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SYNOPSIS OF SELECTED MINNESOTA
TORT & INSURANCE LAWS
TORT & INSURANCE LAWS
MINNESOTA COURT SYSTEMS
The Courts
Procedure
FAULT, LIABILITY, and DAMAGES
ComparativeFault, Joint and Several Liability, and Assumption of Risk
Claims Against Public Entities
Collateral Source Calculations
Punitive Damages
Workers' Compensation Subrogation Claims
STATUTES OF LIMITATION
Bodily Injury
Property Damage
Improvements to Real Property
Wrongful Death and Survival
Libel, Slander and Defamation
Minors
When does the Statute of Limitations Begin to Run?
ARBITRATION and ALTERNATIVE DISPUTE RESOLUTION
Contractual Arbitrations
Automobile No-Fault Action
Alternative Dispute Resolution
PRE- and POST-JUDGMENT INTEREST
Pre-Judgment Interest
Post-Judgment Interest
OFFERS OF JUDGMENT OR SETTLEMENT
The Making of an Offer
Consequences of Non-Acceptance
MEDICARE LIENS
Federal
State
FRIVOLOUS LAWSUITS
PREMISES LIABILITY
General Rules
Ingress and Egress
Ice and Snow
Miscellaneous Foreign Substances on the Floor
PRODUCT LIABILITY
Causes of Action Defenses
VERDICT POTENTIAL OF MINNESOTA COUNTIES
TYPICAL COMMON LAW CLAIMS IN THE EMPLOYMENT CONTEXT
Defamation
Breach of Contract
Promissory Estoppel
Negligent Hiring, Retention and Supervision of Employees
THE UNFAIR CLAIMS PRACTICES ACT (UCPA) & BAD FAITH CLAIMS
APPENDIX
The Courts
The Minnesota judiciary has three levels of hearing civil cases.
- District Courts. These are courts of trial level general jurisdiction. Cases are tried either by a judge or a jury of six persons. Twelve-person juries are only used in felony criminal cases. Most cases filed in district court are tried by a judge or jury (or otherwise resolved) in 18 months from the time the case is filed.
- Minnesota Court of Appeals. This is an intermediate appellate court. Appeal is by right from the District Courts to the Minnesota Court of Appeals. An appeal must be filed within 90 days of the entry of judgment in the District Court.
- Minnesota Supreme Court. This is the highest court in the State of Minnesota. Decisions of the Court of Appeals are reviewed by the Minnesota Supreme Court on a discretionary basis. The Minnesota Supreme Court grants relatively few Petitions for Review. Generally, for review to be granted, the case must involve novel issues.
Procedure
Minnesota state court cases are commenced by service of a Summons and Complaint upon a defendant. The Summons and Complaint are not required to be filed in order to commence the action. Following commencement of the action, the Summons and Complaint or the Answer may be filed by the parties whenever they select. However, the case is not assigned to a judge and does not move towards trial or other resolution until it is filed.
The Minnesota Rules of Civil Procedure and Minnesota's General Rules of Practice for District Courts contain the procedures for civil cases filed in the district courts of the State of Minnesota. The Federal Rules of Civil Procedure and the Local Rules of the United States District Court for the District of Minnesota contain the procedures for civil cases filed in the United States District Court for the District of Minnesota. The rules governing civil cases filed in the State of Minnesota district courts differ in some respects from the rules governing civil cases filed in the United States District Court for the District of Minnesota.
Comparative Fault, Joint and Several Liability, and Assumption of Risk
Minnesota is a comparative fault state; thus, the fault of all parties to an occurrence is compared whether the case is based on negligence, strict liability, or breach of warranty. Plaintiff may recover against any party if plaintiff's fault is not greater than the fault of the other party. However, plaintiff's recovery is reduced by the percentage of his or her fault. In Minnesota comparative negligence may be used as a defense in an action based on strict liability. Minnesota's Comparative fault statute defines "fault" broadly.
Minnesota Statute section 604.02 was amended in 2003 for claims arising after 8/1/03 and is now more friendly to defendants. The Minnesota law for claims that occur before 8/1/03 is still following the principle of joint and several liability. However, a person can meet the statutory limitation if an actor is found 15% or less at fault, his or her negligence is limited to four times that amount in the event that another defendant or defendants are insolvent or were previously released from the case.
Now due to the amendment, if the claim arises after 8/1/03 and two or more persons are severally liable, they will not be held jointly and severally liable for the whole award unless they meet one of the exceptions. More specifically, contribution to awards shall be in proportion to the percentage of fault attributable to each individually, unless one of the following is true:
1) a person's fault is greater than 50%;
2) two or more persons are acting in a common scheme or plan that results in injury;
3) a person commits an intentional tort;
4) or, a person's liability arises under pesticide control, water pollution control, waste management, environmental response and liability, leaking underground storage tanks and pipeline safety, public nuisance, damage to the environment or the public health, or any other environmental or public health law, or any environmental or public health ordinance or program of a municipality (as defined in Section 466.01).
Minnesota recognizes the doctrines of primary and secondary assumption of risk. Secondary assumption of risk is not a complete defense, but simply an element of fault. Primary assumption of risk involves situations where plaintiff's conduct is to such a high degree as to absolve a defendant from any duty. Situations involving primary assumption of risk are rare, and the factors to establish it exists are outlined in Andren v. White-Rodgers Co., 465 N.W.2d 102 (Minn. App. 1991).
The applicable statute section 604.01 (comparative fault; effect) is found in the Appendix.
Claims Against Public Entities
Minnesota law limits the liability of a municipality as follows:
- $300,000 when the claim is one for death by wrongful act or omission and $300,000 to any claimant in any other case;
- $750,000 for any number of claims arising out of a single occurrence; and
- $1,000,000 for any number of claims arising out of a single occurrence, for claims arising on or after January 1, 2000; or
- twice the limits provided in clauses 1 and 3 above when the claim arises out of the release or threatened release of a hazardous substance.
- No award for damages on any such claim shall include punitive damages.
Collateral Source Calculations
In a civil action, whether based on contract or tort, Minnesota's collateral source rule prevents double recoveries by the plaintiff by requiring deduction of certain benefits recovered by the plaintiff. The statute requires deducting payments related to the injury or disability made to the plaintiff or on the plaintiff's behalf up to the date of verdict by or pursuant to:
- a federal, state, or local income disability or workers' compensation act; or
other public program providing medical expenses, disability payments, or
similar benefits;
- health, accident and sickness, or automobile accident insurance or liability
insurance that provides health benefits or income disability coverage; except
life insurance benefits, payments made pursuant to the United States Social
Security Act, or pension payments;
- a contract or agreement of a group, organization, partnership, or
corporation to provide, pay for, or reimburse the costs of hospital, medical,
dental or other health care services; or
- a contractual or voluntary wage continuation plan provided by employers or any other system intended to provide wages during a period of disability, except benefits received from a private disability insurance policy where the premiums were wholly paid for by the plaintiff.
The applicable statute section 548.36 (collateral source calculations) is found in the Appendix.
Punitive Damages
Minnesota law provides for punitive damages; however, upon commencement of a civil action, the complaint can not seek punitive damages. Only after the suit has been filed can a motion to amend the complaint to claim punitive damages be brought.
Upon motion to amend the complaint, the plaintiff must make a showing that a jury could reasonably find that there is clear and convincing evidence that the acts of the defendant show a "deliberate disregard for the rights or safety of others." Previously, the statute required clear and convincing evidence of a "willful indifference" of the rights and safety of others. A 1990 amendment provided the much more difficult standard of clear and convincing evidence showing a "deliberate disregard" for the rights and safety of others. In addition, after any award of punitive damages, the award is to be specifically reviewed by the court. There is no statutory cap on punitive damages in Minnesota.
Minnesota prohibits punitive damages in a breach of contract case. Punitive damages may be awarded in a master-servant or principal-agent situation in a tort case only if certain statutory requirements are met pursuant to Minnesota Statutes section 549.20. For example, punitive damages are available in this situation if the principal authorized the doing of the act, or the agent was unfit and the principal knowingly disregarded knowledge of that fact, or the agent was employed in a managerial capacity and was acting in the scope of that employment, or the principal ratified the act of the agent with knowledge of the consequences. Punitive damage claims against a principal frequently occur in discrimination, sexual harassment, defamation, and employment termination cases.
Although Minnesota has tightened its standards for punitive damages, District Courts will frequently allow amendments to add punitive damages in products liability cases, particularly if the product has not been tested or if the product has been distributed without any warning whatsoever. Finally, in motor vehicle accidents, if the defendant driver has a blood alcohol concentration of .10 or more, or if the driver was operating a motor vehicle under the influence and refused to take a test, the statute permits a finding of punitive damages, even in the absence of aggravated driving conduct.
The applicable statutes sections 549.191 (claim for punitive damages) and 549.20 (punitive damages) are found in the Appendix.
Workers' Compensation Subrogation Claims
Like most states, Minnesota permits statutory subrogation for workers' compensation claims pursuant to Minnesota Statute section 176.061. However, unlike virtually every other jurisdiction, Minnesota permits contribution cases against an employer. The seminal case is Lambertson v. Cincinnati Corp., 257 N.W.2d 679 (Minn. 1977). Even if a third-party defendant employer is less at fault than the plaintiff-employee, the employer may have to contribute to the verdict. However, a third-party defendant employer's liability is limited to an amount in new money equal to the amount of workers' compensation benefits paid or payable. For example, assume that an employee received $50,000 in workers' compensation benefits from his employer and later commenced a tort action against a third party. The third party (defendant and third-party plaintiff) may commence a third-party action against the employer and attempt to prove fault on the part of the employer. If a verdict were rendered in favor of plaintiff-employee in the amount of $100,000 and the jury found plaintiff 0% at fault, defendant and third-party plaintiff 10% at fault and third-party defendant-employer 90% at fault, defendant and third-party plaintiff would owe the entire verdict to the plaintiff. It could, though, recover contribution from third-party defendant-employer. Using general comparative negligence principle, a third-party defendant would owe 90% of the verdict, or $90,000. However, since an employer's contribution is limited to an amount in new money equal to the amount of workers' compensation benefits paid, the employer's contribution would be limited to an additional $50,000. Accordingly, defendant and third-party plaintiff would ultimately pay $50,000 of the $100,000 verdict. Using the same scenario, but assuming the jury were to find defendant and third-party plaintiff 90% at fault and third-party defendant-employer 10% at fault, defendant and third-party plaintiff would pay the entire $100,000 verdict to the plaintiff, but would be entitled to recover 10%, or $10,000 from the employer.
This application, while often confusing, was created by the Minnesota Supreme Court to balance the equitable right of contribution against the Minnesota Workers' Compensation Act, which provides that workers' compensation benefits is to be the only remedy by an employee against the employer.
In Minnesota, employees can and frequently do settle their claims against a third-party tortfeasor and exclude the subrogation interest of the employer and insurer. As long as the subrogation claim is not jeopardized, this type of release is allowed under the Minnesota case of Naig v. Bloomington Sanitation, 258 N.W.2d 891 (Minn. 1977). This is commonly referred to as a Naig release. An employer and insurer can also settle its subrogation claim directly with the tortfeasor apart from the plaintiff-employee's claim. This is commonly referred to as a reverse Naig settlement.
If the plaintiff-employee settles his claim, leaving the subrogation unresolved, there can be no contribution against the employer for the amounts paid in the settlement to the plaintiff-employee for his own claim. The contribution would only attach as to those amounts that had been earmarked as workers' compensation funds.
Complicating matters is the fact that when subrogation is asserted and the case for subrogation is tried, the employer and insurer must prove all of the damages of the insured employee according to the recent Minnesota Supreme Court case of M.W. Ettinger Transfer v. Schaper Manufacturing, Inc., 494 N.W.2d 29 (Minn. 1992). Despite the fact that the Supreme Court has separated the claim of the employee from that of the employer, when the employer tries its subrogation case, it must prove the nature and extent of the employee's damages. The decision causes many problems because the benefits under the workers' compensation statute do not correlate directly with damages at law for personal and bodily injury.
Finally, with respect to subrogation claims for workers' compensation, there can be no workers' compensation subrogation in either an uninsured motorist or underinsured motorist action under the Minnesota decisional law as it currently stands. There is a basis for an argument under Minnesota Statute section 176.061, subdivision 10, that there should be statutory indemnity for workers' compensation subrogation in uninsured and underinsured motorist cases. However, there are no appellate decisions standing for that proposition.
The applicable statute section 176.061 (third party liability) is found in the Appendix.
Bodily Injury
Personal injury actions generally have a six-year statute of limitations. Minn. Stat. § 541.05, subd. 1(5).
Property Damage
Claims for property damage, and claims arising from contracts unless the Uniform Commercial Code otherwise specifies, must be filed within six years of their accrual. Minn. Stat. § 541.05.
Improvements to Real Property
A claim for damages based on services or construction regarding improvements to real property must be brought within two years of accrual. Minn. Stat. § 541.051.
Wrongful Death and Survival
An action for damages due to wrongful death, in which there is no allegation of professional negligence of a medical provider or an act of murder, must be commenced within three years after the date of death. There is a further requirement that the action must be commenced within six years after any act or omission which caused death. Minn. Stat. § 573.02, subd. 1.
Libel, Slander and Defamation
Defamation, including libel and slander, has a two-year statute of limitations. Minn. Stat. § 541.07(1).
Minors
Where an injury to a minor is concerned, the statute of limitations does not apply until one year after the plaintiff has reached the age of 18 years. Minn. Stat. § 541.15. In other words, if the plaintiff was injured at age 10, he or she has until age 19 to commence the action. If the plaintiff received an injury when he or she was 19 years old, the normal six-year statute would apply.
When does the Statute of Limitations Begin to Run?
The statute of limitations begins to run when the action "accrues." The Minnesota Supreme Court has held that an action accrues when the act causes an injury upon which one could base a claim. Sollar v. Oliver Iron Mining Co., 54 N.W.2d 114 (Minn. 1952).
Note that an action based upon breach of warranty pursuant to the Uniform Commercial Code must be commenced within four years after the cause of action accrues. Minn. Stat. § 336.2-725.
Contractual Arbitration
Minnesota has adopted the Uniform Arbitration Act to carry out the policy of a speedy, informal and relatively inexpensive procedure for resolving controversies. The first step in ascertaining whether arbitration is an alternative to litigation is to determine whether a valid arbitration agreement exists. This is an issue for the court. Once it is determined a valid arbitration agreement exists, the procedures for initiating arbitration and the process to be used are generally provided in the agreement itself or a reference is made to the rules of the American Arbitration Association for arbitration of that type.
After the award is made, the statute provides for an application to the arbitrator to modify or correct the award. Application must be made within 20 days after delivery of the award. The statute then provides for the District Court to confirm the award, vacate the award, or modify or correct the award. A request to vacate, modify or correct the award must be made within 90 days after delivery of a copy of the award or after grounds become known for an order vacating an award.
Upon the court's granting an order to confirm, modify, or correct an award, a judgment will be entered. A party may then appeal from the judgment. The appeal is taken in the same manner as one would from orders or judgments in other civil actions.
Finally, of note, pursuant to Wacker v. Allstate Ins. Co., 251 N.W.2d 346 (Minn. 1977), one who wishes to appeal an arbitration award must first move to vacate the award within the statutory time limit. If a motion to vacate an award is not brought within the 90-day period, it is barred, and there is nothing for the higher court to review. From a practical standpoint, absent bias or partiality of the arbitrator, arbitration awards are rarely overruled.
The relevant statutes are found in Minnesota Chapter 572. Of particular interest and found in the Appendix are statutes sections 572.08, 572.09, 572.16, 572.18, 572.19, 572.20, and 572.26.
Automobile No-Fault Action
The Minnesota No-Fault Act requires mandatory submission to binding arbitration of no-fault cases where a claim at commencement of arbitration is in an amount of $10,000 or less against the insurer for no-fault benefits or comprehensive or collision damage coverage.
The applicable statute section 65B.525 is found in the Appendix.
Alternative Dispute Resolution
The Minnesota General Rules of Practice for District Courts provides that essentially all civil cases are subject to alternative dispute resolution (ADR). The processes available to the parties include arbitration, consensual special magistrate, early neutral evaluation, mediation, mediation/arbitration, mini trial, and summary jury trial.
Pursuant to the Rules, the parties are to meet within sixty days of filing the action to select an ADR process. The form of resolution selected is then placed on the court's scheduling order and becomes a part of the litigation process. ADR is new to Minnesota; and in reality, at the present time, only Hennepin County and Ramsey County have viable ADR mechanisms in place. The parties may voluntarily agree to ADR at an earlier time which they mutually select.
The ADR procedure is outlined in the General Rules of Practice for District Courts, Rule 114; Special Rules of Practice for the District Courts, Second Judicial District [Ramsey County], Rule 25; and Special Rules of Practice for District Courts, Fourth Judicial District [Hennepin County], Rule 5.
Pre-judgment Interest
"Pre-judgment interest" is awarded to provide full compensation by converting time-of-demand damages into time-of-verdict damages; it is designed to compensate a plaintiff for the loss of the use of money owed. Simeone v. First Bank Nat'l Ass'n, 73 F.3d 184 (8th Cir. 1996). Simple pre-judgment interest, which for 1996 is six (6) percent. 1 Pre-judgment interest is awarded in most civil actions except for the following cases:
- judgments, awards, or benefits in workers' compensation cases, but not including third-party actions;
- judgments or awards for future damages;
- punitive damages, fines, or other damages that are noncompensatory in nature;
- judgments or awards not in excess in the amount specified in 491A.01 [which is currently $7,500]; and
- that portion of any verdict, award, or report which is founded upon interest, or costs, disbursements, attorney fees, or other similar items added by the court or arbitrator.
If either party serves a written offer of settlement, the other party may serve a written acceptance or a written counteroffer within 30 days. After that time, interest on the judgment is calculated in the following manner. If the amount of the prevailing party's offer is closer to the judgment than the opposing party's offer, the prevailing party receives interest from the time of the action's commencement (or demand for arbitration or written notice of the claim) until the time of the verdict or award. If, however, the amount of the losing party's offer is closer to the judgment, the prevailing party receives interest only on the amount of the settlement offer or the judgment or award, whichever is less, and only from the time of commencement of the action (or demand for arbitration or written notice of the claim) until the time the settlement offer was made.
The applicable statute section 549.09 is found in the Appendix.
Post-Judgment Interest
Each calendar year, interest (at the same rate as described above for pre-judgment interest) accrues on the unpaid balance of a judgment or award from the time it is entered or made until it is paid.
The Making of an Offer
At any time up to 10 days before the trial begins, any party may serve upon an adverse party an offer of judgment or an offer of settlement. Offers of settlement are more common. An offer of settlement must specify the amount offered and should also state that costs and disbursements then accrued by the other party will also be paid. Such offers may be accepted within 10 days after service of the offer and offers not accepted by that time are deemed to be withdrawn. During the 10-day period the offer is irrevocable.
The applicable Minnesota Rule of Civil Procedure (Rule 68) is found in the Appendix.
Consequences of Non-Acceptance
An unaccepted offer is not admissible as evidence, except in a proceeding to determine costs and disbursements. However, if the judgment finally entered is not more favorable to the offeree than the offer, the offeree must pay the offeror's costs and disbursements. The purpose of this rule is to encourage settlement of lawsuits. Borchert v. Maloney, 581 N.W.2d 838 (Minn. 1998).
Federal
Subchapter XVIII of 42 U.S.C., chapter 7§1395 et. seq., known as the Medicare Act, provides health insurance for the aged and disabled. On December 5, 1980, Congress passed the Omnibus Reconciliation Act of 1980, a portion of which is encompassed in 42 U.S.C. § 1395y(b). The Act establishes that Medicare should not make payments for medical services to the extent that payment has been made "or can reasonably be expected to be made" under a "workmen's compensation law or plan, automobile or liability insurance policy or plan (including a self-insured plan) or under no-fault insurance." This Amendment became effective for services rendered after July 1, 1981.
In 1984, Congress passed the Deficit Reduction Act, which amended 42 U.S.C. §. 1395y(b). It allows the United States a right of action for Medicare payments against any entity which would be responsible for payment or against any entity which has been paid for medical service. The United States is also subrogated, to the extent of payments made, to the right of any individual or entity on whose behalf the payment has been made. The statute also allows a private right of action with double damages for a primary plan which fails to provide primary coverage. "Primary plan" under this Act includes self-insured plans as set forth above. These amendments took effect for services rendered on or after July 18, 1984. There is a 6-year limitation of action during which Medicare may seek reimbursement. U.S. v. Blue Cross & Blue Shield of Michigan, 726 F. Supp. 1517 (E.D. Mich. 1989).
42 U.S.C. § 1396, the federal Medicaid anti-lien provision prohibits states from imposing a lien on property of a Medicaid recipient to seek reimbursement for medical assistance paid. Specifically excepted from this prohibition is a state's lien on real property of an individual institutionalized for personal care (nursing homes, intermediate care facilities for the mentally retarded, or a hospital).
State
In Minnesota, a state agency that provides medical assistance benefits (limited to nursing homes, intermediate care facilities for the mentally retarded, or a hospital) to a person or a person's spouse who owns real property in Minnesota has a lien upon all real property owned on or after institutionalization. The lien becomes unenforceable 18 months after receipt of notice by the lienor of the later of the recipient's or the recipient's spouse's death, or three years after the last to die of the recipient or the recipient's spouse. The applicable statute section 514.981 is found in the Appendix.
Minnesota's medical assistance subrogation provision, Minn. Stat. § 256B.37, subd. 1 (see Appendix), provides that the state or state agency that furnishes medical care is subrogated to the rights, legal or otherwise, of a person with the right to receive medical care from an organization or entity arising from an occurrence that necessitated the payment of medical assistance to the extent of the cost of medical care furnished. Recently, the Minnesota Supreme Court held the federal Medicaid anti-lien provision preempts § 256B.37 to the extent that it allows a lien for medical assistance paid to be placed on a medical assistance recipient's cause of action before a recipients death. Martin v. City of Rochester, 2002 WL 433356 (Reporter citation currently unavailable).
Rule 3.1 of the Minnesota Rules of Professional Conduct prohibits a lawyer from bringing or defending a frivolous proceeding, or assenting or controverting a frivolous issue.
Rule 11 of the Minnesota Rules of Civil Procedure provides that every pleading, motion or other paper of a party represented by an attorney must be signed by the attorney, or, if the pleader does not have an attorney, by the pleader. The signature constitutes a certification that the pleading, motion or paper has been read; that to the best of the signer's knowledge and after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; and that it is not interposed for any improper purpose, such as to harass or cause unnecessary delay or needless increase in the cost of litigation. If a pleading, motion or other paper is signed in violation of this rule, the court, upon motion or its own initiative, will impose a sanction, which could include an order to pay the other party's expenses incurred because of the filing of the pleading, motion or other paper, including reasonable attorney fees.
The applicable Minnesota Rules of Civil Procedure (Rules 3.1 and 11) are found in the Appendix.
General Rules
A few general, perhaps competing, rules govern this area of law. First, a store owner is not an insurer of safety of an invitee; the invitee must use reasonable care for his or her own protection. Krengel v. Midwest Automatic Photo, Inc., 295 Minn. 200, 203 N.W.2d 841, 845 (Minn. 1973). Second, a store has a duty to use reasonable care to protect its customers from even obvious hazards on its property, if the store should anticipate that the hazard might cause injury. Gearin v. Wal-Mart Stores, Inc., 53 F.3d 216, 217 (8th Cir. 1995).
Ingress and Egress
Minnesota has abolished the traditional distinction between licensees and invitees. Instead, the duty is one of reasonable care to entrants. A landowner's duty to use reasonable care for the safety of all persons on its premises includes a duty to provide and maintain suitable access to and from buildings on the land. McIlrath v. College of St. Catherine, 399 N.W.2d 173, 174 (Minn. Ct.App. 1987). A unique twist to this law comes in the area of maintenance of city sidewalks. The obligation to maintain a public sidewalk in a reasonably safe condition is solely that of the municipality, even where ordinances require the abutting property owner to shovel or clean the boulevard (public) portion of the sidewalk. Sternitzke v. Donahue's Jewelers, 249 Minn. 514, 83 N.W.2d 96 (1957). In other words, although it is customary for a property owner to shovel the boulevard portion of the sidewalk, there is no obligation to do so and the property owner cannot be held liable if it is not shoveled or maintained. This is the rule, as well, in situations where the sidewalk is cracked, broken or fallen. Unless the property owner has created the defective condition of the sidewalk by some affirmative act, the property owner is not liable for its condition. Id.
Ice and Snow
As one may imagine, winter in Minnesota presents a fertile occasion for slip and fall cases. However, decisions from Minnesota appellate courts have not imposed unreasonable burdens on property owners. The rule in Minnesota is that a property owner may await the end of a storm and a reasonable time thereafter before removing ice and snow from sidewalks and steps. Niemann v. Northwestern College, 389 N.W.2d 260 (Minn. App. 1986). A fact issue is presented to resolve issues relating to when a storm actually ended. Frykman. v. University of Minnesota-Duluth, 611 N.W.2d 379, 381 (Minn. Ct. App. 2000).
For a customer to succeed in a slip and fall case involving a store's icy parking lot, the customer must prove that the store knew about the patch of ice or that the ice patch had been in the lot long enough for the store to discover it through reasonable inspection and take steps to protect the customers from the hazard. Gearin v. Wal-Mart Stores, Inc., 53 F.3d 216 (8th Cir. 1995). In evaluating whether the store was negligent in a slip and fall case, several factors must be considered, including the purpose for which the plaintiff was on the premises, foreseeability of the accident, and ease with which the accident could have been prevented. Block v. Target Stores, Inc., 458 N.W.2d 705 (Minn. App. 1990), review denied (Minn. Sept. 28, 1990).
Miscellaneous Foreign Substances on the Floor
Cases involving foreign substances on a floor are quite fact-specific. For example, in suit by a customer against a grocery store for injuries sustained when she stepped on a banana peel, the Minnesota Supreme Court held the evidence was insufficient to justify finding that a dangerous condition resulted from the acts of the grocery store's employees. Messner v. Red Owl Stores, 57 N.W.2d 659 (Minn. 1953). Also, in a customer's action for injuries sustained while stepping on a nail in an aisle of a department store, the supreme court held the evidence was insufficient for a jury to find the store was negligent in permitting a depression in which nails and similar articles could become lodged to remain in the floor. Bragg v. Dayton Co., 4 N.W.2d 320 (Minn. 1942). On the other hand, in Sears Roebuck & Co. v. Peterson, 76 F.2d 243 (8th Cir. 1935), the evidence in an action against a store for injuries to a customer, who tripped on twine left in an aisle by a store employee was held to warrant a jury's finding that the store was negligent in failing to keep the aisle clean.
Generally, a retailer is not liable for a fall resulting from a foreign substance on the floor, unless the plaintiff can prove that store employees were the source of the object on the floor or that store employees knew or should have known of its presence and failed to take corrective action.
Causes of Action
The traditional differences between product liability actions based on strict liability or negligence have been all but eliminated in Minnesota. Cases based on defective design and failure to warn employ a reasonableness standard which compares the conduct of the manufacturer to that of the consumer.
1. Design Defect
A manufacturer has a duty to use reasonable care when designing a product so as to avoid any unreasonable risk of harm to the consumer. The reasonableness standard considers the facts and circumstances of each particular case. This may include the likelihood and seriousness of harm as well as the feasibility of any precautions which may prevent the harm. If the manufacturer did not use reasonable care when designing the product in question, then the product is in a defective condition and reasonably dangerous to the consumer.
2. Failure to Warn
A product is also in a defective condition unreasonably dangerous to the consumer if the manufacturer or seller knew or should have known of the dangers involved in using the product but did not provide the consumer adequate warnings or instructions. A retailer must provide warning of dangers inherent in the improper use of the product if that misuse is one the retailer should reasonably foresee.
3. Manufacturing Defects
This is one area where the concept of strict liability is alive and well. If a product has a manufacturing flaw which causes it to fail during use, the manufacturer will be found strictly liable. A product is in a defective condition unreasonably dangerous to the consumer if it presents a danger not contemplated by an ordinary consumer who uses the product with the knowledge common in the community.
4. Breach of Warranty
An injured party may also assert a product liability claim based upon breaches of express or implied warranties pursuant to the U.C.C.
Defenses
In product liability actions, Minnesota recognizes comparative negligence as a defense to actions based in negligence. An unforeseeable misuse of a product is also considered a defense.
1. Useful Life of Product
In a product liability action for the recovery of damages for personal injury, death, or property damage, the designer, manufacturer, distributor, or seller of the product that caused the injury may have a defense if the injury was sustained following the expiration of the ordinary useful life of the product. Minn. Stat. § 604.03, subd. 1. The product's useful life is not necessarily the life inherent in the product but instead is the period during which the reasonable safety of the product should be useful to the user. Minn. Stat. § 604.03, subd. 2.
However, in Hodder v. Goodyear Tire & Rubber, 426 N.W.2d 826 (Minn. 1988), the Minnesota Supreme Court limited the application of the statute. The court held that a defendant may still be held liable when plaintiff is injured by a product whose useful life has expired. The court explained that the useful life a product is merely one factor for the trier of fact to consider in determining fault. The jury is to use information regarding the useful life, as well as the other evidence in the case, to arrive at its determination as to whether a defendant is at fault.
2. Limits on the Liability of Non-Manufacturers and Retailers
In any product liability action based upon strict liability against a defendant other than the manufacturer of the product, the non-manufacturing defendant shall, upon answering or otherwise pleading, file an affidavit certifying the correct identity of the manufacturer of the product. Minn. Stat. § 544.41, subd. 1. Once the plaintiff has filed a complaint against a manufacturer and the manufacturer has, or is required to have, answered or otherwise pleaded, the court shall order the dismissal of the strict liability claim against the non-manufacturing defendant. Minn. Stat. § 544.41, subd. 2. The courts shall not enter a dismissal in favor of a non-manufacturing defendant if the plaintiff can show the defendant exercised some significant control over the design or manufacture of the product, the defendant had actual knowledge of the defect, or the defendant caused the defect in the product. Minn. Stat. § 544.41, subd. 3.
The applicable statute section 544.41 (Products liability; limit on liability of non-manufacturers) is found in the Appendix.
There are eighty-seven counties in Minnesota which comprise ten judicial districts. Cases are tried in the county seats of each county. Accordingly, a county by county analysis is not practical. The largest judicial districts are the Fourth District, which is comprised of Hennepin County. The county seat is Minneapolis. The next largest is the Second Judicial District which is comprised of Ramsey County with the county seat in St. Paul. The verdicts in both of those judicial districts could be characterized as moderately liberal.
As most people who have dealt with an employment related claim can attest, a disgruntled employee rarely, if ever, limits his/her claims to a single factual incident or cause of action. Instead, the employee will throw a mixed bag of claims at the employer which typically include legal theories premised upon statutory and common law claims. Thus, it is not uncommon for an employee to seek damages based upon causes of action such as statutory violations under the ADA, Human Rights Act, and other related state and federal regulations; breach of contract; and defamation and/or infliction of emotional distress. The following is intended to provide a brief overview of common law which are typically brought in the employment context, other than claims for intentional and negligent infliction of emotional distress.
Defamation
Claims for defamation typically arise out of the context of the termination of an employee. In order to prove defamation, the employee must establish that:
- The employer communicated a defamatory statement to someone other than the plaintiff;
- The statement was false; and
- The statement harmed plaintiff's reputation.
In certain circumstances, a former employee may also make a claim for defamation even if the employer makes no publication of statements about the employee. Lewis at 886. When considering the reasoning of other courts which have considered the issue of self-publication, the Court stated:
These courts have recognized that if a defamed person was in some way compelled to communicate the defamatory statement to a third person, and if it was foreseeable to the defendant that the defamed person would be so compelled, then the defendant could be held liable for the defamation.Id. Therefore, under to Lewis, a terminated employee may succeed on a claim for defamation if he or she was required to discuss the reasons for termination in a subsequent job interview, the reasons carried a negative implication, and the reasons were untrue.
In certain circumstances, an employer's defamatory statements may be subject to a qualified privilege. If so, the employer will not be liable for its statements as long as they are made in good faith and for a legitimate purpose. Brooks v. Doherty, Rumble & Butler, 481 N.W.2d 120, 124-25 (Minn. Ct. App. 1992). A plaintiff employee may overcome a qualified privilege by showing that the employer acted with malice. Bauer v. State, 511 N.W.2d 447 (Minn. 1994). Malice can be established by showing that the employer acted with ill-will or a design to carelessly and wantonly injure the plaintiff. Brooks, 481 N.W.2d at 126. Likewise, malice can be proved by evidence that the employer knew the statements were false or by intrinsic evidence such as the character of the language used (exaggerated language), or the extent of publication. Frankson v. Design Space International, 394 N.W.2d 140, 144 (Minn. 1986).
Breach Of Contract
In considering claims for breach of employment contracts, courts typically agree on four settled principals. First, unless otherwise agreed, the employer/employee relationship is terminable at the will of either party. Cederstrand v. Lutheran Brotherhood, 117 N.W.2d 213, 221 (Minn. 1962). Second, a promise of employment on particular terms may create a binding unilateral contract which alters the at-will relationship. Pine River State Bank v. Mettille, 333 N.W.2d 622, 626 (Minn. 1983). Third, an offer or promise of particular employment may be inferred from statements or conduct of the parties, but such an offer or promise must be definite in form and communicated to the offeree. Cederstrand, 117 N.W.2d at 221. Finally, an employer's general statements of policy do not constitute a contractual offer. Pine River State Bank, 333 N.W.2d at 626, 630.
Critical to the formation/modification of an employment contract (whether based on an employee handbook, an employer's oral promise of continued employment, or an implied contract) are:
- An offer definite in form;
- Communication of the offer to the employee;
- Acceptance of the offer by the employee; and
- Adequate consideration.
Typically speaking, breach of contract claims are founded upon allegations that promises made by an employer, during the course of employment, change the nature of the employment relationship from at-will to permanent or one of a specific duration. In these cases, the employee typically claims reliance upon an employer's promise of permanent employment and some form of detriment as a result of relying upon such promise.
There are occasions where promises made by employers are sufficient to imply a promise of permanent employment. Pine River, 333 N.W.2d 622 (employee handbook modified employment relationship so that employer was required to follow disciplinary procedures set out in handbook). However, in many of these situations, the employee handbook contains a provision which expressly reserves the right to terminate based upon the employer's discretion. See, e.g., Ward v. Employee Development Corp., 516 N.W.2d 198, 202-03 (Minn. Ct. App. 1994).
While disclaimers may be useful in defeating a claim based upon language contained in the same handbook, such disclaimers are not necessarily helpful when a promise is made after the dissemination of the handbook. For example, a subsequent dissemination of a company policy concerning issues such as sexual harassment and/or equal opportunity may modify the nature of the employment relationship if it contains sufficiently definite language. Fitzgerald v. Norwest Corp., 382 N.W.2d 290, 292 (Minn. Ct. App. 1986) ("Statements in an employee handbook may become enforceable as part of an employment agreement if the requirements for formation of a unilateral contract are met"). Therefore, care must be exercised to ensure that subsequent policy statements which are disseminated to employees have the intended effect.
Promissory Estoppel
Promissory estoppel is an equitable remedy that implies a contract in law where none exists in fact. Grouse v. Group Health Plan, 306 N.W.2d 114, 116 (Minn. 1981). Thus, even when there is no contract, a party may be entitled to contract damages if he/she can establish that:
- A party made a clear and definite promise;
- The party intended to induce reliance by its promise;
- Reliance occurred; and
- The promise must be enforced in order to prevent an injustice.
Negligent Hiring, Retention And Supervision Of Employees
In order to prove a claim based upon negligence, it is necessary for the employee to establish:
- The existence of a duty;
- A breach of said duty; and
- Damages caused directly by the breach.
The Minnesota Court of Appeals has limited an employer's liability under the negligent hiring theory to cases where the employee committed an intentional act which caused injury to a third party. Bruchas v. Preventive Care, Inc., 553 N.W.2d 440 (Minn. Ct. App. 1996). Another significant limitation on the theory of negligent hiring is the requirement of a breach of the duty owed to the third party. In P.L. v. Aubert, 545 N.W.2d 666 (Minn. 1996), a high school student was sexually abused by his teacher. He sued the school district alleging negligent hiring. The district court dismissed the complaint. While the school district did not contest that it owed a duty to the student, it presented evidence that no duty was breached since the teacher had a valid license, good academic credentials, and excellent references. The Court stated:
A school district cannot be held liable for actions that are not foreseeable when reasonable measures of supervision are employed to insure adequate educational duties are being performed by the teachers, and there is adequate consideration being given for the safety and welfare of all students in the school. The safety and welfare of the students in a school setting is paramount. However, in this case, closer vigilance would not have uncovered the relationship because both participants worked hard to conceal it.Id. at 668. Therefore, the Court concluded, no duty was breached. For this reason, the Court reinstated the summary judgment granted by the trial court.
For causes of action based on negligent supervision or retention the elements are similar. In order to state a cause of action, it must be established that (1) the employer knew or should have known that the employee posed a risk; (2) the employer failed to take action against such risk; and (3) the employee's unfitness caused injury to the plaintiff. Yunker v. Honeywell, Inc., 496 N.W.2d 419, 422 (Minn. Ct. App. 1993) review denied April 20, 1993; citing Ponticus v. K.M.S. Investments, 331 N.W.2d 907, 911 (Minn 1983).
Minnesota's Unfair Claims Practices Act ("UCPA") authorizes the Commissioner of Commerce to impose administrative remedies, including fines, on insurers for various unfair claims handling practices. Minn. Stat. §§ 72A.20 and 72A.201, located in the Appendix, outline the prohibited conduct. The express purpose of the UCPA is to regulate trade practices in the business of insurance. The UCPA provides for administrative enforcement and does not permit first party bad faith claims against insurers. Morris v. American Family Mut. Ins. Co., 386 N.W.2d 283 (Minn. 1986).
Further, it is well settled in Minnesota that an injured third party claimant is not privy to the insurance contract and cannot sue an insurer directly for failure to pay a claim but must first obtain a judgment against the insured. Rinn v. Transit Casualty Co., 322 N.W.2d 357, 358 (Minn.1982); Miller v. Market Men's Mutual Insurance Co., 115 N.W.2d 266 (1962). If an insurer fails to settle in good faith with a third-party claimant, the insured can bring a bad faith action against the insurer; further, the claimant can take an assignment of the insured's bad faith claim and maintain the insured's action against the insurer. Strand v. Travelers Insurance Co., 219 N.W.2d 622 (1974). Minnesota common law follows the traditional rule that a bad faith breach of contract does not convert a breach of contract into a tort, Haagenson v. National Farmers Union Property & Casualty Co., 277 N.W.2d 648, 652 (Minn.1979). Consequently, a first party insured cannot recover punitive damages in a breach of contract action against an insurer in the absence of some independent tort. Minnesota-Iowa Television Co. v. Watonwan T.V. Improvement Association, 294 N.W.2d 297, 309 (Minn.1980)..
Footnotes:
1 Rates for prior calendar years are as follows: 2001 - 6%; 2000 - 5%; 1999 - 4%; 1998 - 5%; 1997 - 5%; 1995 - 6%; 1994 - 3%; 1993 - 4%; 1992 - 5%; 1991 - 7%; 1990 - 7%. The rate for 2002 has not been announced. BACK
Minn. Stat. § 72A.20 - Methods, acts, and practices which are defined as unfair or deceptive
Minn. Stat. § 72A.201 - Regulation of claims practices
Minn. Stat. § 256B.37 - Private insurance policies, causes of action
Minn. Stat. § 65B.525 - Arbitration procedure; rules of court
Minn. Stat. § 514.981 - Medical assistance lien
Minn. Stat. § 544.41 - Product liability; limit on liability of non-manufacturers
Minn. Stat. § 548.36 - Collateral source calculations
Minn. Stat. § 549.09 - Interest on verdicts, awards, and judgments
Minn. Stat. § 549.20 - Punitive damages
Minn. Stat. § 549.191 - Claim for punitive damages
Minn. Stat. § 572.08 - Validity of arbitration agreements, application to specific agreements
Minn. Stat. § 572.09 - Procedure to compel or stay arbitration
Minn. Stat. § 572.16 - Change of award by arbitrators
Minn. Stat. § 572.18 - Confirmation of an award
Minn. Stat. § 572.19 - Vacating an award
Minn. Stat. § 572.20 - Modification or correction of award
Minn. Stat. § 572.26 - Appeals
Minn. Stat. § 604.01 - Comparative fault; effect
Minn. Stat. § 176.061 - Third party liability
Minnesota Rule of Civil Procedure 11
Minnesota Rule of Civil Procedure 68
Rule of Professional Conduct 3.1
604.01 Comparative fault; effect
Subdivision 1. Scope of application. Contributory fault does not bar recovery in an action by any person or the person's legal representative to recover damages for fault resulting in death, in injury to person or property, or in economic loss, if the contributory fault was not greater than the fault of the person against whom recovery is sought, but any damages allowed must be diminished in proportion to the amount of fault attributable to the person recovering. The court may, and when requested by any party shall, direct the jury to find separate special verdicts determining the amount of damages and the percentage of fault attributable to each party and the court shall then reduce the amount of damages in proportion to the amount of fault attributable to the person recovering.
Subd. 1a. Fault. "Fault" includes acts or omissions that are in any measure negligent or reckless toward the person or property of the actor or others, or that subject a person to strict tort liability. The term also includes breach of warranty, unreasonable assumption of risk not constituting an express consent or primary assumption of risk, misuse of a product and unreasonable failure to avoid an injury or to mitigate damages, and the defense of complicity under section 340A.801. Legal requirements of causal relation apply both to fault as the basis for liability and to contributory fault. The doctrine of last clear chance is abolished.
Evidence of unreasonable failure to avoid aggravating an injury or to mitigate damages may be considered only in determining the damages to which the claimant is entitled. It may not be considered in determining the cause of an accident.
Subd. 2. Personal injury or death; settlement or payment. Settlement with or any payment made to an injured person or to others on behalf of such injured person with the permission of such injured person or to anyone entitled to recover damages on account of injury or death of such person shall not constitute an admission of liability by the person making the payment or on whose behalf payment was made.
Subd. 3. Property damage or economic loss; settlement or payment. Settlement with or any payment made to a person or on the person's behalf to others for damage to or destruction of property or for economic loss does not constitute an admission of liability by the person making the payment or on whose behalf the payment was made.
Subd. 4. Settlement or payment; admissibility of evidence. Except in an action in which settlement and release has been pleaded as a defense, any settlement or payment referred to in subdivisions 2 and 3 shall be inadmissible in evidence on the trial of any legal action.
Subd. 5. Credit for settlements and payments; refund. All settlements and payments made under subdivisions 2 and 3 shall be credited against any final settlement or judgment; provided however that in the event that judgment is entered against the person seeking recovery or if a verdict is rendered for an amount less than the total of any such advance payments in favor of the recipient thereof, such person shall not be required to refund any portion of such advance payments voluntarily made. Upon motion to the court in the absence of a jury and upon proper proof thereof, prior to entry of judgment on a verdict, the court shall first apply the provisions of subdivision 1 and then shall reduce the amount of the damages so determined by the amount of the payments previously made to or on behalf of the person entitled to such damages.
466.04. Maximum liability
Subdivision 1. Limits; punitive damages. (a) Liability of any municipality on any claim within the scope of sections 466.01 to 466.15 shall not exceed:
(1) $300,000 when the claim is one for death by wrongful act or omission and $300,000 to any claimant in any other case;
(2) $750,000 for any number of claims arising out of a single occurrence, for claims arising on or after January 1, 1998, and before January 1, 2000;
(3) $1,000,000 for any number of claims arising out of a single occurrence, for claims arising on or after January 1, 2000; or
(4) twice the limits provided in clauses (1) to (3) when the claim arises out of the release or threatened release of a hazardous substance, whether the claim is brought under sections 115B.01 to 115B.15 or under any other law.
(b) No award for damages on any such claim shall include punitive damages.
Subd. 1a. Officers and employees. The liability of an officer or an employee of any municipality for a tort arising out of an alleged act or omission occurring in the performance of duty shall not exceed the limits set forth in subdivision 1, unless the officer or employee provides professional services and also is employed in the profession for compensation by a person or persons other than the municipality.
Subd. 1b. Total claim. The total liability of the municipality on a claim against it and against its officers or employees arising out of a single occurrence shall not exceed the limits set forth in subdivision 1.
Subd. 2. Inclusions. The limitation imposed by this section on individual claimants includes damages claimed for loss of services or loss of support arising out of the same tort.
Subd. 3. Disposition of multiple claims. Where the amount awarded to or settled upon multiple claimants exceeds the applicable limit under subdivision 1, paragraph (a), clauses (2) to (4), any party may apply to any district court to apportion to each claimant a proper share of the total amount limited by subdivision 1. The share apportioned each claimant shall be in the proportion that the ratio of the award or settlement made to each bears to the aggregate awards and settlements for all claims arising out of the occurrence.
548.36. Collateral source calculations
Subdivision 1. Definition. For purposes of this section, "collateral sources" means payments related to the injury or disability in question made to the plaintiff, or on the plaintiff's behalf up to the date of the verdict, by or pursuant to:
(1) a federal, state, or local income disability or workers' compensation act; or other public program providing medical expenses, disability payments, or similar benefits;
(2) health, accident and sickness, or automobile accident insurance or liability insurance that provides health benefits or income disability coverage; except life insurance benefits available to the plaintiff, whether purchased by the plaintiff or provided by others, payments made pursuant to the United States Social Security Act, or pension payments;
(3) a contract or agreement of a group, organization, partnership, or corporation to provide, pay for, or reimburse the costs of hospital, medical, dental or other health care services; or
(4) a contractual or voluntary wage continuation plan provided by employers or any other system intended to provide wages during a period of disability, except benefits received from a private disability insurance policy where the premiums were wholly paid for by the plaintiff.
Subd. 2. Motion. In a civil action, whether based on contract or tort, when liability is admitted or is determined by the trier of fact, and when damages include an award to compensate the plaintiff for losses available to the date of the verdict by collateral sources, a party may file a motion within ten days of the date of entry of the verdict requesting determination of collateral sources. If the motion is filed, the parties shall submit written evidence of, and the court shall determine:
(1) amounts of collateral sources that have been paid for the benefit of the plaintiff or are otherwise available to the plaintiff as a result of losses except those for which a subrogation right has been asserted; and
(2) amounts that have been paid, contributed, or forfeited by, or on behalf of, the plaintiff or members of the plaintiff's immediate family for the two-year period immediately before the accrual of the action to secure the right to a collateral source benefit that the plaintiff is receiving as a result of losses.
Subd. 3. Duties of the court. (a) The court shall reduce the award by the amounts determined under subdivision 2, clause (1), and offset any reduction in the award by the amounts determined under subdivision 2, clause (2).
(b) If the court cannot determine the amounts specified in paragraph (a) from the written evidence submitted, the court may within ten days request additional written evidence or schedule a conference with the parties to obtain further evidence.
(c) In any case where the claimant is found to be at fault under section 604.01, reduction required under paragraph (a) must be made before the claimant's damages are reduced under section 604.01, subdivision 1.
Subd. 4. Calculation of attorneys' fees. If the fees for legal services provided to the plaintiff are based on a percentage of the amount of money awarded to the plaintiff, the percentage must be based on the amount of the award as adjusted under subdivision 3. Any subrogated provider of a collateral source not separately represented by counsel shall pay the same percentage of attorneys' fees as paid by the plaintiff and shall pay its proportionate share of the costs.
Subd. 5. Jury not informed of collateral sources. The jury shall not be informed of the existence of collateral sources or any future benefits which may or may not be payable to the plaintiff.
544.41. Product liability; limit on liability of non-manufacturers
Subdivision 1. In any product liability action based in whole or in part on strict liability in tort commenced or maintained against a defendant other than the manufacturer, that party shall upon answering or otherwise pleading file an affidavit certifying the correct identity of the manufacturer of the product allegedly causing injury, death or damage. The commencement of a product liability action based in whole or part on strict liability in tort against a certifying defendant shall toll the applicable statute of limitation relative to the defendant for purposes of asserting a strict liability in tort cause of action.
Subd. 2. Once the plaintiff has filed a complaint against a manufacturer and the manufacturer has or is required to have answered or otherwise pleaded, the court shall order the dismissal of a strict liability in tort claim against the certifying defendant, provided the certifying defendant is not within the categories set forth in subdivision 3. Due diligence shall be exercised by the certifying defendant in providing the plaintiff with the correct identity of the manufacturer and due diligence shall be exercised by the plaintiff in filing a law suit and obtaining jurisdiction over the manufacturer.
The plaintiff may at any time subsequent to dismissal move to vacate the order of dismissal and reinstate the certifying defendant, provided plaintiff can show one of the following:
(a) That the applicable statute of limitation bars the assertion of a strict liability in tort cause of action against the manufacturer of the product allegedly causing the injury, death or damage;
(b) That the identity of the manufacturer given to the plaintiff by the certifying defendant was incorrect. Once the correct identity of the manufacturer has been given by the certifying defendant the court shall again dismiss the certifying defendant;
(c) That the manufacturer no longer exists, cannot be subject to the jurisdiction of the courts of this state, or, despite due diligence, the manufacturer is not amenable to service of process;
(d) That the manufacturer is unable to satisfy any judgment as determined by the court; or
(e) That the court determines that the manufacturer would be unable to satisfy a reasonable settlement or other agreement with plaintiff.
Subd. 3. A court shall not enter a dismissal order relative to any certifying defendant even though full compliance with subdivision 1 has been made where the plaintiff can show one of the following:
(a) That the defendant has exercised some significant control over the design or manufacture of the product, or has provided instructions or warnings to the manufacturer relative to the alleged defect in the product which caused the injury, death or damage;
(b) That the defendant had actual knowledge of the defect in the product which caused the injury, death or damage; or
(c) That the defendant created the defect in the product which caused the injury, death or damage.
Subd. 4. Nothing contained in subdivisions 1 to 3 shall be construed to create a cause of action in strict liability in tort or based on other legal theory, or to affect the right of any person to seek and obtain indemnity or contribution.
549.191. Claim for punitive damages
Upon commencement of a civil action, the complaint must not seek punitive damages. After filing the suit a party may make a motion to amend the pleadings to claim punitive damages. The motion must allege the applicable legal basis under section 549.20 or other law for awarding punitive damages in the action and must be accompanied by one or more affidavits showing the factual basis for the claim. At the hearing on the motion, if the court finds prima facie evidence in support of the motion, the court shall grant the moving party permission to amend the pleadings to claim punitive damages. For purposes of tolling the statute of limitations, pleadings amended under this section relate back to the time the action was commenced.
549.20. Punitive damages
Subdivision 1. (a) Punitive damages shall be allowed in civil actions only upon clear and convincing evidence that the acts of the defendant show deliberate disregard for the rights or safety of others.
(b) A defendant has acted with deliberate disregard for the rights or safety of others if the defendant has knowledge of facts or intentionally disregards facts that create a high probability of injury to the rights or safety of others and:
(1) deliberately proceeds to act in conscious or intentional disregard of the high degree of probability of injury to the rights or safety of others; or
(2) deliberately proceeds to act with indifference to the high probability of injury to the rights or safety of others.
Subd. 2. Punitive damages can properly be awarded against a master or principal because of an act done by an agent only if:
(a) the principal authorized the doing and the manner of the act, or
(b) the agent was unfit and the principal deliberately disregarded a high probability that the agent was unfit, or
(c) the agent was employed in a managerial capacity with authority to establish policy and make planning level decisions for the principal and was acting in the scope of that employment, or
(d) the principal or a managerial agent of the principal, described in clause (c), ratified or approved the act while knowing of its character and probable consequences.
Subd. 3. Any award of punitive damages shall be measured by those factors which justly bear upon the purpose of punitive damages, including the seriousness of hazard to the public arising from the defendant's misconduct, the profitability of the misconduct to the defendant, the duration of the misconduct and any concealment of it, the degree of the defendant's awareness of the hazard and of its excessiveness, the attitude and conduct of the defendant upon discovery of the misconduct, the number and level of employees involved in causing or concealing the misconduct, the financial condition of the defendant, and the total effect of other punishment likely to be imposed upon the defendant as a result of the misconduct, including compensatory and punitive damage awards to the plaintiff and other similarly situated persons, and the severity of any criminal penalty to which the defendant may be subject.
Subd. 4. Separate proceeding. In a civil action in which punitive damages are sought, the trier of fact shall, if requested by any of the parties, first determine whether compensatory damages are to be awarded. Evidence of the financial condition of the defendant and other evidence relevant only to punitive damages is not admissible in that proceeding. After a determination has been made, the trier of fact shall, in a separate proceeding, determine whether and in what amount punitive damages will be awarded.
Subd. 5. Judicial review. The court shall specifically review the punitive damages award in light of the factors set forth in subdivision 3 and shall make specific findings with respect to them. The appellate court, if any, also shall review the award in light of the factors set forth in that subdivision. Nothing in this section may be construed to restrict either court's authority to limit punitive damages.
572.08. Validity of arbitration agreements, application to specific agreements
A written agreement to submit any existing controversy to arbitration or a provision in a written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable, and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract. The provisions of sections 572.08 to 572.30 shall apply to controversies arising out of any contract for the construction or repair of state trunk highways when such contract specifically provides for arbitration or when the parties agree to submit an existing controversy to arbitration. Sections 572.08 to 572.30 also apply to arbitration agreements between employers and employees or between their respective representatives unless otherwise provided in the agreement.
572.09. Procedure to compel or stay arbitration
(a) On application of a party showing an agreement described in section 572.08, and the opposing party's refusal to arbitrate, the court shall order the parties to proceed with arbitration, but if the opposing party denies the existence of the agreement to arbitrate, the court shall proceed summarily to the determination of the issue so raised and shall order arbitration if found for the moving party, otherwise, the application shall be denied.
(b) On application, the court may stay an arbitration proceeding commenced or threatened on a showing that there is no agreement to arbitrate. Such an issue, when in substantial and bona fide dispute, shall be forthwith and summarily tried and the stay ordered if found for the moving party. If found for the opposing party, the court shall order the parties to proceed to arbitration.
(c) If an issue referable to arbitration under the alleged agreement is in an action or proceeding pending in a court having jurisdiction to hear applications under clause (a), the application shall be made therein. Otherwise and subject to section 572.25, the application may be made in any court of competent jurisdiction.
(d) Any action or proceeding involving an issue subject to arbitration shall be stayed if an order for arbitration or an application therefor has been made under this section or, if the issue is severable, the stay may be with respect thereto only. When the application is made in such action or proceeding, the order for arbitration shall include such stay.
(e) An order for arbitration shall not be refused on the ground that the claim in issue lacks merit or bona fides or because any fault or grounds for the claim sought to be arbitrated have not been shown.
572.16. Change of award by arbitrators
Subdivision 1. Application of party. On application of a party, the arbitrator may modify or correct the award:
(1) upon the grounds stated in section 572.20, subdivision 1;
(2) for the purpose of clarifying the award; or
(3) where the award is based on an error of law.
Subd. 2. Submission by court. If an application to the court is pending under section 572.18, 572.19, or 572.20, on submission to the arbitrators by the court under such conditions as the court may order, the arbitrators may modify or correct the award upon the grounds stated in section 572.20, subdivision 1, or for the purpose of clarifying the award.
Subd. 3. Procedure. For purposes of subdivision 1 or 2, the application shall be made within 20 days after delivery of the award to the applicant. Written notice thereof shall be given forthwith to the opposing party, stating that the opposing party must serve objections thereto, if any, within ten days from the notice. The award so modified or corrected is subject to the provisions of sections 572.18, 572.19 and 572.20.
572.18. Confirmation of an award
Upon application of a party, the court shall confirm an award, unless within the time limits hereinafter imposed grounds are urged for vacating or modifying or correcting the award, in which case the court shall proceed as provided in sections 572.19 and 572.20.
572.19. Vacating an award
Subdivision 1. Upon application of a party, the court shall vacate an award where:
(1) The award was procured by corruption, fraud or other undue means;
(2) There was evident partiality by an arbitrator appointed as a neutral or corruption in any of the arbitrators or misconduct prejudicing the rights of any party;
(3) The arbitrators exceeded their powers;
(4) The arbitrators refused to postpone the hearing upon sufficient cause being shown therefor or refused to hear evidence material to the controversy or otherwise so conducted the hearing, contrary to the provisions of section 572.12, as to prejudice substantially the rights of a party; or
(5) There was no arbitration agreement and the issue was not adversely determined in proceedings under section 572.09 and the party did not participate in the arbitration hearing without raising the objection;
But the fact that the relief was such that it could not or would not be granted by a court of law or equity is not ground for vacating or refusing to confirm the award.
Subd. 2. An application under this section shall be made within 90 days after delivery of a copy of the award to the applicant, except that, if predicated upon corruption, fraud or other undue means, it shall be made within 90 days after such grounds are known or should have been known.
Subd. 3. In vacating the award on grounds other than stated in clause (5) of subdivision 1, the court may order a rehearing before new arbitrators chosen as provided in the agreement, or in the absence thereof, by the court in accordance with section 572.10, or, if the award is vacated on grounds set forth in clauses (3) and (4) of subdivision 1, the court may order a rehearing before the arbitrators who made the award or their successors appointed in accordance with section 572.10. The time within which the agreement requires the award to be made is applicable to the rehearing and commences from the date of the order.
Subd. 4. If the application to vacate is denied and no motion to modify or correct the award is pending, the court shall confirm the award.
572.20. Modification or correction of award
Subdivision 1. Upon application made within 90 days after delivery of a copy of the award to the applicant, the court shall modify or correct the award where:
(1) There was an evident miscalculation of figures or an evident mistake in the description of any person, thing or property referred to in the award;
(2) The arbitrators have awarded upon a matter not submitted to them and the award may be corrected without affecting the merits of the decision upon the issues submitted; or
(3) The award is imperfect in a matter of form, not affecting the merits of the controversy.
Subd. 2. If the application is granted, the court shall modify and correct the award so as to effect its intent and shall confirm the award as so modified and corrected. Otherwise, the court shall confirm the award as made.
Subd. 3. An application to modify or correct an award may be joined in the alternative with an application to vacate the award.
572.26. Appeals
Subdivision 1. An appeal may be taken from:
(1) An order denying an application to compel arbitration made under section 572.09;
(2) An order granting an application to stay arbitration made under section 572.09(b);
(3) An order confirming or denying confirmation of an award;
(4) An order modifying or correcting an award;
(5) An order vacating an award without directing a rehearing; or
(6) A judgment or decree entered pursuant to the provisions of this chapter.
Subd. 2. The appeal shall be taken in the manner and to the same extent as from orders or judgments in a civil action.
176.061. Third party liability
Subdivision 1. Election of remedies. If an injury or death for which benefits are payable occurs under circumstances which create a legal liability for damages on the part of a party other than the employer and at the time of the injury or death that party was insured or self-insured in accordance with this chapter, the employee, in case of injury, or the employee's dependents, in case of death, may proceed either at law against that party to recover damages or against the employer for benefits, but not against both.
Subd. 2. Action for recovery of damages. If the employee, in case of injury, or the employee's dependents, in case of death, brings an action for the recovery of damages, the amount of the damages, the manner in which they are paid, and the persons to whom they are payable, are as provided in this chapter. In no case shall the party be liable to any person other than the employee or the employee's dependents for any damages resulting from the injury or death.
Subd. 3. Election to receive benefits from employer; subrogation. If the employee or the employee's dependents elect to receive benefits from the employer, or the special compensation fund, the employer or the special compensation fund has a right of indemnity or is subrogated to the right of the employee or the employee's dependents to recover damages against the other party. The employer, or the attorney general on behalf of the special compensation fund, may bring legal proceedings against the party and recover the aggregate amount of benefits payable to or on behalf of the employee or the employee's dependents, regardless of whether such benefits are recoverable by the employee or the employee's dependents at common law or by statute together with costs, disbursements, and reasonable attorney's fees of the action.
If an action as provided in this chapter is prosecuted by the employee, the employer, or the attorney general on behalf of the special compensation fund, against the third person, and results in judgment against the third person, or settlement by the third person, the employer has no liability to reimburse or hold the third person harmless on the judgment or settlement in absence of a written agreement to do so executed prior to the injury.
Subd. 4. Application of subdivisions 1, 2, and 3. The provisions of subdivisions 1, 2, and 3 apply only if the employer liable for benefits and the other party legally liable for damages are insured or self-insured and engaged, in the due course of business in, (a) furtherance of a common enterprise, or (b) in the accomplishment of the same or related purposes in operations on the premises where the injury was received at the time of the injury.
Subd. 5. Cumulative remedies. If an injury or death for which benefits are payable is caused under circumstances which created a legal liability for damages on the part of a party other than the employer, that party being then insured or self-insured in accordance with this chapter, and the provisions of subdivisions 1, 2, 3, and 4 do not apply, or the party other than the employer is not then insured or self-insured as provided by this chapter, legal proceedings may be taken by the employee or the employee's dependents in accordance with clause (a), or by the employer, or by the attorney general on behalf of the special compensation fund, in accordance with clause (b), against the other party to recover damages, notwithstanding the payment of benefits by the employer or the special compensation fund or their liability to pay benefits.
(a) If an action against the other party is brought by the injured employee or the employee's dependents and a judgment is obtained and paid or settlement is made with the other party, the employer or the special compensation fund may deduct from the benefits payable the amount actually received by the employee or dependents or paid on their behalf in accordance with subdivision 6. If the action is not diligently prosecuted or if the court deems it advisable in order to protect the interests of the employer or the special compensation fund, upon application the court may grant the employer or the special compensation fund the right to intervene in the action for the prosecution of the action. If the injured employee or the employee's dependents or any party on their behalf receives benefits from the employer or the special compensation fund or institutes proceedings to recover benefits or accepts from the employer or the special compensation fund any payment on account of the benefits, the employer or the special compensation fund is subrogated to the rights of the employee or the employee's dependents or has a right of indemnity against a third party regardless of whether such benefits are recoverable by the employee or the employee's dependents at common law or by statute. The employer or the attorney general on behalf of the special compensation fund may maintain a separate action or continue an action already instituted. This action may be maintained in the name of the employee or the names of the employee's dependents, or in the name of the employer, or in the name of the attorney general on behalf of the special compensation fund, against the other party for the recovery of damages. If the action is not diligently prosecuted by the employer or the attorney general on behalf of the special compensation fund, or if the court deems it advisable in order to protect the interest of the employee, the court, upon application, may grant to the employee or the employee's dependents the right to intervene in the action for the prosecution of the action. The proceeds of the action or settlement of the action shall be paid in accordance with subdivision 6.
(b) If an employer, being then insured, sustains damages due to a change in workers' compensation insurance premiums, whether by a failure to achieve a decrease or by a retroactive or prospective increase, as a result of the injury or death of an employee which was caused under circumstances which created a legal liability for damages on the part of a party other than the employer, the employer, notwithstanding other remedies provided, may maintain an action against the other party for recovery of the premiums. This cause of action may be brought either by joining in an action described in clause (a) or by a separate action. Damages recovered under this clause are for the benefit of the employer and the provisions of subdivision 6 are not applicable to the damages.
(c) The third party is not liable to any person other than the employee or the employee's dependents, or the employer, or the special compensation fund, for any damages resulting from the injury or death.
A coemployee working for the same employer is not liable for a personal injury incurred by another employee unless the injury resulted from the gross negligence of the coemployee or was intentionally inflicted by the coemployee.
Subd. 6. Costs, attorney fees, expenses. The proceeds of all actions for damages or of a settlement of an action under this section, except for damages received under subdivision 5, clause (b) received by the injured employee or the employee's dependents or by the employer or the special compensation fund, as provided by subdivision 5, shall be divided as follows:
(a) After deducting the reasonable cost of collection, including but not limited to attorneys fees and burial expense in excess of the statutory liability, then
(b) One-third of the remainder shall in any event be paid to the injured employee or the employee's dependents, without being subject to any right of subrogation.
(c) Out of the balance remaining, the employer or the special compensation fund shall be reimbursed in an amount equal to all benefits paid under this chapter to or on behalf of the employee or the employee's dependents by the employer or special compensation fund, less the product of the costs deducted under clause (a) divided by the total proceeds received by the employee or dependents from the other party multiplied by all benefits paid by the employer or the special compensation fund to the employee or the employee's dependents.
(d) Any balance remaining shall be paid to the employee or the employee's dependents, and shall be a credit to the employer or the special compensation fund for any benefits which the employer or the special compensation fund is obligated to pay, but has not paid, and for any benefits that the employer or the special compensation fund is obligated to make in the future.
There shall be no reimbursement or credit to the employer or to the special compensation fund for interest or penalties.
Subd. 7. Medical treatment. The liability of an employer or the special compensation fund for medical treatment or payment of any other compensation under this chapter is not affected by the fact that the employee was injured through the fault or negligence of a third party, against whom the employee may have a cause of action which may be sued under this chapter, but the employer, or the attorney general on behalf of the special compensation fund, has a separate additional cause of action against the third party to recover any amounts paid for medical treatment or for other compensation payable under this section resulting from the negligence of the third party regardless of whether such other compensation is recoverable by the employee or the employee's dependents at common law or by statute. This separate cause of action of the employer or the attorney general on behalf of the special compensation fund may be asserted in a separate action brought by the employer or the attorney general on behalf of the special compensation fund against the third party, or in the action commenced by the employee or the employer or the attorney general on behalf of the special compensation fund under this chapter, but in the latter case the cause of action shall be separately stated, the amount awarded in the action shall be separately set out in the verdict, and the amount recovered by suit or otherwise as reimbursement for medical expenses or other compensation shall be for the benefit of the employer or the special compensation fund to the extent that the employer or the special compensation fund has paid or will be required to pay compensation or pay for medical treatment of the injured employee and does not affect the amount of periodic compensation to be paid.
Subd. 8. Repealed by amendment, Laws 1983, c. 290, § 35, eff. July 1, 1983.
Subd. 8a. Notice to employer. In every case arising under subdivision 5, a settlement between the third party and the employee is not valid unless prior notice of the intention to settle is given to the employer within a reasonable time. If the employer or insurer pays compensation to the employee under the provisions of this chapter and becomes subrogated to the right of the employee or the employee's dependents or has a right of indemnity, any settlement between the employee or the employee's dependents and the third party is void as against the employer's right of subrogation or indemnity. When an action at law is instituted by an employee or the employee's dependents against a third party for recovery of damages, a copy of the complaint and notice of trial or note of issue in the action shall be served on the employer or insurer. Any judgment rendered in the action is subject to a lien of the employer for the amount to which it is entitled to be subrogated or indemnified under the provisions of subdivision 5.
Subd. 9. Service of notice on attorney general. In every case in which the state is liable to pay compensation or is subrogated to the rights of the employee or the employee's dependents or has a right of indemnity, all notices required to be given the state shall be served on the attorney general and the commissioner.
Subd. 10. Indemnity. Notwithstanding the provisions of chapter 65B or any other law to the contrary, an employer has a right of indemnity for any compensation paid or payable pursuant to this chapter, regardless of whether such compensation is recoverable by the employee or the employee's dependents at common law or by statute, including temporary total compensation, temporary partial compensation, permanent partial compensation, medical compensation, rehabilitation, death, and permanent total compensation.
Subd. 11. Right of contribution. To the extent the employer has fault, separate from the fault of the injured employee to whom workers' compensation benefits are payable, any nonemployer third party who is liable has a right of contribution against the employer in an amount proportional to the employer's percentage of fault but not to exceed the net amount the employer recovered pursuant to subdivision 6, paragraphs (c) and (d). The employer may avoid contribution exposure by affirmatively waiving, before selection of the jury, the right to recover workers' compensation benefits paid and payable, thus removing compensation benefits from the damages payable by any third party.
Procedurally, if the employer waives or settles the right to recover workers' compensation benefits paid and payable, the employee or the employee's dependents have the option to present all common law or wrongful death damages whether they are recoverable under the Workers' Compensation Act or not. Following the verdict, the trial court will deduct any awarded damages that are duplicative of workers' compensation benefits paid or payable.
65B.525. Arbitration procedure; rules of court
Subdivision 1. Except as otherwise provided in section 72A.327, the supreme court and the several courts of general trial jurisdiction of this state shall by rules of court or other constitutionally allowable device, provide for the mandatory submission to binding arbitration of all cases at issue where the claim at the commencement of arbitration is in an amount of $10,000 or less against any insured's reparation obligor for no-fault benefits or comprehensive or collision damage coverage.
Subdivision 2. The rules of court may provide that cases which are not at issue, whether or not suit has been filed, may be referred to arbitration by agreement of reference signed by counsel for both sides, or by the parties themselves. Such agreement of reference shall define the issues to be arbitrated and, shall also contain any stipulations with respect to facts submitted or agreed or defenses waived. In such cases, the agreement of reference shall take the place of the pleadings in the case and be filed of record.
At any time prior to 10 days before the trial begins, any party may serve upon an adverse party an offer to allow judgment to be entered to the effect specified in the offer or to pay or accept a specified sum of money, with costs and disbursements then accrued, either as to the claim of the offering party against the adverse party or as to the claim of the adverse party against the offering party. Acceptance of the offer shall be made by service of written notice of acceptance within 10 days after service of the offer. If the offer is not accepted within the 10-day period, it is deemed withdrawn. During the 10-day period the offer is irrevocable. If the offer is accepted, either party may file the offer and the notice of acceptance, together with the proof of service thereof, and thereupon the court administrator shall enter judgment. An offer not accepted is not admissible, except in a proceeding to determine costs and disbursements. If the judgment finally entered is not more favorable to the offeree than the offer, the offeree must pay the offeror's costs and disbursements. The fact that an offer is made but not accepted does not preclude a subsequent offer.
A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis for doing so that is not frivolous, which includes a good faith argument for an extension, modification or reversal of existing law. A lawyer for the defendant in a criminal proceeding, or the respondent in a proceeding that could result in incarceration, may nevertheless so defend the proceeding as to require that every element of the case be established.
The filing of an action or defense or similar action taken for a client is not frivolous merely because the facts have not first been fully substantiated or because the lawyer expects to develop vital evidence only by discovery. Such action is not frivolous even though the lawyer believes that the client's position ultimately will not prevail. The action is frivolous, however, if the client desires to have the action taken primarily for the purpose of harassing or maliciously injuring a person or if the lawyer is unable either to make a good faith argument on the merits of the action taken or to support the action taken by a good faith argument for an extension, modification or reversal of existing law.
514.981. Medical assistance lien
Subdivision 1. Property subject to lien; lien amount. (a) Subject to sections 514.980 to 514.985, payments made by a medical assistance agency to provide medical assistance benefits to a medical assistance recipient who owns property in this state or to the recipient's spouse constitute a lien in favor of the agency upon all real property that is owned by the medical assistance recipient on or after the time when the recipient is institutionalized.
(b) The amount of the lien is limited to the same extent as a claim against the estate under section 256B.15, subdivision 2.
Subd. 2. Attachment. (a) A medical assistance lien attaches and becomes enforceable against specific real property as of the date when the following conditions are met:
(1) payments have been made by an agency for a medical assistance benefit;
(2) notice and an opportunity for a hearing have been provided under paragraph (b);
(3) a lien notice has been filed as provided in section 514.982;
(4) if the property is registered property, the lien notice has been memorialized on the certificate of title of the property affected by the lien notice; and
5) all restrictions against enforcement have ceased to apply.
(b) An agency may not file a medical assistance lien notice until the medical assistance recipient and the recipient's spouse or their legal representatives have been sent, by certified or registered mail, written notice of the agency's lien rights and there has been an opportunity for a hearing under section 256.045. In addition, the agency may not file a lien notice unless the agency determines as medically verified by the recipient's attending physician that the medical assistance recipient cannot reasonably be expected to be discharged from a medical institution and return home.
(c) An agency may not file a medical assistance lien notice against real property while it is the home of the recipient's spouse.
(d) An agency may not file a medical assistance lien notice against real property that was the homestead of the medical assistance recipient or the recipient's spouse when the medical assistance recipient received medical institution servi