 183Mont. 190, 201, 598 P.2d 1099, 1105, that there was "pressing need" for him topurchase a house. Therefore,we hold the partial lump sum advancewas proper. The third issue presented is whether the Workers' Compensation Court erred in denying the appellantpenalty for respondent's unreasonable treatment of the medical cost payment. The respondentwas obligated topay the appellant's medical costs but ithad refused to make thesepayments. The Workers' Compensation Court found that this refusal was unreasonable. The Workers' Compensation Court determined that no statutory penalty applied, however, because the statute spoke of compensationand not medical benefits. This Court recently addressed this issue in Carlson v. Cain (Mont. 1985), 700 P.2d 607, 42 St.Rep. 695. We decided