Submitted: January 16, 2002
AFFIRMED
10/19/04
DECISION AND JUDGMENT AFFIRMING DECISION
BELOW
MIKE
McCARTER JUDGE.
Summary:
Claimant was injured in 1984 while working for an uninsured
employer. She contacted the Uninsured Employers' Fund
(UEF) and was told the UEF was not paying benefits and that
she could pursue an action against her employer. In fact, the
UEF had ceased paying benefits in 1981, and did not commence
paying benefits until 1987 after the legislature amended
statutes requiring it to maintain "adequate reserves and
surpluses." Claimant waited until 1992 to file a claim
and now asserts that the UEF is equitably estopped from
interposing the one-year claim filing requirement, §
39-71-601(1), MCA, as a defense, and that it should have paid
a portion of benefits during the 1981-1987 time frame rather
than ceasing to pay any benefits. A hearing officer for the
Department rejected her claim and she requested judicial
review by the Workers' Compensation Court.
Held:
While the UEF's action cutting off all benefits is
questionable, the Court need not decide that issue since the
claimant has failed to prove that the UEF misrepresented any
fact and has therefore failed to establish even the first
element for estoppel.
Topics:
Limitations
Periods: Claim Filing: Estoppel. The first element
of an equitable estoppel is a misrepresentation of fact,
thus, where the representation is true there is no estoppel.
(Note: this decision was affirmed at Lako v.
ERD/UEF, 2004 MT 290.)
Limitations Periods: Claim Filing. The
one-year claim filing requirement, § 39-71-601(1), MCA
(1983-1993), applies to claims with the Uninsured
Employers' Fund since "all appropriate
provisions" of the Workers' Compensation Act apply
to UEF claims. § 39-71-505, MCA (1977-2001).
Constitutions, Statutes, Regulations and Rules:
Montana Code Annotated: § 39-71-601(1), MCA
(1983-1993). The one-year
claim filing requirement, § 39-71-601(1), MCA
(1983-1993), applies to claims with the Uninsured
Employers' Fund since "all appropriate
provisions" of the Workers' Compensation Act apply
to UEF claims. § 39-71-505, MCA (1977-2001).
¶1
This is an appeal of a decision of the Department of Labor
and Industry (Department) denying the claimant's request
for benefits from the Uninsured Employers' Fund (UEF).
Claimant, Rita Lako (Lako), was injured in 1984 while working
for an uninsured employer. At the time of her injury, the UEF
deemed itself insolvent and unable to pay benefits. In 1984,
it advised Lako that no UEF claims were being paid and told
her that she could pursue a private civil action against her
employer. Over the next eight years claimant did nothing to
pursue a claim with the UEF. Finally, on August 19, 1992, she
filed a written claim, which was denied by the UEF as
untimely. After a hearing, the Department affirmed the
UEF's determination that the claim was untimely. This
Court now affirms the Department's decision.
Statutory
and Factual Background
I. The
Uninsured Employers' Fund
¶2
The UEF was created in 1977[1] as a safety net for workers
injured while working for uninsured employers. It "is a
legislatively provided source from which to minimize the
hardships imposed when an injured worker is unable to get
workers' compensation benefits as a result of the
employer's failure to provide coverage." Thayer
v. Uninsured Employers' Fund, 297 Mont. 179, 184,
991 P.2d 447, 450 (1999).
¶3
Funded by penalties and reimbursement from uninsured
employers, who often are insolvent, the legislature
recognized that benefits payable by the UEF could outstrip
its ability to pay. It therefore provided for that
contingency, first by providing for an initial $150, 000
capitalization of the Fund before paying
benefits;[2] second, by requiring the UEF to maintain
"[p]roper surpluses and reserves";[3] and, third, by
providing for a proportionate reduction of benefits in the
event the sums maintained by the UEF are inadequate to pay
all claims.[4]
II.
Insolvency
¶4
In 1981 the administrator of the UEF determined that there
were inadequate funds on hand to pay all benefits and
"proportionately" reduced benefits by 100%, i.e.,
payment of all benefits ceased. (Findings of Fact;
Conclusions of Law; and Final Order (FFCL) at 5.) Thereafter,
the UEF continued to receive monies from penalties, however,
it still paid no benefits because, according to its
accounting, its projected liability for claims, which was
also growing, continued to exceed the accumulated funds on
hand. (Id. at 5-6.) According to a 1987 legislative
audit, by 1987 the funds on hand had grown to $874, 000 but
liability for claims had grown to $1.6 million. (Id.
at 6.)
¶5
In 1987 the legislature finally addressed the divergence
between UEF revenues and liabilities, repealing the surplus
and reserve requirement and directing the UEF to make
payments that it considers appropriate as funds become
available from time to time. The existing provision for
proportionate reduction of payments if UEF funds, §
39-71-510, MCA, was unaffected, as was a companion provision
in the same existing section which provided that
"reductions do not entitle claimants to retroactive
reimbursements in the future."[5] Payments of benefits by the
UEF resumed July 1, 1987. (Uncontested Fact 3.[6])
III.
History of Lako's Claim
¶6
On September 27, 1984, Lako was injured in the course and
scope of her employment. (FFCL, Finding 5.) Her employer -
Siversten Ranches/Robert Sivertsen - was uninsured at the
time. (FFCL, Finding 4.)
¶7
After learning of her employer's lack of insurance Lako
and her husband contacted the UEF. On October 4, 1984, they
"were informed by the UEF that no claims for UEF
benefits were being paid, and that Lako had a right to pursue
a private civil action against" the employer.
(Uncontested Fact 8.) Lako did nothing further to pursue UEF
benefits at that time.
¶8
Eight years passed, then on August 19, 1992, Lako filed a
written claim for compensation. (Uncontested Fact 9.) No
prior written claim had been filed and on October 1, 1992,
the UEF denied the claim since it had not been filed within
one year of the work-related injury. Untimeliness was the
sole basis articulated for the denial. (Uncontested Fact 10
and Department File - October 1, 1992 letter of Cheryl
Russell to Lako.)
¶9
On December 30, 1992, Lako filed a request for mediation.
(Department File.) However, since jurisdiction to review the
UEF's determination lay with the Department, the
Mediation Unit dismissed the request and referred the matter
to the Hearings Unit, which opened a contested case file on
January 22, 1993. After multiple continuances and seven
years, the case was finally submitted to the hearing officer
on ...