State v. Dist. Court of Ninth Judic

No. 81-12

I N THE SUPREME COURT OF THE STATE OF MONTANA

STATE O F MONTANA, ex r e l . , CROCKETT S. HARRY,

Petitioner,

D I S T R I C T COURT OF THE NINTH J U D I C I A L D I S R I C T O F THE STATE OF MONTANA, I N AND FOR THE COUNTY O F GLACIER, e t a l . ,

Respondents. O R I G I N A L PROCEEDING: C o u n s e l of R e c o r d :

For P e t i t i o n e r :

John P. M o o r e a r g u e d , C u t B a n k , M o n t a n a

For R e s p o n d e n t :

J a m e s C. N e l s o n argued, C o u n t y A t t o r n e y , C u t B a n k , Montana M a r k Murphy a r g u e d , A s s t . A t t y . G e n e r a l , H e l e n a , Montana

Submitted: A p r i l 20, 1981

Decided : 1AR/ 2 6 1981

Filed: MAY 2 6 1961

Mr. Justice Gene B. Daly delivered the Opinion of the Court. This is an original proceeding wherein the petitioner seeks a writ of prohibition or other appropriate relief. Petitioner requests the relief from this Court in an attempt to vacate and annul certain orders of the respondent, Glacier County District Court, made and entered on November 17, 1980, in the case of State v. Crockett S. Harry, District Court Cause No. DC 80-24. After a hearing on the petition, the Court issues the following opinion. In September 1979 petitioner Crockett S. Harry was injured in an industrial accident, entitling him to workers' compensation benefits. A lump sum settlement was eventually received from the State Workers' Compensation Division by petitioner on June 10, 1980. The proceeds of the settlement, amounting to $7,000, were deposited with the First National Bank in Cut Bank, Montana. The money has remained on deposit with the bank throughout this proceeding and has never been commingled with any other funds. On November 2, 1980, petitioner was arrested and charged with deliberate homicide. He appeared with court- appointed counsel for arraignment on November 5, 1980. Upon interviewing petitioner, the District Court learned of the $7,000 certificate of deposit and, as a result, found that petitioner was not indigent and could employ his own attorney. The court advised petitioner to retain private counsel and that, if he chose to keep his court-appointed attorneys, he would be required to defray the costs of their appointment . Petitioner, on November 17, 1980, again appeared with appointed counsel and advised the District Court that he was

unable to find an attorney who would take his case. The District Court at this time allowed for petitioner's continued representation by appointed counsel but with the proviso that he utilize the $7,000 certificate of deposit to reimburse Glacier County, Montana, for the fees and costs incurred in his defense. The court then issued an order directing the Cut Bank First National Bank not to cash the $7,000 certificate of deposit and ordering petitioner not to assign, hypothecate, pledge or in any manner liquidate the certificate without further order of the court. On December 15, 1980, petitioner filed a motion to quash. The grounds for the motion were: (1) the order was made without any notice or opportunity to be heard; and (2) the $7,000 workers' compensation settlement is totally protected from any attachments, garnishments, assignments or debts. The District Court denied the motion, and the petition for relief was filed with this Court. Petitioner now seeks to vacate and annul the District Court's order seeking the $7000 certificate of deposit to be used to reimburse Glacier County for the costs of his appointed counsel. The main thrust of petitioner's argument is that workers' compensation funds are exempt from being held liable in any manner for the debts of the recipient. Section 39-71-743, MCA, is pertinent in this regard and provides as follows: "Assignment or attachment of payments. No payments under this chapter [the Workers' Compensation Act] shall be assignable, subject to attachment or garnishment, or be held liable in any way for debts." This section has yet to be interpreted by this Court.

We now c o n c l u d e , however, that t h e provided exemption is absolute, allowing a blanket protection a g a i n s t claims of e v e r y k i n d , i n c l u d i n g t h e one a t i s s u e .

The underlying purpose and objective of workers' compensation legislation is to insure the injured worker that he will be compensated for disabilities caused by

industrial accidents which, when added to his remaining e a r n i n g a b i l i t y , w i l l e n a b l e him t o f u n c t i o n w i t h o u t b e i n g a burden t o o t h e r s . S e e Mahlum v . Broeder ( 1 9 6 6 ) , 1 4 7 Mont.

386, 412 P.2d 572; 1 Larson, T h e Law o f W o r k m e n ' s C o m p e n s a t i o n , B 2.50 a t 11 ( 1 9 7 8 ) .

I n a c c o r d a n c e w i t h t h i s o b j e c t i v e and t o a s s u r e i t s maximum benefit for the injured worker, the Montana

legislature has specifically provided that payment of a workers' c o m p e n s a t i o n award s h a l l b e exempt f r o m a l l f o r m s of seizures. If this exemption is to now b e liberally

construed i n favor of t h e worker, a s mandated by section 39-71-104, MCA, i t m u s t b e g i v e n e f f e c t a s w r i t t e n , and t h e

e x e m p t i o n m u s t be deemed c o m p l e t e . Respondent a r g u e s t h a t t h e exemption does n o t extend t o governmental e n t i t i e s s e e k i n g t o r e c o v e r p u b l i c monies

expended t o s u p p o r t t h e i n j u r e d worker. W e acknowledge t h a t

t h i s p o s i t i o n h a s b e e n u p h e l d i n o t h e r j u r i s d i c t i o n s on t h e r a t i o n a l e t h a t g o v e r n m e n t a l e n t i t i e s s h o u l d be g r a n t e d t h e s t a t u s of an "extraordinary" creditor so as to keep the i n j u r e d w o r k e r f r o m becoming a p u b l i c c h a r g e . See S t a t e v. Coburn ( I o w a 1 9 8 0 ) , 294 N.W.2d 5 7 ; McDougald v , N o r t o n ( D . C . Conn. 1 9 7 3 ) , 361 F.Supp. 1325. The c i t e d c a s e s , however, a r e not controlling, and w e r e j e c t t h e i r application. We h o l d t h a t t h e s t a t u t o r y e x e m p t i o n i s t o t a l as t o a n y and a l l

creditors, including a county governmental entity seeking to recover funds expended for a defendant's appointed counsel. A writ of prohibition is hereby granted, and the District Court's order seizing the proceeds of the petitioner's workers' compensation award is vacated.

We concur:

Chief Justice

Mr. Chief J u s t i c e Frank I. Haswell, s p e c i a l l y c o n c u r r i n g : I concur i n the r e s u l t .

I n my v i e w t h e o r d e r o f t h e D i s t r i c t C o u r t d i r e c t i n g t h e

F i r s t N a t i o n a l Bank n o t t o c a s h t h e $ 7 , 0 0 0 c e r t i f i c a t e of d e p o s i t and o r d e r i n g r e l a t o r n o t t o a s s i g n , h y p o t h e c a t e , p l e d g e o r l i q u i d a t e t h e c e r t i f i c a t e m u s t be v a c a t e d and s e t a s i d e . Relator

was d e n i e d p r o c e d u r a l due p r o c e s s by e n t r y o f t h i s o r d e r w i t h o u t n o t i c e and an o p p o r t u n i t y t o a p p e a r and c o n t e s t t h e o r d e r .

------------ Chief J u s t i c e