United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

Nos. 04-3386/3855

___________

Conwed Corporation, *

*

 Cross-Appellee/Appellant, *

* Appeals from the United States

v. * District Court for the 

* District of Minnesota. 

Union Carbide Corporation, * 

*

 Cross-Appellant/Appellee. * 

___________

Submitted: September 15, 2005

Filed: April 18, 2006

___________

Before RILEY, HEANEY, and COLLOTON, Circuit Judges.

___________

COLLOTON, Circuit Judge.

Conwed Corporation appeals the district court’s application of comparative

fault to reduce Conwed’s jury-awarded damages in its subrogation action to recover

workers’ compensation benefits paid and payable to its employees. Union Carbide

cross-appeals, claiming that the action was collaterally estopped, and that the court

incorrectly included certain damages and erroneously dismissed its counterclaim for

equitable contribution. We affirm in all but one respect. 
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I.

Conwed used asbestos purchased from Union Carbide to manufacture ceiling

tiles. Employees of Conwed, a self-insured employer, contracted asbestos-related

diseases, and Conwed paid them workers’ compensation benefits. The employees also

sued Union Carbide in tort based on a theory of product liability, and all of the

employees entered into settlements with Union Carbide for damages not compensated

through Minnesota’s statute governing workers’ compensation. Conwed then sued

Union Carbide in subrogation, seeking recovery for the workers’ compensation

benefits that were paid and payable (i.e., “benefits paid”). Union Carbide

counterclaimed for contribution and indemnity. The district court certified five

questions to the Supreme Court of Minnesota, and after receiving guidance on certain

matters of state law, Conwed Corp. v. Union Carbide Chemicals & Plastics, Co., 634

N.W.2d 401 (Minn. 2001), the district court proceeded to try the claims.

The court divided the claims into three disease groups and then tried the first

group, consisting of mesothelioma claims. The first trial resulted in a jury verdict for

Union Carbide. Conwed agreed to a dismissal of claims for the employees in the

second disease group (lung cancer), and the parties then tried the consolidated claims

of eleven employees with a third disease, asbestosis, in a bifurcated trial. The jury

found both Conwed and Union Carbide at fault for causing injuries to six of those

employees, and awarded common law damages, including general disability and loss

of future earning capacity. 

In accordance with Tyroll v. Private Label Chemicals, Inc., 505 N.W.2d 54

(Minn. 1993), a special master determined the amount of benefits paid and payable by

Conwed to the employees. The district court reviewed and partially adopted the

special master’s findings, and determined the amount of subrogation damages to

which Conwed was entitled: the lesser of (1) the amount of benefits actually paid and

payable through workers’ compensation; or (2) the percentage of the jury’s award of
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damages attributable to Union Carbide’s fault. For five of the six employees, the

amount of workers’ compensation benefits paid and payable was less than the tort

damages attributable to Union Carbide, so the court reduced the amount of benefits

paid by the percentage of fault attributable to Conwed. For the sixth employee, the

tort damages attributable to Union Carbide were less than the benefits paid, so the

court reduced the tort damages attributable to Union Carbide by Conwed’s percentage

of fault. The remaining 118 asbestosis claims were stayed pending the appeal. 

Conwed appeals, claiming that the district court improperly applied the jury’s

common law allocation of fault to the benefits paid and payable to determine

Conwed’s subrogation award. Conwed argues that the court instead should have

applied the allocation of fault only to the common law damages determined by the

jury, and then awarded as subrogation damages the lesser of (1) the resulting common

law damages amount or (2) the amount of the workers’ compensation benefits paid

and payable. Union Carbide cross-appeals, arguing that the second jury trial was

barred by collateral estoppel, because the issue of whether Union Carbide’s warnings

regarding its asbestos were adequate already had been conclusively established in the

first trial concerning mesothelioma. Alternatively, if the action was not barred, Union

Carbide claims the district court improperly allowed the jury to award disability

damages, damages for loss of future earning capacity, and damages for the predicted

progression of existing conditions. The district court denied Union Carbide’s claim

against Conwed for equitable contribution to offset the jury’s award of subrogation

damages, and Union Carbide appeals that decision as well.

II.

We address first whether the doctrine of collateral estoppel barred the second

jury trial. In the first trial concerning mesothelioma, the district court provided the

jury with a special verdict form. The first question asked, “Was the Calidria asbestos

Union Carbide sold to Conwed in a defective condition unreasonably dangerous to the
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users of that asbestos because Union Carbide failed to provide adequate warnings and

instructions for the safe use of that asbestos?” If the jury answered in the affirmative,

the verdict form then asked whether the defective condition of Union Carbide’s

asbestos was a direct cause of mesothelioma in each of the six employees, whether

Conwed was negligent with respect to the safety of the workers, and what amount of

money would compensate the employees. The jury instructions accompanying the

first question directed the jury as follows:

In deciding whether the manufacturer’s warnings and instructions were

reasonably adequate, consider all the facts and circumstances, including,

among others: 1) The likelihood that harm would result from use of the

product; 2) The seriousness of the harm that would result; 3) The cost

and ease of providing warnings and instructions that would avoid the

harm.

Instructions to the Jury (R. Doc. 749, at 9). The jury answered “no” to the first

question on the verdict form, and, in accordance with the instructions, did not answer

the remaining questions. 

Union Carbide argues that the jury’s negative answer to this first question

precludes Conwed from challenging the adequacy of Union Carbide’s warnings in the

second jury trial concerning employees affected with asbestosis. The district court

held that despite the broad language of the first question, because the employee claims

were grouped by disease and the jury was instructed to consider all the facts and

circumstances, the jury reasonably could have assumed that the “harm” described in

the jury instructions was limited to mesothelioma. The district court noted that

Conwed did not present all of its evidence with respect to claims involving lung

cancer or asbestosis, and held that Union Carbide had not met its burden of showing

that the issue of the adequacy of Union Carbide’s warnings with respect to

mesothelioma plaintiffs was identical to the issues to be determined in the remaining

claims by employees afflicted with different diseases. The court further held that that
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Conwed did not have a fair opportunity to litigate the adequacy of the warnings with

respect to the claims of employees not before the first jury. We agree with the district

court that Conwed is not collaterally estopped from litigating the adequacy of Union

Carbide’s warnings with respect to asbestosis, because this issue was not necessarily

determined in the first trial.

A federal court with jurisdiction by virtue of diversity of citizenship applies

state law to questions of issue preclusion. Canal Capital Corp. v. Valley Pride Pack,

Inc., 169 F.3d 508, 513 (8th Cir. 1999). Issue preclusion is a mixed question of law

and fact, and the district court’s decision on that matter is subject to de novo review.

Liberty Mut. Ins. Co. v. FAG Bearings Corp., 335 F.3d 752, 757 (8th Cir. 2003).

Minnesota applies the doctrine of collateral estoppel to prevent parties from

relitigating issues that are “both identical to those issues already litigated by the

parties in a prior action and necessary and essential to the resulting judgment.” Pope

County Bd. of Comm’rs v. Pryzmus, 682 N.W.2d 666, 669 (Minn. Ct. App. 2004)

(internal quotation omitted). Collateral estoppel applies if all four of the following

elements are present: 

1) the issue was identical to one in a prior adjudication; 2) there was a

final judgment on the merits; 3) the estopped party was a party or in

privity with a party to the prior adjudication; and 4) the estopped party

was given a full and fair opportunity to be heard on the adjudicated issue.

Willems v. Comm’r of Pub. Safety, 333 N.W.2d 619, 621 (Minn. 1983). 

Issue identity “requires the party asserting it to establish that the precise

question was in fact presented and necessarily determined by the verdict in the former

trial.” Brooks Realty, Inc. v. Aetna Ins. Co., 128 N.W.2d 151, 153 (Minn. 1964). A

determination of the identical issue must be “necessarily implied” in the verdict of the

earlier action. Gollner v. Cram, 102 N.W.2d 521, 523 (Minn. 1960). Minnesota
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courts do not apply collateral estoppel rigidly, but instead focus on “whether an

injustice will be worked upon the party upon whom estoppel is urged.” Nelson v. Am.

Family Ins. Group, 651 N.W.2d 499, 511 (Minn. 2002). Union Carbide claims that

because the jury’s special verdict form separated the question of the adequacy of the

warnings from the question of whether Union Carbide’s asbestos caused

mesothelioma, the jury’s negative answer to the first question necessarily implies that

it found the warnings adequate with respect to all potential hazards.

As noted, the district court divided the cases into three trial groups based on the

type of injury claimed (mesothelioma, asbestosis, or lung cancer). Conwed was

required to assert and prove separate claims for each of its former employees, and the

divided trial structure limited the evidence presented in the first trial largely to the

disease of mesothelioma.

The arguments of counsel likewise focused on mesothelioma, and suggested

that whether the asbestos caused mesothelioma was part of the analysis in determining

whether the warnings were adequate. In closing argument, Union Carbide argued that

it was “not fair” to criticize its product warnings for failing to warn that the asbestos

may cause mesothelioma, because “there wasn’t any scientific basis” for saying that

“Calidria could cause mesothelioma.” (Closing Arg. Tr. at 26). Conwed similarly

urged the jury to consider “the likelihood that harm would result from use of the

product” when evaluating the adequacy of the warnings, and equated “harm” with

mesothelioma: “Once you have got mesothelioma it is incurable, you’re going to die.

This harm is as bad as it can be.” (Closing Arg. Tr. at 85). 

Union Carbide argues that under the jury instructions in the first trial, the

question whether asbestos was likely to cause mesothelioma was relevant only if the

jury first found that the product warnings were inadequate. We are not persuaded,

however, that the questions of adequate warnings and causation were wholly

independent. The jury instructions contained ambiguities. By incorporating the
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likelihood that harm would result from the use of asbestos into the question whether

warnings were adequate, the broadly worded instruction on warnings permitted a

reasonable jury to conclude that warnings were adequate because the asbestos was not

likely to cause the “harm” that was the subject of the first trial – mesothelioma. Both

parties addressed the adequacy of warnings by debating whether the warnings were

sufficient to inform users of the dangers of contracting mesothelioma. Thus, viewing

the jury instructions as a whole in the context of the trial, we conclude that the first

jury’s verdict did not “necessarily imply” that Union Carbide’s warnings were

adequate for all purposes, including to warn against the possible harm of asbestosis.

Therefore, the doctrine of collateral estoppel did not bar the second trial.

III.

The remaining issues relate to whether the district court correctly determined

workers’ compensation subrogation damages under Minnesota law. We review

questions of state law de novo. Salve Regina Coll. v. Russell, 499 U.S. 225, 231

(1991). 

A.

Conwed argues that the district court misapplied the jury’s allocation of fault

and incorrectly calculated its subrogation award. In Minnesota, workers’

compensation claims are regulated by statute. If an employee elects to receive

benefits from his or her employer, the employer has a right of indemnity against any

third-party tortfeasor whose action many have contributed to the employee’s injury.

Minn. Stat. § 176.061, subd. 3 (1992). Any recovery against the third party is divided

according to a three-step procedure. After collection costs are deducted, one third of

the remainder belongs to the injured employee without any right of subrogation by the

employer. Out of the remaining balance, the employer is reimbursed the amount of

workers’ compensation benefits paid, less a proportionate share of the collection costs.
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Any amount remaining is paid to the employee and is a credit against any benefits the

employer is obligated to pay in the future. Minn. Stat. § 176.061, subd. 6. 

If the employer is apportioned any fault, the liable third-party tortfeasor may

assert a right of contribution against the employer in an amount proportional to the

employer’s fault, but not to exceed the amount of benefits paid and payable by the

employer. Lambertson v. Cincinnati Corp., 257 N.W.2d 679, 689 (Minn. 1977). This

contribution claim is essentially an equitable set-off against the employer’s recovery

of workers’ compensation benefits paid from the third-party tortfeasor. 

Instead of proceeding with a trial, the employee also may choose to settle with

the third-party tortfeasor for all claims outside of the workers’ compensation scheme

(and thus not subject to the employer’s subrogation claim). In Minnesota, such a

settlement is known as a “Naig settlement,” based on the decision in Naig v.

Bloomington Sanitation, 258 N.W.2d 891 (Minn. 1977), which described the process.

After a Naig settlement, the employer may still assert a subrogation claim to recover

workers’ compensation benefits paid and payable from the third-party tortfeasor, but

the employee gives up his or her statutory right to one-third of any recovery. Id. at

894. The employer also has no liability to contribute to the settlement agreement

between the employee and the third-party tortfeasor. Kempa v. E.W. Coons Co., 370

N.W.2d 414, 418 (Minn. 1985).

Once an employee has entered into a Naig settlement with the third-party

tortfeasor, the employer steps into the shoes of the employee and asserts a subrogation

claim in tort against the third party to recover benefits paid. This subrogation

recovery is not subject to the statutory formula, and is limited to the type of

compensatory damages awarded under workers’ compensation. Tyroll, 505 N.W.2d

at 60-61. The district court holds a hearing to determine the amount of benefits paid

and payable, and any tort damages the employer recovers in the subrogation action

apply to this amount. If the tort damages exceed the amount of workers’
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compensation benefits paid and payable, then the employer’s maximum recovery is

limited to the benefits paid and payable. If the tort damages are less, the employer

may only recover the amount of the jury verdict. Id. 

Minnesota courts, however, have not indicated how the jury’s allocation of fault

to the employer applies to this determination of subrogation damages following a Naig

settlement. The Supreme Court of Minnesota in Tyroll stated that “[u]nder this

method, comparative fault (when an issue) may diminish or defeat liability for the

subrogation claim.” 505 N.W.2d at 61. But because the jury in Tyroll did not find the

employer negligent, the court had no occasion to indicate precisely how the

employer’s fault would diminish the subrogation damages. Id. at 56.

Union Carbide entered into a Naig settlement with the employees. Conwed

then proceeded against Union Carbide to recover subrogation damages, and the court

appointed a special master to determine the amount of benefits paid. In the second

phase of the bifurcated asbestosis trial, however, the jury found both Conwed and

Union Carbide liable for causing injuries to six employees, and apportioned fault to

both companies. Conwed’s fault ranged from 70 to 91 percent, while Union Carbide’s

fault ranged from 9 to 30 percent. None of the six employees was found to be at fault.

The district court held that the allocation of fault should apply to the lesser of the

benefits paid or the percentage of common law tort damages attributable to Union

Carbide. It adopted a two-step procedure, under which the court first determined the

employer’s subrogation damages (the lesser of the benefits paid and payable as

determined in the hearing or the percentage of the jury’s award attributable to Union

Carbide’s fault). The court then reduced the total subrogation damages

proportionately by the percentage of fault attributable to Conwed and entered

judgment against Union Carbide in this amount. 

Conwed disagrees with this method. It contends that the jury’s allocation of

fault should reduce the jury’s award of damages first, and then the lesser of this
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reduced verdict or the benefits paid should be the amount of the judgment. Conwed

urges that under Kempa and Tyroll, the employer’s subrogation damages must be

“recovered out of the common law tort damages for which the third party tortfeasor

is first found responsible.” Tyroll, 505 N.W.2d at 60. Because the jury’s allocation

of fault is part of the common law jury verdict, Conwed argues, it should be applied

to the verdict first. This reduced verdict, in Conwed’s model, may be recovered up

to the cap of benefits paid.

Union Carbide relies on a competing principle in Minnesota law, namely, that

third-party tortfeasors should not be forced to bear the costs of negligent employers.

It is a “basic proposition” in Minnesota decisions that all parties must pay according

to their share of fault, Todalen v. United States Chemical Co., 424 N.W.2d 73, 82

(Minn. Ct. App. 1988), and tortfeasors are liable for damages “commensurate with

their own relative culpability.” Kempa, 370 N.W.2d at 421. Lambertson equitable

contribution claims are recognized to prevent “a third-party stranger to the workers’

compensation system” from bearing the burden of a full common-law tort judgment,

and to preclude employers from recovering all workers’ compensation benefits paid

in a subrogation action, where the employer was at greater fault than the tortfeasor.

Lambertson, 257 N.W.2d at 684. Equitable contribution allows the employer to

recover only those portions of the subrogation damages attributable to the tortfeasor’s

negligence. Against this backdrop, Union Carbide argues that it should have to bear

the percentage of the benefits paid attributable to its relative fault, but Conwed should

have to bear the percentage attributable to its fault. Thus, the reduction due to

Conwed’s fault should apply to the lesser of the jury verdict or the benefits paid. 

While Minnesota law is unsettled in this area, we believe that the Supreme

Court of Minnesota is more likely to agree with Union Carbide. Here, the jury found

that the employer bore a percentage of fault for the injuries to its employees.

Minnesota law consistently emphasizes that parties should bear the portion of

damages attributable to their percentage of fault, and Tyroll is not inconsistent with
1

For five of the six employees, the district court’s initial reduction of the jury

verdict had no effect, because this value was still greater than the amount of benefits

paid. For one employee, Frederick Riedel, the amount of the tort damages reduced by

Union Carbide’s fault was less than the amount of benefits paid, so the court

incorrectly reduced again the tort damages already reduced by Conwed’s fault. The

court should have reduced the amount of benefits paid ($69,426.74) rather than the

reduced tort damages ($65,982.62) by Conwed’s fault (88%). (Appellant’s App. at

49-50). The correct award of subrogation damages for this employee is $8,331.21,

rather than $7,917.91, a difference of $413.30, and the total award should be

$23,878.36 instead of $23,465.06.

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this principle. Therefore, we do not believe the Minnesota courts are likely to endorse

the view that Conwed may recover 100% of the benefits paid and payable, despite its

contribution to the injuries. We agree with the district court that the jury’s allocation

of fault should apply to the lesser of the benefits paid or the jury verdict. We note,

however, that the reduction should only be applied once, to the lesser of the full value

of the verdict or the benefits paid. The district court’s initial reduction of the precomparison damages by Union Carbide’s percentage of fault was error.1

Union Carbide also claims an additional Lambertson contribution claim to set

off against the subrogation damages and to reduce further Conwed’s recovery, even

after the reduction by the jury’s allocation of fault. Comparative fault, however, is the

basis for the modified apportionment of damages that was developed in Lambertson

and applied as an equitable contribution claim. Kempa, 370 N.W.2d at 421.

Lambertson applies where a jury verdict must be apportioned between compensable

damages recoverable under workers’ compensation and those not recoverable, not

where noncompensatory damages have been settled and the trial is only to recover

workers’ compensation benefits paid. The Supreme Court of Minnesota refers to this

distinction when it notes that where only a subrogation claim is tried to the jury, “there

is no Lambertson contribution problem because the employer, even if at fault, is not

liable to contribute to the sum the tortfeasor paid the employee to settle the

‘nonrecoverable’ damages under the Naig release.” Tyroll, 505 N.W.2d at 61. The
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only damages at issue in this appeal are the subrogation damages, and the application

of comparative fault provides the proper allocation of damages without resort to an

additional equitable contribution.

B.

Union Carbide argues that the district court incorrectly allowed Conwed to

obtain common law general disability damages in a subrogation action when it

permitted Conwed to recover permanent disability benefits paid to six workers. It

contends that permanent disability benefits are a type of general disability damages,

and that general disability damages are not recoverable under workers’ compensation,

so they should not be recoverable in a subrogation action. Union Carbide contends

that any claim the employees had for non-compensable damages was settled by the

Naig settlement, so Conwed should not be permitted to recover permanent disability

benefits. 

The district court held that Conwed could recover in a subrogation action

damages for permanent disability benefits paid to its employees under workers’

compensation. The jury found that six workers suffered from asbestos-related disease

causing lung impairment. Conwed had paid permanent partial disability to five of

these workers, and permanent total disability to one, so the court permitted Conwed

to seek recovery of these benefits paid. The court noted that although the language

in Tyroll seemed to indicate a line of demarcation between the categories of damages

recoverable and those not recoverable, Minnesota courts traditionally have enjoyed

the flexibility to allocate damage awards, and Conwed was not precluded as a matter

of law from recovering benefits paid for permanent disability. 

We agree with the district court. It is true, as Union Carbide notes, that Tyroll

provides guidance concerning the types of damages “ordinarily” recoverable under

workers’ compensation: 
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[C]ommon law tort damages for past and future wage loss and loss of

earning capacity are the kind of damages that should be deemed

recoverable under workers’ compensation. Common law damages of the

kind not recoverable under workers’ compensation should, we think, be

deemed to include pain and suffering, general disability, embarrassment,

disfigurement, and mental anguish. We believe this division for

allocation purposes should govern, at least ordinarily. 

Tyroll, 505 N.W.2d at 59.

This division, however, is premised on the principle that employers should be

able to sue for the type of common law tort damages recoverable under workers’

compensation. The Minnesota Workers’ Compensation Act states that in a

subrogation action, an employer may recover “the aggregate amount of benefits

payable to or on behalf of the employee,” Minn. Stat. § 176.061, subd. 3, and, in

Minnesota, employers are required to pay workers’ compensation benefits for

permanent partial and total disability. See Minn. Stat. § 176.021, subd. 3; Minn. Stat.

§ 176.101, subd. 4. 

As the district court points out, Minnesota courts also have been empowered to

allocate damages between those compensable under workers’ compensation and those

not compensable, see, e.g., Kempa, 370 N.W.2d at 417, and, prior to Tyroll, the

Minnesota Supreme Court allowed an employer to recover disability benefits, as well

as medical expenses, in a workers’ compensation subrogation action. Dockendorf v.

Lakie, 61 N.W.2d 752, 756 (Minn. 1953); Kempa, 370 N.W.2d at 417 n.1, 420 n.3

(including payments for permanent partial and total disability in the damages subject

to the employer’s subrogation interest). While Tyroll correctly notes that damages for

injuries such as embarrassment and mental anguish are not recoverable under workers’

compensation, payments for permanent disability benefits are authorized by statute.

They are not “general disability” payments akin to damages for pain and suffering or

mental anguish. The “aggregate amount of benefits paid” includes payments for
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permanent disability, and the district court thus determined correctly that Conwed is

not precluded from recovering permanent disability benefits in its subrogation action.

C. 

The jury also awarded damages for loss of future earning capacity for two

employees. Union Carbide contends that because Conwed offered no evidence of the

employees’ current medical condition, work status, or earnings, and because the

district court dismissed Conwed’s claim for past lost wages for lack of proof, the

claim for loss of future earning capacity should have been dismissed as well. The

district court concluded that a stipulation of the parties and medical records in

evidence provided a sufficient basis for the jury’s award.

A reviewing court must consider the evidence in the light most favorable to the

verdict and may set aside a jury verdict only where no reasonable jury could have

arrived at the result based on the evidence. Majerus v. Guelsow, 113 N.W.2d 450, 454

(Minn. 1962). The district court held that, while recent evidence of Conwed’s

employees’ wages and work history may have been helpful, proof of that sort was not

required for the jury to determine a loss of future earning capacity. An employee

needed to show only that he suffered a permanent impairment of function resulting

from the injury, and that the impairment prevented him from performing his duties in

the same manner as before the injury. The court thought the jury permissibly could

infer the employees’ ages, employment history, and symptoms from the medical

records produced at trial.

We agree with the district court. Loss of future earning capacity does not

require specific proof of actual earnings either before or after the injury, Wilson v.

Sorge, 97 N.W.2d 477, 482-83 (Minn. 1959), and, for example, the Supreme Court

of Minnesota has allowed recovery for a plaintiff “who was presently performing
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homemaker activities and had no plans to resume gainful employment.” Kwapien v.

Starr, 400 N.W.2d 179, 183 (Minn. Ct. App. 1987) (citing LeMay v. Minneapolis

Street Railway Co., 71 N.W.2d 826, 831 (1955)). This is because the plaintiff need

only prove a loss of earning capacity, that is, that an impairment in his or her power

to earn a living was reasonably certain to occur as a result of the injuries. Id. 

The plaintiff must prove “the reasonable certainty of future damages by a fair

preponderance of the evidence.” Id. There is no recovery for loss of future earning

capacity damages that are speculative, remote, or conjectural. Carpenter v. Nelson,

101 N.W.2d 918, 921 (Minn. 1960). An award for impairment of earning capacity

should be based on an evaluation of such factors as age, life expectancy, health,

occupation, talents, skill, experience, and training. Kwapien, 400 N.W.2d at 184. 

 The jury in this case was provided with information on the employees’ ages,

past wage rates, and medical histories. An expert testified regarding the percentage

of lung impairment suffered by both employees, and the rate at which the impairment

would be expected to increase. Conwed presented evidence of the employees’ ages

and last known wage rates. The record included medical records describing their

symptoms through the early 1990s. Under the standard of review and Minnesota law,

we conclude that this evidence is sufficient to support the award of loss of future

earnings. 

D.

Union Carbide also argues that Conwed cannot recover damages for future

workers’ compensation benefits payable based on projections that existing conditions

will worsen. Union Carbide contends that Conwed can only recover where an

employee has filed a valid claim and where Conwed has a present duty to pay the

employee at the employee’s existing level of disability. The district court disagreed,

holding that Conwed could recover any benefits it expected to pay in the future based
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on existing conditions, including any benefits payable for existing conditions

projected to worsen. We agree. 

This issue was certified to the Supreme Court of Minnesota. The court held that

“to the extent Certified Question No. 1 asks whether, under Minn. Stat. §176.061,

Conwed may recover for benefits it has paid or expects to pay following settlements

for existing claims based on existing illnesses that may worsen, we answer it in the

affirmative.” Conwed Corp., 634 N.W.2d at 408. In a footnote, the court clarified

that Conwed may not recover damages based on scientific projections regarding the

likelihood of the employees’ developing wholly new illnesses. Id. at 408 n.6. The

court thus distinguished between claims based on illnesses that had not yet manifested

themselves but were caused by the same exposure, and claims based on existing

illnesses that worsened. Conwed could recover for benefits that it expected to pay

based on worsening of existing illnesses, but not for wholly new illnesses. Id. at 408-

09. 

This interpretation of Conwed Corp. is consistent with a previous decision of

the Supreme Court of Minnesota holding that a trial court need not require an

employer to commence a separate action as each future workers’ compensation claim

is made, but rather can make “approximations based on reasonable assumptions” and

award a final one-time lump sum based on these predictions. Wilken v. Int’l Harvester

Co., 363 N.W.2d 763, 767-68 (Minn. 1985). The employer’s subrogation award

should be calculated by the trial court, reduced to its present value, and disbursed in

a single payment. Id. We conclude, therefore, that Conwed may recover benefits paid

and payable to its employees for existing conditions that may worsen. 

* * *
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For the foregoing reasons, we affirm the judgment of the district court in large

part, but remand with directions to enter judgment in the amount of $23,878.36, rather

than $23,465.06.

______________________________