The Minnesota Supreme Court issued a ruling addressing the significance of a potential intervenor’s decision not to intervene when it received adequate and timely notice of its right to intervene in an employee’s pending proceeding. In Koehnen v. Flagship Marine Company, File No. A20-0053 (August 12, 2020), the Minnesota Supreme Court confirmed that pursuant to Minn. Stat. §§ 176.271, 176.291 and Minn. R. 1420.1850, subp. 3B, when a potential intervenor receives adequate and timely notice of its right to intervene but chooses not to intervene in an employee’s pending proceeding, it can be extinguished by the award on stipulation for settlement and cannot subsequently dispute the award.
The employee sustained an injury on May 30, 2017, and sought chiropractic treatment with Johnson Chiropractic Clinic. The clinic submitted its bills to the insurer requesting payment. However, at that time, the employer and insurer had denied liability for the employee’s injury. The employee did not have personal health insurance, so the clinic’s bills were not paid. The employee subsequently filed a claim petition seeking workers’ compensation benefits, including payment of treatment that he received from Johnson Chiropractic Clinic, and other providers. On the same date that the claim petition was filed, the employee also sent a letter to Johnson Chiropractic Clinic providing it with notice of its right to intervene pursuant to Minn. Stat. § 176.361. Johnson Chiropractic Clinic received this letter but “chose to exercise his right to not intervene.” The Minnesota Supreme Court points out that Johnson Chiropractic Clinic conceded that the notice it received was timely and adequate as a matter of law. The employee subsequently settled his claims with the employer and insurer. As is typically done when a potential intervenor does not file a timely motion to intervene, the stipulation for settlement and award on stipulation were filed, extinguishing potential intervenors which received adequate notice to intervene but did not, including Johnson Chiropractic Clinic.
Eight months later, Johnson Chiropractic Clinic filed a Petition for Payment of Medical Expenses arguing that the employee, employer, and insurer failed to comply with Minn. Stat. § 176.521, and that because it was excluded from settlement negotiations, it was entitled to automatic reimbursement of charges for the treatment, plus interest. Johnson Chiropractic Clinic also argued that the compensation judge lacked authority to extinguish its interest and, alternatively, that any statute granting the compensation judge that authority was invalid and unenforceable. The employee and the employer and insurer filed motions to dismiss Johnson Chiropractic Clinic’s Petition. The compensation judge granted the motions to dismiss, finding that Johnson Chiropractic Clinic lacked standing to assert the claim for payment. The W.C.C.A. affirmed. Johnson Chiropractic Clinic appealed to the Minnesota Supreme Court which also affirmed. The issue on appeal was whether a potential intervenor, which did not intervene after receiving adequate notice of the employee’s pending workers’ compensation proceeding, can initiate a proceeding to collaterally attack the validity of a final award on stipulation under Minn. Stat. §§ 176.271, 176.291 and Minn. R. 1420.1850, subp. 3B. Stating that the Workers’ Compensation Act provides numerous mechanisms for intervenors to protect their interests and pursue payment, even when an employee chooses to settle a claim, the Court found that the plain language of the statutes and rules does not allow the potential intervenor to pursue a collateral attack of an award on stipulation when the potential intervenor was placed on adequate notice of its right to intervene but chose not to intervene in the case.
The Minnesota Supreme Court confirmed that when a potential intervenor is placed on adequate notice of its right to intervene but fails to intervene in the case, the potential intervenor’s interest can be extinguished in the stipulation for settlement and award on stipulation. Notably, however, the Supreme Court’s ruling requires that the notice provided to potential intervenors strictly comply with Minn. Stat. § 176.361 and Minn. R. 1415.1100. While the result in the Koehnen decision is favorable, future challenges by extinguished potential interveners may be successful if an intervention notice fails to comply with the requirements for proper and timely notice. Additional scrutiny of the notices will be necessary in the future.
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