# The Attorney General of Texas

March 24, 1983 JIM MATTOX Attorney General

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An Equal Opportunity/ Affirmative Action Employer Mr. H. S.Harris, Jr. Chairman Texas IndustrialAccident Board 200 East RiversideDrive Austin, Texas 78704 OpinionNo. JM-21 Re: Workers' Compensation statutespertaining to payment of lump sum benefits in cases involving fatality DearMr. Harris: You have asked us to construe sections of the workers' compensation laws providing for lump sum payment of death benefits in certain cases involving fatality. of section 8(d), You suggest that the requirements article 8306, V.T.C.S., are inconsistentwith those of sections 15 and 17 of the samearticle. Section 15 states that in caseswhere death or incapacityresults from an injury, e lump sum payment of benefits may be made. It also provides that in cases where manifest hardship and injury would otherwiseresult, theboard may compelpayment of its award in a lump sum. Section 17 provides for lump sum payment of benefits to non-resident alien beneficiaries when certain requirements are met. Both sections 15 and 17 were enacted in 1917. Acts 1917, 35th Leg., ch. 103, 1615, 17, at 280-81. Article 8306, section 8 was amended in 1973. Acts 1973, 63rd Leg., ch. 88, 84. at 187-88. Section 8(d) currentlyreads inpart:

The benefits payable to a widow, widower, or childrenunder this section shallnot be paid in e lump sum except in events of remarriageor in case of bona fide disputes as to the liability of the association for the death. (Emphasisadded). Thus, section 8 appears to bar lump sum payment under circumstances where sections 15 and 17would permit it. You firstask:

1. May the Industrial Accident Board award lump sum benefits to a surviving spouse or child where there is no bona fide dispute as to the liabilityof the insurancecarrier?

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_ Mr. H. S. Harris, Jr. - Page 2 (JM-21)

The Texas SupremeCourt discussedarticle 8306, section8 in Twin City Fire Insurance Company v. Cortez. 576 S.W.2d 786 (Tex. 1979). The court stated thatarticle 8306, section 8 restricts lump sum death benefits to the two situations listed in section 8(d). Id. at 789. Accord,Waltersv. Fidelity & CasualtyCompany ofNew York. 611 S.W.2d 934, 937 (Tex. Civ. App. - Eastland 1981,writ ref'd n.r.e.); Walden v. Royal Globe Insurance Company, 577 S.W.2d 296, 299-300 (Tex. Civ. APP. - Beaumont 1979, writ ref'd n.r.e.). Thus, where payments are made to a widow, widower, or childrenas a result of the death of the insured, lump sums may be paid in only two circumstances: (1) to a widow orwidowerupon remarriage,or (2) in case of bona fide disputes as to the liabilityof the association. The 1973amendment to section 8 was intended to change the prior practice of paying death benefits in a lump sum. Walters v. Fidelity 8 Casualty Company of New York, supra; Walden v. RoyalGlobe InsuranceCompany,s. Your first question is answered in the negative because neither of the conditionsrequisitetopayment of a lump sum is present. Your second question is as follows:

2. May the IndustrialAccidentBoard approvea lump sum settlement agreement by a s"rviving spouse or a child and the insurance carrier, in a fatal case,where there isno bone fidedisputeas to the liability of the insurance carrier, but only a dispute as to the proper beneficiary or beneficiaries? No provisionof theworkers' compensationlaw authorizes lump sum payment to settle a dispute as to the proper beneficiary. Sections 8 and 8a of article 8306 state the persons to whom death benefits are payable. The lest sentence of section 8a provides that "[tlhe compensation provided for in this law shall be paid weekly to the beneficiaries herein specified, subject to the provisions of this law." (Emphasisadded). Sections8a end 8(d) alsoprovide forweekly payments. There is no conflictbetween section 8a end section 8(d). Section 8(d) provides that lump sum paymentsmay be made in disputes as to the liabilityof the association;section8a provides thatwhere there is no dispute es to liability. beneficiaries must be paid weekly. Therefore,we conclude that lump sumpaymentsmay not be made to beneficiaries when the only dispute is to whom payments must be made. You next ask:

3. May the Industrial Accident Board award lump sum benefits to a surviving spouse or child or other beneficiary,where there is no bona fide dispute es to the lisbility of the insurance

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Mr. H. S.Harris, Jr. - Page 3 (JM-21)

carrier, but where the board finds 'manifest hardship end injury would otherwise result' as authorized in section 15? Your third questionwas answered by the Eastland Court of Civil Appeals in Walters v. Fidelity 8 Casualty Company of New York, supra at 937. The widow of the deceased employee attested that she had no income or funds, and that she was ii&g under a severe economic hardship. She argued that the trial court should have awarded a lump sum payment of death benefits. The appellate court discussed section 8(d) and stated as follows:

Since there is neither a remarriage nor a settlement,we hold that the trial court correctly denied lump sum payment of future death benefits toMrs. Welters. Seealso Twin City Fire InsuranceCompanyv. Cortez,supra at 789. Section 15 now applies only in cases where the insured's injury results in incapacity.not death. You finallyask the followingquestion:

4. Despite the provision of section 17, are the restrictionson lump sumpaymentsdescribed in section 8(d) applicable in cases involving the payment of fatal benefits to non-resident alien beneficiaries? Your last question concernswhether lump sumpaymentsmay be made to non-resident alien beneficiaries es provided in section 17. Section 8(d), as the latest expression of legislative intent repeals inconsistent provisions of section 17. See State v. Easley, 404 S.W.2d 296, 300 (Tex. 1966); Allied Finance Company of Bay City v. J.M. Falkner, 397 S.W.2d 846, 847 (Tex. 1966). Thus, payments to the non-resident alien beneficiariesof a deceased insuredmay be made to a widow or widower only in the event of remarriage or to other beneficiaries in cases of bona fide disputes as to liability of the association. SUMMARY

Article 8306, section8(d),V.T.C.S., restricts lump sum payment of death benefits to two situations: (1) upon remarriage of the widow or widower or (2) in the case of bone fide disputes as to the liabilityof the association. Thus, the Texas IndustrialAccident Boardmay not award lump sumpayments to an unremarriedwidow orwidower or

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to other beneficiarieswhere there is no dispute as to the liability of the insurance carrier. There is no provision in theWorkers' Compensation Act permitting a lump *urn payment in the settlement of a dispute as to proper beneficiaries. Thus, no lump sum payment may be made in that circumstance. The board may award lump sum payments pursuant to sections 15 and 17 of article 8306,V.T.C.S., to the insuredwhere he survives but is incapacitated, but not to the beneficiariesof a deceased insurd. Very trulyyou 

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JIM MATTOX Attorney General of Texas TOM GREEN FirstAssistantAttorneyGeneral DAVID R. RICHARDS ExecutiveAssistantAttorneyGeneral Preparedby PatriciaHinojosa AssistantAttorney General APPROVED: OPINION COMMITTEE SusanL. Garrison,Chairman Jon Bible Rick Gilpin PatriciaHinojosa Jim Moellinger

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