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Evans v. State Compensation Insurance Fund

Court of Workers Compensation of Montana

May 30, 1996

JOSEPH EVANS Petitioner
v.
STATE COMPENSATION INSURANCE FUND Respondent/Insurer for ROSCOE STEEL & CULVERT COMPANY Employer.

          Submitted: May 8, 1996

          FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT

          MICKE McCARTER JUDGE.

         Summary: 47-year old permanently, totally disabled claimant, injured in 1980, entered into agreement with State Compensation Insurance Fund to receive lump sum advance to purchase home. He agreed in writing that State Fund would recoup the advance by reduction in his benefits through his reaching age 65. He now asks for a lump sum conversion of all remaining benefits to pay existing debts or an order that the recouping of benefits occur through age 79, his claimed life expectancy.

         Held: In this old law case, guidance on lump sum conversion comes from Sullivan v. Aetna Life & Casualty, 271 Mont. 12, 894 P.2d 278 (1995), wherein the Supreme Court reiterated that biweekly benefits are the general rule, but a lump sum conversion may be done when in the claimant's best interests. A lump sum advance for payment of debts may be in a claimant's best interests but the mere fact that the claimant has indebtedness is not sufficient grounds. Here, the Court was not satisfied a lump sum advance was in claimant's interest where his explanations regarding his indebtedness were not satisfactory and claimant appears simply unable or unwilling to manage his money. Claimant did not provide the Court with a credible accounting of income and expenses, nor a reasonable plan for the future. Where claimant specifically agreed that the prior advance would be recouped before he reached age 65, and claimant's life expectancy may be lower than the age 79 he claims, the Court will not order State Fund to delay or decrease recoupment of the prior advance. Note: this decision was affirmed by the Montana Supreme Court in Evans v. State Compensation Ins. Fund, No. 96-329 (1996), an unpublished, non-citeable opinion.

         Topics:

         Benefits: Lump Sums: Generally. In this old law case, guidance on lump sum conversion comes from Sullivan v. Aetna Life & Casualty, 271 Mont. 12, 894 P.2d 278 (1995), wherein the Supreme Court reiterated that biweekly benefits are the general rule, but a lump sum conversion may be done when in the claimant's best interests. A lump sum advance for payment of debts may be in a claimant's best interests but the mere fact that the claimant has indebtedness is not sufficient grounds. Here, claimant's explanations regarding his indebtedness were not satisfactory and he appears simply unable or unwilling to manage his money. Claimant did not provide the Court with a credible accounting of income and expenses, nor a reasonable plan for the future. Note: this decision was affirmed by the Montana Supreme Court in Evans v. State Compensation Ins. Fund, No. 96-329 (1996), an unpublished, non-citeable opinion.

         Benefits: Lump Sums: Best Interests. In this old law case, guidance on lump sum conversion comes from Sullivan v. Aetna Life & Casualty, 271 Mont. 12, 894 P.2d 278 (1995), wherein the Supreme Court reiterated that biweekly benefits are the general rule, but a lump sum conversion may be done when in the claimant's best interests. A lump sum advance for payment of debts may be in a claimant's best interests but the mere fact that the claimant has indebtedness is not sufficient grounds. Here, claimant's explanations regarding his indebtedness were not satisfactory and he appears simply unable or unwilling to manage his money. Claimant did not provide the Court with a credible accounting of income and expenses, nor a reasonable plan for the future. Note: this decision was affirmed by the Montana Supreme Court in Evans v. State Compensation Ins. Fund, No. 96-329 (1996), an unpublished, non-citeable opinion.

         Trial in this matter was held on May 8, 1996, in Billings, Montana. Petitioner, Joseph Evans (claimant), was present and was represented by Mr. Brad L. Arndorfer. Respondent, State Compensation Insurance Fund, was represented by Ms. Ann E. Clark. Exhibits 1 through 18 were admitted without objection. Exhibit 19 was admitted over the objection of Ms. Clark. The claimant and Samantha Heigh were sworn and testified

         Issues presented: Claimant seeks a lump sum conversion of his remaining entitlement to permanent total disability benefits. If his request is denied, he seeks an order directing the State Fund to recoup a prior lump sum advance from the distal end of his benefits.

         Having considered the Pre-trial Order, the testimony presented at trial, the demeanor and credibility of the witnesses, the depositions and exhibits, and the arguments of the parties, the Court makes the following:

         FINDINGS OF FACT

         1.Claimant is 47 years old. He has a GED.

         2.On June 25, 1980, claimant suffered an industrial injury to his right shoulder while working as a laborer for Roscoe Steel in Billings, Montana. (Ex. 1.)

         3.The State Fund insured Roscoe Steel and accepted liability for claimant's industrial injury. It has paid both medical and wage loss benefits. (Ex. 16.)

         4.Since his injury the claimant has had continued difficulty with his shoulder. In September 1993, the State Fund determined he was permanently totally disabled and converted his benefits to permanent total status.

         5.On February 17, 1993, claimant, through his attorney, requested a lump sum conversion of his remaining permanent total disability benefits. He specifically requested a lump sum advance of $85, 342.42, of which $65, 342.42 was intended for attorney fees and the remaining $20, 000.00 for a house purchase, and another $100, 000.00 for the purchase of an annuity which would pay him $176, 027.26 over his lifetime. (Ex. 17 at 7.) The request for an advance for money to buy a house was based on his assertion that he was then living in a Billings neighborhood which was riddled by crime and inhabited by drug dealers. (Id.) According to his attorney's letter, he had been involved in a shoot out with putative drug dealers. (Id.) By implication, his life was in danger.

         6.Thereafter, there was an exchange of letters between the State Fund and claimant's attorney, culminating in an October 20, 1993 letter from the State Fund finally rejecting any lump sum conversion of future benefits. (Ex. 15 at 31.) However, the letter, written by claims examiner Samantha Heigh, indicated that the State Fund would be willing to "offer a lump sum if Mr. Evans can show the need for financial assistance. That lump sum would then be recovered on a biweekly basis until Mr. Evans reaches age 65." (Id.; emphasis added.)

         7.Claimant's counsel wrote the State Fund on August 11, 1994, proposing a lump sum advance of $68, 750. The letter reiterated claimant's need to move from his current neighborhood and went on to say, in relevant part:

Mr. Evans has found a home in Bridger, Montana of the modest price of $55, 000. It is imperative that he move and it is certainly in his best interests.
I would ask for an advance of the $55, 000 plus $13, 750 attorney fees (25% of 55, 000). We were unable to settle this previously and I do not care to if Mr. Evans can get this money for the home.
The seller is not willing to hold the property for long and is insisting that she needs a decision by Tuesday, August 16, 1994 or she will list the property.
Could you please run this by whomever and call me as soon as ...

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