Gullickson v. Lutsen Resort, Inc.

474 N.W.2d 216, 1991 Minn. App. LEXIS 875, 1991 WL 163088
CourtCourt of Appeals of Minnesota
DecidedAugust 27, 1991
DocketC0-91-513
StatusPublished
Cited by2 cases

This text of 474 N.W.2d 216 (Gullickson v. Lutsen Resort, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gullickson v. Lutsen Resort, Inc., 474 N.W.2d 216, 1991 Minn. App. LEXIS 875, 1991 WL 163088 (Mich. Ct. App. 1991).

Opinions

OPINION

FOLEY, Judge.

Investors Diversified Services, Inc. and Travelers Insurance Company appeal from an order denying their motion to reinstate a suit initiated by an IDS employee against respondents Lutsen Resort, Inc. and Superior Crafts, Inc. We reverse and remand.

FACTS

The facts are not in dispute. Ray Kenneth Gullickson seriously injured his back in 1982 while attending a seminar at Lut-sen when a swing made by Superior Crafts collapsed. Gullickson sued Lutsen on June 9,1986, and Lutsen sued Superior Crafts as a third party defendant. Gullickson’s employer, IDS, and its workers’ compensation carrier, Travelers, (hereafter IDS) intervened to protect their subrogation claim on December 3, 1986. Gullickson’s action and IDS’ action were brought before the statute of limitation had run on Gullickson’s claim.

On March 16, 1989, after the statute of limitations had run, IDS voluntarily dismissed its claim without prejudice in order to “simplify the issues at trial.” IDS did not file a stipulation for dismissal, and there is no order dismissing IDS. However, IDS informed all parties that it expected the trial court to account for its subrogation interest pursuant to Minn.Stat. § 176.061, subd. 6 (1988), which provides that workers’ compensation benefits be subtracted from a damage award. Gullick-son’s action never reached a jury.

On March 28, 1989, one day after trial began but prior to any verdict, Gullickson settled all claims except for workers’ compensation benefits with Lutsen and Superi- [218]*218or Crafts. This is commonly known as a “Naig” settlement. See Naig v. Bloomington Sanitation, 258 N.W.2d 891, 893 (Minn.1977) (subrogation claim survives employee’s settlement with tortfeasor).

Upon learning of the settlement, counsel for IDS wrote to opposing counsel requesting that the

Stipulation of Dismissal which is prepared in this matter[] reflect[] that all claims are dismissed except the Workers’ Compensation Subrogation elaim[ ] of IDS * * *.
I do not want there to be any future misunderstandings on the dismissal.
Furthermore, I intend to serve this matter in the name of IDS * * * against the defendants in the above action.

The settlement agreement executed on April 12, 1989 expressly preserved IDS’ subrogation rights. However, the stipulation and order for dismissal with prejudice, which did not list IDS as a party in the caption, makes no mention of IDS or any reservation of IDS’ claim.

In December 1989, Gullickson settled his workers’ compensation claim with IDS. In February 1991, almost two years after the dismissal and nearly three years after the statute of limitations on Gullickson’s claim had run, IDS moved the trial court to reinstate the matter in order to recover workers’ compensation benefits paid to Gullick-son from Lutsen and Superior Crafts.

IDS argued the dismissal was conditional and the statute of limitation was tolled because Gullickson timely filed the action. Lutsen and Superior Crafts submitted the affidavits of their counsel stating that during the settlement negotiations with Gul-lickson in March 1989, counsel for IDS repeatedly advised opposing counsel that IDS would remain dismissed from the action and would not proceed with any further claim. IDS submitted an affidavit of its counsel in response, stating that IDS clearly indicated its intention to pursue its subrogation claim and that the dismissal was merely for the convenience of the parties trying the case. Correspondence in the record supports this view.

The trial court denied IDS’ motion to reinstate the action. The trial court held that, while IDS joined the case within the statute of limitations, the limitation barred the revival of their claim following IDS’ voluntarily dismissal after the limitation had run. The trial court noted that despite IDS’ suggestion, nothing in the record supported the proposition that the dismissal was conditional or limited. The trial court also noted that IDS’ motives for dismissal did not affect the running of the statute of limitation.

ISSUE

Where a subrogation claimant joins an action brought within the statute of limitation, and voluntarily dismisses its action without prejudice after the limitation has run, may the subrogation claimant reinitiate its claim after the underlying action is dismissed?

ANALYSIS

The interpretation of the relationship among subrogation claims, underlying tort claims, and the applicable statute of limitation presents a question of law. This court is not bound by the conclusions of a trial court when reviewing issues of law. A.J. Chromy Constr. Co. v. Commercial Mechanical Serv., Inc., 260 N.W.2d 579, 582 (Minn.1977).

IDS argues the trial court erred when it held that IDS’ subrogation claim was barred by the six-year statute of limitations provided by Minn.Stat. 541.05, subd. 1(5) (1990). There is no dispute the six-year limitation applies and the statute ran in 1988. IDS argues that its 1991 subrogation action relates back to the timely tort action brought by its employee in 1986. Lutsen and Superior Crafts argue that although IDS’ initial action was timely, their voluntary dismissal of that action in 1989 foreclosed IDS’ right to reinitiate its claim after the limitation had run.

The resolution of this dispute depends on the interpretation of Liberty Mut. Ins. Co. v. Nutting Truck & Caster Co., 295 Minn. 211, 203 N.W.2d 542 (1973). In Nutting, an injured employee sued the alleged tort-[219]*219feasor within the limitation period. The workers’ compensation carrier joined the suit to protect its subrogation claim after the limitation had run. The employee then settled all claims except the workers’ compensation claim, and his action against the tortfeasor was dismissed. The trial court simultaneously dismissed the subrogation claim because the subrogation claimant was joined after the limitation had run on the underlaying claim.

The subrogation claimant then sued the tortfeasor independently. The trial court first allowed the subrogation claimant to proceed, then dismissed the portion of the claim for lost wages, allowing only the medical payment claim to proceed. The subrogation claimant appealed to pursue its lost wage claim as well.

The Minnesota Supreme Court held that the statute of limitation did not bar the subrogation claim because the original underlying tort action brought by the employee was timely. The supreme court reasoned that once an employee receives workers’ compensation benefits, his or her employer is subrogated to his or her rights against the tortfeasor. Thus, when an employee brings an action against a tort-feasor, he or she is suing not only on his behalf but on behalf of his or her employer as well. Therefore, where the employee sues to recover for his or her personal injury within the limitation period, his or her employer’s subrogated workers’ compensation claims are also timely, even if the employer is joined after the limitation runs. Id. 208 N.W.2d at 544.

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Related

State Farm Fire & Casualty Co. v. Strope
481 N.W.2d 853 (Court of Appeals of Minnesota, 1992)
Gullickson v. Lutsen Resort, Inc.
474 N.W.2d 216 (Court of Appeals of Minnesota, 1991)

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Bluebook (online)
474 N.W.2d 216, 1991 Minn. App. LEXIS 875, 1991 WL 163088, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gullickson-v-lutsen-resort-inc-minnctapp-1991.