STANLEY L. ROEMHILDT, Employee, v. GRESSER COS., INC., and ZURICH INS. CO./CREATIVE RISK SOLUTIONS, Employer-Insurer, and MET CON COS., and STATE FUND MUT. INS. CO., Employer-Insurer/Appellants.

 

WORKERS COMPENSATION COURT OF APPEALS

AUGUST 23, 2006

 

No. WC06-105

 

HEADNOTES

 

PRACTICE & PROCEDURE - STATUTE OF LIMITATIONS; STATUTES CONSTRUED - MINN. STAT. ' 176.151(1) and 176.221, SUBD. 1.  Amendments to Minn. Stat. ' 176.221,  subd. 1, relating to commencement of payment of benefits, did not overrule or modify the provisions of Minn. Stat. ' 176.151(1) and case law interpreting time limitations for bringing an action or Aproceeding@ to recover compensation.  By making voluntary payments of benefits to the employee, the employer and insurer initiated a proceeding.  Once a proceeding has been commenced, the statute of limitations cannot be revived or re-asserted, despite a subsequent denial of primary liability.

 

CONTRIBUTION & REIMBURSEMENT.  An employer and insurer that have settled all future claims by the employee for a lump sum are not entitled to lump sum contribution or reimbursement toward that payment from a nonsettling employer and insurer.

 

Affirmed in part and reversed in part.

 

Determined en banc.

Compensation Judge: Janice M. Culnane

 

Attorneys: Mark G. Olive, Sieben, Grose, Von Holtum, Minneapolis, MN, for the Respondent Employee.  Jay T. Hartman and Jessica M. Stimac, Heacox, Hartman, Koshmrl, Cosgriff & Johnson, St. Paul, MN, for Respondents Gresser/Zurich.  M. Chapin Hall and Andrew W. Lynn, Lynn, Scharfenberg & Associates, Minneapolis, MN, for the Appellants.

 

 

OPINION

 

THOMAS L. JOHNSON, Judge

 

Met Con Companies and State Fund Mutual Insurance Company appeal from the compensation judge=s award of contribution to Gresser Companies and Zurich Insurance Company, arguing the claim is barred by the statute of limitations and that the compensation judge, in any event, erred in ordering Met Con/State Fund to pay contribution toward a lump sum full, final, and complete settlement negotiated between the employee and Gresser/Zurich.  We affirm in part and reverse in part.

 

BACKGROUND

 

Stanley L. Roemhildt, the employee, sustained an injury to his low back on August 17, 2001, while employed as a bricklayer by Met Con Companies (Met Con)^[1] then insured for workers= compensation liability by State Fund Mutual Insurance Company.  Met Con filed a first report of injury on August 23, 2001.  Several days later, on August 28, 2001, Met Con served a notice of primary liability determination, admitting liability for the injury.  The employee was paid wage loss benefits from August 20, 2001, through September 16, 2001, as well as medical expenses.  On September 18, 2001, after making these payments, Met Con served another notice of primary liability determination, this time denying liability, alleging the employee had failed to cooperate with investigation of the injury and also that the employee=s symptoms were the result of an earlier injury.  This second notice of primary liability determination was filed with the Department of Labor and Industry on September 20, 2001.  The employee testified he was going to contest the termination of benefits but Ait never really panned out to anything@ and he went back to work shortly after that.  (T. 70.)  He also testified his low back pain Anever did go away@ after the August 2001 work injury.  (T. 76.)

 

On September 7, 2004, and October 4, 2004, the employee allegedly injured his low back again while working as a bricklayer for Gresser Companies (Gresser),^[2] insured by Zurich Insurance Company.  Restrictions imposed by his treating physician prevented the employee from returning to work as a bricklayer thereafter.^[3]  On October 21, 2004, the employee served a claim petition, seeking various benefits from Met Con and/or Gresser as a result of his work injuries.  Gresser subsequently began paying benefits pursuant to a temporary order and sought contribution and/or reimbursement from Met Con.  The employee=s claim petition and Gresser=s petition for contribution were consolidated for hearing.

 

In August 2005, following private mediation, the employee and Gresser settled all of the employee=s claims against both Gresser and Met Con on a full, final, and complete basis, except future medical expenses.  The settlement agreement provided that Gresser would pay the employee a lump sum payment of $82,500.00, less attorney fees, while reserving Gresser=s right to seek contribution from Met Con.  The provision concerning Gresser=s reservation of rights reads as follows:

 

It is the express intention of this settlement agreement to preserve all rights that Gresser Companies, Inc. and Zurich Insurance Company shall have against Met Con Companies and State Fund Mutual Insurance Company for contribution and/or reimbursement of past, present or future workers= compensation benefits paid to, or on behalf of the employee, including the $82,500.00 lump sum paid pursuant to this stipulated settlement, which has purchased a full, final and complete settlement of the employee=s claims against not only the employee=s injuries at Gresser, Inc., but also the employee=s August 17, 2001, injury, with the exception of medical expenses.  Met Con Companies/State Fund Mutual Insurance Company has refused to participate in the settlement negotiations that resulted in this settlement agreement or the terms of this settlement agreement, and nothing contained in this document shall be deemed to in any way limit any defense Met Con Companies or State Fund Mutual Insurance Company might have against a subsequent contribution/reimbursement claim pursued by Gresser/Zurich.  The employee assigns all rights that he might have against Met Con Companies and State Fund Mutual Insurance Company for past or future workers= compensation benefits to Gresser, Inc./Zurich Insurance Company, which the employee understands will be the subject matter of a future contribution claim against Met Con Companies and State Fund Mutual.  The express intention of this agreement is that nothing contained in this settlement agreement or otherwise will in any way preclude or limit the rights of Gresser, Inc./Zurich Insurance Company to proceed in contribution and/or reimbursement against Met Con Companies/State Fund Mutual for all past workers= compensation benefits paid by Gresser, Inc./Zurich to or on behalf of the employee or for the payments made pursuant to this Stipulation for Settlement.  The parties to this Stipulation for Settlement agree that the $82,500.00 lump sum payment made herein represents a fair and reasonable compromise of good and valid claims the employee would have for workers= compensation benefits in the future and that all past benefits received by the employee have been appropriately paid pursuant to the Workers= Compensation Act.

 

As indicated in the stipulation for settlement, Met Con did not participate in the mediation and was not a party to the agreement.  An Award on Stipulation was filed on August 12, 2005.

 

Gresser=s claim for contribution from Met Con was heard by a compensation judge on October 14, 2005.  Issues at the hearing included equitable apportionment of liability, whether claims against Met Con for the August 2001 injury were barred by the statute of limitations, and whether Gresser was entitled to contribution from Met Con for the lump sum paid pursuant to the settlement between the employee and Gresser.  Gresser submitted deposition testimony from attorney David Bailly to establish that the settlement agreement was reasonable.  Mr. Bailly testified that the settlement was favorable to both employers.

 

In a decision issued on December 16, 2005, the compensation judge concluded the claims against Met Con were not barred by the statute of limitations and that Met Con was liable for 50 percent of the employee=s disability after January 3, 2005.  However, the compensation judge also determined that Gresser was solely liable for a 10 percent whole body impairment and that benefits for a 10 percent impairment should be subtracted from the lump sum settlement payment prior to dividing liability for the settlement  payment equally between Gresser and Met Con.^[4]  Met Con was ordered to reimburse Gresser, accordingly, for benefits paid by Gresser under the temporary order and pursuant to the settlement.  Met Con appeals.

 

DECISION

 

1.  Statute of Limitation

 

MAJORITY OPINION

 

Minn. Stat. ' 176.151, the statute of limitations, specifies that Aactions or proceedings@ to recover compensation must be brought within three years after Athe employer has made a written report of the injury to the commissioner of the department of labor and industry.@  Minn. Stat. ' 176.151(1).  Both the employee=s claim petition and Gresser=s claim for contribution were filed more than three years after Met Con filed the first report of injury for the employee=s 2001 work injury.  The compensation judge, however, relying on Meinen v. Dashow, 283 Minn. 269, 167 N.W.2d 730, 24 W.C.D. 883 (1969), concluded that Met Con=s voluntary payment of benefits to the employee immediately after the 2001 injury constituted commencement of Aproceedings@ so as to toll the statute of limitations.

 

The limitations provision itself, Minn. Stat. ' 176.151, has not changed, for purposes relevant to this appeal, since Meinen was issued.^[5]  That is, the language concerning Aactions or proceedings@ is essentially identical and has not been amended to clarify or overrule case law defining what constitutes Aproceedings.@  A long line of cases dating back to 1932 establishes that a voluntary payment of workers= compensation benefits to an injured employee constitutes commencement of a Aproceeding@ under the statue and tolls the limitations period.  See, e.g., Savina v. Litton Indus., 330 N.W.2d 456, 35 W.C.D. 659 (Minn. 1983); Weidemann v. Kemper Ins. Group, 312 Minn. 157, 251 N.W.2d 117, 29 W.C.D. 376 (1976); Meinen, id.; Knopp v. Gutterman, 258 Minn. 33, 102 N.W.2d 689, 21 W.C.D. 195 (1960); Nyberg v. Little Falls Black Granite Co., 192 Minn. 404, 256 N.W.2d 732, 8 W.C.D. 232 (1932).

 

Moreover, the facts in Meinen are markedly similar to those in the present case, in that the employer in Meinen initially paid benefits but then denied liability.  In analyzing the statute of limitations question, the Minnesota Supreme Court reiterated the longstanding rule that voluntary payment of benefits constitutes Aproceedings@ for purposes of the statute of limitations, explaining, Awe do not see how a change of mind on the part of the employer-insurer could transform acts constituting proceedings . . . to something less than that.@  Meinen, 283 Minn. at 272, 167 N.W.2d at 732, 24 W.C.D. at 886.

 

Met Con argues, however, that amendments to Minn. Stat. ' 176.221, subd. 1, have altered the effect of a voluntary payment of benefits.  Prior to 1981, Minn. Stat. ' 176.221, subd. 1, read as follows:

 

Subdivision 1.  Denial of liability, request for extension of time.  Within 30 days from the date of notice to or knowledge by the employer of an injury compensable under the chapter, and unless within that 30 day period the employer or the insurer files with the commissioner of the department of labor and industry a denial of liability or a request for an extension of time within which to determine liability, the person responsible for payment of compensation, charges for treatment under section 176.135 or retraining expenses under 176.102, subdivision 9 shall begin payment of compensation or charges for treatment.

 

The statute further allowed for a 30-day extension of time within which to determine liability.  Minn. Stat. ' 176.221, subd. 2 (1980).  Currently, following amendments in 1981, 1983, and 1995, Minn. Stat. ' 176.221, subd. 1, reads in pertinent part:

 

Subdivision 1.  Commencement of Payment.  Within 14 days of notice to or knowledge by the employer of an injury compensable under this chapter the payment of temporary total compensation shall commence.  Within 14 days of notice to or knowledge by an employer of a new period of temporary total disability which is caused by an old injury compensable under this chapter, the payment of temporary total compensation shall commence; provided that the employer or insurer may file for an extension with the commissioner within this 14-day period, in which case the compensation need not commence within the 14-day period but shall commence no later than 30 days from the date of the notice to or knowledge by the employer of the new period of disability.  Commencement of payment by an employer or insurer does not waive any rights to any defense the employer has on any claim or incident either with respect to the compensability of the claim under this chapter or the amount of compensation due.  . . . Liability for compensation under this chapter may be denied by the employer or insurer by giving the employee written notice of the denial of liability.  . . . If the employer or insurer has commenced payment of compensation under this subdivision but determines within 60 days of notice to or knowledge by the employer of the injury that the disability is not a result of a personal injury, payment of compensation may be terminated upon the filing of a notice of denial of liability within 60 days of notice or  knowledge.  After the 60-day period, payment may be terminated only by the filing of a notice as provided under section 176.239.

 

Through these amendments, the legislature shortened the initial time in which an employer or insurer must commence payment of benefits, and extended the time in which a denial of liability may be filed to within 60 days of notice of the work injury.  The statute expressly preserves the employer and insurer=s defenses with respect to compensability of the claim or the amount of benefits due, so long as payment is commenced consistent with the requirements of Minn. Stat. ' 176.221, subd. 1.  In the present case, it is undisputed that Met Con commenced payment within 14 days and then denied liability and terminated payment consistent with the statute.  The question then is whether this amendment has overruled case law defining a proceeding under Minn. Stat. ' 176.151.

 

AThe object of interpretation and construction of laws is to ascertain and effectuate the intention of the legislature.@  Minn. Stat. ' 176.16.  The appellant argues the clear legislative intent in adding the Aany defense@ language to Minn. 176.221, subd. 1, was to overrule existing case law to permit an employer or insurer to assert the statute of limitations as a defense despite a voluntary payment of benefits.  We cannot agree.

 

The payment of any type of benefit to or on behalf of an employee under the workers= compensation act indicates an acceptance of liability for the injury and constitutes a proceeding for purposes of Minn. Stat. ' 176.151(1).  Livgard v. Cornelius Co., 308 Minn. 467, 243 N.W.2d 309, 311, 28 W.C.D. 413, 415-16 (1976).  Thus, a voluntary payment of benefits is an admission by the employer and insurer that the employee=s injury is one Aarising out of and in the course of employment.@  Minn. Stat. ' 176.011, subd. 16.  The supreme court has held, however, that a voluntary payment of benefits does not, absent prejudice, estop an insurer from later denying primary liability for a claimed injury.  Zontelli v. Smead Mfg. Co., 343 N.W.2d 639, 36 W.C.D. 453 (Minn. 1984); Scott v. Kirk Minnesota Co., 271 Minn. 96, 135 N.W.2d 31, 23 W.C.D. 890 (1965); see also Windsperger v. Viking Automatic Sprinkler, slip op. (W.C.C.A. 2000).  To hold otherwise would discourage voluntary payments of workers= compensation benefits.  We believe the legislative amendments to Minn. Stat. ' 176.221 do no more than codify the principle that a voluntary payment of benefits does not automatically estop an employer or insurer from later asserting the injury did not arise out of or in the course of employment.  This is not the same as the time limitations specified in Minn. Stat. '176.151.  As the supreme court in Meinen observed,

 

If the employer-insurer was justified in refusing to make the payments, it will be relieved from responsibility by a determination of this matter on the merits.  If it was not justified in denying liability, its denial should not work to the prejudice of the employee.

 

Meinen, at 733, 24 W.C.D. at 887.  Once an action or proceeding has been commenced it cannot be undone.  The statute of limitations has been tolled and cannot be revived or re-asserted.  More prosaically, a bell once rung can not be unrung.

 

As the dissent notes, the supreme court in Meinen acknowledged policy considerations opposed to the court=s decision but declined to overrule its longstanding precedent, stating any change in case law should come from the legislature.  This was in 1969.  Twelve years later, the appellant argues, the legislature finally decided to overrule Nyberg and Meinen and change the definition of the word Aproceedings@ in Minn. Stat. ' 176.151 by amending Minn. Stat. ' 176.221.  Had the legislature intended to overrule judicial construction of the word Aproceedings,@ it easily could have added a clause to Minn. Stat. ' 176.151 stating a voluntary payment of benefits was not a proceeding.  It did not do so.  We cannot conclude in the absence of such an amendment to Minn. Stat. ' 176.151, that the legislature intended to repeal Nyberg and Meinen indirectly by an ambiguous amendment to Minn. Stat. ' 176.221.

 

We further conclude the position argued by the appellant is not good policy.  An employer and insurer=s obligation to promptly initiate payment of benefits, without the necessity of a claim petition, is consistent with the statutory policy to ensure the Aquick and efficient delivery of indemnity and medical benefits to injured workers at a reasonable cost to the employers.@  Minn. Stat. ' 176.001.  In most cases, a voluntary payment of benefits obviates the need for a claim petition, which, in turn, reduces costs.  It is not unusual in workers= compensation matters that a personal injury results in a brief period of disability and medical treatment followed by sufficient improvement to allow the employee to return to his or her regular job.  Construing a voluntary payment of benefits as a Aproceeding@ averts the possibility that a subsequent claim, some years later, would be barred by the statute of limitations, without consideration of the merits of the employee=s claim.  A different result would clearly penalize employees who accept a voluntary payment of benefits in contrast to an employee who files a claim petition.^[6]  It was precisely this discrimination which the Nyberg court rejected:

 

To hold otherwise would be to put at a disadvantage the employee who reaches an agreement as to his compensation as compared with one who institutes a controversy.  We cannot believe the Legislature so intended.

 

Nyberg at 733, 8 W.C.D. at 234.

 

We, therefore, affirm the compensation judge=s determination that the employee=s claims against Met Con were not barred by the statute of limitations.

 

 

CONCURRING OPINION

 

DAVID A. STOFFERAHN, Judge

MIRIAM P. RYKKEN, Judge

 

We concur with Judge Johnson.

 

 

DISSENTING OPINION

 

DEBRA A. WILSON, Judge

 

In my view, there is only one reasonable way to construe the statutory language at the heart of this case: by adding the language concerning Aany defense@ to Minn. Stat. ' 176.221, subd. 1, the legislature intended to allow employers to assert whatever defenses those employers could have asserted but for their timely and voluntary payment of benefits.  To my knowledge, the only defense affected by voluntary payment of benefits is the statute of limitations defense.  In fact, in Meinen, the supreme court implicitly invited the legislature to evaluate the policy implications of case law concerning voluntary payment and the statute of limitations, quoting from a concurring opinion from the Industrial Commission decision in Meinen as follows:

 

From a policy standpoint, the result of the majority is undesirable.  Prompt payment of compensation would be discouraged, since the employer-insurer would tend to file a denial of liability until such time as it could determine whether or not the injury was compensable.  Presently, it is not unusual for compensation payments to be made to the injured employee during the investigative period in order to effectuate the intention of the Workmen=s Compensation Act.  For the same reasons, contested workmen=s compensation cases would increase.  Moreover, under circumstances similar to the case before us, the burden is put upon the employer-insurer to expend additional sums for costs and attorney=s fees to obtain a determination by the Referee that the injury is not compensable, even though a denial of liability is filed after compensation is paid and the employee acquiesces thereto.

 

Meinen, 238 Minn. at 272-73, 167 N.W.2d at 733, 24 W.C.D. at 887.  In rejecting the employer=s request that prior case law be overruled based on the policy consideration raised above, the supreme court in Meinen indicated that Athese are matters which should be evaluated by the legislature.@  Id.  As I see it, the amendments to Minn. Stat. ' 176.221, subd. 1, were a legislative response to these concerns, with the aim being to place employers that voluntarily pay but then deny liability in no worse position than employers that deny liability from the outset.

 

Even if I were not convinced that the Aany defense@ language in Minn. Stat. ' 176.221, subd. 1, was directed specifically toward the statute of limitations, my ultimate conclusion on this issue would be the same.  AIt is a fundamental rule of statutory construction that words and phrases are to be construed according to their plain meaning.@  Owens v. Water Gremlin Co., 605 N.W.2d 733, 736, 60 W.C.D. 36, 41 (Minn. 2000).  Contrary to the majority=s assertion, the language at issue is not at all ambiguous, and I can find nothing anywhere in the statute to support the conclusion that the legislature intended to exclude the statute of limitations when it used the phrase Aany defense@ in the amendment to Minn. Stat. ' 176.221, subd. 1.

 

In 1981, twelve years after Meinen, the legislature amended Minn. Stat. ' 176.221, subd. 1, by including the Aany defense@ language while at the same time substantially reducing the period for commencement of benefits, from 30 to 14 days.  These new provisions, read together, reflect a trade-off intended to balance the interests of both employers and injured employees.  In contrast with the majority, I find it highly unlikely that the legislature added these provisions simply to codify decades of existing and noncontroversial case law concerning an employer=s right to deny primary liability after voluntary payment of benefits.  The majority does not explain just what might have prompted the legislature to add the language in question when it did.  Similarly, the majority does not address the question of just why the legislature would have used the term Aany defense@ when it intended to mean only primary liability.

 

It may be true, as the majority points out, that the legislature could have, but did not, amend Minn. Stat. ' 176.151(1), to clarify what constitutes a Aproceeding@ for purposes of the statute of limitations.  It is equally true, however, that the legislature could have, but did not, amend Minn. Stat. ' 176.221, subd. 1, so as to preserve the employer=s right to deny Aprimary liability@ after voluntary payment.  The statute by its express terms allows employers to assert Aany defense,@ and the majority=s construction renders this language virtually meaningless.

 

According to Larson=s treatise, the rule in many jurisdictions is that, A[w]hen an employer voluntarily makes compensation payments, the period for filing a claim . . . dates from the last payment.@^[7]  Arthur Larson & Lex K. Larson, Larson=s Workers= Compensation Law, ' 126.07[1] (2006).  Application of this rule in the present case would not change the result.  The employee had a claim for wage loss benefits when Met Con filed its denial of liability in September of 2001.  Had Met Con not paid benefits, promptly and voluntarily, following the August 2001 injury, there would be no question but that both the employee=s claim petition and Gresser=s petition for  contribution would be barred as untimely under Minn. Stat. ' 176.151(1).  Because the only rational conclusion is that the statute of limitations qualifies as Aany defense@ within the meaning of Minn. Stat. ' 176.221, subd. 1, I would hold that Gresser=s contribution claim is barred by the statute of limitations.

 

 

CONCURRING DISSENTING OPINION

 

WILLIAM R. PEDERSON, Judge

 

I concur with the dissent of Judge Wilson.

 

 

2.  Contribution Toward Lump Sum Settlement Payment ^[8]

 

MAJORITY OPINION

 

DEBRA A. WILSON, Judge

 

In analyzing Gresser=s claim for contribution toward the lump sum settlement payment made by Gresser to the employee in August of 2005, the compensation judge cited this court=s decision in Othon v. Hutchinson Technology, slip op. (W.C.C.A. June 16, 1995), and, concluding that the settlement was Areasonable,@ she found Met Con liable to reimburse Gresser for a proportionate share of the settlement.  In her memorandum, the judge acknowledged that Met Con could not Abe ordered to pay, as a term of the Stipulation for Settlement, because they were not a party to the settlement.@   However, she ultimately concluded as follows:

 

Gresser/Zurich also submitted depositional testimony, post hearing, from Attorney David H. Bailly.  Attorney Bailly is an experienced workers= compensation attorney and his depositional testimony was offered in support of Gresser/Zurich=s opinion that the settlement was reasonable.  Attorney Bailly reviewed documents and medical reports concerning this case and concluded the lump sum settlement and settlement terms, reached in the Stipulation for Settlement (Exhibit 5), were reasonable.  Attorney Bailly also explained there were factors which would make it favorable to settle, rather than try the case.  Attorney Bailly also explained why it could be a disadvantage, to the employee, to settle with just one insurer and proceed to a hearing with the other insurer.  The Court accepts the opinion of Attorney Bailly and finds it to be credible and convincing.  Therefore, the court concludes the Stipulation for Settlement (Exhibit 5) was a reasonable settlement.  Because this was a reasonable settlement, and the settlement closed out past and future claims against Met Con/State Fund, Gresser/Zurich may seek contribution against Met Con/State Fund.  Othon v. Hutchinson Technology, 1995 WL398204 (W.C.C.A. June 16, 1995).

 

*  *  *

 

In conclusion, this is an unusual situation and both insurers come to this hearing with risks and exposures.  Met Con/State Fund had the opportunity to litigate, at the evidentiary hearing, the issue of apportionment, liability for and the nature of the injury of August 17, 2001, and the reasonableness of the settlement terms.  Even though they were not a party to the settlement, Met Con/State Fund became responsible for their apportioned share of the settlement, through contribution and reimbursement, without entering into the settlement and helping to craft the terms of the settlement.  Likewise, Gresser/Zurich risked having contribution and reimbursement denied if it was determined the terms of the settlement were not reasonable or that the employee did not sustain a work-related injury on August 17, 2001.  Each party had risks and had the opportunity to litigate the issues of disability and liability at the hearing.  Having had the opportunity to fully review evidence in this case, it is clear the employee had three injuries which were all responsible for his present disability, and the settlement in August of 2005 was a fair and reasonable resolution of his past and future benefits.  For these reasons, contribution and reimbursement was ordered.

 

The judge=s reliance on Othon was misplaced.  In Othon, contribution toward a lump sum settlement was denied, in large part because the settling employer and insurer had Afailed to demonstrate what portion of the [settlement payment] represented a payment of any of [the nonsettling employer and insurer=s] future obligations to the employee.  Without evidence that there was a payment of [the nonsettling employer and insurer=s] obligation there would be no right . . . to contribution.@  Othon, slip op. at 8.  In the present case, Gresser similarly failed to prove that the settlement payment represented payment of any obligation on the part of Met Con, because there is no evidence establishing the employee=s underlying right to any specific future benefits.

 

It is well established that the law generally favors settlement, and workers= compensation settlements are to be encouraged.  Mauer v. Braun=s Locker Plant, 298 N.W.2d 439, 441, 33 W.C.D. 66, 71 (Minn. 1990); Senske v. Fairmont & Waseca Canning Co., 232 Minn. 350, 45 N.W.2d 640, 16 W.C.D. 242 (1951).  The usual purpose of settlement is to Aresolve or avoid future potential or uncertain exposure to liability,@ Husnik v. J.C. Penney Co., Inc., 57 W.C.D. 264, 273 (W.C.C.A. 1997), and, in the present case, Gresser was certainly entitled to assess the risks of trial and to limit its future exposure through settlement with the employee.  At the same time, however, parties may not settle a claim to the detriment of a nonsettling party.  See Stoffel v. Rausch Mfg. Co.. 46 W.C.D. 112, 113-14 (W.C.C.A. 1991).  While plaintiffs in civil damage actions may seek compensation for future, as yet unrealized losses, workers= compensation litigants are generally limited to the remedies provided by statute, and we know of nothing in the workers= compensation act or case law that would allow a compensation judge to compel a party to pay benefits in the absence of proof that such benefits are presently due and actually payable.^[9]  Met Con had an absolute right to refuse to settle and to require the employee=s entitlement to specific benefits to be established at hearing, subject to defenses, prior to payment.  See Masters v. Moorhead Constr. Co., 47 W.C.D. 432 (W.C.C.A. 1992).  Just as an employee may not demand payment of benefits from an insurer unless and until those benefits become payable under the workers= compensation act, an insurer may not obtain contribution or reimbursement from another insurer for benefits not yet owed.  See id.  Contribution claims are derivative, Martin v. Thermoform Plastics, 46 W.C.D. 473 (W.C.C.A. 1992), and Gresser may not accomplish indirectly what the employee could not accomplish directly.  Because Met Con was not a party to the settlement, the reasonableness of the settlement between the employee and Gresser is simply irrelevant to Met Con=s liability.

 

At oral argument, counsel for Met Con suggested that Gresser may petition for reimbursement of benefits that would otherwise be due the employee, as such claims accrue, subject to any defenses Met Con might have to specific benefit claims.  The dissent responds to this suggestion by focusing on problems it perceives with this approach, including its concerns about the use of judicial resources.  We concede that litigation is expensive and inconvenient, and requiring a party to prove a claim is not as efficient as simply ordering payment without proof of entitlement.  That being said, however, we wish to emphasize that our decision here should not be construed to either approve or disapprove of the procedure proposed by Met Con.  Gresser=s right to seek future contribution from Met Con was not an issue before the compensation judge and is not properly before this court on appeal.  We therefore expressly decline to predict whether such claims may be brought or how such claims might be resolved.

 

The workers= compensation act specifies when and how benefits should be paid to injured employees.  It is up to the parties, however, to decide for themselves if and when to settle claims.  By ordering Met Con to pay a share of the settlement payment negotiated by Gresser and the employee, the compensation judge effectively forced settlement on an unwilling party.  While that decision might be practical, it is not equitable, and nothing in the statute or case law permits it.  We therefore reverse the compensation judge=s decision on this issue.

 

 

CONCURRING OPINION

 

WILLIAM R. PEDERSON, Judge

MIRIAM P. RYKKEN, Judge

 

We concur with Judge Wilson.

 

 

DISSENTING OPINION

 

THOMAS L. JOHNSON, Judge

 

I respectfully dissent from the majority=s reversal of the compensation judge=s order for contribution.

 

Contribution is an equitable doctrine based upon the simple demand of justice that parties who share liability for an injury should each pay their fair share in proportion to their liability.  Employers Mut. Cas. Co. v. Chicago, St. P., M & O Ry. Co., 50 N.W.2d 689, 235 Minn. 304 (1951).  In Peniston v. City of Marshall, 192 Minn.132, 255 N.W. 860, 8 W.C.D. 172 (1934), the doctrine of equitable contribution was first applied to apportion liability between successive insurers for a single employer.  In Haverland v. Twin City Milk Producers Ass=n, 142 N.W.2d 274, 280, 23 W.C.D. 764 (Minn. 1966), the supreme court extended equitable apportionment to liability between successive employers and their insurers, holding:

 

It appears reasonable that, if liability for compensation arising from two or more industrial accidents under the same employer may be apportioned between his successive insurers, it should likewise be apportionable between successive employers where industrial accidents are sustained under each of them, both of which contribute to the disability of the employee.  Such apportionment, of course, should be in the ratio that each accident bears to the total disability involved.

 

In DeNardo v. Divine Redeemer Memorial Hosp., 450 N.W.2d 290, 42 W.C.D. 626 (Minn. 1990), the supreme court observed that common law principles of equitable apportionment have long been applied to require successive employers and insurers to each contribute their proportionate shares of the total liability for an injured employee=s benefits.

 

The doctrine of equitable apportionment routinely arises in two types of cases and its application in each is straightforward.  In the first type of case, an employee files a claim petition against two or more employers or insurers, seeking benefits arising out of two or more personal injuries.  In such a case, the compensation judge first determines the benefits to which the employee is entitled and then apportions liability between or among the responsible employers and/or insurers, based upon the percentage of responsibility of each liable employer or insurer.  The second type of case arises where an employer and insurer have paid benefits to an employee under a temporary order^[10] or have settled the employee=s case on a Ato date@ basis by payment of all benefits to which the employee was entitled to the date of the settlement.  The employer and/or insurer who paid benefits to the employee then commence a proceeding seeking contribution from other employers and insurers.  The party seeking contribution must prove the employee=s entitlement to the benefits paid and prove other employers or insurers are also primarily liable for the benefits paid.  As with a direct claim asserted by the employee, the compensation judge determines the benefits to which the employee would have been entitled and apportions responsibility among the liable employers and insurers.

 

The instant case presents a unique question regarding the application of the principles of equitable apportionment.  Gresser Companies and its insurer sought contribution from Met Con for a portion of a lump sum settlement paid to the employee.  Gresser=s settlement with the employee is one commonly referred to as a Afull, final and complete settlement@ in that the settlement closed out the employee=s right to all future benefits, with the exception of medical expenses.  Thus, the settlement was not for accrued benefits to which the employee was entitled but, rather, for benefits to which the employee might be entitled in the future.

 

As the majority correctly states, the workers= compensation act gives the employee no entitlement to an award of future benefits from an employer and insurer, but limits an employee to claims for benefits accrued to date.  If an employee has no right to claim future benefits, the majority reasons, then Gresser has no right to seek contribution from Met Con for its share of the settlement.  Presumably, under the majority=s decision, Gresser must serially assert multiple contribution claims against Met Con for the accrued benefits to which the employee would have been entitled but for the settlement.  We see a number of problems with this result.

 

While a single contribution claim by Gresser may resolve the percentage of liability to be allocated to Met Con, Gresser will be required at each subsequent proceeding to prove the employee=s entitlement to wage loss benefits accrued to date.  This result will require multiple hearings which is a poor use of judicial resources.  Further, testimony from medical experts and rehabilitation experts may well be required at each hearing which adds to the cost of the dispute resolution process.

 

The settlement between the employee and Gresser was a typical Afull, final and complete settlement.@  (See Ex. 5.)  At the time of the settlement, the employee was receiving temporary total disability benefits but was alleging entitlement to permanent total disability benefits.  (Pet. Ex. 3.)  Gresser=s settlement with the employee resolved the employee=s claims for temporary total and permanent total disability benefits.  But, in addition to settling these claims, the employee also settled his right to assert in the future claims for temporary partial disability benefits, rehabilitation benefits and retraining benefits.  Gresser=s expert testified these claims had a settlement value, and Gresser calculated its potential exposure for payment of these benefits at more than $200,000.00.  (Pet. Ex. 16, pp.11-14; Pet. Ex. 2.)

 

The majority holds the petitioner may not receive contribution from a primarily liable employer^[11] absent proof that specific benefits would have been payable to the employee.  But the employee has settled his case and is now out of the labor market.  Consequently, Gresser will never be able to prove the employee=s entitlement to temporary partial, rehabilitation or retraining benefits.  Thus, although some portion of the settlement proceeds may reasonably be allocated to these benefits, under the majority=s decision, Gresser has no contribution claim for these benefits.  The effect of the majority=s decision is that Gresser=s contribution claim is limited to temporary total and/or permanent total disability benefits.  Such a result subverts the principles of equitable apportionment.

 

Further, the procedure established by the majority decision will discourage settlements.  An employer in Gresser=s position may well refuse to settle with the employee when faced with the certainty of multiple contribution claims or the possibility of never recouping a portion of the settlement.

 

Contribution in workers= compensation law is a judicially established equitable doctrine.  The issue in this case is whether an employer and insurer may be compelled to contribute to a settlement of future potential benefits.  So long as the settlement is determined to be a reasonable compromise, there is no great harm in such a result.  Rather, affirming the compensation judge=s decision is consistent with the principles underlying the doctrine of equitable apportionment and contribution and makes practical sense.  I would, accordingly, affirm the compensation judge=s award of contribution to Gresser.

 

 

CONCURRING DISSENTING OPINION

 

DAVID A. STOFFERAHN, Judge

 

I concur with the dissent of Judge Johnson.