ROBERT HAMPTON, Employee, v. SPECTRO ALLOYS CORP. and ZURICH AM. INS., adm=d by GALLAGHER BASSETT SERVS., Employer-Insurer/Appellants, and SPECTRO ALLOYS CORP., and WESTERN NAT=L INS. CO., Employer-Insurer.
WORKERS= COMPENSATION COURT OF APPEALS
AUGUST 22, 2005
PRACTICE & PROCEDURE - DISMISSAL; CONTRIBUTION & REIMBURSEMENT. The compensation judge erred in concluding that the employer and Zurich American=s claim for contribution against the employer and Western National was barred by an order for dismissal of the employee=s claim against Western National for current medical expenses pursuant to the rational in Wolk v. Allian Tech. Sys., slip op. (W.C.C.A. July 18, 1997).
SETTLEMENTS - INTERPRETATION. The compensation judge erred in finding the language of the stipulation for settlement barred the employee=s claim against Western National where the stipulation left open medical expenses Arelated to the surgery on the employee=s neck,@ and the employee=s current claim is for expenses for a second fusion surgery necessitated by the failure of the first cervical fusion.
Determined by: Johnson, C.J., Stofferahn, J., and Pederson, J.
Compensation Judge: Cheryl LeClair-Sommer
Attorneys: Norbert Cuellar, Cuellar Law Office, Minneapolis, MN, for the Respondent Employee. Kristen Anderson Ryan, Johnson & Condon, Minneapolis, MN, for the Appellants. Howard Y. Held and Ryan J. Courtney, Minneapolis, MN, for the Respondents Employer/Western Nat=l.
THOMAS L. JOHNSON, Judge
Zurich American Insurance appeals the compensation judge=s finding that a prior order dismissing Western National Insurance Company bars a subsequent petition by Zurich American to join Western National, and appeals the compensation judge=s findings regarding the intent of the parties to a stipulation for settlement.
Robert Hampton, the employee, alleged that on or about June 26, 2002, and July 9, 2002, he sustained personal injuries arising out of his employment with Spectro Alloys Corporation, the employer, then insured by Western National Insurance Company (Western National). The employer and Western National denied liability for the claimed personal injuries. In July 2003, the parties entered into a settlement of the employee=s claims, including his claim that he was entitled to a fusion surgery at C5-6 and C6-7 as recommended by Dr. Thomas V. Rieser. In the settlement agreement, the parties agreed to a full, final and complete settlement of all claims arising out of the alleged June and July 2002 personal injuries [including medical expenses,] with the exception of, Aclaims to future medical expenses related to the surgery on the Employee=s neck.@ An Award on Stipulation was filed on July 31, 2003.
Subsequent to the fusion surgery, in August 2004, Dr. Rieser examined the employee and concluded the employee had a nearly total reabsorption of the C6-7 graft and recommended a posterior fusion at the C6-7 level. In December 2004, Dr. Thienprasit agreed there was a significant indication to redo the prior C6-7 fusion.
In June 2004, the employee had filed a claim petition alleging a personal injury on June 17, 2004, arising out of his employment with the employer which was then insured by Zurich American Insurance (Zurich American), with claims administered by Gallagher Bassett Services. The employee claimed entitlement to total disability benefits and medical expenses. In its answer, the employer and Zurich American denied the employee sustained a personal injury on June 17, 2004.
In July 2004, the employee amended his claim petition adding Western National as a party to the proceeding. Western National then filed a motion for dismissal contending it had no liability for benefits based upon the July 2003 Award on Stipulation. By letter dated August 3, 2004, Norbert Cuellar, the employee=s attorney, advised the Office of Administrative Hearings he had no objection to dismissing Western National from the proceedings. By order dated August 24, 2004, Compensation Judge Cheryl LeClair-Sommer dismissed Western National stating Athe undersigned finds that Western National Insurance Company is correct, there are no valid claims against them pursuant to the previously filed Stipulation for Settlement and Award on Stipulation.@
In November 2004, Zurich American filed a motion seeking to join Western National contending the recommended C6-7 fusion surgery was the sole responsibility of Western National. Western National objected to the motion. By order dated March 1, 2005, the compensation judge bifurcated the liability issue and scheduled the joinder motion for a hearing. In a Findings and Order filed April 7, 2005, the compensation judge found the August 24, 2004, Order of Dismissal of Western National was res judicata and barred joinder of Western National as a party. The compensation judge further found the 2003 stipulation for settlement was not ambiguous, and the intent of the employee, his attorney and Western National in the settlement was that Western National would pay only medical expenses relating to the initial fusion surgery. The judge concluded Western National, therefore, had no liability for the second fusion surgery proposed by Dr. Rieser and Dr. Thienprasit. Accordingly, the compensation judge denied Zurich American=s motion to join Western National. Zurich American appeals.
1. Order of Dismissal
The compensation judge found the August 24, 2004, order dismissing Western National was res judicata and bars Zurich American from joining Western National as a party to this proceeding. On appeal, Zurich American argues the dismissal order was not a decision on the merits of the underlying claim. Accordingly, Zurich American contends the order was a dismissal without prejudice and was an interlocutory, non-appealable order. In response, Western National contends the dismissal order was a determination on the merits and, absent an appeal, is a final determination which bars a joinder of Western National in the current litigation.
As a general rule, only an order which finally determines the rights of the parties and concludes the action is appealable. Zizak v. Dispatch Indus., Inc., 427 N.W.2d 755 (Minn. App. 1988). The policy behind the general rule is to prevent piecemeal appeals and protect the rights of all parties until all claims have been adjudicated in the trial court. Johnson v. Johnson, 363 N.W.2d 355 (Minn. App. 1985). In this case, however, we need not decide whether the August 24, 2004, order dismissing Western National was a final determination on the merits. In either case, the order does not bar Zurich American=s contribution claim against Western National.
The August 2004 order dismissing the employee=s pending claims against Western National was issued without a hearing. The compensation judge made no findings on the factual issues of whether the employee had any valid claims against Western National, and there was no record of any proceeding leading to the dismissal. Generally, in such a case, this court will vacate the order of dismissal and remand the case to the compensation judge for a hearing. See Bloom v. G.T. Interactive Software, slip op. (W.C.C.A. Nov. 3, 2004) (a vacation of a compensation judge=s order for dismissal is appropriate where the judge made no findings on factual issues and there was no record of the proceeding leading to the dismissal).
In Wolk v. Alliant Tech. Sys., slip op. (W.C.C.A. July 18, 1997) this court held a settlement between the employee and one employer did not preclude another employer from asserting a contribution claim, which arose prior to the settlement against the released employer. We noted in Wolk that while settlements are to be encouraged, a nonsettling party=s rights may not be unduly prejudiced in the process. Although this case involves a dismissal of the employee=s current claim against Western National rather than a settlement, the effect on Zurich American is exactly the same. A claim for contribution is derivative of the claim of the employee so Zurich American can have no greater claim against Western National than does the employee. Thus, if the dismissal order was a determination on the merits of the employee=s medical expense claim against Western National, the order also bars a contribution claim by Zurich against Western. Such a result is contrary to Wolk. We therefore vacate the August 24, 2004, Order of Dismissal of Western National, and reverse the April 7, 2005, Findings and Order.
2. Ambiguity of Stipulation for Settlement
The compensation judge found the language of the stipulation for settlement was clear and unambiguous and barred the employee=s claim against Western National for the second fusion surgery. Zurich American agrees the settlement language is unambiguous, but argues the need for a revision of the first surgery is Arelated to@ that initial surgery. We agree.
A settlement agreement is a contract. Whether a contract is ambiguous is a question of law. Trondson v. Janikula, 458 N.W.2d 679 (Minn. 1990). This court reviews questions of law under a de novo standard of review. Krovchuk v. Kock Oil Refinery, 48 W.C.D. 607 (W.C.C.A.1993). A contract is ambiguous if its language is reasonably susceptible to more than one interpretation. Brookfield Trade Ctr., Inc., v. County of Ramsey, 584 N.W.2d 390 (1998). The cardinal purpose of construing a contract is to give effect to the intention of the parties as expressed in the language used in the entire contract. Art Goebel, Inc., v. North Suburban Agencies, Inc., 567 N.W.2d 511 (Minn. 1997).
This determination depends not upon words or phrases read in isolation, but rather upon the meaning assigned to the words or phrases in accordance with the apparent purpose of the contract as a whole. Metro Office Parks Co., v. Control Data Corp., 295 Minn. 348, 205 N.W.2d 121 (1973). The language found in a contract is to be given in its plain and ordinary meaning. Current Tech. Concepts, Inc., v. Irie Enterprises, Inc., 430 N.W.2d 539 (Minn. 1995).
It is clear from the settlement agreement, that Western National agreed to pay for the first fusion surgery, and that the parties agreed that claims to future medical expenses related to the surgery on the employee=s neck would remain open, and that Western National would be liable for the costs of any reasonable and necessary treatment. The initial surgery failed at the C6-7 level and a second surgical procedure has been recommended. Thus, the employee has not yet received the cure or relief from the effects of his injury contemplated in the settlement. The word Arelated@ is defined as Ato have connection, relation or reference.@ The need for the re-fusion surgery has connection or relation to the first fusion surgery. We therefore reverse the compensation judge=s finding that under the unambiguous language of the stipulation, Western National has no liability for the second fusion surgery. The motion of Zurich American to join Western National as a party to the employee=s pending claim petition is granted.
 American Heritage Dictionary, 1043 (2nd college ed. 1985).