VLADIMIR Y. KRAMARENKO, and SEMEN V. LOYEVSKIY, Employees/Appellants, v. MIRACLE CLEANING CO., and MN ASSIGNED RISK/BERKLEY RISK ADM=RS CO., Employer-Insurer, and MN DEP=T OF HUMAN SERVS., UCARE MN, and ALLSTATE INS. CO., Intervenors.
WORKERS= COMPENSATION COURT OF APPEALS
SEPTEMBER 5, 2003
EVIDENCE - RES JUDICATA - Where the same ultimate issue presented to the compensation judge, whether the employees were in the course of their employment at the time of the accident, was addressed by the district court and court of appeals, and where the same parties, the employer and the employees, were involved in the district court action, collateral estoppel bars the employees from now proceeding with a claim based on the premise that their injuries are compensable under the exception found in Minn. Stat.' 176.011, subd. 16.
Determined by Rykken, J., Pederson, J., and Stofferahn, J.
Compensation Judge: Jennifer Patterson
MIRIAM P. RYKKEN, Judge
Vladimir Kramarenko and Semen Loyevskiy, employees, appeal from the compensation judge=s determination that they were not in the course of their employment when injured in a motor vehicle accident on October 2, 1997, and that their claims were barred by the doctrine of collateral estoppel. The claims have been consolidated on appeal. We affirm.
Vladimir Kramarenko and Semen Loyevskiy, employees, began working for Miracle Cleaning Company, employer, on September 29, 1997. The employer=s owner, Layzer Berkovith, contracted with another company for a temporary packaging project located in Belle Plaine, Minnesota, agreeing to provide workers for that project. Mr. Berkovith had a practice of hiring new immigrants from the Ukraine and Russia; both employees had emigrated from Russia--Mr. Kramarenko, three days before commencing employment with the employer and Mr. Loyevskiy, in late 1995 or early 1996. Both employees worked at the Belle Plaine job site commencing September 29, 1997. On each of the three days the employees worked for the employer, Mr. Loyevskiy picked up Mr. Kramarenko, a relative of his, and then drove him to the home of a co-worker, Vladmir Yevzelman, from where they, along with two co-workers, were driven to the job site by Mr. Yevzelman.
On October 2, 1997, after their third day of work at the Belle Plaine job site, the employees and their two co-workers rode home in a vehicle driven and owned by Mr. Yevzelman. All passengers were injured when the vehicle left the roadway and rolled over. As a result of the accident, Mr. Kramarenko sustained an injury to his low back, neck, right clavicle, lung, ribs, liver and spleen. Mr. Loyevskiy sustained an injury to his low back and lower extremities. Following that motor vehicle accident, Minnesota Assigned Risk/Administered by Berkley Risk Administrators Company, the insurer, filed First Reports of Injury and Notices of Determination of Primary Liability with the Minnesota Department of Labor and Industry, in which the insurer denied primary liability for the employees= injuries.
The employees and the two other passengers in the vehicle brought a civil action in Hennepin County District Court against Mr. Yevzelman and the employer for injuries sustained in the motor vehicle accident. The employees alleged that the employer was vicariously liable for the driver=s negligence, as the driver was in the course of employment, driving workers to and from the job site, at the time of the accident. The parties stipulated to negligence and the amount of damages, so the only issue to be determined at trial in district court was whether Mr. Yevzelman was in the course of his employment at the time of the accident. The issue of whether the four passenger plaintiffs (and specifically, in this case, the two employees) were acting within the course of their employment with the employer, when the accident occurred, was not submitted to the jury.
At trial in August 1999, the jury returned a special verdict finding that Mr. Yevzelman was acting within the scope of his employment with Miracle Cleaning Company, the employer, when the accident occurred. By order issued on August 17, 1999, a Hennepin County District Court Judge found that Vladimir Yevzelman was negligent in the operation of his motor vehicle, that such negligence was a direct cause of the motor vehicle accident on October 2, 1997, and that at the time of the motor vehicle accident, Mr. Yevzelman was an employee of Miracle Cleaning Company. The judge concluded that Miracle Cleaning Company was liable in tort for the negligence of its employee, Mr. Yevzelman, and that the total dollar value of the plaintiffs= claims exceeded $1,000,000.00, the limit of the employer=s liability insurance policy. The judge therefore awarded damages to all four plaintiffs, including the two employees herein, and the employer=s liability insurance policy proceeds were divided among all four plaintiffs. In addition, the driver=s liability insurance proceeds had been divided earlier among the four plaintiffs.
Post-trial, the employer filed for a motion for judgment notwithstanding the verdict (JNOV) and for dismissal of the civil action based on lack of subject matter jurisdiction, arguing that Minn. Stat. ' 176.031 of the Minnesota Workers= Compensation Act provides an exclusive remedy for employees for any claim they may have against an employer. The employer contended that because the jury found that Mr. Yevzelman, the co-defendant, was acting within the scope of his employment when he provided transportation to the plaintiffs, it follows that the employer regularly furnished transportation to the four plaintiffs and that they were acting within the course of their employment at the time of the accident.
The district court judge denied the motion for dismissal, concluding that the district court had jurisdiction over the claims. The employer appealed to the Minnesota Court of Appeals, and, by an unpublished opinion issued August 22, 2000, the court of appeals affirmed, determining that the district court properly concluded that it had subject matter jurisdiction over the case. The court of appeals concluded that the evidence, considered in its entirety, permitted conflicting inferences as to whether the employer regularly furnished the employees transportation to and from work. The court of appeals concluded that
There was no evidence that Yevzelman had agreed to provide transportation for the duration of the Belle Plaine job or that appellant would have arranged alternate transportation for respondents if Yevzelman or his vehicle became unavailable to provide transportation. The district court=s finding that the evidence failed to establish an understanding by respondents that appellant would provide transportation as a condition of employment is not clearly erroneous. Absent such an understanding, Minn. Stat. ' 176.011, subd. 16, does not apply. Therefore, the district court properly concluded that it had subject-matter jurisdiction.
Loyevski, et al., v. Yevzelman and Miracle Cleaning Co., No. C0-99-2098 (Minn. Ct. App. Aug. 22, 2000). No appeal was taken from that decision.
By claim petitions filed on December 15, 2000, the employees claimed entitlement to workers= compensation benefits, arguing that pursuant to Minn. Stat. ' 176.011, subd. 16, they were in the course of their employment at the time of the motor vehicle accident on October 2, 1997. Prior to hearing, the parties moved to sever the primary liability issues from the issues of the benefits due to the employees in the event they proved primary liability; the compensation judge granted that motion. The primary issue addressed at hearing was whether the employees were regularly furnished transportation by the employer at the time of their injuries on October 2, 1997, and therefore whether they would be considered as being in the course of their employment when injured. At hearing held on November 15, 2002, the parties submitted stipulated facts and evidentiary records to the compensation judge, but no testimony was taken. Documents from the district court proceedings were admitted into evidence at the workers= compensation hearing, including transcripts of depositions and statements of the employees, their two co-passengers in the automobile at the time of the accident, the driver of the vehicle at the time of the accident, two other co-workers, and the owner of Miracle Cleaning, Layzer Berkovith. The record contains accounts by the employees and co-workers of their hire by the employer and the transportation arrangements made for their travel to the job site.
Arguments and post-trial briefs were presented to the compensation judge, and by Findings and Orders served and filed on January 8, 2003, the compensation judge found that the employees were collaterally estopped from relitigating, in the workers= compensation forum, the issue of whether they were Amere passengers@ or employees who were regularly furnished transportation at the time of the October 2, 1997, motor vehicle accident. The compensation judge concluded, in pertinent part, that based on the subject matter jurisdiction decisions of the district court and the Minnesota Court of Appeals, the employees were collaterally estopped from now claiming that they were in the course of their employment at the time of the motor vehicle accident. The employees appeal.
STANDARD OF REVIEW
On appeal, the Workers' Compensation Court of Appeals must determine whether "the findings of fact and order [are] clearly erroneous and unsupported by substantial evidence in view of the entire record as submitted." Minn. Stat. ' 176.421, subd. 1 (1992). Substantial evidence supports the findings if, in the context of the entire record, "they are supported by evidence that a reasonable mind might accept as adequate." Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54, 59, 37 W.C.D. 235, 239 (Minn. 1984). Where evidence conflicts or more than one inference may reasonably be drawn from the evidence, the findings are to be affirmed. Id. at 60, 37 W.C.D. at 240. Similarly, findings of fact should not be disturbed, even though the reviewing court might disagree with them, "unless they are clearly erroneous in the sense that they are manifestly contrary to the weight of the evidence or not reasonably supported by the evidence as a whole.@ Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).
"[A] decision which rests upon the application of a statute or rule to essentially undisputed facts generally involves a question of law which [the Workers' Compensation Court of Appeals] may consider de novo." Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993).
The employees contend they were in the course of their employment at the time of the motor vehicle accident, and therefore were covered by the Minnesota Workers= Compensation Act. They appeal from the compensation judge=s determination that the issue of whether the employees were furnished transportation by the employer was resolved by the district court and Minnesota Court of Appeals. The employees contend that the compensation judge erred, as a matter of law, in concluding that the doctrine of collateral estoppel precludes the employee=s claims for workers= compensation benefits. We conclude that the compensation judge was correct in determining that collateral estoppel applies here, and affirm.
The compensation judge found that the employees were collaterally estopped from relitigating, in the workers= compensation forum, the issue of whether they were Amere passengers@ or employees regularly furnished transportation at the time of the October 2, 1997, motor vehicle accident, based, in part, on the post-trial decisions issued by the district court and the Minnesota Court of Appeals. The employees argue that the doctrine of collateral estoppel, which is the preclusion of issues aspect of res judicata, is inapplicable in this case because the issue of the employee=s employment status was not addressed at the district court trial.
Res judicata, or as in this case claim preclusion, is essentially a finality doctrine in which Aa final judgment on the merits bars a second suit for the same claim by parties or their privies.@ Kaiser v. Northern States Power Co., 353 N.W.2d 899, 902 (Minn. 1984). It is well-settled that principles of res judicata are applicable in workers= compensation proceedings, and "bar subsequent proceedings to determine claims which were litigated in a prior proceeding." Alexander v. Kenneth R. LaLonde Enters., 288 N.W.2d 18, 20, 32 W.C.D. 312, 314 (Minn. 1980); Denny v. Halcon Corp., 44 W.C.D. 290, 295-96 (W.C.C.A. 1990). The doctrine of collateral estoppel, Aprecludes the re-litigation of a right, question, or fact distinctly put in issue, actually litigated, determined in a prior adjudication@ and necessary to the determination of the previous judgment. See Coughlin v. Radosevich, 372 N.W.2d 817, 819 (Minn. App. 1985), citing to Southern Pacific Railroad v. United States, 168 U.S. 1, 48-49, 18 S.Ct. 18, 27, 42 L.Ed. 355 (1897). Collateral estoppel applies when A(1) the issue was identical to one in a prior adjudication; (2) there was a final judgment on the merits; (3) the estopped party was a party or in privity with a party to the prior adjudication; and (4) the estopped party was given a full and fair opportunity to be heard on the adjudicated issue.@ Willems v. Comm=r of Pub. Safety, 333 N.W.2d 619, 621 (Minn. 1983), citing to Victory Highway Village, Inc. v. Weaver, 480 F.Supp. 71, 74 (D.Minn. 1979). The employees argue that collateral estoppel does not apply to this case, primarily on the basis that the issues in the workers= compensation hearing were not identical to those addressed in the district court action.
At the hearing at the Office of Administrative Hearings, and on appeal, the employees argued that they were in the course of their employment at the time of the accident because the employer was furnishing transportation to and from Belle Plaine site. Generally, an injury sustained during an employee=s commute between home and his work place is not compensable under the Minnesota Workers= Compensation Act. McConville v. City of St. Paul, 528 N.W.2d 230, 231, 52 W.C.D. 258, 259 (Minn. 1995). But Minn. Stat. ' 176.011, subd. 16, provides an exception to this general rule, and provides, in part, that
Apersonal injury@ means injury arising out of and in the course of employment and includes personal injury caused by occupational disease; but does not cover an employee except while engaged in, on, or about the premises where the employee=s service is required the employee=s presence as a part of such service at the time of the injury and during the hours of such service. Where the employer regularly furnished transportation to employees to and from the place of employment such employees are subject to this chapter while being so transported . . .
(Emphasis added.) Minn. Stat. ' 176.011, subd. 16, applies when the employer regularly furnishes transportation as an incident of employment or in furtherance of his business and does not apply when the employer furnishes transportation as a mere favor. Hardware Mut. Cas. Co. v. Ozmun, 217 Minn. 280, 284-85, 14 N.W.2d 351, 354, 13 W.C.D. 164, 168-69 (1944). Although no formal contract is required for Minn. Stat. ' 176.011, subd. 16, to apply, both the employer and the employee must contemplate and understand that the employer will transport the employee to and from the work place. Gehrke v. Weiss, 204 Minn. 445, 448-49, 284 N.W. 434, 436, 10 W.C.D. 424, 427 (1939).
The employees argue that the issue of their employment status at the time of the motor vehicle accident was not addressed at the district court trial. We disagree. In order to rule on the motion for dismissal, Judge Carey addressed the issue of whether the employer regularly furnished transportation to the employees at the time of the accident. The Minnesota Court of Appeals affirmed his decision, concluding that the district court properly found that the exception in Minn. Stat. ' 176.011, subd. 16, did not apply and that the district court had subject matter jurisdiction.
Application of res judicata requires that the same issues and claims were previously litigated between the same parties. The issue of whether the district court had subject matter jurisdiction over the plaintiffs=/employees= claims necessarily required the district court, and the court of appeals, to determine whether the employer regularly furnished transportation to the employees at the time of the October 2, 1997, motor vehicle accident. Therefore, the same ultimate issue before the compensation judge, whether the employees were in the course and scope of their employment at the time of the accident, was addressed by the district court and court of appeals. The same parties, the employer and the employees, were involved in the district court action. Accordingly, collateral estoppel bars the employees from now proceeding with a claim based on the premise that their injuries are compensable under the exception found in Minn. Stat.' 176.011, subd. 16.
The decision of the compensation judge is affirmed.
The district court judge later amended his order to specify that the cumulative damages incurred by the four plaintiffs totaled $1,000,000.00.