The Minnesota Workers’ Compensation Court of Appeals recently vacated an Award on Stipulation that attempted to extinguish the rights of out-of-state providers, resulting in significant implications for multi-state workers’ compensation claims.
In Humble v. N. Cent. Serv. Inc., an Oklahoma resident sustained a work-related injury in North Dakota while employed by a Minnesota-based company. North Dakota’s Workforce Safety and Insurance (WSI) began paying the Employee workers’ compensation benefits following the filing of a First Report of Injury in North Dakota. The Employee later filed a Claim Petition in Minnesota, asserting jurisdiction of his work injury under Minn. Stat. § 176.041, subd. 3.
Notice was eventually sent to potential intervenors, including WSI and various other out-of-state medical providers. However, WSI and several out-of-state medical providers failed to timely intervene. Nevertheless, the parties reached settlement and attempted to extinguish WSI’s and other out-of-state providers’ interests through an Award on Stipulation. A compensation judge subsequently approved the parties’ stipulation for settlement and award, and all outstanding litigation was dismissed.
Eight months later, WSI demanded reimbursement in the amount of $39,384.20 for initial workers’ compensation benefits paid to the Employee and filed a civil action in North Dakota against the Employee. The Employee then petitioned to vacate the settlement, alleging a mutual mistake of fact at the time of settlement and failure to conform with the Minnesota Workers’ Compensation Act.
While the Court of Appeals granted the Employee’s petition to vacate, the Court did so with respect to only subject matter jurisdiction and failure to comport with the Minnesota Workers’ Compensation Act.
As for the Employee’s mutual mistake argument, the Court of Appeals found that the stipulation’s plain language did not limit closure to benefits paid after WSI suspended payments or to in-state providers. Consequently, the Employee’s misunderstanding was that of a unilateral mistake and did not constitute a sufficient basis to vacate the stipulation.
Regarding subject matter jurisdiction, the Court of Appeals held that the compensation judge lacked authority to adjudicate rights arising under another state’s workers’ compensation statutes. Thus, by extinguishing WSI’s and other out-of-state providers’ interests, the Award on Stipulation exceeded its jurisdictional limits and was therefore voidable.
Given the Award did not comport with the Minnesota Workers’ Compensation Act in extinguishing the out-of-state interests fundamental to the settlement’s structure, the entire Award was deemed invalid.
The Humble decision has potentially far-reaching implications for employers and insurers, affecting both the manner in which settlements are structured and the extent to which stipulations may be susceptible to subsequent vacation challenges. As a result, employers and insurers can no longer rely on an out-of-state payor’s failure to timely intervene. Instead, they will need to obtain explicit no-interest letters or otherwise settle any potential claims before submitting a stipulation for settlement for approval.