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Rausch v. State Compensation Insurance Fund9/5/2002
Submitted on Briefs: December 13, 2001
Appellants, Alexis Rausch (as conservator for Kevin Rausch), Charles Fisch, and Thomas Frost, each filed separate petitions in Workers' Compensation Court claiming entitlement to immediate payment of an impairment award based on their respective impairment ratings. Respondent, State Compensation Insurance Fund, denied immediate payment of the impairment awards, asserting that the benefit was not due until each claimant reached his retirement age. Appellants brought their claims as individuals and on behalf of others similarly situated, and also sought attorney fees, penalties, and common fund attorney fees. The Workers' Compensation Court consolidated the three cases and concluded that neither the 1991 nor 1997 Montana Workers' Compensation Acts (which applied to these claimants) provided a statutory basis for an impairment award to permanently totally disabled claimants. Claimants contended that if that conclusion was correct, their rights to equal protection and due process were violated. The Workers' Compensation Court held that the Montana Workers' Compensation Act, as interpreted by the Court in its previous order, did not violate either the equal protection or due process clauses of the Montana Constitution. Appellants appeal from the Workers' Compensation Court's Order and Decision Disposing of Non-Constitutional Issues, Order and Judgment Regarding Constitutional Challenge, and the Judgment Respecting Impairment Awards. We reverse the Workers' Compensation Court's orders which denied impairment awards to permanently totally disabled workers and denied attorney fees.
The issues presented on appeal are restated as follows:
1. Did the District Court err as a matter of law when it concluded, pursuant to the 1991 and 1997 versions of the Montana Workers' Compensation Act, that permanently totally disabled workers are not entitled to receive impairment awards?
2. Is an impairment award due to a permanently totally disabled claimant upon the receipt of his or her undisputed impairment rating or upon retirement?
3. Should an impairment award to a permanently totally disabled claimant be characterized as a total or partial disability benefit?
4. Are claimants' attorneys entitled to attorney fees pursuant to the common fund doctrine?
FACTUAL AND PROCEDURAL BACKGROUND
Kevin Rausch, Charles Fisch, and Thomas Frost were all determined to be permanently totally disabled as a result of work-related injuries. Kevin Rausch sustained a head and spinal cord injury on July 8, 1992, and is quadriplegic with brain damage. Charles Fisch sustained a spinal cord injury on July 9, 1998, and is an incomplete quadriplegic. Thomas Frost sustained a back injury on August 30, 1997, and has undergone a series of four back surgeries. The State Compensation Insurance Fund (State Fund) insured each claimant's employer and has accepted liability for each of the injuries.
Rausch, Fisch, and Frost currently receive permanent total disability benefits as a result of their work-related injuries, and are entitled to those benefits until their death or retirement age, whichever occurs first. The claimants began receiving permanent total disability benefits immediately upon termination of their temporary total disability benefits. None of the claimants have ever received permanent partial disability benefits.
Each claimant has reached maximum medical improvement from his respective injuries. On December 14, 1998, Kevin Rausch received an impairment rating equal to 96% of the whole person. On July 29, 1999, Charles Fisch received an impairment rating equal to
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