SSM Health Care System v. Bartel

914 S.W.2d 8, 1995 Mo. App. LEXIS 1869, 1995 WL 673063
CourtMissouri Court of Appeals
DecidedNovember 14, 1995
DocketNo. 67501
StatusPublished
Cited by4 cases

This text of 914 S.W.2d 8 (SSM Health Care System v. Bartel) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
SSM Health Care System v. Bartel, 914 S.W.2d 8, 1995 Mo. App. LEXIS 1869, 1995 WL 673063 (Mo. Ct. App. 1995).

Opinion

DOWD, Judge.

SSM Health Care System d/b/a St. Mary’s Health Care Center (SSM) appeals from the trial court’s order dismissing, with prejudice, SSM’s cause of action to “Set Aside Fraudulent Conveyance”. We reverse and remand.

Peggy Ann Bartel and K-Mart Corporation (K-Mart) reached a settlement agreement concerning a November 7, 1980, work-related injury suffered by Bartel while she was employed by K-Mart. The settlement set out K-Mart had previously paid $16,-862.23 to Bartel in compensation and $56,-796.27 for Bartel’s medical expenses. The settlement required K-Mart to make an additional $40,000 lump sum payment for compensation. Bartel’s attorney was directly paid $17,025.20 of this amount for attorney fees and expenses. The remaining $22,-974.80 was payable to the Missouri Family Trust1 for the creation of an irrevocable trust with Bartel as the beneficiary. The stated purpose for making payment in this manner was to “avoid the claims of creditors and not effect past, present and/or future social security or other government support benefits for which Peggy Ann Bartel would otherwise qualify.” On November 19, 1992, the Division of Workers’ Compensation approved the settlement.

On December 1, 1992, SSM received a judgment against Bartel for the sum of $55,-285.23 plus costs for unpaid medical services rendered in treatment of the injuries which gave rise to Bartel’s workers’ compensation action against K-Mart. Although the settlement of the workers’ compensation action had been approved in November, the record shows execution on the judgment was stayed the lesser of sixty days or the conclusion of the workers’ compensation action.

SSM subsequently discovered the existence of Bartel and K-Mart’s settlement and its provisions concerning the manner of payment. On May 11, 1993, SSM filed a “Petition to Set Aside Fraudulent Conveyance”, naming Bartel, the Missouri Family Trust Board of Trustees, and Rose Marie Sept (a co-trustee of the trust agreement) as defendants. In its petition, SSM asserted that payment to and receipt by Missouri Family Trust Board of Trustees was void because the transaction failed to comply with the requirements of § 402.199(5) and § 402.205(1), RSMo 1994, of the statutes governing the Missouri Family Trust Fund. SSM additionally asserted the transaction was contrary to § 428.024 and § 428.029, RSMo 1994, of the Missouri Uniform Fraudulent Transfer Act. SSM asked, inter alia, for an order of execution against the $22,-974.80 held by Missouri Family Trust Board of Trustees.

Bartel and Sept filed a motion to dismiss citing § 287.260, RSMo, of the Missouri Workers’ Compensation Act. The trial court sustained this motion and dismissed SSM’s cause with prejudice and assessed costs against SSM.

SSM appeals asserting the trial court erred in dismissing its cause because, inter alia, § 287.260.1 does not exempt the benefits paid to Bartel from execution.2 [10]*10SSM argues § 287.260.1 protects workers’ compensation benefits only prior to their payment to the claimant. In reviewing a circuit court’s dismissal of a petition, we determine whether the facts pleaded and all reasonable inferences therefrom state any ground for relief. Sullivan v. Carlisle, 851 S.W.2d 510, 512 (Mo. banc 1993). “A petition will not be dismissed for failure to state a claim if it asserts any set of faets which, if proved, would entitle the plaintiff to relief.” Id,3

Section 287.260.1 reads:

1. The compensation payable under this chapter, whether or not it has been awarded or is due, shall not be assignable, shall be exempt from attachment, garnishment, and execution, shall not be subject to setoff or counterclaim, or be in any way liable for any debt and in case of insolvency of an employer or insurer, or the levy of an attachment or an execution against an employer or insurer shall be entitled to the same preference and priority as claims for wages, without limit as to time or amount, except that if written notice is given to the division or the commission of the nature and extent thereof, the division or the commission may allow as lien on the compensation, reasonable attorney’s fees for services in connection with the proceedings for compensation if the services are found to be necessary and may order the amount thereof paid to the attorney in a lump sum or in installments....

To resolve whether the protection of the § 287.260.1 exemption remains with an award even after actual payment to the claimant, we must focus on the phrase defining the exempt benefits: “The compensation payable under this chapter, whether or not it has been awarded or is due,_” (Emphasis added). In Duzan v. Cantley, 227 Mo. App. 670, 55 S.W.2d 711 (1932), the Court of Appeals was similarly faced with determining whether an exemption contained in the World War Veterans’ Act of Congress of 1924, 38 U.S.C.A. § 454, protected benefits even after paid to the beneficiary. As here, the defining term of the exemption was the word “payable”:

“[funds] payable under Parts II, III, and IV, respectively, shall not be assignable; shall not be subject to the claims of creditors of any person to whom an award is made; * * * and shall be exempt from all taxa-tion_” (Emphasis in original). Duzan 55 S.W.2d at 712 (quoting 38 U.S.C.A. § 454, p. 217). The Court of Appeals held:

This contention is on the theory that the purpose and intent of the legislation in behalf of veterans is to protect the money from all claims ... not only until it comes into the hands of the beneficiary, but also until the latter has himself spent it. We think this is not the correct construction or interpretation to be placed thereon. In our view, funds thus arising are not thus protected after they have once come into the hands of the beneficiary. They have then become his absolute property, and having once come into his hands are no longer an object of solicitude or care on the part of the government. The latter is careful to protect the fund until the beneficiary receives it, but no further. This seems to be clear from the use and subsequent reiteration of the word “payable.” So long as a fund is “payable” to a person it has not reached his hands, but when it has, it can no longer be said to be payable to him_ (Emphasis in original).

Id.

We are similarly bound by the clear meaning of the word “payable,” and hold the § 287.260.1 exemption does not protect Missouri workers’ compensation benefits once paid to the claimant. This interpretation is supported by other language in the statute. The statute clarifies that “compensation payable” includes funds “whether or not it has [11]*11been awarded or is due.... ” Both these clarifying terms, “awarded” and “due,” refer to the benefit in its prepayment form. The statute does not include any terms indicative of funds once paid to the claimant. Compare Federal Social Security Law, 42 U.S.C.A. § 407 (exempting social securities benefits “paid or payable”). Furthermore, § 287.260.1 describes the protection afforded “compensation payable” in the case of employer/insurer insolvency or levy or attachment against an employer/insurer. These provisions would be necessary only if “compensation payable” referred to prepayment funds.

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Bluebook (online)
914 S.W.2d 8, 1995 Mo. App. LEXIS 1869, 1995 WL 673063, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ssm-health-care-system-v-bartel-moctapp-1995.