JEFF VARNEY, Employee, v. OLD DUTCH FOODS, INC., and CNA INS. CO., Employer-Insurer, and OLD DUTCH FOODS, INC., and SAFECO INS. CO., Employer-Insurer/Appellants, and OLD DUTCH FOODS, INC., and CHUBB INS. CO., Employer-Insurer.
WORKERS= COMPENSATION COURT OF APPEALS
NOVEMBER 18, 2003
SETTLEMENTS. The focus in workers= compensation matters is not on the body part injured but on the injury itself; where the employee=s 1997 stipulation for settlement of certain claims for payment of medical expenses related to a 1989 work injury was not a final settlement closing out future claims against the insurer on that injury, the compensation judge erred in dismissing, under Johnson v. Tech Group, a petition for contribution filed by the insurer on a 2002 shoulder injury against the 1989 insurer and another insurer, notwithstanding the fact that the 1997 stipulation provided expressly that the employee did not injure his right shoulder in the 1989 injury.
Determined by Pederson, J., Rykken, J., and Johnson, C.J.
Compensation Judge: Peggy A. Brenden.
Attorneys: Lori J. LeCount, Arthur, Chapman, Kettering, Smetak & Pikala, Minneapolis, MN, for Appellants. Jeffrey A. Magnus, Law Offices of Joseph M. Stocco, Edina, MN, for Respondents. Jeffrey W. Jacobs, Wilkerson & Hegna, Edina, MN, for Employee. D. Jeffrey Priccro, Aafedt, Forde, Gray & Monson, Minneapolis, MN, for Employer/Insurer.
WILLIAM R. PEDERSON, Judge
Safeco Insurance Company appeals from the compensation judge=s order dismissing CNA Commercial Insurance Company as a party to the proceeding. We reverse.
On January 4, 1989, Jeffrey Varney, the employee, sustained a personal injury while working for Old Dutch Foods, Inc. [the employer], then insured by CNA Commercial Insurance Company [CNA]. The employer and CNA admitted liability for the personal injury. In 1992, the parties entered into a stipulation for settlement resolving the employee=s claim for permanent partial disability relating to the cervical spine. An award on stipulation was filed on November 10, 1992. In 1997, the parties entered into a second stipulation for settlement, resolving the employee=s claims for payment of certain medical expenses. Paragraph 5 of that stipulation provided as follows:
That the Employee hereby stipulates and agrees that he did not injure his right shoulder as a result of the January 4, 1989 work injury. That the Employee stipulates and agrees that any right shoulder symptoms at this time represent referred pain from his neck based on subjective radicular symptoms from his neck. There is no separate injury to his right shoulder.
An award on stipulation was filed on August 12, 1997. The employee returned to work for the employer.
On July 5, 2002, Dr. John Anderson performed arthroscopic decompression and debridement of the employee=s right shoulder. The employee then filed a claim petition, alleging personal injuries while working for the employer on July 19, 2001, and March 27, 2002, and claiming entitlement to wage loss benefits, permanent partial disability benefits, and medical expenses. On July 19, 2001, the employer was insured by Safeco Insurance Company [Safeco]; on March 27, 2002, the employer was insured by Chubb Insurance Company [Chubb]. Thereafter, a temporary order was filed, ordering Chubb to pay wage loss benefits to the employee commencing July 5, 2002, together with reasonable and necessary medical and rehabilitation expenses. Chubb then filed a petition for contribution seeking contribution from Safeco, later amended to include a petition for contribution seeking contribution from both Safeco and CNA.
CNA filed a motion for summary judgment, seeking dismissal of Chubb=s contribution petition. Chubb filed an objection and the matter was heard at a pre-trial conference. By Order filed April 22, 2003, the compensation judge dismissed Chubb=s contribution claim against CNA. In a memorandum, the judge concluded that the 1997 stipulation was clear and unambiguous and that the employee=s right to claim workers= compensation benefits related to a right shoulder injury on January 4, 1997, was extinguished in the stipulation. Citing Johnson v. Tech Group, 491 N.W.2d 287, 47 W.C.D. 367 (Minn. 1992), the compensation judge concluded that the stipulation also barred any derivative claim by Chubb against CNA. Accordingly, the compensation judge dismissed Chubb=s contribution claim against CNA. Safeco appeals from the compensation judge=s decision.
In Johnson v. Tech Group, the supreme court held that a full, final, and complete settlement for an injury does not bar an action or proceeding for benefits arising out of a separate and distinct subsequent injury. Johnson v. Tech Group, 491 N.W.2d 287, 288, 47 W.C.D. 367, 369 (Minn. 1992), citing Hansen v. Jen Her Builders, 366 N.W.2d 294, 298, 37 W.C.D. 565, 570 (Minn. 1985). The court further held that the amount and period of compensation payable by reason of the subsequent injury has nothing to do with allocation of liability among various employers and insurers. Id. Thus, an employer and insurer liable for benefits for a subsequent injury is barred from seeking contribution from an employer and insurer liable for the first injury. The compensation judge applied that principle in this case and dismissed Chubb=s contribution claim against CNA.
Safeco contends that the compensation judge erred in relying on Johnson in dismissing Chubb=s petition for contribution. Safeco argues that the 1997 stipulation was not a full, final, and complete settlement between the employee and CNA and that, therefore, neither the employee=s nor Chubb=s claim against CNA is barred by operation of law. Accordingly, Safeco argues that the compensation judge erred as a matter of law in dismissing the petition for contribution. CNA contends that the employee=s stipulation that he did not injure his right shoulder as a result of the January 4, 1989, work injury is clear and unambiguous. Explicit in this agreement, CNA argues, is a close-out by the employee of all claims against CNA for any workers= compensation benefits related to the employee=s right shoulder. The employee=s current claim petition seeks benefits secondary to a right shoulder and arm condition. Since Chubb=s contribution claim against CNA can only be derivative of the employee=s right to assert a direct claim, CNA argues that Chubb=s contribution claim is barred by the supreme court=s decision in Johnson v. Tech Group. We disagree.
A personal injury is an injury Aarising out of and in the course of employment.@ Minn. Stat. ' 176.011, subd. 16. An employer is liable to pay workers= compensation benefits caused by a personal injury to an employee. Minn. Stat. ' 176.021, subd. 1. The employee here sustained a personal injury on January 4, 1989. There exists no final settlement between the employee and CNA closing out future claims by the employee for benefits caused by that personal injury. Although CNA=s argument focuses on the body part injured in 1989, we have held that the focus must be not on the body part injured but on the personal injury itself. Schutte v. Independent Sch. Dist. #281, 63 W.C.D. 476 (W.C.C.A. 2003). Accordingly, CNA remains liable to the employee for all benefits causally resulting from the 1989 personal injury. CNA=s liability is not limited or extinguished by the employee=s stipulation that he did not injure his right shoulder in January 1989. The question here is not whether the employee injured his right shoulder in 1989 but whether the employee=s current disability and need for medical care, or any portion thereof, is causally related to his 1989 work injury.
To the extent that the 1989 injury is a substantial contributing cause of the employee=s current wage loss, CNA remains liable both to the employee directly and to Chubb for contribution. See DeNardo v. Divine Redeemer Memorial Hosp., 450 N.W.2d 290, 42 W.C.D. 626 (Minn. 1990). To the extent that the 1989 injury caused, aggravated, or accelerated the employee=s need for right shoulder surgery, CNA also remains liable for medical expenses. See Minn. Stat. ' 176.135. Whether the requisite causal connection exists is a question of fact, not of law. Casey v. Northern States Power Co., 247 Minn. 295, 77 N.W.2d 67, 19 W.C.D. 335 (1956). Accordingly, the compensation judge=s dismissal of Chubb=s petition for contribution from CNA is reversed.