1. Supreme Court
1. Civil Damages Act
2. Insurance
3. Torts
2. Court of Appeals
1. Agency
2. Construction Law
3. Evidence
4. Insurance
5. Public Law
6. Torts
3. Federal Court
1. Discrimination
2. Insurance
3. Torts

4. Minnesota Workers' Compensation
1. Arising Out Of And In The Course Of
2. Average Weekly Wage
3. Medical/Temporary Total Disability
4. Permanent Partial Disability
5. Res Judicata/Collateral Estoppel
6. Temporary Partial Disability
5. Wisconsin Workers' Compensation
1. There were no updated cases for review as of the printing of this Newsletter.
6. Michigan Workers' Compensation
1. There were no updated cases for review as of the printing of this Newsletter.

The Minnesota Supreme Court affirmed the Court of Appeals, ruling that vicarious liability under the Civil Damages Act is limited to alcohol licensees. A drunk driver struck plaintiffs' vehicle, killing and injuring its passengers. Plaintiffs sued American Legion Post 184 under the Civil Damages Act, alleging that Post 184 illegally served the drunk driver alcohol on the night of the accident. The Court determined that neither American Legion National nor the Minnesota chapter were licensees and were therefore not liable under the Act.

In this long-awaited construction law decision, briefed and argued by Andrea E. Reisbord of this office, the Minnesota Supreme Court gave effect to known loss principles, concluding that only those policies that are on the risk between closing and notice of a claim are triggered. After the insured receives notice of a claim, the loss is not insured under subsequent policies. In addressing an issue admittedly not before it, the Court next held that once triggered, a policy is triggered for its entire policy period, basing allocation on years on the risk, not months, weeks, or days. The allocation period will generally run from the beginning of the first triggered policy through the end of the policy period of the policy on the risk when the insured receives notice of the claim.

In situations in which the insured has uninsured periods prior to notice, allocation is determined by why the insured has the uninsured periods. If the insured did not have coverage because such coverage was unavailable, allocation is through the last policy period available to the insured. On the other hand, if insurance was available, an insured being self-insured for example, the allocation period ends at the time of notice to the insured, with the insured bearing a pro-rata share. The total damages for which the insured is legally held responsible was determined to be the amount allocated.

Finally, recognizing that the duty to defend is a contractual obligation and not a matter of equity, the Court held that defense costs are to be shared equally among all insurers whose policies are triggered, assuming the Iowa National rule, which prohibits contribution claims among insurers, does not apply. The Court expressly rejected a pro-rata allocation of defense costs, as such an approach that would encourage an undesirable "wait and see" attitude.

In this wrongful death case arising from an automobile accident, the Minnesota Supreme Court held that a new trial was warranted because the lower court incorrectly instructed and possibly confused the jury on the driver's standard of care. The Court also held that a jury instruction regarding the decedent's life expectancy was erroneous because: (1) the expectancy was for a newborn rather than for a person of the Decedent's age, and (2) there was no evidence of how the expectancy was calculated or whether it was reliable. A taxicab passenger had been killed when the cab swerved across a median during a winter storm and was crushed by an oncoming tractor-trailer truck.

Here, a prospective buyer phoned the owner to inquire about buying commercial property and was told to contact the owner's accountant. The accountant, with whom the owner had done business for 30 years and employed to help with the sale of the property and with whom the owner signed a blank purchase agreement, was found by the Court to have authority to negotiate terms of the agreement, including the price.

In this appeal from District Court, the Minnesota Court of Appeals affirmed finding that if a residential contractor fails to comply with Minn. Rule 2891.0030 (2005) and Minn. Stat. § 326.84 (2004), (which requires contractors to provide customers with a contract providing a summary of the work to be performed, a description of materials, and a total contract price), the contractor is not precluded from claiming the existence of an implied or oral contract and that such a contract should not be deemed unenforceable for lack of the contractor's good faith.

In this case, the Court of Appeals reversed and remanded because the District Court failed to address a subcontractor's claim that it was entitled to fees, costs and penalty interest under Minn. Stat. § 337.10, subd. 3. This appeal involved a dispute over attorney fees on the undisputed portion of the amount due to plaintiff for work performed as defendant's subcontractor on a large construction project. Plaintiff commenced a mechanic's lien foreclosure action and that matter was stayed to allow the parties to participate in arbitration to resolve the dispute. The arbitration award stated that attorney fees were best determined by the District Court. However, the Court's Order failed to state whether it intended to deny plaintiff's motion for costs and fees under Minn. Stat. § 337.10, subd. 3. Therefore, the matter is reversed and remanded, and the District Court is to provide specific findings on the applicability of the statute.

The Court of Appeals affirmed the District Court decision allowing an injured driver's complete driving record to be admitted. The driver worked as a driver for a courier service, and his driving record related to the claim for loss of future earnings. Additionally, the District Court did not abuse its discretion by allowing the operator of a combine who is defending against an allegation of negligent operation from testifying that other cars had previously passed him safely. The Court also allowed an employee of a manufacturer to testify regarding the absence of prior collisions. Under Minnesota law, the absence of prior accidents from the same inanimate cause is admissible to prove that the inanimate cause is not dangerous or likely to cause such accidents and that the person responsible for the inanimate cause was unaware of its dangerous character.

Minnesota law does not recognize the distinction between a "business" exclusion and a "business pursuits" exclusion in a standard homeowners's insurance policy. Therefore, here, where a snowmobile accident occurred on a plot of land being developed as a residential development, the Court concluded that there was no coverage under a homeowner's policy which excludes coverage for accidents occurring in connection with any business because the liability causing conduct is connected with the landowner's business.

By finding that a member of the Armed Forces who is incarcerated for crimes committed while on active duty is not in "military service" for the purposes of the Servicemembers Civil Relief Act ("SCRA"), the Court ruled that incarcerated servicemembers are therefore not entitled to the protection of the SCRA when a civil proceeding is initiated during the servicemember's incarceration. The SCRA protects servicemembers by providing for the "temporary suspension of judicial and administrative proceedings and transactions that may adversely affect the civil rights of the servicemembers during their military service." The purpose of this protection is to enable servicemembers "to devote their entire energy to the defense needs of the Nation." The appellate court upheld the District Court's determination that Albaaj was not entitled to protection under the SCRA while serving time confined in a military prison for crimes committed while in military service.

Here, a master electrician changed employers, and as the former employer alleges, provided his new employer with information regarding clients and ongoing proposals of his former employer. An affidavit and documents produced show that, almost immediately after the employee's new employment several companies took their business to the electrician's new employer. The Court concluded that there were sufficient material facts in dispute as to whether the new company tortiously interfered with the former employer's contracts.

The Eighth Circuit Court of Appeals affirmed entry of summary judgment in favor of an employer where the employee asserted claims of discrimination and a hostile work environment. This case involved a fifty-two year old African American who worked as a gate guard. The Court held that the guard's hostile work environment claim failed because the employee did not adhere to the harassment policy in the employee policy manual. The claims of discriminatory discharge and age discrimination failed because the employee offered no evidence that the employer's reasons for discharging him were a pretext for illegal discrimination. The Court dismissed the employee's claim of wage discrimination because the employer offered undisputed evidence that all gate guards received the wage mandated by a collective bargaining agreement.

The District Court granted a home insurer's motion for summary judgment because the home had been vacant for more than 60 consecutive days. David Wilcox's home was damaged by a running faucet that overflowed the sink. The home had been unoccupied for more than 60 consecutive days. Farm Bureau Mutual Insurance Company, which insured the home, brought an action seeking a declaration that the water damage was excluded from coverage under the insurance policy. Farm Bureau's policy excluded loss arising from vandalism or malicious mischief where a dwelling had been vacant or unoccupied for more than 30 consecutive days. Minnesota's Standard Fire Policy excluded loss where the premises had been vacant or unoccupied beyond a period of 60 days. A factual dispute existed as to whether the water problem was caused by vandalism or by Wilcox's wife forgetting to turn off the faucet. The Court avoided the factual issue and granted summary judgment under the Standard Fire Policy exclusion.

Granting summary judgment in favor of the defendants in this case, the Court ruled that a sincere belief that a prisoner was malingering was not deliberate indifference to serious medical need and that application of minimal force during an unclothed body search is not necessarily excessive force. Here Jones, a morbidly obese prisoner, died shortly after being transferred to the Shakopee Women's Correctional Facility. She did not appear to be in need of medical attention nor did she request medical assistance. The Court noted that the plaintiff's deliberate indifference claim failed because Jones did not suffer from an objectively serious medical need and because the officers and medical staff at the facility had a sincere belief that Jones was malingering. The plaintiff failed to show that officers and medical staff should have been aware of Jones' serious medical need. The Court also dismissed the excessive force claim, noting that "no reasonable jury could conclude that the use of force during the body search was unreasonable, punitive, arbitrary, malicious, or repugnant to mankind."

The issue in this case was whether the employee's depression was causally related to his admitted work injuries. The compensation judge found that the injuries were not a substantial contributing factor to the development of the employee's major depressive disorder or anxiety disorder with depressive mood. The compensation judge concluded the employee's psychological condition was not a result of his pain complaints or loss of ability to function but of anxiety related to his commencement of a post-injury job as an estimator, and denied the employee's claim. The employee appealed, and the WCCA affirmed.

The employee sustained rotator cuff tears to both his shoulders as the result of two separate work incidents. The employee subsequently underwent four surgeries and a Functional Capacity Evaluation. The FCE placed significant restrictions on the employee's work activities which precluded him from returning to his pre-injury job as a journeyman plumber. The employer offered, and the employee accepted, a job as an estimator which was within his restrictions and offered the same salary and benefits as his pre-injury position.

The employee's initial job performance evaluations were positive. However, medical records showed that a few months later the employee returned to his treating physician reporting the stress of his new job was bothering him. In addition, testimony and evidence admitted at hearing indicated that the employee began to feel overwhelmed by the demands of his new job and that his work performance deteriorated. In response, the employee sought treatment for depression. He was diagnosed with major depression and prescribed antidepressants.

During the hearing two medical opinions were offered regarding the cause of the employee's depression. Both opinions opined that the transition to the new job and the stresses and the feelings of being overwhelmed substantially contributed to the employee's depressive episode. Dr. Augdahl, employee's treating psychologist, however opined that the work injuries were a substantial contributing cause to said depressive episode. Dr. Gratzer, after conducting an independent medical evaluation, disagreed and concluded that the physical injuries the employee sustained to his shoulders were not substantial contributing factors to his depressive episode. At the conclusion of the trial, the compensation judge accepted the opinion of Dr. Gratzer, and found the employee's work injuries were not a substantial contributing factor to his depression.

The employee appealed the compensation judge's Findings and Order on both factual and legal bases. First, the employee argued that the judge's finding that loss of function arising from the employee's work injuries was not a substantial contributing factor in his disabling psychological condition was not supported by substantial evidence in the record. Second, the employee contended that the compensation judge erred as a matter of law in concluding that the causal link between the employee's shoulder injuries and his psychological condition was "so indirect as to break the chain of causation."

In ruling on the factual issue, the WCCA reasoned that it does not necessarily follow that the physical injury caused the mental injury just because the mental injury followed the physical injury. The Court also rejected the employee's argument that because a career change was necessitated by the work injuries, the mental stress subsequently caused by the job transition was a direct and natural result of the employee's work injuries. The WCCA found the compensation judge's reliance on Dr. Gratzer's opinion was not in error and that substantial evidence supported the compensation judge's decision.

In ruling on the employee's legal contention, the WCCA stressed that "the question as to whether subsequent injuries or aggravations related in some way to the primary injury were only compensable with a showing that they were a direct and natural result" of the initial injury. Here, the WCCA found that the injury was not the medical cause of the claimed psychological consequence, or in other words, the employee's psychological condition was not a direct consequence of physical pain or physical inability to perform his post-injury job. Thus, the employee's claimed psychological consequence is not compensable.

The WCCA once again addressed average weekly wage in this case. The employee worked for the employer as a sales manager responsible for the sale of vending installation agreements and customer service. On July 26, 1999, the employee sustain an admitted injury to his low back. The employer and insurer paid compensation to the employee based upon a weekly wage which included certain payments for "overtime hours" in 1999 that they later alleged should not have been included in the weekly wage calculations. As a result, the employer and insurer claimed that they had overpaid the employee and were entitled to a credit against future compensation. The employee, however, claimed that he had been underpaid benefits. According to a written employment agreement, in 1999 the employee's base pay was $600.00 per week. In addition, the employee was to be paid placement and incentive bonuses based upon his work. During the 26- week period preceding the employee's injury, his bonuses ranged from $181.00 to $3,226.00. The employee was also paid $4,111.04 for his additional work for a cafeteria project. Two issues before the Court included whether the employee's earnings were irregular or difficult to determine, and whether the earnings from the cafeteria project should be included in his average weekly wage calculation. In the Findings and Order issued February 14, 2006, the compensation judge found that the employee's earnings were irregular and difficult to determine and that the employee worked regular and frequent overtime for the cafeteria project. As a result, she used the statutory method to determine the employee's average weekly wage and also included the cafeteria project income as overtime. The employer and insurer appealed the judge's calculation of the employee's base wage and the inclusion of his cafeteria project earnings.

The WCCA found that since the employee's weekly wage included sales commissions that were irregular, it was proper for the compensation judge to use the statutory formula. This was despite the fact that the employee's employment agreement stated that his base pay was $600.00 per week.

Regarding the employee's additional earnings from the cafeteria project, the employer and insurer argued that the employee was a salaried employee and did not qualify for overtime; that the overtime was not regular or frequent as required by Minn. Stat. § 176.011, subd. 18; that the cafeteria project was a one-time project that did not extend past February 24, 1999 (the majority of this work occurred before the 26-week period prior to the date of injury); and there was no documentation of the overtime making it difficult to determine what period of time the overtime covered. The WCCA acknowledged that the evidence was subject to differing interpretations, however, the compensation judge's decision was supported by substantial evidence. The compensation judge had determined that the employee was paid $4,111.04 over a 24-week period for the cafeteria project, therefore, she divided that figure by the 24 weeks and arrived at a weekly amount of $171.29. She concluded that this accurately reflected the employee's earning capacity on the date of injury. The WCCA noted that as it has stated on numerous occasions, when evidence is not available in order to calculate the average weekly wage according to the statutory formula, the compensation judge may use another calculation method as long as it fairly represents the employee's lost earning capacity. The WCCA affirmed the compensation judge's findings.

In this case, the Workers' Compensation Court of Appeals addressed four issues: admissibility of an independent medical report post-120 days; diagnostic medical expenses; the nature of the employee's injury; and benefits although the employee had no restrictions.

As early as 2002, the employee knew that his left arm was smaller than his right arm, however, he did not seek treatment for this condition until his work-related injury on September 13, 2004. The employee testified that on September 13, 2004, he was stocking shelves when he heard a "pop" in his left shoulder and on that day he consulted with Dr. William Isaksen regarding his left shoulder. The employer and insurer denied primary liability for the employee's condition and injury. On October 26, 2004, the employee filed a Claim Petition for temporary total disability benefits from and after September 14, 2004. At the request of the employer and insurer, the employee was examined by Dr. Joel Gedan on May 25, 2005. Dr. Gedan found that the employee's injury was a soft tissue injury or shoulder strain. He also opined that the employee was at maximum medical improvement and had no restrictions related to the September 2004 work injury. After the hearing on January 30, 2006, the compensation judge found that the employee had sustained a temporary injury on September 13, 2004, and that he had reached MMI as of June 13, 2004. He also ordered that temporary total disability benefits and medical benefits be paid through 90 days post-MMI. The employee appealed, and the employer and insurer cross-appealed.

The employee objected to the admission of Dr. Gedan's report since it was filed past the granted extension to May 20, 2005. The WCCA found that the employer and insurer had originally requested the extension since an IME was scheduled for March 26, 2005; therefore, it appeared that the granted extension to May 20, 2005 was a typographical error. The WCCA also found that there was no indication that the employee had been prejudiced by the delay in the examination since his hearing was not until January 30, 2006. As a result, the WCCA affirmed that Dr. Gedan's report could be entered into evidence.

The employer and insurer appealed the award of medical expenses arguing that the employee's medical treatment after the injury related to his pre-existing condition, therefore, it was not reasonable and necessary to cure or relieve the employee from the effects of his work injury. Citing previous cases, the WCCA reiterated that diagnostic treatment or evaluation to rule out alternative diagnoses may be compensable even if the ultimate diagnosis was non-work-related. Ultimately finding no causal relationship between the employee's injury and his pre-existing condition, therefore, did not render the employee's medical treatment noncompensable.

The WCCA also found that Dr. Gedan's medical opinion that the employee's work injury was temporary in nature supported the compensation judge's finding of a temporary injury. In addition, since Dr. Gedan determined that the employee was at MMI and had no physical restrictions as of May 26, 2005, the employee was not entitled to temporary total disability benefits or medical expenses beyond that date. As a result, the WCCA reversed the award of temporary total disability benefits and medical expenses after that date.

The Workers' Compensation Court of Appeals addressed whether an employee should be able to receive permanent partial disability for vision loss in one eye along with permanent partial disability for cosmetic disfigurement.

The employee sustained an admitted personal injury to her right eye on February 7, 1989. As a result of this injury, the employee's iris was badly damaged and the pupil was an abnormal shape and increased size. The employer and insurer paid the employee for 24% permanent partial disability for the complete loss of vision in one eye. Although the Minnesota Workers' Compensation Guidelines do not have a section that pertains specifically to eye disfigurement, Dr. Audrey Fox assessed and rated the employee's cosmetic disfigurement of her right eye to be appropriately 10% permanent partial disability of the total body. The employee filed a Claim Petition seeking payment for the permanent partial disability as rated by Dr. Fox. The compensation judge awarded this rating pursuant to Weber v. City of Inver Grove Heights, 461 N.W.2d 918 (Minn. 1990). The employer and insurer appealed.

The employer and insurer argued that a cosmetic disfigurement permanent partial disability award under Weber was an error of law. The appellants contended that the employee was fully compensated for her injury under Minn. Rule 5223.0030, subp. 1, when she was given a 24% disability.

Although the 24% permanent partial disability for the employee was specifically for the loss of sight in her right eye, it was not for any disfigurement. Since a cosmetic disfigurement is anything that disfigures or defaces, and since the employee had a physical scar through the cornea of her right eye with significant damage to her iris causing an abnormal shape and increased size, the WCCA determined that she was entitled to a permanent partial disability rating although there was not a cosmetic disfigurement rating for an eye. According to Minn. Stat. § 176.105(1)(c), codification of the 1992 Weber decision, if there was an injury that was not rated by the permanent partial disability schedule, the unrated injury could be assigned and compensated according to the most similar condition that was rated. The court found that the fundamental purpose of permanent partial disability is to compensate for functional impairment whereas compensation for cosmetic disfigurement is for a separate and distinct impairing condition. If an employee has two separate and distinct impairing conditions, both conditions may be awarded. As a result, the WCCA affirmed the compensation judge's award of 10% whole body disability for the employee's right eye cosmetic disfigurement.

The employee appealed from the compensation judge's dismissal of her claims on grounds of res judicata. On November 28, 2001, the employee sustained an admitted work-related injury to her low back. In August of 2004, the employee filed a Medical Request, seeking authorization for an MRI scan and a referral to a physiatrist. The employee also filed a Claim Petition alleging entitlement to wage loss benefits, permanent partial disability benefits, and rehabilitation assistance. The matter, at the employee's request, were not consolidated.

The employee's Medical Request came on for hearing first. The issues were whether the proposed MRI and referral to Dr. Agre was reasonable and necessary and whether the November 28, 2001 work injury was a substantial contributing factor to the recommended treatment. The compensation judge in her Findings and Order determined that the evidence failed to establish that the November 28, 2001 work injury was a substantial contributing factor to the MRI and follow-up visit with Dr. Agre, a Physiatrist.

A hearing was then subsequently held regarding the employee's Claim Petition before the same compensation judge. The employer and insurer contended, in part, that the employee's claim for wage loss benefits, permanent partial disability benefits, and rehabilitation benefits were barred by res judicata and/or collateral estoppel. In her decision, the compensation judge found, in relevant part, that the current issue of whether the work injury was a substantial contributing factor to the ongoing condition was identical to the issue at the prior medical request hearing. The compensation judge, thus, found that the employee was precluded from relitigating the nature of the November 28, 2001 work injury in the subsequent hearing on the Claim Petition.

The WCCA found that the compensation judge's decision that the employee's claims were barred by res judicata was clearly erroneous. The WCCA reasoned that "it was one thing to find that the need for recommended treatment may be related to a pre-existing condition, while it is quite another to find that the employee no longer suffers from the effects of an admitted injury." In addition, the WCCA distinguished the case of Publicover v. Voltelcom, 64 W.C.D. 231 (W.C.C.A. 2004) finding that, unlike in Publicover, the compensation judge made no specific findings here as to whether the employee's injury was temporary, resolved, and/or a finding that the employee's ongoing condition was unrelated to the injury. As a result, the WCCA reversed the Findings and Order of the compensation judge and remanded the matter for further proceedings.

The issue on appeal is the employer and insurer's entitlement to a discontinuance of temporary partial disability compensation payments based upon 450 weeks having elapsed after the date of injury. The facts of the case were not in dispute. The employee sustained three work-related injuries with three different employers and insurers. The initial injury occurred on November 11, 1993, when the employee was working for Hyman Freightways, insured by Liberty Mutual. The second injury was on December 28, 1998, at Viracon, insured by Insurance Company of Pennsylvania, and the third injury was on September 9, 2002, at Filister Enterprises, insured by Cambridge Integrated Services. The employee was awarded temporary partial disability compensation from December 12, 2004, and continuing through the date of the hearing. Liberty Mutual was ordered to be the paying agent.

On October 21, 2005, Liberty Mutual filed a Notice of Intention to Discontinue Compensation Benefits, seeking to discontinue the employee's temporary partial disability compensation based on Minn. Stat. § 176.101, subd. 2(b) which states that temporary partial disability benefits were not payable after 450 weeks after the date of injury. The employee objected to the discontinuance and argued that Liberty Mutual should be barred from asserting the 450-week defense to the payment of temporary partial disability benefits based on equitable estoppel and/or laches. The employee asserted that Liberty Mutual should have and could have raised the issue during the initial hearing. Further that Liberty Mutual's failure to do so resulted in prejudice to the employee as no payments have been made of temporary partial disability benefits.

The WCCA rejected the employee's arguments, however, agreed with the compensation judge that the relevant question in this matter is a procedural one as the rights of the employee and the obligations of the two other parties remain at issue. The WCCA affirmed the compensation judge's denial of the discontinuance citing Hammer v. Mark Hagen Plumbing & Heating, 435 N.W.2d 525, 529, 41 W.C.D. 634, 640 (Minn. 1989). In that decision, the insurer was ordered to continue to pay temporary total disability compensation where the employee had not reached maximum medical improvement from all injuries despite the fact that the employee had reached maximum medical improvement from the injury covered by the insurer. The rationale underlying the decision was to prevent the creation of an unwarranted gap in the employee's benefits in a case where the employee's entitlement to temporary partial disability compensation was undisputed, and a denial of the discontinuance was warranted.

The WCCA, however, pursuant to Minn. Stat. § 176.421, subd. 6, did remand the matter for further hearing, stating an Order for Joinder should be issued adding the other two insurers as parties to the pending litigation. The WCCA also stated the compensation judge should allocate liability, determine an appropriate paying party, make findings as to the correct amounts to be paid to the employee for temporary partial disability benefits, and may consider any other issues raised by the parties.

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

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