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Francetich v. State Compensation Mutual Insurance Fund3/10/1992
49 St.Rep. 222
Submitted November 5, 1991.
Claimant and appellant Wayne Francetich suffered an on-the-job injury on December 2, 1988. Respondent State Compensation Mutual Insurance Fund accepted liability and paid workers' compensation benefits to the claimant. The claimant also obtained a policy limits insurance settlement from the third party responsible for the accident. The State Fund attempted to exercise subrogation rights pursuant to § 39-71-414(6)(a), MCA. The claimant resisted the State Fund's attempt to subrogate, contending that the statute providing for subrogation in this instance is in direct violation of Article II, Section 16, of the Montana Constitution. We reverse.
We are presented with the following three issues for review:
1. Is § 39-71-414(6)(a), MCA, unconstitutional in that it directly contravenes the clear language of Article II, Section 16, of the Montana Constitution?
2. Does § 39-71-414(6)(a), MCA, violate constitutional guarantees of equal protection?
3. Does § 39-71-414(6)(a), MCA, violate the worker 's right to due process of law?
Because of our holding on issue one that § 39-71-414(6)(a), MCA, is unconstitutional, we need not address issues two and three. The determinative issue before this Court is whether § 39-71-414(6)(a), MCA, is unconstitutional in that it directly contravenes the clear language of Article II, Section 16, of the Montana Constitution.
Claimant petitioned for a hearing before the Department of Labor and Industry for a determination of the State Fund's subrogation interest. The parties submitted their dispute to an administrative hearing officer before the Department of Labor and Industry by way of the following stipulated uncontested facts, along with a motion for summary judgment.
1. On December 2, 1988, the claimant Wayne Francetich suffered an industrial injury while employed by an insured of the respondent State Fund.
2. The State Fund paid temporary total disability and other benefits to claimant.
3. Claimant accepted a policy limits settlement in the amount of $25,000 from the third-party tortfeasors responsible for the December 2, 1988, accident.
4. The State Fund contends that it has a 50 percent subrogation interest in the settlement proceeds from the claimant's third-party recovery and is entitled to subrogation in the amount of $10,865.14.
5. The State Fund demanded payment from claimant in the sum of $5,391.03, that amount being 50 percent of the benefits previously paid to claimant.
6. On April 6, 1990, the State Fund refunded to claimant the aforesaid $5,391.03 pursuant to the decision of this Court in Malek v. Henry's Safety Supply Company (1990), 242 Mont. 311, 790 P.2d 965.
7. The State Fund has demanded that it only be required to pay any future compensation or medical benefits to the claimant at 50 percent until the State Fund has reached their total entitlement of $10,879.61.
On September 26, 1990, the hearing examiner granted summary judgment for the respondent while correctly declining to address the constitutional questions on the grounds that administrative agencies lack the necessary judicial power to decide such issues. Jarussi v. Board of Trustees (1983), 204 Mont. 131, 135-36, 664 P.2d 316, 318. Claimant appealed this decision to the Workers' Compensation Court. Following a briefing of the constitutional issues by the parties, the Workers' Compensation Court on January 17, 1991, entered its order on appeal, affirming the administrative decision of the Department of Labor and Indus
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