BROEKER v GREAT FALLS COCA COLA
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NO. 95-221 IN THE SUPREMECOURT OF THE STATE OF MONTANA 1996 THOMASR. BROEKER, Petitioner, Appellant, and Cross-Respondent, v. GREAT FALLS COCA-COLA BOTTLING COMPANY, Employer, and STATE COMPENSATIONMUTUAL INSURANCE FUND, Defendant, APPEAL FROM: Respondent, and Cross-Appellant. Workers' Compensation Court of the State of Montana The Honorable Mike McCarter, Judge presiding. COUNSEL OF RECORD: For Appellant: Lawrence A. Anderson, Great Falls, Montana Attorney at Law, For Respondent: William 0. Bronson, & McCafferty, Great For Amicus American James, Gray, Falls, Montana Insurance Association: Jacqueline T. Lenmark, Keller, Reynolds, Drake, Johnson & Gillespie, Helena, Montana Submitted Filed: on Briefs: February Decided:~;:,: April . .,: 1, 1996 5, 1996 Justice Terry N. Trieweiler The petitioner, Workers' to reduce Court the of amount Insurance benefits based on He have security been date. and judgment and the in to and judgment in 1. that the State Broeker's workers' in its not social calculation compensation of benefits his an order of Broeker Both Broeker We affirm the Court. the social disability security compensation benefits the date on which he became eligible of his would be offset injury? 2 amount for social cost-ofby which be reduced? Court err when it benefit concluded security the could Compensation the date Fund. Court err when it include Did the Workers' than than in favor Compensation the should Court entered and judgment. Compensation workers' rather and that rather issue 2. that were include: Fund could increases disability were offset of the State the order Mutual adjustments injury, he disability security computation of the in which compensation Compensation favor Did the Workers' living date in Compensation social offset of the Workers' on appeal of Montana State the cost-of-living issue a petition which his benefits Fund appeal The issues the his of the Court cost-of-living The Workers' indexing of that against resolving and the State order rate indexed eligibility receipt included State his workers' alleged inappropriately social his the filed by which Fund was offsetting benefits. the opinion Thomas Broeker, Compensation sought delivered by which should concluded Broeker's be indexed security benefits, to FACTUAL BACKGROUND In 1980, repairman injury Thomas Broeker, a truck a ninth-grade education, with when a Coke machine and in the course Bottling Company, Insurance of fell his suffered on him. employment His with properly compensation claim law reported and the and has paid Broeker was insured and refrigeration an industrial injury Great continued his State by the arose Falls injury pursuant Fund accepted him benefits since Coca-Cola had worsened to perform his time, temporary total until June total disability disability. Broeker 1, 1992, May Disability 30, administrative the Social awarded total that Security status disability March held that 1984, able Fund began to pay him it continued to May 1989, the benefit reflected a basic for to pay permanent after to pay hearing, to August Benefits accrued was $651 per 23, 1984, an benefits. pursuant the payment which Security to 23, 1984. rate, 3 a of disability, While indexed Social he was entitled began on August to May 1989. rate injury, Fund has continued 1992, period retroactive initial his by August was converted applied in Broeker's Act, After his benefits. Broeker and law judge found which 1992, the State 1990, Benefits The judge when his for and he was no longer the State benefits, Since permanent On At that to the workers' however, the degree of his disability Compensation liability 1980. to work intermittently; job. State out of Fund. Broeker which driver plus to were from month, five cost-of-living increases that had gone into effect between December 1984 and December 1987. Following the State the Social Fund began compensation Security to payments take based Administration's an offset on his security benefits (1979). The amount of the offset of the social $74.91 security to State petitioned reception of benefit, $651.50, workers' federal and was based on the Fund's the Workers' offset social -702(2), MCA initial amount and amounted to offset calculation. should be based on a social of be able injury, to include He also rather Compensation based on his not for Broeker's §§ 39-71-701(2) disability should date from per week. Broeker the pursuant determination, adjustments claimed security than claim that that for the on which to reduce State inflation the State disability the date Court Fund in its Fund's indexed rate offset to his he became eligible benefits. ISSUE 1 Did the Workers' the State Fund could increases in We review determine 1995), Farm not whether they 902 P.2d 1014, 1016, (1993), 261 Mont. 256, the could correct. security amount concluded that cost-of-living by which Broeker's be reduced? Compensation are err when it social of benefits the Workers' Court include calculation compensation workers' to its Compensation Court's conclusions CNA Ins. Co s, v. Dunn of law (Mont. 52 St. Rep. 981, 982; Stordalenv.Ricci sFood 258, 862 P.2d 393, 4 394. The State offset, but disability benefit simply received since offset it on did the not miscalculate initial was entitled cost-of-living social to receive. increases, the date The offset initial Fund asserts statutes 186 Mont. of his or this that Court's it security did Broeker security not act decision in this Fund has not increases social its And while the State based upon any cost-of-living the State Therefore, that it Broeker an offset (198O)I based benefit included taken the Fund contends benefit. contrary to McClanathan v.Smith 56, 606 P.2d 507. statute applicable to this case provides: In cases where it is determined that periodic benefits granted by the Social Security Act, 42 U.S.C. 301 (1935), are payable because of the injury, the weekly benefits payable under this section are reduced, but not below zero, by an amount equal, as nearly as practical, to one-half the federal periodic benefits for such week. Sections 39-71-701(2) and -702(2), In McClanathan , we held apply only 42 U.S.C. pursuant at to the primary § 423, to 42 U.S.C. 512. subsequent increases of the initial Because not the State to intended cost-of-living McClanathan , 186 Mont. award, and therefore, in the initial pursuant to provided at 64, 606 P.2d increases made we did not discuss award. increases, including are governed Fund has the offset increases cost-of-living award, that amount specified concerned to the initial included Congress insurance § 415. McClanathan Any cost-of-living part and that MCA (1979). not taken those which by the Social offsets become a Security based upon Act. any cost-of-living living increases adjustments Security here the added are granted individual primary to amount benefit." Therefore, disability date), date Broeker's and the commencement benefit was $651.50 granted social date and security 1992. the cost-of- amount, and and including are to the added of time the to the entitlement (2) (A) (ii)-(iii). not apply for benefits his 1984 (his and was entitled to granted were on August between benefits that actually was May 1989 at which five 23, until period, a waiting recipients Social in § 415, benefits benefits included cost-ofthe insurance for did date into following regard which the determination primary for to built 42 U.S.C. § 415(i) eligible increases eligibility the Broeker subject cost-of-living to "without although he became May 1990, benefit eligible 42 U.S.C. award, those in any year becomes insurance that to initial are Pursuant is which the initial 5 415(i). increase increases year issue Administration's &e 42 U.S.C. living at since commenced. time his cost-of-living between 1984 1984 initial increases and 1988. These increases included a 3.5 percent increase on 12/84; a 3.1 percent increase on 12/85; a 1.3 percent increase on 12/86; a 4.2 percent increase on 12/87; and a 4.0 When determination which is adjustments. case we decided of now the A4cClanathan, primary that: increase the insurance applicable, 42 U.S.C. we concluded percent did § 415. on 12/88. statutory amount, not Therefore, formula unlike include when the for version cost-of-living we decided that The benefits to which appellant is entitled under 42 U.S.C. § 423 are disability benefits, not cost-ofliving benefits, and are defined as "equal to his primary insurance amount for such month" calculated as though he had attained age 62. It is evident that the provisions of 42 U.S.C. 5 424a(d) allowing the states to provide an offset contemplate only the benefits recoverable under 42 U.S.C. § 423, relating to the individual's primarv insurance benefits. Therefore, we hold that the state offset may not be used to reduce the benefits accruing to the appellantunderthe cost-of-living increases provided in 42 U.S.C. 5 415. 186 Mont. at 64, 606 P.2d at 511-12 Because the definition of primary McClanathan, changed to determine primary amount has since adjustments, cost-of-living the insurance insurance added). cost-of-living include whether (emphasis adjustments included be excluded from the offset primary insurance amount should also the change in definition the basic benefit for we must in IlOW the determination. Despite amount, prescribed increases by 42 are added. an increase in inflation. For increases in necessary. for U.S.C. exclusion the the disabled § 415(a) Any increase offset McClanathan, were given is still before any basic which reasons, calculations 186 Mont. persons to that cost-of-living, several of in inclusion is neither the amount cost-of-living amount is due to turn of is caused cost-of-living equitable at 64, 606 P.2d at 511. by the Colorado v. HartfordAccident andIndemnity Co. (Cola. Supreme Court 1984) , 680 P.2d 231. nor Reasons in Engelbrecht The court reasoned: Allowing increase an injured worker to keep his cost-of-living better protects the worker and gives him a more 7 by reliable source of income. In addition a cost-of-living increase does not result in a double award. The federal government has decided that it will maintain the buying power of social security payments, not that it will provide additional benefits for a particular injury. Because Colorado does not provide [workers' compensation1 benefits to keep pace with inflation, there is no double payment. 680 P.Zd Engelbrecht , Workers' provide to Compensation for keep Act, Like increases. in of the offset Act, award. offset does Montana did not allowing Broeker not Moreover, result in inclusion calculations statute, the injury, Therefore, increases or a double increases Colorado's at the time of Broeker's cost-of-living benefit of-living 233. cost-of-living the increased purpose at does of cost- not which we have described an serve the as follows: The legislative intent behind the workers' compensation statutes is to replace income to injured workers. The purpose behind the state offset statute is " over replacement" or duplication of to prevent disability pay. Watsonv.Seekins (1988), 234 Mont. As noted in Colorado, of his or her benefits to replace For reasons, initial rate against workers' to 5s 39-71-701(2) of the Workers' Compensation should that and -702(2), 8 all whether that social included be excluded disability Court allows 332. portion person of benefits. increases, compensation to keep that to inflation we conclude or awarded later, 763 P.2d 328, a claimant duplication cost-of-living disability pursuant allowing attributable income without these 309, 314-15, benefits MCA (1979). to this effect security in the when the offset is calculated The decision is affirmed ISSUE Did social the the Workers' security compensation Compensation disability benefits on which date the Broeker requires rate is when it the eligible workers' security to the date benefits, rather of offset statute the a social injury, rather those the security than benefits. offset disability the His statute is date on contention ambiguous is determined that periodic where it by the Social Security Act, 42 U.S.C. payable because of the injury, the weekly under this section are reduced, but not an amount equal, as nearly as practical, federal periodic benefits for such week. the the could of to the ultimate asks ambiguous, it so that See § 39-71-104, this the date to of week" MCA (1979). refers the (emphasis week," to Social that liberally to "the is claimant's disability; conclude be interpreted 9 such claimant's Court such (1979) "for entitlement should "for MCA phrase refer date claimant's claimant -702(Z), that the Broeker is and it injury; benefits. injury." his that claims because industrial the on to receive suggestion Broeker ambiguous of of 39-71-701(2) added). statute Broeker's that provides: Sections of concluded be indexed language based date In cases benefits granted 301 (1935), are benefits payable below zero, by to one-half the date social the that to on his should for an offset he became when it injury? of indexed based his err by which be offset eligible contends use which of Court benefit would he became than 2 or the Security since in week the favor of the In response held to this argument, the Workers' Compensation Court that: HOWeVer, the Court finds nothing ambiguous about the phrase. None of the proposed interpretations is correct. The provision is express and clear. It provides that "the weekly [workers' compensation] benefits" are to be reduced by "one-half of the federal periodic benefits for such week." It is plain from the words and context of the provision that "for such week" refers to the week in which the workers' compensation benefits are paid. The statute requires that the offset be based on actual social security benefits paid during the same week as the workers' compensation benefits are paid. (Alteration in original.) We agree. effect at Furthermore, the time of as stated, the their face and must Fund (1993), 260 construction words the Broeker's of the applicable statute 279, to of injuries be applied Mont. rule liberal is are 285, 860 ambiguous inapplicable plain as written. construction in because, and unambiguous on Love11v. state camp. Mut. Ins. P.2d statutes 95, 99. do not Rules apply to of this statute. Therefore, was correct workers' social we conclude when compensation security he became For Workers' it these Workers' the amount benefits to reasons Compensation the that held disability eligible that should benefit receive those we affirm Court. Compensation by be offset as indexed which is to the Broeker's based date Court on the on which benefits. the order and judgment of the we concur: Chief i Justice
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