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Valance v. State Compensation Insurance Fund

Court of Workers Compensation of Montana

March 10, 1998

JEREMY SHAUN VALANCE Petitioner
v.
STATE COMPENSATION INSURANCE FUND Respondent/Insurer for LOUIE D. O'BRIEN Employer.,

          Submitted: March 9, 1998

          JUDGMENT

          MIKE MCCARTER JUDGE

         Summary: In 1992, claimant and State Fund settled his claim for indemnity benefits, reserving medical benefits. Subsequently, there were numerous disputes between claimant and the insurer relating to the nature and extent of authorized medical care, the identity of authorized medical providers, and payment of medical expenses. Evidence from claimant's physicians and a psychologist indicated that claimant had become obsessed and paranoid concerning the workers' compensation delivery "system" and that this interfered with his health. Medical care providers, the claimant, and State Fund were in agreement for settlement of medical benefits and had negotiated an agreement whereby State Fund would pay claimant $50, 000 in a lump sum and purchase an annuity paying him $965 per month for ten years, with a clause that unpaid annuity amounts would revert to State Fund should claimant die before expiration of the ten years. The parties sought Court approval of the settlement so that the matter would be considered fully and finally resolved by all.

         Held: The WCC has wide discretion to approve a settlement on the basis suggested where the parties are in agreement and settlement is in claimant's best interests. Where medical authority speaks firmly that claimant must have final resolution of workers' compensation issues to achieve maximum recovery and health, an appropriate basis for settlement exists. The settlement is approved.

         Topics:

Settlements: Medical Benefits. Under its wide discretion to approve a settlement agreed to by the parties and in claimant's best interest, the WCC approves settlement of claimant's medical benefits where evidence indicates claimant and the insurer had numerous disputes relating to the nature and extent of authorized medical care. Medical evidence indicated claimant had become obsessed and paranoid regarding the workers' compensation delivery "system" and that this interfered with his health. Under the agreement, State Fund would pay claimant $50, 000 in a lump sum and purchase an annuity paying him $965 per month for ten years, with any unpaid annuity amounts reverting to State Fund should claimant die before expiration of the ten years. The settlement was approved because its terms were reasonable and medical authority had spoken firmly that claimant must have final resolution of workers' compensation issues to achieve maximum recovery and health.

         ¶1 The Court assumed jurisdiction of this cause under section 39-71-2905, MCA, and ordered an evidentiary hearing on the question of whether to approve a tentative resolution of the controversy between the parties. The evidentiary hearing came before the Court on March 6, 1998, at 11:00 a. m. Mr. Tom L. Lewis represented the petitioner. Ms. Susan C. Witte represented the State Compensation Insurance Fund (State Fund). Ms. Carol Gleed appeared on behalf of the Department of Labor and Industry (Department). Jeremy Shawn Valance, the petitioner, and Henry P. Worsech, Jr., Senior Adjuster for the State Fund, were sworn and testified.

         Relevant Facts

         ¶2 On September 26, 1989, while in the course and scope of his employment with Louie D. O'Brien in Libby, Lincoln County, Montana, the claimant injured his spine when he was on top of a load of logs chopping off limbs and slipped on wet logs falling on his tailbone.

         ¶3 The claimant settled his claim by compromise settlement in May 1992. By the settlement order, claimant reserved medical benefits under the Workers' Compensation Act. Subsequent to the settlement there were disputes between the claimant and the insurer relating to the nature and extent of authorized medical care, the identity of the medical professionals who were to provide medical services, and payment of medical expenses submitted to the insurer.

         ¶4 The mediation procedures set forth in the Workers' Compensation Act have been complied with by the parties. After mediation and extensive negotiations, the parties reached a tentative resolution of the controversy between the parties, whereby the insurer would pay the claimant $50, 000 in a lump sum and purchase an annuity paying him $965 per month for ten years. The parties are unwilling to consummate this compromise agreement without an Order of the Court based upon full disclosure of the relevant facts, so that there can be no question that this matter is finally resolved.

         ¶5 The claimant suffered injury to his spine as a result of his industrial accident. He has undergone lumbar laminectomy and cervical fusion. He is still under treatment for his injuries and has undergone extensive evaluations, which objectively document a basis for ongoing treatment including medication (Lortab elixir) for chronic pain, surgery to accommodate a problem swallowing food diagnosed as pharyngeal phase dysphasia with epiglottic dysfunction, surgery on his tailbone, and possible repeat lumbar surgery.

         ¶6 Confounding treatment of these objective medical problems is a lack of trust in the workers' compensation delivery "system" reinforced by ongoing disputes with the insurer to the point that the claimant became obsessive and paranoid concerning workers' compensation. This lack of trust is dysfunctional and interferes with his treatment. The claimant's primary treating physician and psychological counselor have also documented the fact that claimant must have a complete financial settlement with State Fund so that he can manage his life-long medical and psychological care on his own. Based upon the testimony and medical documentation reviewed, the lack of closure of claimant's workers' compensation dispute exacerbates his extreme obsessiveness about his injuries and pain. Medical care providers recommend a "fair settlement" so that the claimant can achieve a treatment plan and appropriate therapy.

         ¶7 Medical care providers, the claimant, and the State Fund are in agreement that the best course of action is to settle all aspects of his workers' compensation case, so that claimant will have the funds to secure medical care and treatment from physicians with whom he has full confidence, without any interference from workers' compensation. Unless this matter is put behind claimant, it appears that he will ...


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