Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Stavenjord v. Montana State Fund

Court of Workers Compensation of Montana

August 27, 2004

DEBRA STAVENJORD Petitioner
v.
MONTANA STATE FUND Respondent/Insurer.

          Submitted: July 14, 2004

         Appealed to Supreme Court 09/21/04 Reversed and Remanded at 2006 MT 257

          DECISION ON COMMON FUND RETROACTIVITY

          MIKE McCARTER JUDGE

         Summary: The claimant urges that the decision in this case - Stavenjord v. State Compensation Ins. Fund, 2001 MTWCC 25, aff'd, 2003 MT 67, 314 Mont. 466, 67 P.3d 229 - applies retroactively and seeks common fund attorney fees.

         Held: Stavenjord v. State Compensation Ins. Fund, 2001 MTWCC 25, aff'd, 2003 MT 67, 314 Mont. 466, 67 P.3d 229, is retroactive but only to June 3, 1999. A common fund exists with respect to claimants reaching maximum medical improvement after June 3, 1999, and the claimant is entitled to common fund attorney fees with respect to post-June 3, 1999 Stavenjord entitlements.

         Topics:

Pleading: Attorney Fees. The claimant need not plead the request for common fund fees in the original petition.
Pleading: Class Action. A request for class certification must be made in the case-in-chief. A request made after the merits of the case are adjudicated is too late and will be refused.
Courts: Retroactivity of Decisions. The void ab initio doctrine does not make the decision in Stavenjord v. State Compensation Ins. Fund, 2001 MTWCC 25, aff'd, 2003 MT 67, 314 Mont. 466, 67 P.3d 229, retroactive. The statute declared unconstitutional in Stavenjord is unconstitutional only as applied, not on its face.
Courts: Retroactivity of Decisions. As recently determined in Schmill v. Liberty Northwest Ins. Corp., 2004 MTWCC 47, Montana decisions concerning retroactivity of judicial decisions are in conflict; however, the latest decision available to the Workers' Compensation Court indicates that Montana follows the three-part test laid out in Chevron Oil Co. v. Huson, 404 U.S. 97 (1971), rather than the per se rule of Harper v. Virginia Dept. of Taxation, 509 U.S. 86 (1993).
Courts: Retroactivity of Decisions. If any one of the three Chevron factors preponderates against retroactive application, a decision applies prospectively only. Poppleton v. Rollins, 226 Mont. 267, 271, 735 P.2d 286, 289 (1987).
Courts: Retroactivity of Decisions. The equity factor under Chevron Oil Co. v. Huson, 404 U.S. 97 (1971), preponderates in favor of retroactive application of Stavenjord v. State Compensation Ins. Fund, 2001 MTWCC 25, aff'd, 2003 MT 67, 314 Mont. 466, 67 P.3d 229, back to June 3, 1999, which is the date on which Henry v. State Compensation Ins. Fund, 1999 MT 126, 294 Mont. 449, 982 P.2d 456 was decided. But in light of the failure of any claimant to prosecute a constitutional challenge to the 1987 occupational disease act for nearly a decade, and the administrative hardship and expense of going back seventeen years to recompute benefits due claimants, the factor preponderates against retroactive application prior to June 3, 1999. Accordingly, Stavenjord applies retroactively only to June 3, 1999.
Attorney Fees: Common Fund. A common fund is created where all of the following three factors are satisfied: (1) The decision in the case-in-chief must "create, reserve, increase, or preserve a common fund;" (2) the party bringing the action incurred legal fees in establishing the common fund; and (3) ascertainable, non-participating beneficiaries are benefitted.
Attorney Fees: Common Fund. For the common fund to apply, it is not enough that the claimant establishes a general principal of law applicable to other claimants; she must show that the litigation entitles similarly situated, identifiable claimants to specific monetary benefits.
Attorney Fees: Common Fund. A common fund is created where the precedent established in the case-in-chief entitles individual, identifiable claimants to additional benefits and the additional benefits can be calculated pursuant statutorily mandated formulas.
Attorney Fees: Common Fund. A common fund was created by Stavenjord v. State Compensation Ins. Fund, 2001 MTWCC 25, aff'd, 2003 MT 67, 314 Mont. 466, 67 P.3d 229, but only with respect to those claimants reaching maximum medical improvement after June 3, 1999 and who are entitled to additional benefits on account of the Stavenjord decision. Since claimant incurred legal fees in establishing that entitlement, her attorney is entitled to common fund attorney fees.
Attorney Fees: Common Fund. The common fund doctrine extends only to those claimants who are insured by the respondent in this case.

         ¶1 In my original decision in this case - Stavenjord v. State Compensation Ins. Fund, 2001 MTWCC 25 - I held that claimants suffering from occupational diseases after June 30, 1987, are entitled to the same permanent partial disability (PPD) benefits as workers under the Montana Workers' Compensation Act (WCA) if the latter benefits are more favorable than those available under section 39-72-405, MCA. The Supreme Court affirmed that decision in Stavenjord v. State Compensation Ins. Fund, 2003 MT 67, 314 Mont. 466, 67 P.3d 229, and remanded the matter for further proceedings.

         ¶2 Upon remand, the additional benefits due the claimant were paid. The only remaining issues involve a request for common fund attorney fees. Respondent, Montana State Fund (State Fund), opposes the request, urging that it is belated and that in any event there is no common fund because the Stavenjord decision is not retroactive. The issues have been more particularly framed as follows:

¶2a Does the failure of the claimant to request common fund fees or class certification in the pre-remand proceedings in this case bar her from now seeking common fund fees or requesting class status?
¶2b Does the prior decision in this case apply retroactively?
¶2c Did the prior decision in this case create a common fund and entitle claimant's attorney to common fund fees from benefitted claimants?
¶2d If there is a common fund, is it limited to claimants insured by the respondent insurer or does it extend to all claimants irrespective of which insurer is responsible for their benefits?
I. Failure to Earlier Request Common Fund Fees or Class Certification

         ¶3 The State Fund urges that the claimant cannot seek common fund fees or class certification because she failed to request either prior to this Court's Stavenjord decision. I have previously held it unnecessary to plead the common fund doctrine in the main case, Flynn v. State Compensation Ins. Fund, 2003 MTWCC 55, and reaffirm that determination here. On the other hand, I recently found that a request for class action is untimely where made after the main action has been fully adjudicated and judgment entered. Mathews v. Liberty Northwest Ins. Corp., 2004 MTWCC 55. I stand by that decision as well. I therefore conclude that Stavenjord's common fund request is timely but that any class action request is not.

         II. Retroactivity

         ¶4 The retroactivity issue is tied to the claimant's request for common fund attorney fees. If Stavenjord is not retroactive, then claimants reaching maximum medical improvement prior to the date of the decision[1] are not entitled to any additional benefits and no common fund exists.

         A. Ab Initio Argument

         ¶5 The claimant initially argues that Stavenjord is retroactive because section 39-72-405, MCA (1987-present), is void ab initio. Void ab initio means that the statute is "null from the very beginning." Black's Law Dictionary (5th Ed.) The rule has been applied to unconstitutional statutes.

         ¶6 The void ab initio rule regarding unconstitutional statutes is summarized in American Jurisprudence:

[A]n unconstitutional statute, whether federal or state, though having the form and name of the law, is in reality no law, but is wholly void, and ineffective for any purpose. Since unconstitutionality dates from the time of its enactment, and not merely from the date of the decision so branding it, an unconstitutional law, in legal contemplation, is as inoperative as if it had never been passed and never existed, that is, it is void ab initio.

16 Am. Jur. 2d, § 203(footnotes omitted). Montana decisions, e.g., Brockie v. Omo Construction, Inc., 268 Mont. 519, 525, 887 P.2d 167, 171 (1994); Ex parte Anderson, 125 Mont. 331, 238 P.2d 910 (1951); Sadler v. Connolly, 175 Mont. 484, 489, 575 P.2d 51, 54 (1978); Trusty v. Consolidated Freightways, 210 Mont. 148, 151-52, 681 P.2d 1085, 1087-88 (1984), have invoked and applied the rule.

         ¶7 The void ab initio rule applies to statutes which are unconstitutional on their face and which therefore have no effect whatsoever. For example, in Ex parte Anderson, the Supreme Court held that a criminal statute, unconstitutional on its face, was "void, and is as no law," thus it created no crime. 125 Mont. at 336-37, 238 P.2d at 913. In Sadler, the Court held that a freeholder eligibility requirement for city office was facially unconstitutional and therefore void. In Trusty, a workers' compensation case, the Court held that a 100% social security offset provision was unconstitutional and unenforceable.

         ¶8 The statute at issue here - section 39-72-405, MCA, - is void only when applied to particular facts. In its various forms since 1987, [2] section 39-72-405, MCA, has limited permanent disability benefits for conditions less than totally disabling to $10, 000. Under all post-1985 versions of section 39-72-405, MCA, payment of benefits is premised on wage loss. In Theda Bouldin v. Liberty Northwest Ins. Corp., 1997 MTWCC 68, I held that the obvious purpose of section 39-72-405, MCA (1993), "is to provide some sort of compensation for claimants who experience a partial wage loss as a result of their occupational diseases." Id. at 7. I noted that the section does not provide any time limit for determining wage loss, but I found the 350-week PPD limit prescribed in the WCA "helpful" in determining whether a $10, 000 award was appropriate. Id. at 8. Based on a weekly wage loss of approximately $39 a week, and applying the two-third's formula for determining wage-loss benefits under section 39-71-703, MCA, I found that Bouldin would reach the $10, 000 level in approximately 383 weeks. I then awarded her the full $10, 000.

         ¶9 In retrospect, my logic concerning the time in which Bouldin would have been entitled to the $10, 000 under section 39-71-703, MCA, was flawed. Under section 39-71-703, MCA (1993), the rate of PPD compensation was two-thirds of Bouldin's average weekly wage, up to a maximum of one half of the state's average weekly wage. Using the state's average weekly wage, her PPD rate was $174.50. Since she suffered a wage loss less than $2.00, under section 39-71-703, MCA (1993), she would have been entitled to 35 weeks of benefits at $174.50, or $6, 107.50. If the PPD rate under section 39-71-703, MCA, had applied, the $10, 000 mark would have been reached in 57.3 weeks. In any event, the period of wage loss under section 39-72-405, MCA, is unlimited.

         ¶10 Under Stavenjord, Bouldin would be entitled to seek benefits under section 39-71-703, MCA (1993), which provided:

39-71-703. Compensation for permanent partial disability. (1) If an injured worker suffers a permanent partial disability and is no longer entitled to temporary total or permanent total disability benefits, the worker is entitled to a permanent partial disability award.
(2) The permanent partial disability award must be arrived at by multiplying the percentage arrived at through the calculation provided in subsection (3) by 350 weeks.
(3) An award granted an injured worker may not exceed a permanent partial disability rating of 100%. The criteria for the rating of disability must be calculated using the medical impairment rating as determined by the latest edition of the American [M]edical [A]ssociation Guides to the Evaluation of Permanent Impairment. The percentage to be used in subsection (2) must be determined by adding the following applicable percentages to the impairment rating:
(a) if the claimant is 30 years of age or younger at the time of injury, 0%; if the claimant is over 30 years of age but under 56 years of age at the time of injury, 2%; and if the claimant is 56 ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.