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Hebert v. Uninsured Employers' Fund

Court of Workers Compensation of Montana

April 22, 1994

TOM HEBERT Appellant
v.
UNINSURED EMPLOYERS' FUND Respondent.

          DECISION AND ORDER ON APPEAL

          Mike McCarter JUDGE

         Petitioner, Tom Hebert (Hebert), appeals from Findings of Fact; Conclusions of Law; Order entered by the Montana Department of Labor and Industry (DLI) on August 12, 1993. The DLI's decision imposed a $15, 391.48 penalty on Hebert for failing to provide workers' compensation insurance coverage for his employees.

         The basic facts are not in dispute. Hebert operates a carpet business in Bozeman and employs carpet layers. Prior to March 23, 1992, he provided workers' compensation insurance coverage for his employees. On March 23 his coverage lapsed on account of his failure to pay the insurance premium. The lapse continued until June 18, 1993. The premium he should have paid during the lapse was $7, 695.74. Acting pursuant to section 39-71-504, MCA, the Uninsured Employers' Fund (UEF) imposed a penalty of $15, 391.48, which is double the amount of the unpaid premium. Hebert appealed the initial penalty determination to a DLI hearing examiner, who conducted a contested case hearing. On August 12, 1993, the hearing examiner affirmed imposition of the penalty. Hebert then petitioned this Court for judicial review.

         This case comes to the Court pursuant to section 39-71-204 (3), MCA, which generally provides for an appeal to the Workers' Compensation Judge from any order of the Department of Labor and Industry under title 39, part 71.[1] The scope of judicial review of a decision of an administrative agency is governed by section 2-4-704, MCA, which provides:

2-4-704. Standards of review. (1) The review shall be conducted by the court without a jury and shall be confined to the record. In cases of alleged irregularities in procedure before the agency not shown in the record, proof thereof may be taken in the court. The court, upon request, shall hear oral argument and receive written briefs.
(2) The court may not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings. The court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because:
(a) the administrative findings, inferences, conclusions, or decisions are:
(i) in violation of constitutional or statutory provisions; (ii) in excess of the statutory authority of the agency; (iii) made upon unlawful procedure; (iv) affected by other error of law;
(v) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record;
(vi) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion; or
(b) because findings of fact, upon issues essential to the decision, were not made although requested.

         The DLI's authority to assess a penalty of "up to double the premium amount the employer would have paid" is clear. Section 39-71-504 (1), MCA provides in relevant part:

(1) The department may require that the uninsured employer pay to the [uninsured employers'] fund a penalty of either up to double the premium amount the employer would have paid on the payroll of the employer's workers in this state if the employer had been enrolled with compensation plan No. 3 or $200, whichever is greater. [Emphasis added.]

         The amount appellant would have paid in premiums -- $7, 695.74 -- is undisputed. It is also undisputed that the actual penalty imposed was double the premium amount, ...


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