Source: https://mn.gov/law-library-stat/archive/ctapun/9802/1187.htm
Timestamp: 2019-04-24 09:53:24+00:00

Document:
In Re the Matter of the Arbitration between Sheryl Winters, Respondent, vs. American Family Insurance Group, Appellant. C0-97-1187, Court of Appeals Unpublished, February 17, 1998.
Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI § 10.
American Family Insurance Group challenges the district court's order denying its motion to vacate an arbitration award to Sheryl Winters for lost income benefits due to an automobile accident. Because the district court did not err in confirming the arbitrator's award, we affirm.
Arbitration of no-fault claims of $10,000 or less is mandatory under Minn. Stat. § 65B.525, subd. 1 (1996) (the "No-Fault Act"). In no-fault claims, arbitrators are limited to deciding issues of fact, however, leaving interpretation of legal issues to the courts. Johnson v. American Family Mut. Ins. Co., 426 N.W.2d 419, 421 (Minn. 1988). An arbitrator's findings of fact are final. Id. In reviewing an arbitration award, the district court may reverse an award if the arbitrator exceeded his or her powers. Minn. Stat. § 572.19 (1996); see also Johnson, 426 N.W.2d at 420-21 (determining whether arbitration panel exceeded its power by interpreting the law).
Under the No-Fault Act, Winters may obtain "reimbursement for all loss suffered through injury arising out of the maintenance or use of a motor vehicle" subject to certain conditions. Minn. Stat. § 65B.44, subd. 1 (1996). "Loss" is defined as "economic detriment resulting from the accident causing the injury * * *." Minn. Stat. § 65B.43, subd. 7 (1996). Income loss benefits provide compensation for 85 percent of the injured person's loss of present and future gross income due to the injury and are subject to a maximum of $250 per week. Minn. Stat. § 65B.44, subd. 3 (1996). To determine income loss benefits under Minn. Stat. § 65B.44, subd. 3, Winters must demonstrate that at the time of the accident she (1) was employed, (2) had an offer of employment, or (3) had consistently been employed such that a specific future period of employment could reasonably be predicted. Keim v. Farm Bureau Ins. Co., 482 N.W.2d 823, 825 (Minn. App. 1992), review denied (Minn. May 21, 1992).
American Family argues that the arbitrator exceeded the scope of his authority by deciding a legal question--the proper calculation of Winters' income loss benefits. This court has determined that whether employment could be reasonably predicted and the amount of income loss a claimant incurs are factual questions. Id. Once the arbitrator resolves this factual question regarding the amount of income loss, the arbitrator must apply the law and decide whether the claimant is entitled to recover income loss benefits. See Erickson v. Great American Ins. Cos., 466 N.W.2d 430, 432 (Minn. App. 1991) (distinguishing between determination that claimant would have continued job but for accident, which is factual issue, and determination that recovery under No-Fault Act is limited to income actually lost, which is legal issue).
The district court confirmed the arbitrator's award, reasoning that the arbitrator must have found that Winters was receiving wages for work in her husband's law office based on record evidence demonstrating that Winters received wages for her work. We conclude that the district court's determination was correct.
The arbitrator received evidence regarding Winters' hourly wage and hours worked for 1995-1996. The record contains evidence of Winters' 1995 W-2 form and a paycheck and paystub indicating that on December 28, 1995, she received $11,296.87 net pay in lump sum form for the hours she worked in 1995. The record also demonstrates that Sheryl Winters received wage statements indicating that she received $8.41 per hour for the hours she was able to work at the office through August of 1996. Winters' husband, John Winters, testified that the $8.41 rate was established on the basis of what her salary was when it was suspended in the mid-1980s and that this rate, which equals approximately $14,000 per year, is significantly lower than the market rate for paralegals in the area today.
It was within the arbitrator's discretion to admit this evidence regarding Winters' 1995 wages. Because the record evidence is sufficient to establish a "direct, certain basis" upon which the arbitrator could have calculated an award, the arbitrator's award must be affirmed. Rindahl v. National Farmers Union Ins. Cos., 373 N.W.2d 294, 299 (Minn. 1985).
American Family asserts that Winters' injury did not result in a "loss," which the No-Fault Act defines as "economic detriment resulting from the accident causing the injury." Minn. Stat. § 65B.43, subd. 7. American Family relies on the reasoning in two cases that we conclude are inapposite. In the first case, Erickson, 466 N.W.2d at 430, the claimant worked at two jobs before her injury, one of which was as a housecleaner. Id. at 431. Several months after the accident, the claimant began working full time at a new job where she earned more money than she had working at two jobs before the accident. Id. The arbitrator awarded income loss benefits, but the district court vacated and the appellate court affirmed, reasoning that "[r]ecovery under the income loss provisions of the No-Fault Act is limited to income actually lost." Id. at 433. But prior to the accident, the record demonstrates that Winters did earn an income, which the arbitrator chose to calculate based on the lump sum distributed on December 28, 1995.
In the second case, Johnson, the supreme court considered the arbitrator's interpretation and application of the rule in Schmidt v. Clothier, 338 N.W.2d 256 (Minn. 1983), governing the scope of an insurance company's liability for underinsured motorist benefits when there is more than one tortfeasor. 426 N.W.2d at 419. The court held that the arbitrator's actions were improper because "in the area of automobile reparation, arbitrators are limited to deciding issues of fact, leaving the interpretation of the law to the courts." Id. at 422. The holding in Johnson, however, does not require us to reverse Winters' award, because Johnson permits the arbitrator to resolve the primary factual issue, which is the amount of damages and income loss. In Winters' case, we conclude the arbitrator properly resolved the factual issue regarding the amount of damages. See National Indem. Co. v. Farm Bureau Mut. Ins. Co., 348 N.W.2d 748, 750 (Minn. 1984) ("Every reasonable presumption is exercised in favor of the finality and validity of the award").

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