                                No. 8 9 - 3 1 6
                IN THE SUPREME COURT OF THE STATE OF MONTANA
                                     1989




JOHN L . REINHARD,
                 Claimant and Appellant,
         -vs-
MISSOULA SHEET METAL, Employer,
       and
STATE COMPENSATION INSURANCE FUND,
                 Defendant and Respondent.




APPEAL FROM:     The Workers' Compensation Court, The ~ono&ble Timothy
                 Reardon, Judge presiding.

COUNSEL OF RECORD:
         For Appellant:
                 Richard R. Buley; Tipp, Frizzell      &   Ruley, Missoula,
                 Montana
         For Respondent :
                 Oliver H. Goe; Browning, Kaleczyc, Berry        &   Hoven,
                 Helena, Montana



                                    Submitted on Briefs:       Nov. 2, 1 9 8 9
                                        Decided:      Decenber 22, 1989
                                                  a
Filed:


                 -
                                    Clerk
Justice R. C. McDonough delivered the Opinion of the Court.

     Claimant, John L. Reinhard, appeals the May 31, 1989
judgment of the Workers' Compensation Court which denied him
a conversion of his biweekly workers' compensation benefits
to a lump sum payment. We affirm.
     The sole issue on appeal is:
     Whether the Workers' Compensation Court abused its
discretion when it denied John Reinhard's request to convert
his biweekly payments to a lump sum award.
     The claimant, Mr. Reinhard, is a 41 year old, married
man with two dependent children.      On March 14, 1985, he
suffered an on the job injury while employed at Missoula
Sheet Metal in Missoula, Montana. This injury rendered Mr.
Reinhard permanently and totally disabled.    He must spend
nineteen hours a day flat on his back and he can only walk
with the aid of two canes.
     In addition to his physical ailments, Mr. Reinhard also
suffers from rather substantial psychological problems.
Since the injury, he has suffered severe depression.    This
depression has at times become so intense, that Mr. Reinhard
has become suicidal. Examining physicians believe that the
cause of Mr. Reinhard's depression is multi-faceted.     They
maintain that his psychological condition has its roots in
the injury itself, chronic pain, loss of job, marital
difficulties and pre-injury psychological problems arising
from a chaotic social history.
     Despite his health problems, Mr. Reinhard has done a
remarkable job managing his finances. His assets, which are
estimated at approximately $200,000, include I.R.A.'s, an
investment portfolio, and several pieces of real property.
Mr. Reinhard's monthly income is approximately $4,000 and his
monthly livinq expenses usually equal about $1000-$1200. By
his own admission, his workers' compensation benefits are not
needed to meet the family budget or any other expenses.
     In an effort to ease his psychological and physical-
problems, Mr. Reinhard presented a request to the Division of
Workers' Compensation for a lump sum advance of his benefits.
The advance, which is approximately $350,000, would be used
for the purchase of an apartment complex and for the purchase
of a one level home.      The living area in Mr. Reinhard's
present home is split by two sets of stairs and is heated
primarily with wood.     Due to his injuries, Mr. Reinhard
cannot easily negotiate the stairs which run between the two
levels in his home. He is, therefore, relegated to just half
of the house much of the nineteen hours a day in which he
must lie flat. Also, due to his injury, Mr. Reinhard can no
longer split and saw the wood which is necessary to heat his
house.   He therefore desires to replace his home with one
that suits his disabled condition.
     The remainder of the lump sum would be used to purchase
an apartment complex.     Mr. Reinhard maintains that this
purchase would benefit him in a number of ways. First, the
investment would give him some direction in life and would
allow him to beneficially occupy his time by managing the
finances and income realized from the apartments.        This
direction, he maintains, would restore lost self-esteem which
has accompanied his job loss and loss of position as the
family bread winner.    Mr. Reinhard also asserts that his
continual problems with the Workers' Compensation Division
necessitate    his  separation from the      "comp system."
Apparently, the inadequacies and his perceived incompetence
of the Division has been a never ending source of frustration
to Mr. Reinhard.     It has become a major source of his
depression and anger. Finally, Mr. Reinhard maintains that
this investment will allow him to increase his yearly income
by almost $7,000.00. This increase, he argues, would serve
to better meet his physical and psychological needs.
     The Workers' Compensation Court, following trial, denied
Mr. Reinhard's request.   It found that he had not overcome
the presumption in favor of biweekly benefits, nor had he
adequately established that a lump sum payment would be in
his best interest. Following a denial of his request for a
rehearing, Mr. Reinhard appealed to this Court.

     The decision to award or deny a lump sum settlement will
not he interfered with on appeal unless there has been an
abuse of discretion. The Workers' Compensation Court will be
presumed correct and affirmed if supported by substantial
evidence.   It will be reversed only if the evidence clearly
preponderates against its findings.     Hock v. Lienco Cedar
Products (1981), 634 P.2d 1174, 38 St.Rep. 1598.
     Mr. Reinhard maintains that the lower court abused its
discretion by holding that there is a presumption in favor of
biweekly payments.   According to Reinhard, at the time the
accident occurred, there was no such presumption stated in
the workers' compensation statutes.    Statutes which are in
effect at the time of the accident control the outcome of any
case brought before the Workers' Compensation Court. Buckman
v. Montana Deaconess Hospital (1986), 224 Mont. 318, 730 P.2d
380. Therefore, Mr. Reinhard argues, and we agree, that the
law, as it existed on the date of his injury will control the
outcome of the case.
     There was no statutory presumption against lump sum
payments on March 14, 1985, which was the date of Mr.
Reinhard's accident. See $ 5 39-71-740 and 741, MCA (1983).
However, through case law, it has always been recognized that
biweekly payment of compensation is the favored means of
dispensation of benefits.      Lump sum conversion is the
exception.   Laukatis v. Sisters of Charity of Leavenworth,
 (1959), 135 Mont. 469, 342 P.2d 752. The rationale behind
this conclusion is that workers' compensation benefits are a
substitution of wages and therefore should be paid in the
same manner as wages, on a regular biweekly basis. In light
of this rationale, it has been held that settlements are only
granted where there is outstanding indebtedness, pressing
need or where the best interests of the claimant, his family
and the general public will be served. Willoughby v. General-
Accident Fire and Life (1980), 187 Mont. 253, 257, 609 P.2d
700, 702.
     The Workers' Compensation Court determined that a lump
sum payment would not be in Mr. Reinhard's best interest. It
based this determination on testimony from two doctors, Mr.
Reinhard's accountant, his stockbroker and from testimony of
Mr. Reinhard himself.
     Dr. Stratford, a psychiatrist who examined Mr. Reinhard,
testified that a lump sum payment would not by itself
alleviate Mr. Reinhard's problems with depression. Rather,
according to Dr. Stratford's testimony, Mr. Reinhard's
problems with the Workers' Compensation Division are not a
cause of his mental health problems, but, instead, are the
focus of his depression. He also expressed concern over Mr.
Reinhard's ability to successfully manage large sums of money
while he is in such a precarious mental state.
     Dr. Shea, Mr. Reinhard's treating clinical psychiatrist,
testified that a lump sum would probably hasten his recovery
from depression. However, he also stated that settlement of
the case either way would probably decrease the claimant's
depression and that continuation of biweekly benefits would
not necessarily increase it. Both Dr. Shea and Dr. Stratford
agreed that the most beneficial treatment for Mr. Reinhard is
conti.nued treatment with anti-depressant medication and
psychotherapy, and that a lump sum payment, by itself, would
at the most have a very minimal affect upon Mr. Reinhard.
     The lower court also determined, based upon testimony
from Mr. Reinhard's accountant, that the business proposal is
fraught with potential risks. In particular the court found
that the feasibility of the project was doubtful in light of
the depressed real estate market in Missoula. It also found
that Mr. Reinhard's health problems, would make it difficult
for him to work with his tenants and withstand the stress
which naturally accompanies apartment management.
     Finally, the court determined there was no "pressing
need" which would entitle Mr. Reinhard to a lump sum
conversion. The court pointed out that his monthly income of
$4,000.00 exceeded his living expenses by nearly $3,000.00 a
month. In addition, with a net worth of nearly $200,000.00,
including his present home which is worth approximately
$69,900.00, Mr. Reinhard has enough financial resources to
purchase a new home.     In short, the Workers' Compensation
Court found that there was no "outstanding indebtedness or
pressing need" which would necessitate a lump sum conversion.
     The lower court's findings of fact and conclusions of
law are fifteen pages long, reasoned and thought out.
Although its findings may be based upon conflicting evidence,
this Court's function on review is confined to determining
whether there is substantial evidence to support its
findings. Kuenning v. Big Sky of Montana (1988), 750 P.2d
1091, 45 St.Rep. 383. We find that the Workers' Compensation
Court's decision is supported by substantial evidence, is not
an abuse of discretion and its judgment is affirmed.
.We Concur:




         Justices
Justice John C. Sheehy, dissenting:


    The statute on lump-sum settlements as in existence at
the time of the injury to this employee read as follows:
     39-71-741.    Compromise Settlements and Lump-Sum
    payments-Division Approval Required.
    The biweekly payments provided for in this chapter
    may be converted, in whole or in part, into a
     lump-sum payment. Such conversion can only be made
     upon the written application of the injured worker
    or the worker's beneficiary, with the concurrence
    of the insurer, and shall rest in the discretion of
    the division, both as to the amount of such
     lump-sum payment and the advisability of such
    conversion.    The division is hereby vested with
     full power, authority and jurisdiction to allow and
    approve compromises of claims under this chapter.
    All settlements and compromises of compensation
    provided in this chapter are void without the
    approval of the division. Approval of the division
    must be in writing.     The division shall directly
    notify every claimant of any division order
    approving or denying a claimant's settlement or
    compromise of a claim.     A controversy between a
    claimant and an insurer regarding the conversion of
    biweekly payments into a lump-sum is considered a
    dispute for which the Workers' compensation Judge
    has jurisdiction to make a determination.
     Nothing in the foregoing statute precludes the lump-sum
settlement requested here by this employee, and the
strictures which the Workers' Compensation Court placed upon
the proposed lump-sum settlement are not based on any
stat-ute. They are not based on decided cases in this Co.urt
either. In Willoughby v. Arthur G. McKee and Company (1980),
187 Mont. 253, 257, 609 P.2d 700, this Court said:
    Lump-sum settlements are only granted where there
    is "outstanding indebtedness," "pressing need," or
    where "the best interests or the claimant, his
    family and the general public will be served. '
     The disjunctive "or" in the foregoing quotation shows
that the Workers' Compensation Court need not have considered
"pressing need," and the only question involved here is
whether the proposal would serve the best interests of the
claimant, his family and the general public.
     We have here a claimant of considerable business acumen.
He manages a $200,000 estate well enough to produce a monthly
income of $4,000. It is laughable that the business acumen
of this claimant is disparaged by the State Compensation
Insurance Fund, whose present cash flow problems are probably
the reason for the refusal of this 1.ump-sum proposal,
problems which in my judgment are the result of mismanagement
and bungling through the past 15 years.
     It seems in this case that the public would be well
served, as well as the claimant, by permitting him to take a
commutation of his future payments in a lump-sum, so that      the
claimant could use his business sense to better himself        and
his community through prudent economic investment.     He      has
demonstrated know-how, which is more than we can say of        his
opponents.
                                 <       J   Z   ~      -8-
                                                          ,
                                                          +
                                                     Justice    f
                                     {   /
