Missouri: Court Declines to Compel Payment of Fund Award

Missouri: Court Declines to Compel Payment of Fund Award

An injured worker with an unpaid award of permanent total benefits could not compel the Fund to fully pay the award by a writ of mandamus, according to the court of appeals. Skirvin v Treasurer of the State of Mo., 2013 Mo App. Lexis 84 (Jan 22, 2013)

The court of appeals vacated a writ of mandamus against the State Treasurer ordering payment of an award of permanent and total disability with accrued benefits of $124,000, and transferred the case to the Supreme Court. The Circuit Court of Cole County on June 21, 2012 entering a motion ordering a writ of mandamus to compel the Treasurer to pay a PTD award issued in May 2011. It rejected the Treasurer’s motion to join about 200 employees with PTD awards against the Fund, also unpaid since March 2011, to allow the court to determine who should have priority regarding any outstanding liabilities of more than 21 million dollars. Claimant argued since he was first in line he should be paid first.

The Fund has the statutory duty to sacredly to safeguard and preserve all funds. In March 2011 the Fund stopped paying new PTD awards and accrued unpaid obligations of about $2.5 million a month.

The court decided whether the Treasurer and the Director can be compelled by mandamus to pay permanent total disability awards on a first-come/first served basis where SIF is admittedly unable to pay all present and future permanent total disability awards.

The court found that mandamus was an inappropriate remedy unless claimant established the Fund was insolvent and had the means to replenish its account to meet its obligations, relying upon, State ex rel. Sturdivant Bank v. Little River Drainage Dist., 334 Mo. 753, 68 S.W.2d 671 (Mo. banc 1934) and State ex rel. Drainage Dist. No. 8 of Pemsicot County v. Duncan, 334 Mo. 733, 68 S.W.2d 679 (Mo. banc 1934). The treasurer could not replenish the Fund to generate revenues to pay the obligations based on 3% surcharge caps in 2005. The dissent argued the state was the real obligor and had the authority to replenish the fund as the state was not insolvent.

The court indicates mandamus may not have been appropriate either if claimant had requested a ratable payment and that solution would have required joinder of other parties.

The opinions decries the inequity to deprive employees to their full compensation. The situation is described as untenable and an embarrassment which requires a legislative remedy. “For reasons not explained, the General Assembly abandoned its commitment to sufficient SIF funding in 2005.” The language in the dissent is revealing: “Those administering the special fund must lie awake at night plotting ….” The court contains a detailed history of the Fund since 1951, discussions of mandamus, and citation to the Federalist Papers and the limits of judicial power.

In the original decision, 2011 Mo WCLR Lexis 96, the Commission modified an award of permanent partial to permanent total for a 60-year old electrician who treated conservatively for his neck, back and shoulder and then settled his case with the employer.

Source: Martin Klug, Huck, Howe & Tobin. Read Martin Klug's Mo. Workers' Comp Alerts.

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