This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).




The Work Connection, Inc.,



Berkley Administrators,

f/k/a Employee Benefit Administration,

a division of Tri-State Insurance Company of Minnesota,


Filed June 9, 1998


Kalitowski, Judge

Ramsey County District Court

File No. CX966642

Gerald S. Duffy, Jordan M. Lewis, Siegel, Brill, Greupner, Duffy & Foster, P.A., 100 Washington Avenue South, Suite 1300, Minneapolis, MN 55401 (for appellant)

Richard B. Allyn, Mark D. Wisser, Robins, Kaplan, Miller & Ciresi L.L.P., 2800 LaSalle Plaza, 800 LaSalle Avenue, Minneapolis, MN 55402 (for respondent)

Considered and decided by Kalitowski, Presiding Judge, Schumacher, Judge, and Holtan, Judge.*

*Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.



Appellant The Work Connection, Inc. sued its workers' compensation insurance administrator, respondent Berkley Administrators, alleging negligence, fraud, unjust enrichment, breach of fiduciary duty, and breach of implied covenant of good faith and fair dealing. We affirm the district court's grant of summary judgment on the grounds that: (1) respondent has no fiduciary duty or duty of good faith and fair dealing toward appellant; and (2) appellant failed to produce sufficient evidence on the essential elements of causation and damages.


On appeal from summary judgment, the appellate court must determine whether there are any genuine issues of material fact and whether the district court erred in applying the law. Offerdahl v. University of Minn. Hosps. & Clinics, 426 N.W.2d 425, 427 (Minn. 1988). All doubts are resolved against the moving party. Nord v. Herreid, 305 N.W.2d 337, 339 (Minn. 1981). However, one function of summary judgment is to dispose of unsupportable claims. Frey v. Ramsey County Community Human Servs., 517 N.W.2d 591, 596 (Minn. App. 1994). Moreover, summary judgment is required when the nonmoving party cannot provide proof of an essential element of its claim. Lubbers v. Anderson, 539 N.W.2d 398, 401 (Minn. 1995).


The existence of a duty is a legal question. H.B. v. Whittemore, 552 N.W.2d 705, 707 (Minn. 1996). Appellant asserts that a fiduciary relationship existed between the parties, and respondent breached its fiduciary duty by not acting in appellant's best interest. "`A fiduciary relation exists when confidence is reposed on one side and there is resulting superiority and influence on the other * * *.'" Stark v. Equitable Life Assurance Soc'y, 205 Minn. 138, 145, 285 N.W. 466, 470 (1939) (quoting Miranovitz v. Gee, 157 N.W. 790, 792 (Wis. 1916)). If the plaintiff should have known that the defendant was representing adverse interests, there is no fiduciary duty. Id.

This court recently declined to find a fiduciary duty in the relationship between a workers' compensation insurer and its business client. Cherne Contracting Corp. v. Wausau Ins. Cos., 572 N.W.2d 339, 341 (Minn. App. 1997), review denied (Minn. Feb. 19, 1998). We concluded that relationships created by an insurance contract inherently involve competing interests and often result in litigation between the parties, making the existence of a fiduciary relationship highly unlikely. Id. at 343. Further, we also required the business client who alleged a fiduciary relationship to establish that the insurer was aware that the client reposed its trust in the insurer. Id. Here, appellant established neither the existence of a fiduciary relationship nor respondent's knowledge that appellant reposed its trust in respondent.

Appellant cites Transport Indem. Co. v. Dahlen Transp. Inc., 281 Minn. 253, 257, 161 N.W.2d 546, 549 (1968), for the proposition that an insurer owes its insured a duty of good faith and fair dealing when the insurance is based on a retrospective premium. However, the court in Cherne stated that "any responsibility to establish good faith under Dahlen exists only because of the parties' contractual relationship," and that there is "no duty independent of the contract." Cherne, 572 N.W.2d at 343-44. Because there was no contract between the parties here, we conclude there is no additional duty under Dahlen.

Appellant further claims respondent had a duty to pursue subrogation claims in good faith, specifically referring to the Nesseth file. Appellant argues respondent should at least be required to split the proceeds of that subrogation. We disagree. There is no evidence in the record that respondent in any way prevented appellant from pursuing its own recovery. Further, the district court properly determined that in the Nesseth claim, the amount of losses far exceeded the state accident limit, so any subrogation proceeds could not have been applied to appellant's experience modification factor (Mod).


Referring to appellant's case, the district court stated: "[T]he record is replete with allegations and generalities without substance." We agree. Specifically, in presenting its tort claims, appellant fails to establish the essential element of causation. Appellant instead cites Dahlen, 281 Minn. at 258, 161 N.W.2d at, 549, for the proposition that the burden of proof is on the insurer to demonstrate the reasonableness and good faith of settlements made for a retrospective premium policy. Dahlen, however, does not require defendants to disprove a plaintiff's case. Rather, if a defendant provides evidence that its practices were reasonable and within its duties required by law, the burden shifts back to the plaintiff. Here, respondent produced an expert's affidavit concluding that its administration was "reasonable and met or exceeded industry standards for workers' compensation claim administration."

Appellant argues that because appellant now pays less for coverage with its new insurer, respondent must have been responsible for those previously high costs. We conclude the district court properly determined that this argument is insufficient to survive summary judgment because respondent presented undisputed evidence concerning other factors that contributed to appellant's high Mod rating. Specifically, evidence was presented that: (1) appellant hired a safety director who testified that employee attitude and training problems were at least partially responsible for appellant's poor safety record; and (2) under Minn. Stat. § 176.061 (1996), appellant could have reduced its premiums by pursuing its own action against parties responsible for driving up its workers' compensation costs.

Considering that appellant is only challenging 1.2% of the cases handled by respondent and that evidence was presented supporting other explanations for appellant's high Mod, we conclude the district court did not err in determining appellant failed to produce sufficient evidence on causation.

Additionally, damages that "are remote and speculative cannot be recovered." Jackson v. Reiling, 311 Minn. 562, 563, 249 N.W.2d 896, 897 (1977). "There is no general test of remote and speculative damages, and such matters should usually be left to the judgment of the trial court." Id. In establishing appellant's damages, its expert assumed, without supporting evidence, that: (1) all subrogation actions would have been successful in recovering all monies spent on employee claims; (2) all benefits paid to identified workers were undeserved; (3) the workers would not have been successful in challenging any denial of benefits; and (4) files were over-reserved solely because the claims closed for less than the reserved amount. The district court properly determined that it could not predict the result of litigation for cases respondent settled rather than tried, or predict the outcome of the claims in which appellant thought subrogation should have been pursued. We conclude the district court did not abuse its discretion in determining appellant's alleged damages were too speculative.