KEITH INGRAHAM, CLAIMANT AND PETITIONER, v. CHAMPION INTERNATIONAL, A SELF-INSURED PLAN I EMPLOYER, DEFENDANT AND RESPONDENT.
No. 89-159.
SUPREME COURT OF MONTANA
Submitted March 1, 1990. Decided March 23, 1990.
793 P.2d 769
Bradley J. Luck argued, Garlington, Lohn & Robinson, Missoula, James Scheier argued, Agency Legal Services, Helena, for defendant and respondent.
John Bothe, Bothe & Lauridsen, Columbia Falls, for amicus curiae.
Petitioner Keith Ingraham has filed his petition for declaratory
On April 3, 1989, this Court ordered respondents Champion International, the Division of Workers’ Compensation, and the Attorney General for the State of Montana to file written responses to the petition. Champion International has filed herein its brief and response, and the Attorney General has responded in brief in his own behalf and on behalf of the Division of Workers’ Compensation. We have in addition received an amicus brief from John H. Bothe, an attorney in Columbia Falls, Montana, appearing as a friend of the court in support of the petition for declaratory judgment.
Under the facts of this case, not disputed, Keith Ingraham is an employee of Champion International. Champion is enrolled under Plan I of the Montana Workers’ Compensation Act and is self-insured. Subsequent to December 18, 1987, Ingraham had reported that he had suffered an industrial injury on such date in the course and scope of his employment when a board struck him in the chest. Champion accepted liability for the injury and benefits were initiated. At the time briefs were filed herein, Ingraham continued to receive temporary total disability benefits on a bi-weekly basis. Champion claims that issues exist in the claim concerning the relationship of some of Ingraham‘s physical problems and the alleged disability from the industrial injury. Ingraham claims that though he is now receiving total temporary disability benefits, that he will probably have a permanent partial disability as defined in
Once standing is established, we determine whether there are necessary factors sufficient for this Court to accept original jurisdiction. Speaking in the context of an original action for declaratory judgment, this Court has stated:
“Once standing to bring the action is established, the question shifts to whether the action meets the necessary factors for this Court to accept original jurisdiction. This Court has found that an assumption of original jurisdiction is proper when: (1) constitutional issues of major state wide importance are involved; (2) the case involves pure legal questions of statutory and constitutional construction; and (3) urgency and emergency factors exist making the normal appeal process inadequate. (Citations omitted.) Moreover, this Court clearly
stated the Court has original jurisdiction to accept declaratory judgment proceedings ‘where the issues have impact of major importance on a statewide basis, or upon a major segment of the state, and where the purpose of the declaratory judgment proceedings will serve the office of a writ provided by law ...’ Grossman v. State, Depart. of Natural Resources (1984), 209 Mont. 427, 436, 682 P.2d 1319, 1324.”
The issues raised by the petitioner Ingraham, and addressed by the respondent and the Attorney General in their replies, as well as by amicus, show without a doubt that the requirements for the acceptance of original jurisdiction are fully present in this case. We therefore accept original jurisdiction.
I.
In 1987, the legislature embarked on a comprehensive revision of the laws relating to Workers’ Compensation culminating in the adoption of Chapter 464, Laws of Montana (1987), approved by the Governor on April 4, 1987. Included in the legislation were amendments to then-existing
“Compromise settlements, lump-sum payments, and lump-sum advance payments.
“(1)(a) Benefits may be converted in whole to a lump sum:
“(i) if a claimant and an insurer dispute the initial compensability of an injury; and
“(ii) if the claimant and insurer agree to a settlement.
“(b) The agreement is subject to division approval. The division may disapprove an agreement under this section only if there is not a reasonable dispute over compensability.
“(c) Upon approval, the agreement constitutes a compromise and release settlement and may not be reopened by the division or by any court.
“(d) The parties’ failure to reach an agreement is not a dispute over which a mediator or the workers’ compensation court has jurisdiction.
“(2)(a) If an insurer has accepted initial liability for an injury, permanent total and permanent partial wage supplement benefits may be converted in whole to a lump-sum payment.
“(b) The conversion may be made only upon agreement between a claimant and an insurer.
(c) The agreement is subject to division approval. The division may approve an agreement if: “(i) there is a reasonable dispute concerning the amount of the insurer‘s future liability or benefits; or
“(ii) the amount of the insurer‘s projected liability is reasonably certain and the settlement amount is not substantially less than the present value of the insurer‘s liability.
“(d) The parties’ failure to reach agreement is not a dispute over which a mediator or the workers’ compensation court has jurisdiction.
“(e) Upon approval, the agreement constitutes a compromise and release settlement and may not be reopened by the division or by any court.
“(3)(a) Permanent partial wage supplement benefits may be converted in part to a lump-sum advance.
“(b) The conversion may be made only upon agreement between a claimant and an insurer.
“(c) The agreement is subject to division approval. The division may approve an agreement if the parties demonstrate that the claimant has financial need that:
“(i) relates to the necessities of life or relates to an accumulation of debt incurred prior to injury; and
“(ii) arises subsequent to the date of injury or arises because of reduced income as a result of the injury.
“(d) The parties’ failure to reach an agreement is not a dispute over which a mediator or the workers’ compensation court has jurisdiction.
“ . . . ”
Ingraham has mounted a number of issues respecting the constitutionality of the foregoing subsections. Without reaching the merits of the other issues, we choose two as dispositive in this case. They are:
- Do the subsections contain unconstitutional delegations of legislative authority?
- Do the subsections violate the administration of justice clause of the Montana Constitution,
Art. II, sec. 16 (1972) ?
II.
We must be cognizant, as Champion contends in brief, that in analyzing constitutional challenges, this Court has certain boundaries surrounding the power of the Court to determine constitutionality. Among those is the principal of avoiding constitutional questions whenever possible, State ex rel. Hammond v. Hager (1972), 160 Mont. 391, 400, 503 P.2d 52, 57; and an act of the legislature will not be
Permanent partial disability benefits for injured workers are provided in
Ingraham claims that he is a likely candidate for permanent partial wage supplement benefits. His request for a lump-sum payment is therefore subject to subdivision (2) or (3) of
Before the 1987 amendment to
III.
A further reason that subdivision (2),
We are reminded by the respondents, and properly so, that the Workers’ Compensation Court is a creature of statute, without constitutional status, with its jurisdiction fixed by the legislature. State ex rel. Pac. Emp. Ins. v. Wkrs’ Comp. (1988), 230 Mont. 233, 234, 749 P.2d 522, 523. We are also reminded that a worker‘s right to compensation benefits is not fundamental, Cottrill v. Cottrill Sodding Service (1987), 299 Mont. 40, 42-43, 744 P.2d 895, 897, and that this Court has held that a person‘s right of access to the courts is likewise not considered fundamental for the purposes of constitutional review. Peterson v. Gr. Falls Sch. Dist. No. 1 & A (Mont. 1989), [237 Mont. 376,] 773 P.2d 316, 46 St.Rep. 880. The 1987 amendment goes far beyond fixing the limits of jurisdiction in the Workers’ Compensation Court. By taking away the jurisdiction of the Workers’ Compensation Court unless the insurer agreed to the lump-sum settlement, the legislature did not only deprive the Workers’ Compensation Court of jurisdiction, but it deprived this Court of its appellate power under
Thus, the amended section abrogates the principle that the judicial power cannot be taken away by legislative action. State ex rel. Bennett v. Bonner (1950), 123 Mont. 414, 214 P.2d 747. The legislation completely negates the state constitutional mandate that “courts of justice shall be open to every person, and speedy remedy be afforded to every injury of person, property, or character ...”
IV.
The distinction between legislative and judicial powers brings before us always the rule that the Supreme Court is not at liberty to amend statutes, State, Dept. of Hwys. v. Public Employees Craft Coun. (1974), 165 Mont. 349, 529 P.2d 785, and there is a constitutional prohibition against the exercise of legislative power by courts so that this Court may not alter statutes. State ex rel. Grant v. Eaton (1943), 114 Mont. 199, 133 P.2d 588.
However, the legislature provided in sec. 71 of Chapter 464, Laws of Montana (1987), which includes the legislation we are considering here, that if a part of the act is invalid, all valid parts that are severable from the invalid part remain in effect, and that if a part of the act is invalid in one or more of its applications, the part remains in effect in all valid applications that are severable from the invalid applications.
Where an enactment contains a severability clause, the presumption is that the valid portions would have been enacted without the invalid parts. State ex rel. City of Missoula v. Holmes (1935), 100 Mont. 256, 47 P.2d 624.
Applying the severability provisions of Chapter 464, Laws of Montana (1987), the effect of our decision leaves subsection (2) of
“(2)(a) If an insurer has accepted initial liability for an injury, permanent total and permanent partial wage supplement benefits may be converted in whole to a lump-sum payment.
“(b) [Invalid.]
“(c) The agreement is subject to department approval. The department may approve an agreement if:
“(i) there is a reasonable dispute concerning the amount of the insurer‘s future liability or benefits; or
“(ii) the amount of the insurer‘s projected liability is reasonably certain and the settlement amount is not substantially less than the present value of the insurer‘s liability.
“(d) [Invalid.]
“(e) Upon approval, the agreement constitutes a compromise and release settlement and may not be reopened by the department.”
It will be noted that the words “or by any court” are not included on the foregoing subdivision (e) of subsection 2 of
After deletion of the invalid parts, as required by the severability clause, a controversy between an insurer and a worker as to the propriety of a lump-sum settlement upon which they cannot agree, would constitute a dispute concerning benefits subject to a petition to the Workers’ Compensation judge for a determination after satisfying the dispute resolution requirements otherwise provided in the Workers’ Compensation provisions.
V.
Subsection (3) of
The same reasons for invalidity that apply to subsection (2) foregoing apply also to the provisions of subsection (3). There again it is provided that the conversion may only be made upon the agreement between a
“(3)(a) Permanent partial wage supplement benefits may be converted in part to a lump-sum advance.
“(b) [Invalid.]
“(c) The agreement is subject to department approval. The department may approve an agreement if the parties demonstrate that the claimant has financial need that:
“(i) relates to the necessities of life or relates to an accumulation of debt incurred prior to injury; and
“(ii) arises subsequent to the date of injury or arises because of reduced income as a result of the injury.
“(d) [Invalid.]”
VI.
While Ingraham is not directly concerned with the provisions of subsection (1) of
“(1)(a) Benefits may be converted in whole to a lump sum:
“(i) if a claimant and an insurer dispute the initial compensability of an injury; and
“(ii) [invalid.]
“(b) The agreement is subject to department approval. The department may disapprove an agreement under this section only if there is not a reasonable dispute over compensability.”
“(c) Upon approval, the agreement constitutes a compromise and release settlement and may not be reopened by the department.
“(d) [Invalid.]”
VII.
In Phelps v. Hillhaven Corp. (1988), 231 Mont. 245, 752 P.2d 737, we held that an injured worker‘s right to Workers’ Compensation
This opinion has no effect upon the remaining provisions of
Otherwise, the rulings and decisions made in this opinion and the effect of those rulings as set forth in this opinion shall be and constitute a declaratory judgment and this opinion shall be and constitute such a judgment without further action or other documents or instruments being filed.
CHIEF JUSTICE TURNAGE and JUSTICES SHEEHY, BARZ, HUNT, WEBER and McDONOUGH, concur.
JUSTICE SHEEHY, specially concurring:
I have signed the foregoing Opinion, which I agree with in total. I add these additional comments, because while they are not necessarily judicial in tone or approach, they record some vital reasons why the Opinion in this case is necessary.
In Montana, there are three ways to provide coverage for medical expenses and wage loss when workers are injured in their employment. The employer, if it is financially sound enough, may be a self-insurer under Plan I; or an employer may provide Workers’ Compensation coverage by contracting with a private insurer licensed to do business in the state, a method described as Plan II; or a third way to obtain such coverage is for the employer to apply for insurance to the State Insurance Fund, known as Plan III.
A student of government will discern an immediate problem with
In the decade of the ‘80s, the adversarial attitude of the State Insurance Fund to the worker permeated and carried over into its administration of the rest of the Workers’ Compensation Act. Moreover, the Fund was terribly mismanaged. The result was that many injured workers, in order to obtain official recognition of their rights, have had to hire lawyers to enforce their claims. The insurers, in turn, hired lawyers so that even for the simplest claims the whole business was awash in litigation.
Except for a few notable cases, self-insurers and private insurers seemed to have met the flood of claims without serious financial impairment. The State Insurance Fund, however, became hopelessly mired in financial difficulties. The managers of the State Insurance Fund and the agency found an easy target to blame: it was the lawyers and the courts that were causing all the trouble.
So it was that in 1987, state employees who were managers of the Division of Workers’ Compensation prodded the legislature into a comprehensive revamping of the Workers’ Compensation laws. S.B. 315 was introduced at the request of Governor Ted Schwinden. The bill became law as Ch. 464, Laws of Montana (1987). Its purpose as far as the courts were concerned is easily extracted from the opening paragraphs which declare public policy, especially this paragraph:
“(3) Montana‘s Workers’ Compensation and Occupational Disease Insurance systems are intended to be primarily self-administering. Claimants should be able to speedily obtain benefits, and employers should be able to provide coverage at reasonably constant rates. To meet these objectives, the system must be designed to minimize reliance upon lawyers and the courts to obtain benefits and interpret liabilities.”
Thus, in childlike simplicity did the legislature purport to remove from the courts their time-honored duty to interpret liabilities.
Amazingly, S.B. 315 cruised easily through the two houses of the legislature. In the Senate, whose 50 members were composed of 25 Democrats and 25 Republicans, that measure passed on third reading by a vote of 44-6. In the House of Representatives, which had 51
In the nearly three years since the adoption of the Act, the effect of the lump sum settlements provision is readily demonstrated. It might be said in favor of the self-insurers and insurers, that they are somewhat more amenable to lump sum settlements than is the counterpart State Insurance Fund. The following table will demonstrate:
Plan I and II (self-insurers and insurers):
| Total Settlements | Pre-1987 Claims | % of Total | Post-1987 Claims | % of Total |
| 632 | 535 | 85% | 97 | 15% |
Plan III (State Fund):
| Total Settlements | Pre-1987 Claims | % of Total | Post-1987 Claims | % of Total |
| 564 | 538 | 95% | 26 | 5% |
Some of the foregoing disparity with respect to settlements of pre-1987 claims compared to post-1987 claims may be explained by the fact that the post-1987 claims are relatively new and perhaps not yet ready for lump sum consideration. The three years since the Act was adopted, however, indicate that little progress was made toward any lump sum settlements of post-1987 claims. The cardinal reason undoubtedly is that before application for a lump sum settlement can be made, both the insurer and the worker must agree on the amount.
To some degree, the public policy declared in the 1987 legislation to eliminate lawyers and courts has been successful. A number of good lawyers have dropped out of Workers’ Compensation practice because of the stumbling blocks placed in the way of aiding injured workers
In the three years since the passage of the Act, the management has continued to frighten employers by threats of increased premiums. Hoping to cure a bad situation, the legislature in 1989 separated the State Insurance Fund from the administrative division of the Workers’ Compensation Act. The State Insurance Fund has been converted into the “State Compensation Mutual Insurance Fund.” It is now a “mutual insurance carrier.”