After being denied by Dakota, the employee did not file a petition for workers' compensation with the Workers' Compensation Division of the Office of Administrative Hearings. Instead, the employee filed no-fault insurance claims with Integrity Insurance Company for each accident. Integrity insured White Gloves' vehicles.

Integrity paid the employee's claims but maintained that Dakota had wrongfully denied the workers' compensation claims.

Integrity then sued Dakota for reimbursement of the money that it had paid out under its no-fault coverage.

The trial court dismissed Integrity's claims, concluding that it did not have subject matter jurisdiction to hear the matter because Integrity did not have standing to bring a claim for reimbursement where no workers' compensation claim had been filed by the employee with the Workers' Compensation Division.

Integrity appealed. It argued that the Minnesota No-Fault Automobile Insurance Act (“NFA”) provided it a right to reimbursement and standing to bring its claim.

For its part, Dakota argued that Integrity only had a right to reimbursement under the NFA after the employee had succeeded in bringing a claim for workers' compensation under the Minnesota Workers' Compensation Act (WCA) or the workers' compensation insurer had agreed to pay the claim; otherwise the claim was not “paid or payable under a workers' compensation law” as required by the NFA. Dakota conceded that Integrity would have a right to intervene in a compensation-claim proceeding before the Workers' Compensation Division if the employee had brought one, but it argued that Integrity lacked standing to independently sue Dakota because, under the WCA, a workers' compensation claim had to be filed with the Workers' Compensation Division by the employee and a determination made on the claim.

The Appellate Court's Decision

The appellate court affirmed.

In its decision, the appellate court explained that, under the NFA, workers' compensation benefits were primary, meaning that they had to be paid out first, and that a no-fault insurer could seek reimbursement if it made payments that were “paid or payable under a workers' compensation law.” Minn. Stat. § 65B.61(1).

The appellate court observed that, in Colonial Ins. Co. of California v. Minnesota Assigned Risk Plan, 457 N.W.2d 209 (Minn. Ct. App. 1990), review denied (Minn. July 31, 1990), it recognized that the NFA provided that workers' compensation benefits “paid or payable” were primary to no-fault coverage. The appellate court added, however, that it concluded in Colonial that no-fault insurers did not have standing to bring an action for reimbursement against a workers' compensation insurer when the workers' compensation insurer had denied coverage and the employee had not brought a claim under the WCA.

Moreover, the appellate court continued, it pointed out in Colonial that the NFA and the WCA had to be construed in reference to each other and that, according to the Minnesota Supreme Court, a no-fault carrier had “no independent right to be reimbursed by a workers' compensation carrier” (citing Freeman v. Armour Food Co., 380 N.W.2d 816 (Minn. 1986)).

The appellate court added that the Colonial court also stated that, under the WCA, “only the injured employee” could bring a claim and that the claim had to be brought in the Workers' Compensation Division, not in a Minnesota court.

The appellate court observed that it concluded in Colonial that a no-fault insurer did not have standing to initiate an independent claim for reimbursement in a Minnesota trial court under the NFA because the WCA provided “the exclusive means for proving such a claim.”

The appellate court conceded that its decision in Colonial put Colonial “in a Catch-22 paradox” but it concluded that Colonial was binding precedent and, under the doctrine of stare decisis, “[w]e will only overrule our precedent if provided with a compelling reason to do so. The reasons for departing from former decisions must greatly outweigh reasons for adhering to them.”

It then rejected Integrity's reasons for overruling Colonial, finding that none were “compelling or persuasive.” Therefore, the appellate court declined to overrule Colonial and it affirmed the trial court's order in favor of Dakota.

The case is Integrity Ins. Co. v. First Dakota Indemnity Co., No. A18-1299 (Minn. Ct. App. May 13, 2019). Attorneys involved include: Richard S. Stempel, Gregory A. Maus, Stempel & Associates, PLC, Hopkins, Minnesota (for appellant). Mark G. Pryor, Erica A. Weber, Brown & Carlson, P.A., Minneapolis, Minnesota (for respondents).