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Wray v. State Compensation Insurance Fund

Court of Workers Compensation of Montana

December 28, 1993

BRIAN WRAY Petitioner


          Mike McCarter Judge

         On October 26, 1993, the Court adopted the FINDINGS OF FACT, CONCLUSIONS OF LAW AND PROPOSED JUDGMENT of its hearing examiner. Within the 20 days allowed for the filing of a request for rehearing or to amend, ARM 24.5.244, the petitioner filed a MOTION FOR REHEARING OR TO AMEND JUDGMENT. Additionally, he filed a MOTION TO AMEND PRETRIAL ORDER in which he seeks to restate the issue presented for trial. Both motions have been briefed and are ready for decision.

         1. Motion For Rehearing Or To Amend Judgment

         In his first motion the petitioner seeks two things. First, he requests the Court to strike those portions of the findings, conclusions and judgment which relate to an $11, 029.52 overpayment of benefits which resulted from petitioner's receipt of auxiliary social security benefits. Second, he requests that a portion of paragraph 10 of the findings be stricken because it is contrary to the evidence. Petitioner also requests a new trial.

         The matter of recouping $11, 029.52 arose at the time of trial when petitioner disclosed that he had received previously undisclosed auxiliary social security benefits. The hearing examiner's decision fixed the amount of the resulting overpayment at $11, 029.52, and authorized the respondent, State Compensation Insurance Fund (State Fund), to offset petitioner's biweekly benefits by an additional $17.32 to recoup the overpayment.

         Petitioner argues that the hearing examiner's action was outside of the issues presented for trial. He also points out that the specific amount of overpayment determined by the hearing examiner is not supported by the evidence. He is correct on both points.

         Petitioner initiated this action to restore his full biweekly benefits. At the time of the filing of the petition, the State Fund was offsetting his benefits to recoup previous lump sum advances and a known social security overpayment, which is not at issue here. The State Fund opposed the petition, defending its offsets. It did not counter-petition for an order allowing it to take an additional offset.

         The State Fund agrees that the evidence presented at trial does not support the hearing examiner's $11, 029.52 calculation but argues that the amount can be derived by judicially noticing regulations of the Social Security Administration. Based on those regulations, it argues that the calculated amount is correct.

         It was error to include this matter in the original decision. The matter was outside the scope of the issues presented by the Petition and Pretrial Order, and respondent did not seek affirmative relief by way of a counter-petition. The evidence also failed to support the amount determined by the hearing examiner. It would be inappropriate at this late stage of the case to now take judicial notice of administrative regulations in an attempt to justify the hearing examiner's computation. Moreover, the State Fund will not be prejudiced by excision of the matter from the decision. Petitioner does not dispute the State Fund's entitlement to an offset, and the State Fund does not need Court approval to take the offset. The State Fund can also readily obtain the information necessary to exactly calculate the amount of the overpayment. Therefore, those portions of the original decision which concern the matter will be deleted.

         Petitioner's second argument concerns paragraph 10 of the findings of fact. That paragraph reads:

10. When claimant petitioned for the first three lump sum advances he understood from his lawyer that the advances would be recouped from the 500 weeks of permanent partial benefits he would receive after the age of 65 rather than from his current bi-weekly benefits. (Tr. at 5.) There was no written agreement on recoupment. [Emphasis added.]

         Petitioner objects to the highlighted portion of the paragraph. He argues that there in fact was a written agreement on recoupment, referring the Court to the three petitions for lump sum advances. He further contends that the agreement was for the State Fund to recoup the advances out of his future permanent partial disability benefits. Since he has now been determined to be permanently totally disabled, unless his condition improves those partial benefits will not commence until petitioner reaches age 65, which is in 12 years.

         The Court has reviewed each of the three petitions. Each contains the following open-ended language concerning recoupment:

I understand that such a lump sum advance payment will be deducted from any award or settlement I may ...

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