Court Opinion

ID: 8245690
Source: CourtListenerOpinion
Date Created: 2022-10-16 09:32:21.901044+00
Date Added: 2024-06-11T16:42:42.540204
License: Public Domain

STRAS, Justice
(concurring in part, dissenting in part).
I join all but Part II of the court’s opinion. I would hold that the attorney fees paid to Graffs attorney as a result of the settlement of Graffs two workers’ compensation claims are collateral source payments under Minn.Stat. § 548.251 (2010). The record in this case reveals that on May 18, 2006, Graff settled with his employer1 for a $14,040 lump sum payment to Graff and a payment of $3,760 to Graffs attorney under Minn.Stat. § 176.081 (2010), a provision governing the award of attorney fees in workers’ compensation cases. A subsequent December 13, 2006, settlement directed a $60,000 lump sum payment to Graff and a payment of $7,500 to Graffs attorney. The court today concludes that the $11,260 in payments to Graffs attorney are not “collateral sources” under Minn.Stat. § 548.251. I disagree.
“Collateral sources” are defined as “payments related to the injury or disability in question made to the plaintiff, or on the plaintiffs behalf up to the date of the verdict, by or pursuant to,” among other sources, the Workers’ Compensation Act. Minn.Stat. § 548.251, subd. 1. Therefore, to qualify as a collateral source, a payment must (1) be made pursuant to or by one of the sources listed in section 548.251, subdivision 1(1) — (4); (2) be “related to the injury or disability in question”; and (3) be “made to the plaintiff, or on the plaintiffs behalf up to the date of the verdict.” Minn.Stat. § 548.251, subd. 1. In my view, the payments to Graffs attorney are “collateral sources” because the payments satisfy all three statutory requirements in section 548.251.
The first requirement is not at issue because neither party disputes that Graffs employer paid the $11,260 in fees to Graffs attorney “pursuant to” the Workers’ Compensation Act, a source of payment listed in section 548.251, subdivision 1. Nor do the parties dispute that the same injury forms the basis for Graffs two settled workers’ compensation claims and the present action against Swendra Agency and American Family: the back injury Graff suffered in an August 2004 car accident. At issue in this case are the application of the second and third requirements of the statute — whether the payments to Graffs attorney relate to the back injury suffered by Graff, and if so, whether the payments were “made to [Graff], or on [Graffs] behalf up to the date of verdict.” See Minn.Stat. § 548.251, subd. 1.
In the court’s view, attorney fees can be recovered under the Workers’ Compensation Act only “with respect to a claim for benefits that results in a recovery of monetary, medical, or rehabilitation benefits for the employee.” And unlike payments for “past and future pain, lost wages, the loss of future earning capacity, disability, and emotional distress, which flow directly and inextricably from a given injury or disability, payments made for attorney fees do not flow from the injury or disability at all.”
*125The flaw in the court’s analysis, however, is that the collateral source statute does not require a payment to “flow directly and inextricably” from an injury or disability; rather, the second requirement under the statute is that a payment must be “related to” an injury or disability. To reach its conclusion that the attorney fees in this case are not collateral sources, the court alters the plain meaning of section 548.251 by creating its own novel definition of the phrase “related to” as meaning to “flow directly and inextricably from.” The phrase “related to,” however, requires only a relationship or “connect[ion] by reason of an established or discoverable relation.” Webster’s Third New International Dictionary 1916 (2002); see also The American Heritage Dictionary of the English Language 1473 (4th ed.2009) (defining “related” as “[bjeing connected; associated”). The court articulates the necessary “established or discoverable relation” in its own analysis. As the court states, the Workers’ Compensation Act requires attorneys to enter into a signed retainer agreement with the injured employee pursuant to certain terms mandated by the Act. See Minn. Stat. § 176.081. Then, according to the Act, attorney fees are paid only when the employee recovers monetary, medical, or rehabilitation benefits as a result of an injury or disability arising out of and in the course of employment. Minn.Stat. § 176.081, subd. 1(a); see also Minn.Stat. § 176.021, subd. 1 (2010). In other words, but for the injury or disability suffered by the employee, there would be no attorney fees in a workers’ compensation action.
Nonetheless, in holding that payments to Graffs attorney are not “collateral sources,” the court relies on a false dichotomy between the “claim for compensation” in a workers’ compensation action and the underlying injury or disability. The court’s analysis cannot withstand scrutiny, however, because only an injury or disability can serve as the basis for a workers’ compensation claim. An employee cannot bring a workers’ compensation claim for wrongful termination, discrimination, or any of the other many grounds for bringing an action against an employer. See Minn.Stat. § 176.021, subd. 1 (stating that an employer is liable under the Workers’ Compensation Act in all cases “of personal injury or death of an employee arising out of and in the course of employment”). Rather, the disability or injury and the claim for compensation in a workers’ compensation action are, to use the words of the court, “directly and inextricably” linked.
Finally, I would conclude that the third requirement of section 548.251 has been met because Graffs employer made the payments to Graffs attorney on “[Graffs] behalf.” When his claims settled, Graff owed his attorney a fixed percentage of the total amount recovered from the employer. Instead of the employer paying Graff, who would then pay his attorney, the stipulations permitted the employer to pay Graffs attorney directly. The payments made by the employer to Graffs attorney, though not made to Graff himself, were unquestionably for Graffs benefit, and the stipulations recognize this fact. Graffs December 13 stipulation with the employer, for example, characterizes the $67,500 award as a payment to Graff, and “[t]hat from said sum shall be withheld as attorney fees the amount of $7,500.00 representing allowable fees under Minn.Stat. § 176.081.” Similarly, Graffs May 18 stipulation also treats the $17,800 as a payment to Graff, with $3,760 withheld to pay Graffs attorney.
Accordingly, I would conclude that the payments to Graffs attorney were made pursuant to the Workers’ Compensation Act, were “related to [Graffs] injury or disability,” and were made “on [Graffs] *126behalf,” which is all that is required for qualification as a collateral source under section 548.251.2

. Graff’s employer, the City of Richfield, paid Graff's workers’ compensation benefits pursuant to two stipulations of settlement that also involved the employer's claims administrator, Berkley Risk Administrators Company, LLC. For simplicity and clarity, I will refer to Graff’s employer and Berkley Risk Administrators collectively as the "employer.”

. The court also concludes that it was proper to exclude the attorney fees in the collateral source calculation because the Legislature designed section 548.251 as a bar only to double recovery by a plaintiff. First, this court’s characterization of the purpose of a statute cannot override the plain, ordinary meaning of a statute’s text. Second, even if the court is correct that the statute’s purpose is to prevent double recovery by a plaintiff, Graff is receiving a double recovery here. He is receiving the benefit of legal services in his workers’ compensation action without having to pay for those services under a legally binding contingency fee agreement with his attorney. Nothing in section 548.251 indicates that plaintiffs in workers' compensation actions are entitled to the free services of an attorney when a full recovery is made by the plaintiff in another tort action. Yet that is precisely the result that the court endorses today.