PRACTICE & PROCEDURE – SERVICE. Where the affidavit of service is flawed as a matter of law, and there is no other substantial evidence to prove proper service was made on the potential intervenor in accordance with Minnesota Statutes and Minnesota Rules, the compensation judge’s finding the notice of the right to intervene was properly served is reversed and the matter is remanded for findings on the potential intervenor’s intervention claim.
Compensation Judge: Sandra J. Grove
Attorneys: Zachery Schmoll, Fields Law Firm, Minnetonka, Minnesota, for the Employee/Respondent. Katherine Vanhavermaet, Kelly R. Rodieck & Associates, St. Paul, Minnesota, for the Employer-Insurer/Respondents. Mark P. Essling, Cambridge, Minnesota, for the Intervenor/Appellant.
Reversed and remanded.
SEAN M. QUINN, Judge
The potential intervenor, Independent Therapy Services (ITS), appeals from the Findings and Order of a compensation judge denying its intervention claim. We reverse and remand for additional findings consistent with this opinion.
On July 18, 2018, the employee suffered an alleged injury while working for the employer. She sought medical care from several providers, including occupational therapy at ITS from November 2018 through January 2019, at a cost of $4,500.00.
The employer and insurer denied primary liability for the employee’s claimed work injury and did not pay any workers’ compensation benefits to, or on behalf of, the employee. In early 2019, before the employee filed a claim petition, ITS mailed its bills to the insurer in the form of health insurance claims forms which listed its address as 153rd Street NW, Wells, Minnesota, 56068-0061. (Ex. B.)
On March 18, 2019, the employee served and filed a claim petition. Contemporaneous with the filing of the claim petition, the employee’s attorney’s office attempted to serve notices of the right to intervene on several potential intervenors, including ITS. The notice was mailed to ITS at 153rd Street NW, Wells, Minnesota, 56097.[1] The affidavit of service from the employee’s attorney's office indicated that Kimberly Barnes had sworn an oath and stated she served the notice of the right to intervene on the potential intervenors. The affidavit of service, however, was not signed by Ms. Barnes, but instead by Patty Alvarado, a paralegal working for the employee’s attorney. Ms. Alvarado’s signature was notarized by the employee’s attorney. (Ex. C.) No other notice of the right to intervene was served on ITS by any party.
Neither ITS nor any of the other potential intervenors that were served with notices on March 18, 2019, filed a motion to intervene. Later, a separate potential intervenor was served with a notice of the right to intervene and filed a motion to intervene.
The employee and the employer and insurer subsequently settled the employee’s claims, including the claims of the only intervenor. A stipulation for settlement was prepared, which noted that each of the potential intervenors that were served with a notice on March 18, 2019, failed to exercise their right to intervene and were thus precluded from recovery pursuant to Minn. Stat. § 176.361. The affidavit of service prepared by Ms. Barnes and signed by Ms. Alvarado was attached to the stipulation for settlement. Subsequently, the compensation judge approved the stipulation for settlement and filed an award on stipulation dated December 17, 2020, which, pursuant to Minn. Stat. § 176.361, extinguished the rights of the potential intervenors, including ITS, from any recovery from the employee, the employer and insurer, or any other health insurer. The award on stipulation was served on the employee, the employer, the insurer, the one intervenor, and their respective counsel. None of the non-intervening potential intervenors, including ITS, were served with a copy of the award on stipulation.
Sometime in late February 2021, ITS received a copy of the award on stipulation. On March 4, 2021, ITS’s attorney sent a letter to the compensation judge inquiring as to why ITS’s rights were extinguished when it never received a notice of the right to intervene. ITS requested the case be reopened or vacated. The compensation judge interpreted this as a motion under Minn. R. 1420.1850, subp. 4, and scheduled a hearing.[2] On March 29, 2021, the employer and insurer moved to cancel the hearing, asserting that the March 4, 2021, letter from ITS was not a proper motion to intervene by ITS. On March 30, 2021, the compensation judge issued an order denying the employer and insurer's motion to cancel the hearing and ordering ITS to file a motion to intervene by April 16, 2021.[3] On March 31, 2021, ITS filed a motion to intervene. ITS’s primary argument was that it was not properly served with a notice of the right to intervene and therefore its rights should not have been extinguished by the award on stipulation. ITS also argued that the employer and insurer should be estopped from denying payment of its claim under various equitable and contractual theories.
A hearing was held on ITS’s motion on April 28, 2021. The owner of ITS testified that she is the sole operator of ITS and that she never received the notice of her right to intervene in this case. She testified that her company operates from more than one location in Minnesota including the Wells, Minnesota, address listed on its health insurance claim forms, the same location where she provided services to the employee. The office in Wells, Minnesota, is in a building that is shared with a dental office, and the dental office typically receives ITS’s mail at that location. Once or twice per week, either the owner will go across the hall to pick up ITS’s mail or the dental office employees will bring her any of ITS’s mail.
The attorney who represented the employee did not testify, but made remarks at the end of the hearing where he asserted that he was aware of at least one other potential intervenor which received the notice that was mailed on March 18, 2019, and chose not to intervene. He also stated that the affidavit of service merely contained a typographical error with the wrong name on the top of the affidavit.
Following the hearing, the compensation judge issued a Findings and Order. She found that the employee’s attorney filed a claim petition and sent a notice of the right to intervene to the potential intervenor. (Finding 8.) She also found that ITS was given proper notice of its right to intervene. (Finding 15.) Consequently, the compensation judge denied ITS’s motion to intervene, denied the intervention claim, and dismissed the claim with prejudice.
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(3). 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 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), summarily aff’d (Minn. June 3, 1993).
ITS argues on appeal that substantial evidence does not support the compensation judge’s finding that it was properly served with a notice of the right to intervene, and thus its right to recovery should not have been extinguished by statute. If a potential intervenor is properly served with a notice of its right to intervene, the failure of that potential intervenor to make a motion to intervene in a timely fashion is fatal to any rights to collect from the employee, the employer, the insurer, or any government program. Minn. Stat. § 176.361, subd. 2(a). If, on the other hand, a known potential intervenor is not given proper notice of its right to intervene, and if it is later shown that the potential intervenor was not given the opportunity to participate in settlement negotiations, then such a potential intervenor is entitled to full reimbursement from the employer and insurer regardless of any defenses the employer and insurer may have had. Brooks v. A.M.F., Inc., 278 N.W.2d 310, 314-15, 31 W.C.D. 521, 530-31 (Minn. 1979).
There is no dispute that ITS did not file a motion to intervene until well past 60 days from March 18, 2019. The compensation judge was presented with the question of whether ITS was properly served with a notice of the right to intervene on March 18, 2019. On appeal, this court must determine whether substantial evidence supports the compensation judge’s finding that ITS was so properly served.
When service of process is challenged, a two-step analysis is applied. First, the serving party must offer evidence of effective service. That party has the burden of going forward. Second, if that party satisfies its burden, the party challenging service must offer evidence that service was improper. That party has the ultimate burden of proof. DeCook v. Olmsted Med. Ctr., Inc., 875 N.W.2d 263, 271 (Minn. 2016). While DeCook applies to service of process, we see no material difference to cases involving service of a notice of the right to intervene. Both a summons and complaint and a notice of the right to intervene require the recipient to take timely action or forfeit rights.
Minn. R. 1420.1850, subp. 1(A), provides that for a settlement to lawfully exclude a potential intervenor for failing to move to intervene, a copy of the notice of the right to intervene, together with the affidavit of service, must be attached to the stipulation for settlement. Minn. Stat. § 176.275, subd. 2(a), provides that when proof of service is required under the Workers’ Compensation Act, including its rules, the proof of service must comply with Rule 15 of the Minnesota Rules of General Practice, which states that an affidavit of service must be signed, sworn, and notarized.
The only evidence in the record regarding effective service of the notice of the right to intervene is the affidavit of service signed by Ms. Alvarado. When the stipulation for settlement was filed with the compensation judge for her approval, a copy of the March 18, 2019, notice of the right to intervene directed to ITS[4] was attached with the affidavit of service[5] accompanying the notice. Ms. Alvarado signed that affidavit of service, and her signature was notarized. By signing the document, and having her signature notarized, Ms. Alvarado purportedly made an oath that she performed the actions listed in the document. The text of the document, however, states that Ms. Barnes, not Ms. Alvarado, made an oath, and that Ms. Barnes, not Ms. Alvarado, mailed the notice of the right to intervene to several potential intervenors, including ITS. Ms. Barnes, however, did not sign the affidavit.[6]
The employer and insurer also argue that the only deficiency in the affidavit is a simple typographical error. We disagree. This is not a case where a name was misspelled, but rather a completely different person’s name is at the top of the affidavit and that is a substantive aspect of the affidavit. The compensation judge found that the employee’s attorney, which we can plausibly interpret as the attorney’s office, served the notice of the right to intervene on ITS, with the only evidence to support this finding being the affidavit of service of Ms. Barnes, signed by Ms. Alvarado.
The question presented to this court is whether this flawed affidavit of service, the only evidence in the record to support a finding of effective service, provides substantial evidence to satisfy the first part of the DeCook test. There is limited case law on this issue. In DeCook, the supreme court noted that this first part of the test is a “low hurdle.” Id. at 871. There is case law to support the contention that questionable allegations contained in the affidavit do not defeat a showing of effective service under the first step in the analysis. See Shamrock Dev., Inc. v. Smith, 754 N.W.2d 377 (Minn. 2008) (an affidavit of service by publication contained dubious allegations regarding the residency of the defendant and his reasons for being absent from the state, but was still sufficient proof of service, although the case was remanded to allow the district court to make factual findings regarding whether the allegations were accurate); Holmen v. Miller, 296 Minn. 99, 206 N.W.2d 916 (1973) (the plaintiff satisfied the first part of the test with an affidavit of service completed by a deputy sheriff that alleged he left the complaint at the defendant’s home residence with a person of suitable age and discretion, a 13-year-old child). On the other hand, In re Marriage of Tinsley v. Tinsley, 427 N.W.2d 739 (Minn. Ct. App. 1988), upheld a trial court’s decision that there was no proof of service of a judgement and decree where an affidavit of service was prepared 10 months after the fact and signed by someone other than the person who allegedly served the judgement and decree.
Here, we find that the affidavit of service in the record is too flawed, as a matter of law, to be considered substantial evidence to support the compensation judge’s finding that the notice of the right to intervene was effectively served on ITS. The employer and insurer’s attorney did not serve ITS with any notice. The employee’s attorney, or at least his office, purportedly did, but the proof of that alleged service is a flawed affidavit. No evidence or testimony was presented to cure the flaw.[7] Effective service of a notice of the right to intervene is not a mere technicality. If the penalty of forfeiture of the right to collect for services is to be imposed on a potential intervenor who fails to timely intervene after being served a notice of its right to do so, then procedure should be strictly followed. We acknowledge the ultimate result in this matter may be a Brooks penalty, which the employer and insurer could have avoided. See Brooks, 278 N.W.2d at 314-15, 31 W.C.D. at 530-31. While DeCook states that the first step of the test is a “low hurdle,” it is still a hurdle.[8]
We reverse and hold that the employee and the employer and insurer failed to prove proper service of the notice of the right to intervene on ITS. As such, we also hold that ITS’s motion to intervene is granted. We remand the case to the compensation judge to consider ITS’s intervention claim.
[2] Even when an award on stipulation extinguishes the rights of a non-intervening potential intervenor, which has substantial implications to the legal rights of that potential intervenor, the law as it currently reads does not require service of such an award on stipulation on that party. We note that once ITS became aware of the existence of the award on stipulation, it acted in a timely fashion by moving for a hearing under Minn. R. 1420.2250, subp. 3. See Minn. R. 1420.1850, subp. 4.
[3] Minn. R. 1420.1850, subp. 4, and Minn. R. 1420.2250, subp. 3, do not require a potential intervenor in this situation to move to intervene, but rather to move for a hearing on the issue of whether the potential intervenor was provided proper notice, which, as noted above, the compensation judge determined ITS had so moved by its March 4, 2021, letter.
[4] The law requires that only potential intervenors be given notice. In this case, the insurer was aware of the third-party billing agency used by ITS. In fact, representatives of the insurer communicated with the agency within a week or so after the filing of the claim petition but did not inform the agency that a claim petition was filed or that a notice of the right to intervene was mailed to ITS. Likewise, no notice of the right to intervene was sent to the billing agency. While not required to do so under the current law, it would seem that providing notice to such third-party billing agencies would be a matter of good practice.
[5] The employer and insurer also argue that ITS failed to make a foundational objection to the affidavit before its admission into evidence. They argue, therefore, that the affidavit cannot be challenged. We disagree. ITS did not assert it lacked foundation, but that the document does not prove effective service. A foundational objection is not required for a party to argue that a document means only what it says.
[6] Contrary to some of the arguments made by the parties, the issue is not whether the text of the body of the affidavit complied with Rule 15 of the Rules of General Practice, but whether the different names on the affidavit affected the validity of the service.
[7] Neither Ms. Barnes nor Ms. Alvarado testified. While the attorneys in this case are officers of the court, their statements during opening and closing arguments are not evidence.
[8] The employer and insurer argue that a statement by a potential intervenor that, “I did not receive the notice of the right to intervene,” is not enough by itself to rebut proof of service of the notice. The employer and insurer also argue that ITS may not have been aware of the notice due to its own faulty system for receiving mail. Because these arguments go to the second step of the DeCook test, we decline to address them in this decision.