Wagner v. Farmer's Union Central Exchange

329 N.W.2d 801, 1983 Minn. LEXIS 1035
CourtSupreme Court of Minnesota
DecidedFebruary 4, 1983
DocketNo. C9-82-681
StatusPublished
Cited by1 cases

This text of 329 N.W.2d 801 (Wagner v. Farmer's Union Central Exchange) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wagner v. Farmer's Union Central Exchange, 329 N.W.2d 801, 1983 Minn. LEXIS 1035 (Mich. 1983).

Opinion

SCOTT, Justice.

This case arises from the assessment of a penalty by the Workers’ Compensation Division of the Minnesota Department of [802]*802Labor and Industry (Division) against the National Farmer’s Union Property and Casualty Company (the insurer) because of its delay in making workers’ compensation payments. The penalty was assessed by the Division in favor of the Special Compensation Fund under Minn.Stat. § 176.221, subd. 3 (1982). The insurer and employer appealed to the Workers’ Compensation Court of Appeals on the ground that the Division had incorrectly interpreted § 176.221, subd. 3. On April 20, 1982, the Court of Appeals issued an order reversing the penalty. We affirm the decision of the Court of Appeals to the extent that it reverses the penalty imposed by the Division, but modify its interpretation of the time within which an employer or insurer must begin payment of compensation benefits in order to avoid the 100% penalty imposed by § 176.221, subd. 3. We hold that the legislature intended that the 100% penalty for delay in making compensation payments be imposed if payments are not commenced within 30 days of notice to or knowledge by the employer of a com-pensable injury when no denial of liability or request for an extension of time has been filed.

The facts of this case are not in dispute. On November 11,1981, the employee, Leroy Wagner, strained his back in the course of his employment for Farmer’s Union Central Exchange. The employer was notified immediately and prepared a First Report of Injury. The insurer received the report on November 13, 1981.

On December 10, 1981, the insurer paid the employee temporary total disability for the 2.4 weeks he was absent from work as a result of his injury. His compensation rate was $267 per week; thus, the total payment to the employee was $640.80.

At the same time it made payment to the employee, the insurer filed a Notice of Intention to Discontinue Compensation Benefits and a copy of the First Report of Injury with the Division.

Based on these documents, the Division determined that the payment was two weeks late under Minn.Stat. § 176.221 and issued an order assessing penalties under Minn.Stat. § 176.225, subd. 5 (1982), and Minn.Stat. § 176.221, subd. 3. The first penalty, which is not at issue in this case, is equal to 10% of the total benefits to which the employee is entitled and is paid directly to the employee. The second penalty is equal to 100% of the total benefits and is paid to the Special Compensation Fund.

The issues before this court are:

(1) Whether it was the intention of the legislature, in amending Minn.Stat. § 176.-221, subd. 3, to give the employer a longer period after a compensable injury is reported to him in which to begin payment before incurring liability for the 100% penalty provided by that section when no denial of liability or request for an extension of time has been filed.

(2) Whether Minn.Stat. § 176.221 as applied in this case provides due process to the employer and insurer.

1. In 1981 the Minnesota Legislature modified the provisions of Minn.Stat. § 176.221. The purpose of the modifications was to decrease the time for payment of benefits to injured workers. Minn.Stat. § 176.001 (1982). It was hoped that decreasing the time within which payments are made would also result in less litigation and, ultimately, lower insurance rates.

Minn.Stat. § 176.221, subd. 3, provides a 100% penalty for delay in performing certain acts. The question presented on this appeal is how many days must the employer or insurer be allowed to perform the required act or acts before the penalty is imposed. There are three possible interpretations of the length of time allowed by § 176.221, subd. 3: 14 days; 30 days; or 44 days. For the reasons that follow, we hold that it was the intention of the legislature that the 100% penalty be imposed if the required act or acts were not performed within 30 days of notice to or knowledge by the employer of a compensable injury.

Prior to the 1981 amendments, Minn.Stat. § 176.221, subd. 3 (1980), read as follows:

Where an employer or insurer fails to begin payment of compensation, charges for treatment under section 176.135 or retraining expenses under 176.102, subdivision 9, or to file a denial of liability, or to request an extension of time within [803]*803the 30 day period referred to in subdivision 1, he shall pay to the special compensation fund an amount equal to the total amount of compensation to which the employee is entitled because of the injury. In addition, each day subsequent to the end of the 30 day period and until a compensation payment is made to the injured employee, the person responsible for payment of compensation shall pay to the special compensation fund an amount equal to the total compensation to which injured employee is entitled.

(Emphasis added.) Under this statute the 100% penalty was imposed if the employer or insurer did not begin payment, deny liability, or request an extension within the 30-day period described in Minn.Stat. § 176.221, subd. 1 (1980),1 which is within 30 days of the date of notice to or knowledge by the employer of a compensable injury.

Minn.Stat. § 176.221, subd. 3 (1982), now provides:

Where an employer or insurer fails to begin payment of compensation, charges for treatment under section 176.135 or retraining expenses under 176.102, subdivision 9, or to file a denial of liability, or to request an extension of time within 30 days after the date on which the first payment was due, he shall pay to the special compensation fund an amount equal to the total amount of compensation to which the employee is entitled because of the injury. In addition, each day subsequent to the end of the period and until a compensation payment is made to the injured employee, the person responsible for payment of compensation shall pay to the special compensation fund an amount equal to the total compensation to which the injured employee is entitled.

(Emphasis added.) Under § 176.221, subd. 3, as amended, the 100% penalty is imposed if the employer or insurer does not do the required act or acts within 30 days after the first compensation payment was due. The first compensation payment is due when the employer receives notice of or has knowledge of the injury; thus, the penalty will be imposed, as it was prior to the 1981 amendments, for failure to perform the required acts or acts within 30 days of notice to or knowledge of injury by the employer.

Retention of the 30-day period in § 176.-221, subd. 3, is consistent with the intention of the legislature and other sections of the Workers’ Compensation Act. Nowhere do we find evidence of a legislative intent to change § 176.221, subd. 3. The primary author of the 1981 amendments, Represent ative Wayne Simoneau, explained during floor debate that the purpose of the changes to § 176.221 was to reduce the period in which a workers’ compensation claim went unpaid. He stated:

Section 94 [Section 96 in the final engrossment]. Uncontested payments to begin fourteen days from the notice of injury. Current practice is thirty days. We feel that’s too long. Lots of employees have gone the full thirty days without receiving a check, have visited with an attorney, and suddenly, what may be simply a week or two out of work * * * winds up a case that’s being litigated for permanent partial.

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Bluebook (online)
329 N.W.2d 801, 1983 Minn. LEXIS 1035, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wagner-v-farmers-union-central-exchange-minn-1983.