No. 90-254 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

CAROL CRITTENDON, 

\

Claimant and Respondent, 

TERRIIS RESTAURANT & LOUNGE 

and STATE COMPENSATION MUTUAL 

INSURANCE FUND, 

Employer/Defendant and 

Appellant. 

APPEAL FROM: Workers1 Compensation Court, 

The Honorable Timothy Reardon, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Thomas E. Martello, Special Assistant Attorney 

General, Helena, Montana 

For Respondent: 

'James P. Harrington, Butte, Montana 

-- 

:'.ad Submitted on Briefs: August 30, 1990 

I. L 3 1 9 19911 ~ecided: February 19, 1991 

Filed: 

aERK OF SUPREME Caum srAre of! yOi4TAM . 

tClerk , r 
t 1 b', 

Justice William E. Hunt, Sr., delivered the opinion of the Court. 

Appellant State Compensation Mutual Insurance Fund appeals 

from an order of the Workers1 compensation Court granting the 

claimant Carol ~rittendon a lump sum award for the purchase of an 

apartment house. 

We affirm. 

The issues presented on appeal are: 

1. Was the decision of the Workers1 Compensation Court 

granting claimant a lump sum award in claimantls best interest? 

2. Was the State Compensation Mutual Insurance Fund denied 

its right to a fair and impartial hearing? 

Carol ~rittendon (claimant) injured herself on March 17, 1984, 

while employed at Terrils Restaurant and Lounge in Butte, Montana. 

She began receiving disability benefits shortly thereafter. In 

April of 1989, claimant filed a petition for hearing with the 

Workers1 Compensation Court. The substance of the relief sought 

by the claimant was a conversion of future permanent total 

disability benefits into a single lump sum to be used for the 

purchase of an apartment complex in Helena, Montana. 

Trial was held on June 15, 1989. On January 9, 1990, the 

hearing examiner issued Findings of Fact, Conclusions of Law, and 

an "Interim Ordert1 tentatively granting claimant the requested lump 

sum but directing the claimant to submit within 15 days an 

appraisal of the apartment building and written reports concerning 

heating, plumbing, and electrical systems. The State Compensation 

Mutual Insurance Fund (State Fund) then filed a motion asking the 

2 
Workers' Compensation judge to exercise supervisory control, 

alleging that the issuance of the proposed findings had been sewed 

on the parties prematurely, that the order allowing post-trial 

appraisals violated the State Fund's due process right to crossexamine opposing witnesses, and generally opposing the hearing 

examiner's decision. The court reviewed the file and briefs and, 

based on its review, denied the request on February 22, 1990. On 

April 5, 1990, the court adopted the Findings of Fact and 

Conclusions of Law of the hearing examiner, and entered judgment. 

From that judgment the State Fund appeals. 

The first issue is whether the decision to grant claimant a 

lump sum award to purchase an apartment building is in her best 

interest. 

The Workers1 compensation laws in effect at the time of a 

claimant's injury are controlling. Buckman v. Montana Deaconess 

Hospital, 224 Mont. 318, 321, 730 P.2d 380, 382 (1986). On March 

17, 1984, the date of the claimant's injury, the Workers' 

Compensation statute regarding lump sum awards stated: 

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, with the concurrence of the insurer, 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 allow and 

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. Approval of the division must be in writing. 

The division shall directly notify every claimant of any 

division order approving or denying a claimant's 

settlement or compromise of a claim. A controversy 
between a claimant and an insurer regarding the 

conversion of biweekly payments into a lump sum is 

considered a dispute for which the workers' compensation 

judge has jurisdiction to make a determination. 

5 39-71-741, MCA (1983). 

This statute has been interpreted to mean that "[llump sum 

settlements are only granted where there is loutstanding 

indebtedness,' \pressing need,' or where \the best interests of the 

claimant, his family and the general public will be served.'" 

Willoughby v. General Accident Fire and Life, 187 Mont. 253, 257, 

609 P.2d 700, 702 (1980) (citations omitted). While the 

presumption is in favor of periodic payments, where the best 

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

"they should be awarded without hesitancy . . . Utick v. Utick, 

181 Mont. 351, 355, 593 P.2d 739, 741 (1979). Appellant argues 

that because the apartment house investment is a "passive 

investmentu and because the investment puts the balance of 

claimant's lifetime benefits at risk, it is not in her best 

interest and is therefore contrary to Montana law. 

Decisions regarding "activeN and "passivev investments are, 

as pointed out by the Workers' Compensation Court, made on a caseby-case, fact-by-fact basis. The State Fund maintains that the 

facts of Daniels v. Kalispell Regional Hospital, 230 Mont. 407, 750 

P.2d 455 (1988), and Komeotis v. Williamson Fencing, 232 Mont. 340, 

756 P.2d 1153 (1988), both denying lump sums, are so similar to the 

facts before us that this request should also be denied. A review 

of those facts, twice by the Workerst compensation Court and now 
by us, yields a different conclusion. 

In Daniels, the claimant requested a lump sum conversion in 

order to set up an excavation business in which she would do the 

office work and her husband would run the backhoe. The Court held 

that Ms. Daniels1 role was too remote and the business was too 

risky (her husband had only limited backhoe experience and had 

never bid on an excavation job) to justify investing a large 

portion of her benefits. In Komeotis, the claimant requested a 

partial lump sum conversion for the purchase and operation of 

rental property. This Court held, however, that the lower court 

had properly determined that the claimant's need was not pressing 

enough and his physical and mental disabilities were such that a 

lump sum was not in his best interest. 

Here there are none of the drawbacks of Daniels or Komeotis. 

This will not be a llpassivell investment as evidenced by the 

extensive list of tasks claimant will perform in managing the 

building. These include handling accounts, coordinating 

maintenance, performing bookkeeping, and meeting with tenants. 

While it is true she will receive help from family members, she 

will still be the chief overseer of the rentals and will take 

responsibility for the work of her employees. Although she may 

only need to be "on siteN for a few hours a month, most of her 

labor will be "behind the scenes. That fact, however, does not 

diminish her role as owner/manager. The claimant has also 

demonstrated a pressing need and her physical limitations are not 

debilitating. Thus her situation is not similar to those presented 
by the State Fund and no abuse of discretion by the Workers1 

Compensation Court is evidenced. 

The second issue is whether the State Fund was denied its 

right to a fair and impartial hearing. 

The State Fund claims that by requesting appraisals on the 

heating, plumbing, and electrical systems of the apartment building 

after the trial, the court deprived the Fund of its right to crossexamine opposing witnesses, and allowed the claimant to prove her 

case after trial. Citing the court's order denying motion for writ 

of supervisory control: 

The Court has granted lump sum conversions when specific 

documentation was unclear at the time of trial as to the 

exact nature or extent of the debt and directing the 

parties to obtain that information post-hearing, and if 

consistent with the claim and allegations made at the 

time of trial, has awarded such benefits. 

The Workers1 Compensation Court reviewed claimant's evidence 

for the hearing and again for the defendants1 motion for the Writ 

of Supervisory Control. We find nothing in the record to show the 

court abused its discretion in finding overwhelming support for 

the feasibility of the claimant's proposal. It reached this 

conclusion without benefit of the post-trial appraisals and 

therefore did not deprive the State Fund of its right to a fair 

hearing. 

Affirmed. 

We Concur: