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Filcher v. National Union Fire Insurance Co.

Court of Workers Compensation of Montana

April 15, 1996

DON FILCHER, Petitioner,
v.
NATIONAL UNION FIRE INSURANCE COMPANY, Respondent/Insurer for BIG SKY CARE CENTER, Employer.

          DECISION AND ORDER

          Mike McCarter Judge

         Summary: Insurer took offset relating to claimant's receipt of social security disability benefits by terminating his permanent total disability benefits prior to his reaching retirement age and by refusing to pay him an impairment award which it would otherwise have paid. Claimant argued that while the offset is authorized by statute, the insurer should be estopped from taking it.

         Held: Insurer estopped from recouping social security offset where claimant relied on income without offset and where insurer, which did not take offset earlier based on erroneous information from the federal Railroad Retirement Board that claimant's federal benefits were retirement benefits, had ample information to put it on notice to investigate whether claimant's benefits were in fact disability benefits allowing an offset.

         Topics:

Benefits: Social Security Offset. Insurer estopped from recouping social security offset where claimant relied on income without offset and where insurer, which did not take offset earlier based on erroneous information from the federal Railroad Retirement Board that claimant's federal benefits were retirement benefits, had ample information to put it on notice to investigate whether claimant's benefits were in fact disability benefits allowing an offset.
Benefits: Social Security Offset. The fact that a social security offset was not contemporaneously taken when biweekly benefits were paid does not alone preclude the insurer from recovering overpayments resulting from the failure to contemporaneously take the offset. In Belton v. Carlson Transport, 220 Mont. 194, 196, 714 P.2d 148-149 (1986), the Supreme Court affirmed a decision of this Court permitting an insurer to recoup overpayments totalling $18, 461.58.
Benefits: Social Security Offset. An insurer has a duty to investigate prior to applying a social security offset. Lovell v. State Compensation Mut. Ins. Fund, 260 Mont. 279, 288-289, 860 P.2d 95, 101-102 (1993). That duty arises because the offset is limited to disability benefits payable because of the workers' compensation injury.
Estoppel and Waiver: Equitable Estoppel. Insurer estopped from recouping social security offset where claimant relied on income without offset and where insurer, which did not take offset earlier based on erroneous information from the federal Railroad Retirement Board that claimant's federal benefits were retirement benefits, had ample information to put it on notice to investigate whether claimant's benefits were in fact disability benefits allowing an offset.

         This case is presented to the Court for decision on depositions and briefs. The issue is whether the insurer, National Union Fire Insurance Company, is entitled to a social security offset. It has already taken the offset by terminating permanent total disability benefits and refusing to pay an impairment award. The claimant, Don Filcher, through his petition, asserts that while the offset is authorized by statute National is estopped from taking it. He asks the Court to order National to pay the benefits it has withheld.

         The depositions filed with the Court were those of the claimant, Gordon Amsbaugh, who initially adjusted the claim, Cathy Andersen, who took over from Amsbaugh, and Liesel Ann Curtiss, who provided vocational services. Since the case is presented on depositions and briefs, the Court will address the matter in narrative form. Citations to the record are limited to matters essential to resolution of the dispute.

         Facts

         On November 13, 1990, claimant injured his knee while working for Big Sky Care Center in Helena. Big Sky was insured by National, which accepted liability for the claim.

         Claimant was able to continue working until October 1991, at which time his knee could no longer sustain his employment. At that time, National classified him as temporarily totally disabled and began paying temporary total disability benefits of $284.12 per week.

         In January of 1992, claimant applied for social security disability benefits. In light of his past employment in the railroad industry, his application was processed by the U.S. Railroad Retirement Board.

         On February 9, 1992, claimant was notified that he was entitled to social security disability benefits. The notice was in writing. A copy is attached to claimant's deposition as deposition Exhibit 4. The notice read in relevant part:

We are writing to let you know that your are entitled to monthly disability benefits from Social Security beginning April 1992.
The Railroad Retirement Board will make Social Security payments to you. This is because you, your spouse or the person on whose Social Security record you filed worked for at least 10 years in the railroad industry.

(Filcher Dep. Ex. 4, emphasis added.)

         According to claimant, he provided a copy of the February notice to Crawford and Company, which was acting as the adjuster for National. He was unsure whether he mailed it to Crawford ...


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