The self-insured employer appeals from the compensation judge’s determination that the intervenor, Medica Health Plans, was excluded from settlement negotiations and, as such, is entitled to full reimbursement, including statutory interest, for the medical expenses it paid from 2003 through March 8, 2007, the date of service and filing of an award on stipulation.

The employee, Jill Hansen, sustained the work injury that is the subject of this matter on November 20, 1998, while she was employed at Dayton’s.  The self-insured employer, now known as Macy’s, admitted the occurrence of a work injury on that date.

This case has a long and complicated procedural history.  For a full discussion of the procedural history leading up to the present appeal, see Hansen v. Dayton’s, 71 W.C.D. 443 (W.C.C.A. 2011), summarily aff’d (Minn. Aug. 26, 2011).

In November 2002, the employee and the employer entered into a full, final, and complete settlement of the employee’s claims related to the 1998 injury, leaving only future medical expenses open.  The 2002 stipulation specifically requested that Medica’s potential intervention rights be extinguished for failure to intervene in a timely manner despite receiving notice of its right to intervene.  An award on stipulation was issued on November 27, 2002, approving the stipulation.

Medica’s claims were handled by Healthcare Recoveries, Inc. (HRI) around the time of the 2002 settlement, and on January 6, 2003, Medica and HRI filed an intervention motion relating to prior medical treatment dates.  Although no litigation was pending, the Office of Administrative Hearings (OAH) issued a notice of intervention status to Medica.  Medica’s 2003 intervention motion through HRI listed only bills for dates of service from 2002 and before.

In November 2003, the employee filed a medical request relating to disputed treatment, including an SI joint fusion surgery on January 7, 2003.  The medical request identified Medica as having paid expenses relating to the disputed medical treatment.

Eventually, in 2007, the employee and employer reached a settlement agreement relating to the 2003 medical request.  A stipulation for settlement was submitted to OAH in early March 2007, and on March 8, 2007, OAH issued an award on stipulation.

The 2007 stipulation provided for payment to the employee for out-of-pocket medical expenses, along with payment of attorney fees to the employee’s attorney.  The stipulation provided for payment to three health care providers that had intervened, and it specifically identified five health care providers that were said to have received notices of their right to intervene on November 12, 2003, but failed to respond.  The stipulation requested that these five potential intervention claims be extinguished.

However, neither Medica nor HRI were specifically referenced in the 2007 stipulation, and there was no specific provision made for Medica’s claims.  Rather, the 2007 stipulation states:

Neither Medica nor its representatives were referenced in the 2007 stipulation and award, but Medica was served with the executed award on stipulation from OAH.

In May 2008, the parties began to dispute additional treatment, and the employee filed another medical request.  On October 30, 2009, Medica, which was now being represented by Ingenix, filed an intervention motion.  It initially sought reimbursement for dates of service in 2007 but later revised its claim to include bills for dates of service between 2003 and the settlement in 2007.  The parties proceeded with another hearing in December 2009, and the compensation judge denied Medica’s intervention claim.  Medica and Ingenix appealed the denial of their intervention claim.  The key question was whether Medica was an intervenor and a party at the time of the settlement in March 2007.  This court concluded that Medica was an intervenor and a party in this matter at the time of the March 2007 settlement.  However, there was an absence of evidence on whether Medica’s interest was addressed by the parties during settlement negotiations.  Therefore, this court remanded the case for an evidentiary hearing as to whether or not Medica was excluded from settlement negotiations or discussions, and we stated:

On remand, the case came on for hearing before Compensation Judge Catherine Dallner on February 23, 2012, and April 27, 2012.  The employee appeared pro se, and the self-insured employer and Medica were both represented by attorneys at the hearing.  As the compensation judge noted, Medica’s status as an intervenor was not in dispute and could not be in dispute under the prior decision from this court.  For purposes of the present appeal, the relevant issue presented at hearing was as follows:

The employee’s former attorney, Mark Freeman, was called to testify at the hearing.  He testified that between the 2003 medical request and the 2007 settlement, the parties were aware that Medica had made payments regarding at least some of the treatments at issue, but they did not know what Medica had paid.  Attorney Freeman testified that between 2003 and 2007, his office sent multiple intervention notices to Medica.  He also testified that he asked Medica for a summary of what had been paid on behalf of the employee, but he did not receive any such summary from Medica or its representatives.  Mr. Freeman indicated that he was “frustrated” because Medica had not indicated the amount of their claim.  Mr. Freeman confirmed that after filing his medical request in 2003 and up until the settlement in 2007, he did not know whether Medica was actually asserting a claim.  Medica’s 2003 intervention motion through HRI listed only bills for dates of service from 2002 and before.  Until Ingenix filed its intervention motion in 2009, Medica had not provided an updated itemization of its claimed amount between 2003 and the 2007 settlement.

Mr. Freeman did receive a letter from a Mr. Lindsay at Ingenix.  The letter, dated October 6, 2004, stated that Ingenix had been retained to represent Medica, and it requested copies of relevant pleadings.  Attorney Freeman indicated that he responded to the letter by forwarding the most recent medical request to Mr. Lindsey.  Attorney Freeman was asked whether there had been any other communication with Medica or its representatives regarding settlement before the 2007 settlement.  In response, Mr. Freeman stated, “I did notify them of what was going on, and I did communicate with Medica.  I didn’t receive anything in response.  I didn’t extend any settlement offers, but there was communication from our office to Medica during that period of time.”  Kristie Viscasillas, a senior analyst for Ingenix, testified that she did not know why the letter had been sent from Ingenix in 2004 because, at that time, the claim was still being handled by HRI.  Nonetheless, Mr. Freeman confirmed that the letter, dated October 6, 2004, was the only communication he had received from Medica or any of its representatives prior to the settlement in 2007.

The parties submitted into evidence a number of letters between the attorneys for the employee and employer as they were discussing settlement.  Mr. Freeman was asked about the letters and confirmed that as of April 2004, he believed that Medica had not intervened.  By September 2005, however, the employee’s attorney indicated to the attorney for the employer that there may be some intervention claims that remained outstanding, including claims from Healthcare Recoveries/Medica.  By December 2006, attorney Freeman was concerned about Medica’s claims because they had filed a motion to intervene, and although they may not have followed all of the procedures, according to Mr. Freeman, he believed that they may have considered themselves to have properly intervened.  Mr. Freeman was also concerned because he did not know whether an order closing out Medica’s interest would be upheld.

Ms. Viscasillas testified that her first involvement in the litigation would have been the receipt of a letter from the employee’s attorney dated September 24, 2009, advising Ingenix that Medica may have a potential intervention interest in the pending litigation.  Ms. Viscasillas then filed a motion to intervene on behalf of Medica on October 30, 2009, and the motion covered medical treatment for dates of service in 2007.  She then filed an updated intervention claim for the medical treatment from 2003 through 2007, including the SI joint fusion surgery from January 2003.

Ms. Viscasillas testified that she had no information showing that either Medica or Ingenix had taken any action to make a claim for the SI joint surgery from the time of the medical request in 2003 until the stipulation for settlement in 2007.  Ms. Viscasillas was also unaware of Medica, Ingenix, or HRI completing any paperwork to assert a claim, for example, for the 2003 SI joint surgery until December 1, 2009.  In addition, until 2009, she was not aware of Medica or any of its agents asserting a prior claim for medical treatment other than that which had been foreclosed by the 2002 stipulation.

Ms. Viscasillas testified that there was nothing in her file to indicate that there had been any settlement offer made to Medica leading to the settlement in March 2007.  The employee’s attorney also confirmed that he was not aware of any settlement offers being made to Medica prior to the 2007 settlement.

The employee’s attorney testified that no offer of settlement was made to Medica because the self-insured employer was “looking to close out Medica’s intervention interest, taking the position that Medica did not properly intervene, that Medica had not come forward with a claim for reimbursement.”  As such, he believed that the employer hoped to extinguish Medica’s interest.  The employee’s attorney was not aware of any offers being made to Medica, and counsel for the self-insured employer at the time led attorney Freeman to believe that the employer was not negotiating with Medica because the parties were considering extinguishing Medica’s interest.

The 2002 settlement and award had specifically extinguished Medica’s potential intervention interest because of its failure to intervene.  Attorney Freeman, however, testified that the parties reached a “compromise” on the more general extinguishing language in 2007, quoted above, because he felt a need to exercise caution in attempting to extinguish Medica’s interest.  He stated that the compromise regarding the extinguishing language was reached because “we were seeking to exclude that interest, to - - to extinguish the interest if the employer would be able to do that.”

On remand, the compensation judge found that at the time of the March 2007 settlement, Medica had not been advised that a settlement was being discussed, there were no settlement discussions or negotiations with Medica, and a settlement proposal/offer was not made to Medica.  Therefore, the compensation judge found that Medica Health Plans was excluded from settlement negotiations regarding the March 2007 settlement.  Accordingly, the compensation judge determined that Medica was entitled to full reimbursement from the self-insured employer for medical expenses paid on behalf of the employee prior to service and filing of the award on stipulation on March 8, 2007, along with interest from the date of Medica’s payments on the various bills.

In reviewing cases 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.  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, “[f]actfindings are clearly erroneous only if the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed.”  Northern States Power Co. v. Lyon Foods Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).  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.”  Id.

Whether an intervenor has been excluded from settlement negotiations is a question of fact to be resolved by the compensation Judge.  Parker/Lindberg v. Friendship Village, 395 N.W.2d 713, 718-19, 39 W.C.D. 125, 135-36 (Minn. 1986).

The self-insured employer concedes that the parties did not make any settlement offer to Medica.  However, the self-insured employer argues that Medica had not presented any specific claim or articulated how much, if any, it had paid in medical benefits on behalf of the employee between 2003 and the 2007 settlement.  Further, the employer argues that it was not clear whether Medica was even seeking reimbursement.  Therefore, the self-insured employer agues that Medica effectively ignored requests to articulate its claim and that Medica cannot be allowed to assert subsequently that it was excluded from settlement negotiations.  In addition, the self-insured employer argues that it does not have a duty to make an offer to an intervenor that has not asserted a claim.  Therefore, the self-insured employer requests a remand for a hearing on the merits.

Protection of an intervenor’s interest has long been recognized as an important element in the settlement of workers’ compensation cases.  See Brooks v. A.M.F., Inc., 278 N.W.2d 310, 31 W.C.D. 521 (Minn. 1979) (companion case to Hendrickson v. Central States Insulation, Inc., 278 N.W.2d 310, 31 W.C.D. 521 (Minn. 1979)).

Brooks makes it clear that a consideration of whether to award full reimbursement to an intervenor involves a balance of the interests of all parties involved and must be based “on principles of equity and public policy.”  278 N.W.2d at 315, 31 W.C.D at 531.  Full reimbursement is intended to “motivate the employer-insurer and the employee to include the intervenor in all settlement negotiations.”  Id. at 316, 31 W.C.D. at 533.

The employer admitted in its brief, and the employee’s attorney confirmed, that there were no settlement offers made to Medica before the 2007 settlement.  Rather, as the employee’s attorney clarified, the self-insured employer was looking to extinguish Medica’s intervention interest by taking the position that it did not properly intervene and did not come forward with a claim for reimbursement.

We addressed a similar argument in Gebrekidan v. LSG Sky Chefs, Inc., 70 W.C.D. 71 (W.C.C.A. 2010).  In that case, there was no evidence in the record that a rehabilitation provider was included in settlement negotiations, and the only settlement offer to that provider was made after the stipulation was already drafted and signed.  The parties were well aware of the rehabilitation services provided during the time period in question, but the provider’s interest was not addressed or even mentioned in the settlement.  Furthermore, the attorney for the employer and insurer admitted that the provider was purposely excluded from settlement negotiations based on their position that the provider was not a known intervenor at the time of settlement.  Because the parties were aware of the provider’s services and the potential intervention claim, we held that the rehabilitation provider was a party to the matter whose interest should have been considered and resolved at the time of settlement.  Therefore, because the provider was excluded from settlement negotiations, it was entitled to full payment.

Here, as the employee’s attorney confirmed, the parties were aware that Medica had made payments and that it may have an intervention interest.  However, the parties were seeking to extinguish Medica’s interests for similar reasons to those raised in Gebrekidan.  Therefore, Medica’s interest was not mentioned in the 2007 stipulation, and the parties never made any type of settlement offer to Medica or gave it an opportunity to participate in the settlement negotiations.  As such, Medica is entitled to full reimbursement pursuant to cases such as Brooks, Parker/Lindberg, and Gebrekidan.

We do not condone Medica’s apparent lack of documentation of its claimed amount and its failure to appear at any of the proceedings or to provide any communications before the settlement in 2007.  The protections afforded to intervenors pursuant to the statue and rules, such as Minn. Stat. § 176.361 and Minn. R. 1415.1100 and Minn. R. 1415.1250, are not unlimited, but the minimum expectation for an intervenor is the filing of a motion to intervene, which in and of itself may constitute an appearance.^[2]  Further, Medica’s status as a party to these proceedings was addressed and confirmed in our prior decision.

The Supreme Court has held that the parties bear the burden of making sure that an intervenor’s interests are protected, and an intervenor must be given an opportunity to participate in settlement negotiations.  See Parker/Lindberg, 395 N.W.2d at 718-19, 39 W.C.D. at 134-35 (discussing Brooks).  While Medica may not have presented an itemization of its claimed amount, the parties were aware of Medica’s involvement, and they were aware that Medica had made payments on the medical treatments at issue.  There is no indication, and the employer does not argue, that it was attempting to contact Medica regarding settlement discussions or to make any settlement offers to Medica or any of its representatives.

On balance here, any concerns about the actions, or lack thereof, taken by Medica and its representatives are outweighed by the failure of the parties to include Medica in the settlement negotiations and the attempt to extinguish Medica’s interest, which is exactly the situation Brooks and its progeny address.  As indicated above, there is substantial evidence to support the compensation judge’s conclusions that Medica was not advised that a settlement was being discussed, there were no settlement discussions or negotiations with Medica at the time of the settlement in March 2007, and no settlement proposal/offer was made to Medica at the time of the March 2007 settlement.  Therefore, we affirm the compensation judge’s award of full reimbursement plus interest to Medica for the payments in question.