Case Title: Miller v. Norris Creameries

Citation: 250 N.W.2d 161

Docket Number: 46534

State: minnesota

Court: Minnesota Supreme Court

Date: 1976-12-23T00:00:00Z

Document:
250 N.W.2d 161 (1976) Erwin MILLER, Employee, v. NORRIS CREAMERIES, et al., Relators, Bituminous Casualty Corporation, Insurer, and State Treasurer, Custodian of the Special Compensation Fund, intervenor, Respondent. No. 46534. Supreme Court of Minnesota. December 23, 1976. Jardine Logan & O'Brien and Michael J. Healey, St. Paul, for relators. Warren Spannaus, Atty. Gen., Kenneth E. McCoy, Sp. Asst. Atty. Gen., St. Paul, for respondent state treasurer. Considered and decided by the court without oral argument. PER CURIAM. The employer and insurer seek review by writ of certiorari of an order of the Workers' Compensation Board awarding them reimbursement from the special compensation fund for only those amounts of compensation and medical benefits paid to the employee in excess of 52 weeks of disability and $2,000 medical expenses. The issue on appeal is what is the controlling event which determines the amount of reimbursement to which an employer and insurer are entitled under the Workers' Compensation Act. The employee's back disability was registered with the Workmen's Compensation Commission on August 14, 1970. Minn.St. 1969, § 176.131, applicable on that date, provided in part as follows: Effective September 1, 1971, Minn.St.1969, § 176.131, subd. 1, was amended by L.1971, c. 589, to limit reimbursement from the special compensation fund for applicable disabilities to compensation paid in excess of 52 weeks of monetary benefits and $2,000 in medical expenses. Subdivision 2 was amended to provide for full reimbursement from the special compensation fund only where the preexisting physical impairment contributing to the second injury is diabetes, hemophilia, or seizures. On August 1, 1972, the employee sustained a second back injury in the course of his employment, an injury that would not have occurred "except for" his preexisting back condition. The compensation board held that Minn.St.1971, § 176.131, in effect at the time of the second injury, controlled the amounts of reimbursement to which the employer and insurer were entitled. The Workers' Compensation Act is contractual in nature. In Yaeger v. Delano Granite Works, 250 Minn. 303, 308, 84 N.W.2d 363, 366 (1957), we held that, "[A]ny statute which purports to alter a substantial term of the contract which was in effect at the time the controlling event occurred * * * impairs the obligation of such contract and is therefore unconstitutional." It is the position of the compensation board that the "controlling event" for the purpose of establishing the amounts to be reimbursed from the special compensation fund is the second injury and the legislation in effect on that date governs. In three recent decisions we have held that registrations which complied with the law in existence on the date the registration was filed were valid and entitled the employer and insurer to reimbursement despite statutory amendments between the date of registration and the second injury with which the registrations would not have complied. Lutz v. Spencer Packing Co., Minn., 229 N.W.2d 14 (1975); Stangel v. Lakehead Const. Co., Minn., 235 N.W.2d 200 (1975); Miller v. Norris Creameries, Minn., 235 N.W.2d 203 (1975). In these cases we determined that the "controlling event" as to the requirements for a valid registration was the registration itself. The employer and insurer herein argue that this is also the "controlling event" with regard to the amount of reimbursement to which they are entitled. In Miller v. Norris Creameries, supra, we emphasized the primary purpose of the special compensation fund legislation is to encourage the employment of handicapped workers. We noted the following in that decision, Minn., 235 N.W.2d 206: The amount of compensation an employer must pay before he is reimbursed from the special compensation fund is as much a factor in his assessment of the risk involved in hiring or retaining physically impaired employees as the requirements of a valid registration. In Miller we held that the state could not modify one of those risks without impairing its contract with the employer. The logic of that decision together with the principles of fundamental fairness require that we so hold once again. Consequently, we hold that the 1971 amendment to subds. 1 and 2 of Minn.St. 1969, § 176.131, must be construed to apply only to employees registered after the effective date of that amendment. Reversed and remanded to the Workers' Compensation Board for modification of the award in conformity with this opinion.