Montana Workers' Compensation Court Rejects Attempt to "Lump Out" Medical and Domiciliary Care Benefits - Jiminez v. Liberty Northwest, 2016 MTWCC 17

Posted by Dean Blackaby | Jan 04, 2017 | 0 Comments

Summary: 

Respondent moved to dismiss Petitioner's Petition for Hearing, wherein Petitioner asks this Court to award him a lump sum of his PTD, medical, and domiciliary care benefits, the total of which is approximately $3.5 million.  Respondent argued that the Workers' Compensation Act does not allow for a lump-sum conversion of medical and domiciliary care benefits on a claimant's demand, and Petitioner failed to adequately plead the statutory requirements for a lump-sum conversion of PTD benefits. 

 Held: 

The Workers' Compensation Act does not allow this Court to grant Petitioner a lump-sum conversion of his medical and domiciliary care benefits on his demand and those claims are dismissed.  However, Petitioner sufficiently pleaded his demand for a lump-sum conversion of his PTD benefits, which the Workers' Compensation Act allows under certain circumstances.  Respondent's Motion to Dismiss is therefore granted in part and denied in part.

The matter was before the Workers' Compensation Court on Liberty's Motion to Dismiss for failure to state a claim upon which relief could be granted.   In his Petition for hearing, Jimenez alleged that Liberty had accepted liability for his 2003 injury but the parties had had multiple disputes over the years.

In the fall of 2015, Jimenez sought to bring his case to a close by making a significant demand to lump out all of his workers' compensation benefits – indemnity, medical and domiciliary benefits.  Jimenez demanded that Liberty pay his PTD, medical, and domiciliary care benefits in a lump sum, pursuant to § 39-71-741, MCA (2003) and further argued that it was in his best interest to convert his benefits to a lump sum because Liberty has harmed him by treating him “arbitrarily and unfairly.”  Liberty denied Jimenez' demand for a lump-sum payment.

 In support of his demand, Jimenez calculated the present value of his PTD benefits to be $188,462.02, the present value of his medical benefits to be $465,366.48, and the present value of his domiciliary care benefits to be $2,930,428.64.  Thus, he sought a total award of approximately $3.5 million.

The Department of Labor and Industry entered the case as an intervenor. 

Jimenez, citing cases back to 1929, argued that the statute at issue, §39-71-741, MCA (2003) provided that all workers' compensation benefits could be converted to a lump sum on a claimant's demand by proving that it is in his “best interest” to receive a lump sum.

Liberty argued that this Court should dismiss Jimenez' claims to lump sum his medical and domiciliary care benefits because neither medical nor domiciliary care benefits could be converted to a lump sum on a claimant's demand since neither was specifically listed in §39-71-741(1)(a)-(d), MCA (2003).  Liberty was critical of Jimenez' legal authority noting that none of the cited case law held that a claimant could obtain a lump sum of medical or domiciliary care benefits on demand.

As part of his argument, Jimenez also argued that §39-71-741, MCA (2003), should not be interpreted as an exclusive list and contended that a claimant can obtain a lump sum of all workers' compensation benefits on his demand.  The foundation for this argument was four-fold. 

First, Jimenez pointed to the first sentence of § 39-71-741(1), MCA (2003) — which states, “benefits under this chapter may be converted in whole or in part into a lump sum” — and argued that all workers' compensation benefits can be converted to a lump sum on a claimant's demand.

Second, Jimenez pointed to §39-71-741(4), MCA (2003) — which states that this Court has jurisdiction over a dispute “regarding the conversion of biweekly payments into a lump sum” — and argued that all benefits can be lump summed on a claimant's demand, since § 39-71-740, MCA, states that “[a]ll payments of compensation” are to be paid biweekly.

Third, that Liberty's interpretation of § 39-71-741, MCA (2003), “would – as a practical matter – preclude settlement of all workers' compensation claims concerning medical and domiciliary care benefits, which is something that happens weekly, if not daily, in Montana.”

Finally, Jimenez seized upon the phrase in § 39-71-741(1)(d), MCA (2003) — which allows “lump sum payments agreed to by a claimant and an insurer” — and contended that if the statute did not permit him to obtain his medical and domiciliary care benefits in a lump sum without Liberty's agreement, then the statute contained an unconstitutional delegation of legislative authority under Ingraham v. Champion International.

In its analysis, the Workers' Compensation Court noted that the Act favors the periodic payments of benefits noting that the Department of Labor and Industry and/or the Court could may award a lump sum, in certain circumstances.  The Court rejected the first three arguments based upon principles of statutory construction and the plain language of the statute.

In disposing of the fourth argument, the Court noted that the Legislature cannot delegate to the insurer the absolute discretion to decide whether it will pay a lump sum for which the claimant is expressly eligible under the statute; however, the Legislature can give claimants and insurers the freedom to enter into agreements under which the insurer pays a lump sum.  In this case, however, there was no legal basis to provide a lump-sum conversion of his medical and domiciliary care.  The claimant's request for lump-sum conversion of his permanent total disability benefits was sufficient to survive the requirements for stating a claim upon which relief could be granted.

Attorneys for Jimenez:        Syd McKenna and Justin Starin, Missoula

Attorney for Liberty:            Leo Ward

Attorney for DLI:                   Quinlan O'Connor and Judy Bovington

About the Author

Dean Blackaby

Attorney representing individuals hurt at work; mediation of workers' compensation disputes; settlement consultant focusing on Medicare Secondary Payer compliance and Medicare set-asides.

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