1. Supreme Court
1. Professional Malpractice
2. Torts
2. Court of Appeals
1. Arbitration
2. Civil Damages Act
3. Civil Procedure
4. Constitutional
5. Contracts
6. Employment
7. Health Care
8. Insurance
9. Torts
3. Federal Court
1. Civil Procedure
2. Discrimination
3. Employment
4. Insurance

4. Minnesota Workers' Compensation
1. Consequential Injury
2. Nature And Extent Of Injuries
3. Permanent Total Disability/Social Security Offset
4. Procedure
5. Vacate
6. Wages
7. Recent Child Support Law Changes
5. Wisconsin Workers' Compensation
1. Arose Out Of And In The Course Of.
6. Michigan Workers' Compensation
1. There were no updated cases for review as of the printing of this Newsletter.

7. U.S. District Court

In this professional malpractice case, appellant commenced a lawsuit against respondent alleging theories of recovery including breach of contract, breach of fiduciary duty, accounting malpractice and restitution. Respondent moved to dismiss the first lawsuit, and the District Court granted respondent's motion to dismiss on the basis of failure to serve a timely affidavit of expert review. On appeal, the Court of Appeals affirmed the District Court's dismissal with prejudice on some claims but remanded on others to determine whether expert testimony was necessary. Prior to the determination on remand, appellant commenced a second lawsuit against respondent alleging fraud, misrepresentation, and aiding and abetting as theories of recovery. Respondent moved to dismiss the second lawsuit alleging it was precluded by the doctrine of res judicata. The District Court dismissed the lawsuit holding res judicata applied since there had been a final judgment on the merits in the first lawsuit. The Court of Appeals reversed finding that since the appellate process had not yet been exhausted on the first claim, there was no judgment on the merits. As to the issue of splitting its cause of action, the Court noted that prohibition against claim splitting was inextricably linked to res judicata and the Court declined to adopt the prohibition against claim splitting as an affirmative defense separate from the doctrine of res judicata.

The Minnesota Supreme Court held the answers to interrogatories did not satisfy the minimum standards of Minn. Stat. § 544.42 (2006) and affirmed the dismissal of the accounting malpractice count. The Court also held the complaint in the second action was not barred by res judicata and dismissal of the second Complaint was an inappropriate remedy for claim splitting, affirming the decision of the Court of Appeals.

In this appeal from an Order granting summary judgment, the Minnesota Supreme Court addressed the applicability of Minn. Stat. § 466.12, subd. 3a (2006), which provides immunity to school districts that are unable to obtain liability insurance for an average rate of $1.50 or less per pupil.

The District Court applied the rational basis test, found the statute constitutional and dismissed plaintiffs' cases. The Court of Appeals affirmed the use of the rational basis test but remanded for findings on whether the $1.50 provision was relevant to the statute's purpose under current market conditions. On remand the school district moved for summary judgment in each action and the District Court denied each motion in separate, identical orders finding the statute unconstitutional in light of current market conditions. The school district appealed and the Court of Appeals consolidated the actions, and reversed, finding the statutes constitutional. On appeal to the Minnesota Supreme Court, the Court allowed the appellants to proceed with an argument asserted for the first time on appeal, namely whether Minn. Stat. § 466.12 expired in 1974 and was not revived. Applying rules of statutory construction, the Court reversed the decisions of the Court of Appeals and remanded, finding the statute had expired in 1974 and had not been revived.

In this case, an insurer and a manufacturer agreed to submit a dispute to binding arbitration through Arbitration Forums. Arbitration Forums initiated proceedings based on an obviously incomplete form submitted by the insurer and proceeded with the hearing in the insurer's absence. The manufacturer failed to serve the insurer with documents and allowed Arbitration Forums to exclude the insurer from the hearing. Under these facts, the Court concluded that the exclusion of the insurer from the arbitration proceedings was procured by undue means under Minn. Stat. § 572.19, subd. 1(1). The Court also ruled that the manner in which the arbitration proceeded violated the due-process provisions of the Arbitration Act.

Where the record contains insufficient evidence that a decedent's intoxication proximately caused his drowning, the Court of Appeals held that summary judgment dismissing the action is appropriate.

In this wrongful death action, a state trooper pulled Michael Riley over to the shoulder of a bridge over the Minnesota River for speeding after he had been drinking alcohol at Jerry Dutler Bowl. After failing several field sobriety tests, Mr. Riley was advised he would be placed under arrest for driving while intoxicated. The trooper briefly turned his back before he heard Mr. Riley say, "I'm out of here." The trooper turned around to observe Mr. Riley jump into the river. Mr. Riley's body was found three months later. The parties stipulated that Mr. Riley jumped to escape arrest. The Appellate Court concluded that events between Riley's intoxication at Jerry Dutler Bowl and his drowning did not support the conclusion that the intoxication was the cause of the drowning.

In this case involving water intrusion into a building, the Court of Appeals affirmed the District Court decision. Appellant argued that the District Court erred in allowing respondent to present evidence and argument at trial on issues that the Court had previously decided in appellant's favor on summary judgment. The Court also declined to review a question as to whether appellant had sufficient notice to prepare for trial on coverage issues, because appellant had failed to provide a trial transcript.

Appellant had sought coverage under an insurance policy issued by respondent. The policy excluded damage attributable to rain unless the building first sustained damage by a covered cause of loss. On appellant's motion for summary judgment, the District Court had found that all admissible evidence pointed to a storm, rather than wear and tear, as the cause of loss. The Court further held that an interior damage limitation in the policy did not exclude coverage. After allowing coverage issues to proceed to trial, the District Court found that respondents had proven that the interior damage coverage limitation applied and that rain entered the building because the roof was badly deteriorated and not because of storm damage.

The Court of Appeals reversed and remanded the District Court's dismissal of plaintiff's lawsuit for defamation and tortious interference with contract arising out of termination of her employment. The Court ruled that plaintiff's tort claims were not a compulsory counterclaim under Rule 13.01, so plaintiff's failure to assert her tort claim in a prior non-tort action did not preclude her from asserting that claim in a subsequent lawsuit involving the same parties. In this case, the plaintiff was the executive director of a nonprofit organization who had been terminated and previously challenged the authority of the board but failed to assert a counterclaim arising out of her dismissal and the prior lawsuit.

This matter concerns an appeal from an Order denying a motion to stay docketing of a foreign judgment. A judgment against appellant was entered in Los Angeles County Superior Court. Just over five years later the Superior Court granted respondent's application for a renewal of the judgment. Another five years passed and respondent filed a second petition for renewal of the judgment. In 2006, respondent filed a judgment in Hennepin County under the Uniform Enforcement of Foreign Judgments Acts. Appellant brought a motion to stay the docketing of the judgment claiming the judgment was no longer enforceable. The District Court denied appellant's motion for a stay of the docketing of the foreign judgment, finding that the respondent validly renewed her judgment and it should be enforced in Minnesota. The Court of Appeals affirmed concluding that a renewed or revived judgment is entitled to full faith and credit.

The Court of Appeals held that a car accident victim does not have standing to challenge the constitutionality of a provision in the Municipal Tort Liability Act that excludes professionals from the Act's limits to recovery where the plaintiff-victim's car collided with an ambulance owned by a city and driven by a city employee. Plaintiff's claim did not involve a municipal employee acting in a professional capacity because the employee was not providing professional services while employed by a person other than the municipality. The District Court properly determined that plaintiff did not have standing to challenge the statute and the Act limited the city's liability to $300,000.

The parties to this action purchased a car together as co-owners. At the time of the purchase, the parties were living together but later separated. After the parties defaulted on the car loan, the car was repossessed and ultimately sold at an auction. Ahlborn satisfied the outstanding balance after being pursued by the creditor and later filed a claim in Conciliation Court after Roban ceased making payments. The Conciliation Court awarded Alborn judgment, and Roban had the case removed to District Court. The District Court found that Roban had signed the loan documentation only as a "co-signer" and concluded that it did not merit "joint debt," and that the parties were not co-owners of the vehicle.

The Court of Appeals reversed the District Court's conclusion that the loan documentation did not indicate "joint debt" because the documentary evidence unambiguously demonstrated the parties were joint debtors.

The Court of Appeals in this unpublished decision determined that Clement Felix had breached a contract by failing to pay for the hearing aids and by returning them three months after the 30-day contractual return period had expired. The Court determined that because no market exists for used, custom-made hearing aids, ZVDAC Enterprises was entitled to recovery of the selling price and that the District Court was in error for denying ZVDAC the full contract price. By virtue of this error, the case was reversed and remanded.

In this published case of retaliatory discharge, the Court of Appeals rejected the arguments of appellant employee and amicus curiae, the Minnesota Chapter of the National Employment Lawyers Association, and held that a former employee must actually know of or suspect a violation of a federal or state law at the time he or she makes a report to qualify for protection under Minnesota's whistleblower law. Accordingly, an employee's statements to his supervisors, expressing concerns about the safety of a medical device developed by his employer, did not constitute a "report" within the meaning of the whistleblower law because the employee did not know whether the employer was going to report experiment results to the Food and Drug Administration (FDA), because the employee had no reason to suspect that his employer would not report, and because the employee did not indicate to his supervisors that he suspected a violation of federal law.

In this unpublished opinion by the Court of Appeals, summary judgment was properly granted on Webb's claims of negligent supervision and retention. The Court of Appeals found that plaintiff failed to show a threat of physical injury or actual physical injury in order to maintain a claim for negligent supervision or retention. The Court of Appeals based this decision on the lack of evidence that supported the claim that Webb was being stalked by another employee or that the employee accused of harassment was actually dangerous. As such, the Court of Appeals determined the District Court had properly granted summary judgment on the claims of negligent supervision and negligent retention.

The Court of Appeals, in this unpublished decision, held that a person other than the resident or a financially responsible spouse is a "responsible party" and is financially liable for a nursing home resident's care when the individual both (1) has access to the resident's income and assets, and (2) either agrees to apply the resident's income and assets to pay for the resident's care or agrees to apply for medical assistance on behalf of the resident. The Court affirmed the district court's summary judgment against appellant Extendicare Health Services, Inc. (EHS), a nursing home owner, because EHS had not provided any evidence that the resident's son, Brett Henderson, actually had access to his mother's income or assets. Therefore, Brett Henderson was not responsible for the nursing home costs incurred by his mother, Helen, even though he signed an admissions agreement stating that he agreed to apply his mother's assets to pay for her care.

In this case arising under the Minnesota No-Fault Act, the Court of Appeals affirmed the decision of the lower court finding that a live-in significant other of an insured is not a "dependent" under the Minnesota No-Fault Act. Appellant had lived with the decedent for seven years prior to a fatal accident in early 2005. Respondent denied appellant's request for no-fault benefits on the basis that she was not a survivor within the meaning of the insurance policy and because she was not the insured's dependent. The District Court concluded appellant was ineligible for survivor's economic loss benefits because she was neither a spouse nor a child of a deceased person under the policy. Similarly, she was not a dependent for the purposes of the No-Fault Act. The Court of Appeals affirmed, rejecting appellant's argument regarding the existence of a fact issue as to whether she was a dependent.

In this summary judgment appeal, the Minnesota Court of Appeals determined that under the Minnesota No-Fault Act, if a Minnesota-licensed insurer issues an automobile insurance policy in North Dakota which provides underinsured motorist benefits to an insured who is a Minnesota resident, the policy is obligated to pay the underinsured benefits according to Minnesota law if the insured resident is involved in an accident in Minnesota. In deciding thus, the Court also concluded that decedent Ann Schossow was a Minnesota resident, despite her representations that she was a North Dakota resident, because she lived in Minnesota continuously and worked here full-time with only one weekend visit per month to North Dakota. The Court further concluded that a person living and working in Minnesota is a Minnesota resident notwithstanding evidence that her domicile may be in another state to which she intends to return within a few years.

The Court of Appeals affirmed the District Court's ruling which determined an insurer had no duty to defend or indemnity a Complaint that alleged damage resulting from an occurrence under the policy where a pollution exclusion precluded coverage and coverage was not triggered by the policy's incidental-coverage provisions. The Court of Appeals found that there was an occurrence contrary to the District Court's ruling noting that in order for an act to be excluded from coverage under an insurance policy as intentional, a Court must find that the insured intended the harm, not merely that it intended to act. The Court, however, determined that although there was an occurrence within the meaning of the insurance policy, the policy's pollution exclusion operated to preclude coverage of the underlying Complaint. Specifically, the Court determined that the term "atmosphere" as defined by previous cases is dependent on where the pollution was released rather than the area damaged by the pollution. In addition, the Court determined that the underlying Complaint did not fall within "accidental-spillage" or "damage-to-property-of-others" provisions of the incidental liability coverage, agreeing with the District Court.

In this negligence action involving a person injured by a horse, the District Court determined respondents were not negligent as a matter of law. On appeal, the Court of Appeals affirmed finding the horse's kick was not foreseeable and, therefore, the mother, father and daughter did not owe the appellants a duty of care. For similar reasons, the landowner did not have a duty to appellants as it was not reasonably foreseeable that the horse would start kicking. The Court of Appeals also affirmed the District Court's decision to deny plaintiffs' motion to amend their Complaint.

This unpublished opinion by the Court of Appeals addressed whether the District Court properly concluded that plaintiff primarily assumed the inherent risk of a collision. The Court of Appeals stated that the primary assumption of risk completely bars plaintiff's recovery because it negates a defendant's duty of care. The plaintiff's injuries arose out of risks inherent to participating in the ski patrol, namely, the risk of colliding with a skier or snow boarder when riding a snowmobile up an active ski hill in response to an emergency. Therefore, the Court of Appeals determined that the District Court had properly granted summary judgment when it determined that the plaintiff primarily assumed the inherent risk of a collision.

In this unpublished opinion by the Court of Appeals, the District Court's decision regarding summary judgment based on the delayed discovery statute was reversed. The Court of Appeals determined that the District Court misinterpreted the state of the delayed discovery statute. The Court of Appeals recognized two interpretations of the delayed discovery statute. The delayed discovery statute either allows plaintiff's alleging sexual abuse during the time of minority to maintain a claim six years after turning 18, pursuant to DMS v. Barber, 645 N.W.2d 383 (Minn. 2002), or to maintain a claim six years after turning 19, pursuant to W.J.L. v. Bugge, 573 N.W.2d 677 (Minn. 1998). Given the fact that the claim was brought on November 5, 2004, when the victim was 18, it was well within the statute of limitations period under either interpretation of the statute. The District Court was therefore reversed in its granting of summary judgment against the plaintiff.

In this federal case involving numerous state law causes of action, the Court of Appeals affirmed in part and reversed in part the District Court's decision to dismiss plaintiff's claims. The appeal turned upon whether the plaintiff satisfied the federal diversity jurisdiction requirement of a controversy in an amount greater than $75,000. While plaintiff's claim was for $66,000, it alleged that additional damages were allowed under the receipt of stolen property statute. Plaintiff also alleged punitive damages and claimed attorney's fees and costs pursuant to the "third-party litigation" exception to the rule that each party is responsible for its own attorney's fees.

The District Court had dismissed OnePoint's claims for theft, receipt of stolen property, and attorney's fees for failure to state a claim. The Court had also dismissed the remainder of the suit for lack of subject matter jurisdiction, finding that the amount in controversy requirement for diversity jurisdiction was not satisfied.

The Appellate Court determined that a reasonable jury could find the amount in controversy satisfied the $75,000 requirement, and therefore reversed and remanded the matter for further procedures consistent with its opinion. Concurrently, the Appellate Court affirmed the District Court's dismissal of the theft claim because the criminal statute did not provide for a civil liability. The Court also affirmed dismissal of the receiving stolen property claim, finding that the legislature did not intend to create civil liability absent the filing of a criminal complaint and a criminal conviction. Finally, the Appellate Court upheld the District Court's decision to dismiss plaintiff's claim for attorney's fees under the "third-party litigation" exception because the Complaint treated Borchert and Catuzzi as joint tortfeasors, not third parties.

In a ruling by the United States Supreme Court in a case involving an anti-trust conspiracy claim, the Supreme Court addressed requirements of pleadings in light of Fed. R. Civ. P. 12(b)(6) motions to dismiss for failure to state a claim upon which relief can be granted. The Court found that the plaintiff in order to defeat a Fed. R. Civ. P. 12(b)(6) motion must provide the grounds of his entitlement to relief, which requires more than labels and conclusions and a formulaic recitation of the elements of a cause of action. The factual allegations must be enough to raise a right to relief above the speculative level. The Court abrogated the language in Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed. 2d 80 which uses the language "no set of facts" in its conclusion to determine that a motion for failure to state a claim upon which relief would not be granted unless the plaintiff can prove no set of facts in support of a claim that would entitle him to relief. The Court stated that while the literal language "no set of facts" in Conley would not be applicable before a claim has been adequately stated in the Complaint. After the claim is adequately stated, the claim may be supported by showing any set of facts consistent with the allegations in the Complaint. The Court felt it was merely clearing up possible inconsistencies in the law regarding notice pleadings pursuant to Fed. R. Civ. P. 8 and motions for dismissal for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6).

In a 5-4 decision, the United States Supreme Court affirmed the decision of the Eleventh Circuit Court of Appeals regarding pay discrimination arising under Title VII of the Civil Rights Act of 1964. Petitioner worked for respondent between 1979 until 1998. During most of this time salaried employees were given or denied raises based on their supervisor's evaluation of their performance. Petitioner submitted a questionnaire to the EEOC alleging sex discrimination in March 1998 and filed a formal charge in July 1998. Following Petitioner's retirement in November 1998, she commenced an action alleging a number of claims including a Title VII pay discrimination claim. At the District Court level, a jury found for petitioner and awarded her backpay and damages. On appeal to the Eleventh Circuit Court of Appeals, respondent contended petitioner's pay discrimination claim was time barred with respect to all pay decisions made prior to September 26, 1997, 180 days prior to the filing of her EEOC questionnaire. The Eleventh Circuit Court of Appeals reversed the District Court holding that a Title VII pay discrimination claim cannot be based on any pay decision that occurred prior to the last pay decision that affected the employee's pay during the EEOC charging period. The Court also concluded there was insufficient evidence to prove respondent acted with discriminatory intent in making the only two pay decisions that occurred within that time span.

The United States Supreme Court affirmed the decision of the Eleventh Circuit holding that later effects of past discrimination do not restart the clock for filing an EEOC charge. The Court rejected petitioner's arguments that the respondent's conduct during the changing period gave present effect to discriminatory conduct outside the charging period and that each check issued by respondent triggered a new charging period during which she may properly challenge prior discriminatory conduct that impacted the amount of the paycheck. The dissent argued the majority's opinion insistence on immediate contest overlooked common characteristics of pay discrimination and noted that pay disparities have a closer kinship to hostile work environment claims than to charges of a single episode of discrimination.

The District Court granted an employer's motion for summary judgment dismissing an employee's retaliation claims with prejudice and on the merits but denied the employer's motion for summary judgment regarding the employee's constructive discharge and sex-discrimination claims.

After 26 years of employment with American Crystal, employee Charlotte Mitchell was demoted twice within a 10-month period. After the first demotion, Mitchell filed a grievance report asserting sexual discrimination. After Mitchell's second demotion, she took leave and never returned to work. The record indicates that the supervisor playing a key role in Mitchell's demotions made several comments reflecting his belief that "a woman belongs at home, not in a factory." Mitchell sued American Crystal, alleging her demotions were based on sexual discrimination and retaliation. The Court also analyzed whether Mitchell was constructively discharged after her second demotion.

The Court found that Mitchell satisfied the "low-threshold standard" that she and a similarly-situated male employee were involved in or accused of the same or similar conduct but that she suffered different consequences for that conduct. Because the record contained clear evidence of sex discrimination, the Court relaxed the requirement that a comparator be "similarly situated in all relevant aspects." Evidence that Mitchell's supervisor (1) commented she should not hold a particular position because she is a woman; and (2) supervised her unusually closely after her second demotion was sufficient to conclude the supervisor was biased against Mitchell because of her sex. Therefore, the Court found substantial evidence of sexual discrimination beyond the disparate treatment of Mitchell and other male employee and denied American Crystal's motion for summary judgment regarding Mitchell's sexual discrimination claims.

The Court also found that Mitchell's humiliation over the demotion to the entry-level position she held with American Crystal over 20 years ago was sufficient to constitute "intolerable conditions." Mitchell also gave American Crystal an opportunity to remedy the humiliating demotion by filing a grievance over her demotion, asserting the demotion stemmed from sexual discrimination by a supervisor, and requested reinstatement to her earlier status. Thus, Mitchell satisfied her burden to give American Crystal an opportunity to remedy the intolerable working conditions, and the Court denied American Crystal's motion for summary judgment on this issue.

The Court, however, refused to find Mitchell's second demotion an act of retaliation when the American Crystal employees making the decision to demote Mitchell had no knowledge of Mitchell's earlier complaints of sex discrimination. Further, American Crystal had offered a legitimate, non-retaliatory reason for Mitchell's second demotion. Therefore, the Court granted American Crystal's motion for summary judgment regarding the Mitchell's retaliation claims.

When does a terminated public employee's private personnel data become public and accessible? According to the U.S. District Court, the Government Data Practices Act provides that final disposition on current and former employees is public, including the final disposition of any disciplinary action together with the specific reasons for the action and data documenting the basis of the action. Accordingly, Daniel Hemmah's termination letter became public data when City Council Administrator Kuhlmann decided to terminate his employment on April 27, 2006. Even though Hemmah may have had a contractual right to contest the termination decision, the termination letter was public data and protected from defamation claims before May 8, when a local newspaper reporter asked the City for Hemmah's termination letter.

In this case construing 42 U.S.C. § 1983, the Eighth Circuit Court of Appeals affirmed the decision of the lower court finding Appellant failed to establish a prima facie case. Altonen was hired by the Minneapolis Police Department in 1987 and received a number of promotions during her tenure. In 2003 she was promoted to inspector and advised she would serve at the pleasure of the chief. In October 2003 the Department began a search for a new Police Chief. Altonen supported Deputy Chief Lucy Gerold for the position; however, William McManus was eventually chosen. In December 2003, Altonen was the subject of a human resources investigation involving a complaint by Lieutenant Robert Skomra. Following dismissal of the complaint against her, Altonen requested a copy of the investigative file, which was initially denied. She then sought the file pursuant to the Minnesota Government Data Practices Act and received the file in May 2004. Also in May 2004 management determined downsizing of the Department was necessary. Altonen was removed from her position as investigator to a captain position based on the recommendations of Deputy Chiefs Dolan and Lubinski. Her demotion resulted in a pay decrease and loss of fringe benefits.

Altonen brought suit alleging First Amendment claims pursuant to 42 U.S.C. § 1983 and Minn. Stat. § 181.982, the Minnesota whistleblower statute. The District Court concluded Altonen's lawsuit to gain access to the Skomra investigative file was not protected speech because it was not related to a matter of public concern but that her support of Gerold for chief was protected. While her reassignment was found to be an adverse employment action, she had not established a causal connection between her support for Gerold and her reassignment. The District Court also concluded the City of Minneapolis had shown Altonen would have been reassigned regardless of her support for Gerold. The Eighth Circuit Court of Appeals affirmed the grant of summary judgment. The Court noted there was no evidence in the record that Altonen's position changed due to the Skomra investigation. Furthermore, while the Court acknowledged Altonen's reassignment was an adverse employment action, she has failed to establish a retaliatory motive that led to the reassignment.

The District Court denied Dorpinghaus' claim to recover attorney's fees and costs that he incurred in defending the declaratory-judgment action. In the underlying case, three workers brought a state court action against Dorpinghaus arising out of a construction accident. AMCO assumed the defense of the underlying lawsuit and then commenced the declaratory-judgment action seeking a ruling that it had no duty to defend or indemnify Dorpinghaus in connection with the workers' claims. Dorpinghaus filed a counterclaim for attorney's fees. The Court based its ruling on established Minnesota law that an insured may not recover the attorney's fees incurred in defending a declaratory-judgment action brought by the insurer, unless a statute or insurance contract expressly provides for that recovery or the insurer breaches the insurance contract for failing to defend the underlying action.

The Workers' Compensation Court of Appeals held that the correct test to determine whether a insurer is liable for a consequential injury is whether the second injury also "arose out of and in the course of employment." It is not enough that the second injury is a natural consequence flowing from the first injury. Here, the employee sustained a rather serious foot injury, requiring multiple surgeries. The employer and insurer admitted the foot injury. The employee then alleged a second injury to her low back. There was a casual connection between the foot injury and low back, as the low back pain started after the employee's foot surgeries caused her to walk with an altered gait and use a cart whereby she had to be hunched over. This casual connection is not enough, however, when the second injury is caused by a separate and distinguishable injury from the first injury. When the second injury is caused by a second event the employee still needs to show that the second injury also arose out of and in the course of employment.

The WCCA affirmed the compensation judge's Findings concerning the nature and extent of the employee's work-related injuries. On December 8, 2003, the employee was involved in a work-related accident while driving a 22-wheel Mack truck. The employee was admitted to the intensive care unit of Fairview Red Wing Medical Center, where he was diagnosed with a closed head injury, with concussion, and a nondisplaced sternal fracture. A CT scan of the employee's head was normal; a chest CT revealed a sternal fracture. The employee was discharged from the hospital on December 11, 2003, and chart notes from December 17, 2003 indicate that he was reporting rib tenderness. Those same notes reflected that the employee was dizzy and had seen spots. Subsequently, the employee complained and was evaluated for right eye visual disturbances, fatigue, lack of stamina, dizziness, difficulty breathing, left ankle pain, headaches, chest pain, palpitations, and a feeling of flushing. Testing revealed a healed posterior rib fracture, a near-complete tendon tear in the employee's left ankle, and a posterior vitreous separation in his right eye. He also went through additional cardiac, and pulmonary testing. On June 1, 2004, surgery was performed to repair the tendon in his left ankle. Although the employer and insurer accepted liability for the employee's ankle condition, a dispute arose concerning the work-relatedness of his vision and cardiopulmonary symptoms. When this matter came on for hearing, the primary issue was the nature and extent of the employee's work-related injuries, specifically involving the employee's right eye and cardiopulmonary symptoms. The compensation judge resolved all issues in the employee's favor ordering the employer and insurer to pay for all of the disputed treatment. The employer and insurer appealed.

The employer and insurer's independent medical examiner acknowledged that the employee's posterior vitreous separation was the result of his December 8, 2003 accident. The examiner, however, opined that the condition was not visually significant and with correction the employee's vision was normal. As a result, he needed no further care or testing for his eye. In addition, the employer and insurer contended that the employee's physician was the only one to tie his vision problems to his work injury and since he was not a vision specialist, the doctor lacked foundation for his opinion. The WCCA acknowledged that the medical evidence supporting the employee's eye claim was not particularly strong but the employee did, in fact, injure his right eye in an accident and he had no history of prior right eye vision or tearing problems. Given the circumstances of this case, the WCCA concluded that it was reasonable for the compensation judge to find that the eye treatment at issue was compensable.

Regarding the employee's cardiopulmonary condition, physicians suspected that he had sustained a cardiac contusion or bruising to his lungs as a result of the accident. Cardiac testing was done which appeared to eliminate the cardiac contusion theory, however, the employee's physician was of the opinion that the employee was in need of additional cardiac evaluation. Since the employee offered credible and convincing testimony of ongoing problems and symptomatology, the compensation judge found that the cardiac referrals were reasonable, necessary and causally related to the employee's work accident. The WCCA noted that the employee had fractured his sternum and had a probable related hematoma resulting from his accident. Clearly the subsequent cardiac and pulmonary testing was reasonable and compensable for investigation into whether the condition was caused by the admitted work injury. The WCCA affirmed the compensation judge's decision.

In this matter, the WCCA addressed the award of permanent total disability and the allowance of a Social Security offset. In August 2000, the employee sought medical treatment for low back pain with radiation down her left leg. During the examination, the certified nurse practitioner found muscle pain from the mid-thoracic to L5 level and diagnosed sciatica. On April 3, 2001, the employee again sought medical treatment stating she had fallen in her bathtub several days earlier and was complaining of low back pain with radiation down her left leg. In May 2001, she was again diagnosed with low back pain with radicular symptoms. A lumbar MRI scan in 2001 showed degenerative changes at L4-5 and L5-S1. She fell again in November 2001, and again sought treatment for severe back and left leg pain. By Decision dated February 2, 1999, the employee was awarded Social Security disability insurance benefits effective August 18, 1997. She was qualified for the benefits due to major depression, Fibromyalgia, and chronic pain syndrome. In 2002, the employee began working for Lutheran Social Services on a part-time basis. On April 1, 2002 and August 24, 2003, she sustained injuries to her low back arising out of her employment. An MRI scan in November 2003 showed small disc herniations at L4-5 and L5-S1 with degenerative changes at the L4-5 facet joints. Dr. John Dowdle examined the employee in February 2005 at the request of the self-insured employer. It was his opinion that the employee's April 2002 and August 2003 work injuries were temporary aggravations of an underlying chronic low back condition. Dr. William Fleeson examined the employee in August 2005 at the request of the employee's attorney. It was his opinion that the April 2002 and August 2003 work injuries were substantial and permanent aggravations of pre-existing conditions in the employee's spine. The employee was released to return to work on January 23, 2006 subject to restrictions, two hours a day, three days a week, working every other day. On August 25, 2003, the employee filed a Claim Petition seeking permanent total disability benefits. Following the hearing, the compensation judge awarded permanent total disability benefits but found that the employee's Social Security benefits were occasioned in substantial part by the two work injuries entitling the employer to the Social Security offset. The self-insured employer appealed the permanent total disability benefits award and the employee appealed the employer's ability to offset the employee's Social Security disability benefits.

Citing case law, the WCCA noted that total disability depends on the employee's ability to find and hold a job. This is not based on the employee's physical condition. Total disability can be found when an employee is unable to work any more than sporadic employment resulting in insubstantial income. Even though an injured employee may earn a marginal income, that does not prevent an award of permanent total disability. The court found that although the employee was only working 16 hours per week for Lutheran Social Services prior to her second injury, there were no medical restrictions limiting her to part-time work. Rather, the employee testified that she was self-limiting her hours because she did not want to lose her Social Security benefits. As a result, the WCCA found that a compensation judge could reasonably conclude that the employee was no longer able to obtain employment resulting in more than insubstantial income based on her current restrictions. The self-insured employer also argued that the award of permanent total disability benefits was premature in that one doctor had recommended surgery and another suggested the possibility of a nerve stimulator implant; therefore, there was a possibility of significant improvement in the employee's condition which would increase her employability. The WCCA found that there was no evidence, however, that any further treatment would significantly enable the employee to return to work. As a result, the court found that the judge's finding of permanent total disability was not premature.

The WCCA, however, reversed the compensation judge's decision that the Social Security disability benefits were occasioned in substantial part by the employee's work-related injuries. The court noted that the first specific complaint of the employee's low back pain was noted in a chart note dated August 24, 2000, after issuance of the Social Security decision. In that decision, the Administrative Law Judge had concluded that the employee was eligible for Social Security benefits because of depression, Fibromyalgia with headaches, and chronic pain syndrome. There was only one reference to low back pain wherein the employee had testified that she could sit less than an hour before experiencing low back pain. There was no evidence that the Administrative Judge reviewed any medical records documenting any existing low back condition or complaints. The WCCA concluded that since the Social Security benefits were awarded prior to her work-related injuries, the disability benefits could not offset the employee's permanent total disability benefits.

The WCCA upheld the compensation court's dismissal of the employee's claim, with prejudice, where the employee failed to comply with discovery requests on multiple occasions and also failed to comply with two Orders compelling discovery. The matter had remained stricken from the trial calendar for more than 20 months, at least in part because of delays attributable to the employee's failure to comply with discovery requests and court orders. The employee failed to show for her deposition on four different occasions and also continuously failed to provide unrestricted medical authorizations despite being so ordered by the court.

The WCCA upheld the dismissal noting that the dismissed pleadings only covered a very limited period of temporary partial disability benefits and that the employee's behavior could only be characterized as egregious. The WCCA held that the employee's excuses were simply a part of a continuing pattern of noncompliance with requests for discovery, court orders, and the terms of the Workers' Compensation Act, thereby warranting dismissal.

In this matter, the employee was arguing that the Award on Stipulation filed on July 20, 2000 should be vacated because of a substantial change in condition. The employee sustained an admitted work-related injury to her low back on April 27, 1996. On August 5, 1997, she was released to return to work with restrictions. She first sought medical treatment for the pain in her neck and intrascapular area in October 1999. The doctor eventually opined that the employee's neck and shoulder symptoms were the result of a Gillette-type injury culminating in early October 1999. Sometime in March 2000, the employee filed a Claim Petition seeking temporary total disability benefits as a result of work-related injuries. In June 2000, the parties entered into a Stipulation for Settlement which was a full, final and complete settlement of her claims with the exception of medical expenses relating only to her low back. On November 2, 2000, the employee was seen in the emergency room for complaints of neck pain and numbness in her arms. She underwent an MRI in January 2000, which showed a disc protrusion. Thereafter, the employee had on and off treatment for her neck pain along with tingling and numbness in both arms. In May 2003, she was complaining that her whole body hurt. In July 2004, she was complaining of hand and arm numbness, tightness and pain in the neck, and weakness and giving out of her left leg. She underwent epidural steroid injections to her cervical spine and medication. She was given a 10% whole body disability on November 16, 2005. On November 2, 2006, the employee filed a Petition to Vacate the July 2000 Award on Stipulation based on a substantial change in condition.

Pursuant to Minn. Stat. § 176.461, cause to vacate includes a substantial change in medical condition, since the time of the Award, that was clearly not anticipated. The WCCA applied the Fodness factors in determining whether there had been a substantial change in the employee's medical condition. Those factors include: a change in diagnosis; a change in the employee's ability to work; additional permanent partial disability; unanticipated, necessary, costly and extensive medical care; and a causal relationship between the settled injury and the employee's current worsened condition. The WCCA found that the employee had a cervical diagnosis back in 1999 so her diagnosis had not changed. Her restrictions also had not changed so there was no change in her ability to work. She did have an increased PPD rating, but it was not substantial. The previous Stipulation closed out future medical expenses with the exception of those related to the low back, so it did not appear that additional medical treatment was not anticipated. Finally, there was no medical report which contained a specific or detailed opinion on the issue of causation. As a result, the employee's Petition to have the Award vacated was denied.

Richard Schmidt and Jessica Theisen of Cousineau McGuire successfully defended the employer and insurer's interests against the employee's Petition to Vacate. The employee brought a Petition to Vacate on mutual mistake of fact. The WCCA concluded that the employee failed to establish good cause and denied the Petition to Vacate. In the employee's Petition to Vacate, the employee contended that the parties agreed to leave open prescription costs that were not related to psychiatric and psychological medical care. The employer contended that the Stipulation for Settlement clearly and unambiguously closed out all prescription care. The WCCA agreed with the employer and held the Stipulation explicitly closed out prescription expenses. The Court noted that while the employee may not have intended to foreclose his claim for all prescription expenses, his subjective intent is irrelevant. The parties expressed intent and the Stipulation governs rather than any party's subjective mental intent. Here, the employee failed to establish a mutual mistake of fact and, therefore, the employee's Petition to Vacate was denied.

The question this case addressed is whether an employee's wages were irregular, requiring the use of an averaging formula in calculating the average weekly wage, or if the employee was entitled to his forty-hour a week wages, despite variances in actual hours worked during the 26 weeks before the injury. The employee based his argument on the idea that he was hired to work forty-hours a week and thus should be entitled to wage loss benefits based on a forty-hour week. The WCCA held that an averaging formula should be used, since the employee did not provide any evidence that variances on the time cards were due to holidays, vacation days, or sick leave. The employee's earnings were therefore irregular, requiring the use of an averaging formula to determine the average weekly wage.

It has been a few months since the law changed but most likely insurance companies and employers have not been affected. Effective January 1, 2007, Minnesota joined the migration of states from child support being totally based on the obligor's income (the person obligated to pay child support) to an income shares approach. This approach takes into consideration the following:

• the income of both the obligor and obligee (the person to whom the child support is owed);
• the obligor's parenting time (what percentage of time the obligor spends with their child(ren));
• medical expenses;
• health care coverage;
• the number of children living with each parent (not including the child(ren) for whom child support is being ordered);
• other child support orders for the obligor;
• child care costs; and
• social security or veteran's benefits paid on behalf of the child(ren) for whom child support is being ordered.

The major change in this law is that the child support is based on the income of both parents and that it takes into consideration how much parenting time the obligor has with their child(ren).

How might this affect insurance companies or employers? An entity that provides funds to either parent (not just to an obligor) may be asked to verify both parents' income, not just the obligor's income. Other than responding to more income inquiries, this child support law change should not affect insurance companies or employers.

The Wisconsin Labor and Industry Review Commission found that the employee's limbo dancing did not take her out of the course of her employment at the time of her injury. The employer asserted in its Petition for commission review that the administrative law judge erred in finding that the applicant had not deviated from her employment at the time of her injury. The employee was a Middle School art teacher for the School District at the time of her injury on April 30, 2004. The student's council sponsored a dance and requested that she act as a chaperone. The employee agreed and on April 30, 2004, after completing her teaching duties, she proceeded to the gymnasium where the dance was held. She never left the school premises and she did not receive any extra compensation for her chaperone duties. During the dance, the disc jockey announced that there would be a limbo dance. The employee got up to practice the limbo, bent over to do a back bend, fell on the ground, heard a snap and felt pain in her knee. The issue in this case was whether the employee's chaperone activities were within the course of her employment and, if so, whether her decision to limbo was a sufficient deviation to take her outside the course of her employment.

The Wisconsin Supreme Court has found that upon entering the employer's premises and working, an employee is presumed to be working as long as she remains on the employer's premises, absent evidence to the contrary. With this issue, the deviation test is applied which is to test whether the employee has engaged in some activity of her own which does not relate to the employer's business. In the current case, the administrative law judge found that the employee's activities as a chaperone clearly benefitted the School District. As a chaperone, the employee was there to enforce discipline, the school rules, and prevent harm to students. Although she was not paid for her voluntary services, that did not remove her from the course of her employment. The employer argued that she was outside the course of her employment since the employee's participation would not affect her performance evaluation; however, the employer's business manager testified that if the teacher had misbehaved as a chaperone, she would have been disciplined. The employee testified that mingling with the students and participating in the dance was part of her chaperone duties. The Labor and Industry Review Commission found that the nature of the employee's chaperone duties, including some dancing, was beneficial to the employer, and the evidence established that she was in the course of her employment when she limboed on April 30, 2004.

There were no updated cases for review as of the printing of this Newsletter.

In this case involving the inadvertent production of 542 Lotus Notes documents and an additional 37 non-Lotus Notes documents, the District Court reversed and remanded one order and affirmed another.

The Lotus Notes documents had been segregated into subfolders, and then deleted prior to the production of a DVD. Unfortunately, even though the documents had been moved and deleted, a copy of the e-mails remained in the larger folder structure. The Magistrate Judge held that the plaintiff did not waive privilege with regard to the Lotus Notes documents, and was thus entitled to the return of the same. The Magistrate Judge found that the inadvertently produced documents were embedded in metadata, and therefore the defendant knew or should of known that the information was not intended for disclosure. In addition, the Magistrate Judge denied the defendant's motion to compel additional documents based on common law fraud, because the motion was based on privileged information. The District Court found that the Magistrate Judge's conclusions were based on a misunderstanding of fact, and were therefore clearly erroneous. The plaintiff admitted to the District Court that the documents were privileged on their face because they had been stamped according to confidentiality level. The District Court reversed and remanded for a re-evaluation of whether the privilege was preserved and whether defendant was entitled to withhold documents under a theory of common law fraud.

The non-Lotus Notes documents were initially unreadable, but became readable after processing by an electronic discovery vendor. The Magistrate Judge had denied the plaintiff's request for the return of 37 documents, stating that he was not satisfied that the plaintiff conducted any type of reasonable search with regard to those documents. Although the plaintiff argued that similar diligence was used with the Lotus and non-Lotus Notes documents, the District Court found that the magistrate committed no abuse of discretion.

In this case involving numerous claims, the District Court ordered the defendant to conduct and bear the expense of a search for accessible and relevant electronic information. The plaintiff had requested documents and e-mails from defendant, but the documents produced did not include any e-mails received or authored by the plaintiff. In a previous order, the court had listed five possible places to check, but the defendant had only checked two of them. Noting that under the federal rules the cost of producing accessible data rests with the producing party, the court ordered the defendant to conduct a search of all depositories of electronic information in which one could reasonably expect to find e-mails to the plaintiff, from the plaintiff, or in which the plaintiff's name appeared.

In this case involving a contract to design and construct a storage and logistic base in Israel for use by the Israeli Defense Force, the court granted-in-part and denied-in-part the plaintiff's motion to compel discovery of e-mails. The defendant identified numerous individuals in its interrogatory responses, but failed to produce e-mails for many of them. The defendant argued that to restore backup tapes possibly containing such e-mails would cost between $85,000 and $150,000, and take 30 days. The Court ordered the defendant to restore a portion of the backup tapes from a time period specified by the plaintiff. The defendant was ordered to bear the costs of the tape restoration and screening samples. The parties would then have an opportunity to argue whether additional restoration of backup tapes would lead to relevant evidence and who should bear the cost of additional restoration.

In this multi-claim lawsuit, the Court ordered the defendant to pay the plaintiff $53,943.75 for fees related to the defendant's unjustified failure to disclose documents, and an additional $20,000 to the clerk of court for failure to take the discovery process seriously.

The plaintiff entered an agreement with the defendant to develop and market HIPPA transaction compliance testing systems. The plaintiff sought to prove breach of the agreement by showing that defendant entered agreements with plaintiff's competitors that undermined the contract. Defendant falsely informed the court that such documents did not exist, but plaintiff was able to obtain such documents from third parties. The Court found that the defendant failed to disclose documents responsive to the plaintiff's document requests, forcing the plaintiff to spend many hours re-reviewing documents and seeking discovery from third parties to obtain documents that should have been produced by defendant.

In this discrimination case brought by 13 individual plaintiffs challenging a corporate reduction in force by defendant, plaintiffs brought a motion to compel certain documents, and the Court granted the motion in part and denied it in part. The plaintiffs sought to compel various databases and spreadsheets, and the defendants objected on the grounds that the requests were overly broad and unduly burdensome. The Court compelled some of the documents and declined to compel other documents.

University of Pittsburgh v. Townsend,
U.S. District Court, Eastern District of Tennessee, 3/30/07

The Court, in this dispute over rights to medical scanning technology, refused to sanction a party whose counsel instructed experts to destroy copies of e-mails and report drafts. The Court held that experts need not preserve drafts until the need to retain exists (i.e. until defendants subpoenaed records from the experts), and that the experts had not destroyed the information intentionally, fraudulently, and with a desire to suppress the truth. The Court noted, however, that counsel improperly instructed or suggested that the experts should destroy e-mails, because they were the subject of multiple discovery requests.

In re Veeco Instruments, Inc. Securities Litigation,
U.S. District Court, Southern District of New York, 4/2/07

In this securities case, the court ordered Defendant to restore back-up tapes at its own expense. Plaintiff moved to compel defendant to produce all non-privileged documents from August 2004 through March 2005. Defendants opposed the motion because plaintiff unduly delayed in bringing the motion, and restoring and searching backup tapes would be unduly burdensome. Defendants contended that the cost of any discovery should therefore be shifted to the plaintiff. Because the parties failed to address the issue of searching back-up tapes as required by the federal rules (Rule 26(b)(2)), the court found it unreasonable for plaintiff to assume that back-up tapes were being searched. The court found, however, that plaintiff showed good cause for discovery because e-mails were relevant to the case and were not available from any other easily accessed source, because the discovery requests were specific, and because the parties had sufficient resources. Accordingly, the Court directed defendant to restore the backup tapes and produce non-privileged documents.

Defendant estimated that the cost of the back-up tape discovery would be approximately $124,000.00. The Court stated that it would conduct a cost-shifting analysis after defendant produced the information at its own expense and provided the court with a report of the search results and time and money spent.

Gragg v. International Management Group,
U.S. District Court, Northern District of New York, 4/5/07

In this case involving an array of federal and state law claims, the Ccourt found that the defendant's disclosure of four privileged e-mails (out of 200 e-mails produced) on a CD-ROM waived attorney-client privilege as to the inadvertently produced e-mails, but not as to their subject matter. The e-mails had not been reviewed by counsel before they were produced, and the court found that reviewing the e-mails for privileged material would have been a simple matter.

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