Court Opinion

ID: 9735245
Source: CourtListenerOpinion
Date Created: 2023-08-26 18:06:46.011708+00
Date Added: 2024-06-11T18:26:56.284815
License: Public Domain

COYNE, Justice
(concurring specially).
■ Although I agree with the proposition set out in the majority opinion that an insurer’s equitable contribution claim is not a “covered claim” within the meaning of chapter 60C of the Minnesota Statutes—whether that claim arises with respect to workers’ compensation benefits or otherwise—it seems to me that the nature of the claim of two of the appellants, Donlar Construction Company and American States Insurance Company, ought not be characterized as a claim for “equitable contribution.”
Workers’ compensation is, as we have commented from time to time, a creature of statute without counterpart in the common law. The claim of Donlar Construction and American States Insurance Company arises out of their payment of workers’ compensation benefits in compliance with a temporary order issued by Compensation Judge James M. Gallagher pursuant to Minn.Stat. § 176.-191, subd. 1 (1992), which provides as follows:
Where compensation benefits are payable under this chapter, and a dispute exists between two or more employers or two or more insurers as to which is liable for payment, the commissioner, compensation judge, or court of appeals upon appeal shall direct, unless action is taken under subdivision 2, that one or more of the *835employers or insurers make payment of the benefits pending a determination of liability. A temporary order may be issued under this subdivision whether or not the employers or insurers agree to pay under the order.
When liability has been determined, the party held liable for the benefits shall be ordered to reimburse any other party for payments which the latter has made, including interest at the rate of 12 percent a year. The claimant shall also be awarded a reasonable attorney fee, to be paid by the party held liable for the benefits.
An order directing payment of benefits pending a determination of liability may not be used as evidence before a compensation judge, the workers’ compensation court of appeals, or court in which the dispute is pending.
The prohibition against use of the order in the proceeding to determine which employer or insurer is liable for the benefits appears to indicate legislative recognition that the order is intended only to provide prompt payment of benefits to the injured worker without reference to whether the payer has any liability for those benefits.
Moreover, the statute mandates that once liability is determined, “the party held liable for the benefits shall he ordered to reimburse” the party who paid pursuant to the temporary order. Id. (emphasis added). The order is to include interest as well. Id.
That statutory structure bears no resemblance to subrogation. An insurer which has paid benefits in compliance with a temporary order has a direct statutory right of reimbursement from the party or parties found to be liable for those benefits. The insurer does not stand in the shoes of its insured for the purpose of asserting a claim for contribution or indemnity. The compensation judge is required by Minn.Stat. § 176.191, subd. 1 (1992) to order reimbursement plus interest.
When, in 1971, Minnesota created the Minnesota Insurance Guaranty Association, the act adopted by the legislature departed in several significant respects from the Model Act proposed by the National Association of Insurance. In particular, the legislature omitted from the definition of “covered claim” Section 5 F.(2) of the Model Act:
‘Covered claim’ shall not include any amount awarded as punitive or exemplary damages; sought as a return of premium under any retrospective rating plan; or due any reinsurer, insurer, insurance pool .or underwriting association as subrogation recoveries or otherwise.
Life and Health Insurance Guaranty Association Model Act, III, 540-3 (National Association of Insurance Commissioners Oct. 1993). The Comment to this section of the Model Act states, “The subcommittee does not feel that coverage should be extended to elements of the insurance industry which know or reasonably can be expected to know the financial condition of various companies.” Id. I think it unlikely that the insolvency of a particular insurance company comes as a surprise to most members of the insurance industry. Knowledge of the financial condition of various insurance companies is essential to sound business decisions by reinsur-ers, insurance pools and underwriting associations, and that knowledge may affect the decision of an insurer which anticipates asserting a subrogation claim. I am, however, at a loss to understand how knowledge of the shaky financial condition of another insurer can have any affect on the conduct of an insurer ordered by the commissioner, a compensation judge or the workers’ compensation court of appeals to pay benefits pending determination of liability for those benefits— unless it is to discourage compliance with the temporary order, an effect hardly to be desired.
The statutory duty to pay an obligation which an insurer has neither contractual nor legal obligation to pay other than that imposed by temporary order and the correlative statutory right to reimbursement are both set out with particularity in the Workers’ Compensation Act. Minn.Stat. § 176.-191, subd. 1 (1992). Although I do not question the power of the legislature to deny insurers recourse against the MIGA, it does seem to me that if the legislature wishes to exempt the MIGA from claims arising pursuant to section 176.191, subd. 1 orders, it must do so explicitly and not by a broad catch-all *836phrase of uncertain meaning such as “or otherwise,” particularly where the uncertainty is compounded by linking “or otherwise” to “subrogation,” a term having no relationship to the statutory right of reimbursement.
Finally, it must be recognized that unreim-bursed payments pursuant to a temporary order will undoubtedly affect the insured’s experience rating and cause an increase in the premium which the insured must subsequently pay for workers’ compensation liability insurance. Although the MIGA suggests that it would honor the claims of insureds for increased premiums resulting from the deprivation of the insurer’s right to enforce.the statutory reimbursement order as a covered claim, I think it unlikely that the insured employer would be aware of the right to make claim against the MIGA or able to determine the proper amount to be claimed.
Having said that, however, I nevertheless concur with the result reached by the majority because of the posture of this case in this court. The claim which Donlar Construction Company and American States Insurance Company have made is for contribution. It appears that the insurers of the employer at the time of the employee’s two earlier injuries agreed to partial reimbursement of American States, and the parties entered into a Pierringer release. Under the circumstances it seems to me an overstatement to say that Donlar Construction Company and its insurer had no legal obligation to pay benefits to this employee. Therefore, I concur in the result.