This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. §subd. 3 (1994).


Ernest R. Jacobsen,


Auto Owners Insurance Company,

Filed September 17, 1996

Toussaint, Chief Judge

Stearns County District Court
File No. C7-95-004023

Geo. David Roes, Roes, Larsen & Kierman, P.A., 99 Oak Avenue North, P.O. Box 279, Annandale, MN 55302 (for respondent)

Thomas E. Emmer, Palmer, Hanjani, Barkley, Barley & Emmer, 110 West Railway Street, P.O. Box 385, Loretto, MN 55357 (for appellant)

Considered and decided by Amundson, Presiding Judge, Toussaint, Chief Judge, and Peterson, Judge.


TOUSSAINT, Chief Judge
Appellant Auto Owners Insurance Company (Auto Owners), a no-fault insurer, suspended no-fault benefits to respondent Ernest R. Jacobsen after he refused to attend two independent medical examinations (IMEs). Jacobsen filed a petition for arbitration to recover no-fault wage loss benefits. The arbitrator found Jacobsen was entitled to and awarded wage loss benefits. The district court denied Auto Owners' motion to vacate. Auto Owners contends the district court erred in affirming the arbitrator's award and claims the arbitrator lacked jurisdiction and improperly decided a question of law. Because we find that the arbitrator had jurisdiction to resolve the dispute and that the record supports Jacobson's wage loss claims, we affirm.

Auto Owners, as the party seeking to vacate the arbitrator's award, has the burden to prove that the award is invalid. National Indem. Co. v. Farm Bureau Mut. Ins. Co., 348 N.W.2d 748, 750 (Minn. 1984). The court makes "[e]very reasonable presumption" in favor of the finality and validity of the arbitrator's award. Id. In cases involving the no-fault statute, "arbitrators are limited to deciding issues of fact, leaving the interpretation of the law to the courts." Johnson v. American Family Mut. Ins. Co., 426 N.W.2d 419, 421 (Minn. 1988). "Only where the arbitrators have clearly exceeded their powers must a court vacate an award." National Indem. Co., 348 N.W.2d at 750. See Minn. Stat. §subd. 1(3) (1994) (court shall vacate award when arbitrator has exceeded powers).

Auto Owners contends the arbitrator lacked jurisdiction to consider the claim for wage loss benefits because (1) Jacobsen had not included the wage loss claim in his initial petition, (2) Auto Owners had not consented to arbitrate the claim, and (3) the arbitrator granted Jacobsen's request to consider the income loss claim at the hearing over Auto Owners' objection.
Jacobsen filed a petition seeking reimbursement for chiropractic fees and mileage under Minn. Stat. §Rule 5(c) (1994). Jacobsen later amended the petition, by letter, to include the wage loss claim. Auto Owners acknowledged receipt of that amendment and responded to it in a letter.
Auto Owners next contends that Jacobsen did not present sufficient facts to establish his wage loss claim. The arbitrator had the authority under the no-fault statute to make the factual finding of what constituted "reasonable proof" here. Neal v. State Farm Mut. Ins. Co., 529 N.W.2d 330, 331-32 (Minn. 1995). Whether the record supports the arbitrator's finding is not an issue on review of an arbitrator's award. See State Auditor v. Minnesota Assoc. of Professional Employees, 504 N.W.2d 751, 754 -55 (Minn. 1993) (holding that reviewing court's review of arbitrator's award is "extremely narrow" and is confined to whether arbitrator exceeded its powers); see also Minn. Stat. § 572.19, subd 1 (listing limited grounds for court to vacate arbitration award).
With regard to Auto Owners' claim that it did not consent to arbitration, we note that Auto Owners did agree to arbitrate if it denied the wage loss claim in whole or in part for lack of reasonable proof. Minn. Stat. §Rule 5(d), provides the guidelines for denying a claim:
If a respondent fails to respond in writing within 30 days after reasonable proof of the fact and the amount of loss is duly presented to the respondent, the claim shall be deemed denied for the purpose of activating these rules.

After receiving Jacobsen's documentation supporting his wage loss claim, Auto Owners told him in a letter that it was not yet in a position to accept or deny the claim. In fact, Auto Owners did not respond until 44 days after receipt of Jacobsen's claim and even then took no position on whether it would accept or deny it. The arbitrator and the district court both correctly determined that, under arbitration rule 5(d), Auto Owners effectively denied the claim when it failed to respond within 30 days of receiving the July 28 letter that gave notice of the claim. See Minn. Stat. §rule 5(d). The district court properly found that the arbitrator had jurisdiction to hear this case.

Auto Owners argues that Jacobsen's unreasonable failure to attend the IMEs disqualified him from receiving wage loss benefits as well as reimbursement for chiropractic expenses. The IMEs related directly to Jacobsen's no-fault medical claim, however, not to his later wage loss claim. At the time Auto Owners initially sought to schedule the IMEs, Jacobsen's only claim was for no-fault medical benefits. Jacobsen did not amend his petition to include the wage loss claim until the following year.
Furthermore, Neal, 529 N.W.2d at 333, does not support Auto Owners' argument. The Neal court held that, if an insured unreasonably fails to attend an independent medical examination, it is "eminently reasonable" for an insurer to suspend no-fault benefits until the insured submits to the examination. Id. Auto Owners now contends, under Neal, that Jacobsen forfeited his right to all benefits, including wage loss benefits, when he failed to attend the first two IMEs.
Neal's holding does not mandate termination of all benefits, but describes suspension of benefits as an intermediate sanction "until the claimant has, upon request, submitted to a physical examination scheduled in accordance with the statutory guidelines." Id. Then the arbitrator may decide, based on the evidence, whether to reinstate benefits or suspend them due to lack of cooperation and prejudice to the insurer. Id.
The record reveals that Auto Owners availed itself of the sanction available in Neal when it suspended Jacobsen's no-fault benefits after he failed to attend the first two IMEs. But Jacobsen ultimately cooperated when he submitted to an IME in August 1995, before the arbitration. The record also shows that Auto Owners suffered no prejudice from the delay in gathering information from Jacobsen, because the IME report supported Jacobsen's wage loss claim. Evidence in the record supports the arbitrator's award of wage loss benefits. This determination was a factual finding fully within the arbitrator's power. See id. (allowing arbitrator to receive evidence to determine whether to suspend or reinstate benefits). The district court did not err in denying the motion to vacate the arbitrator's award.