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State Fund Mutual Insurance Co. v. Mead

February 1, 2005

STATE FUND MUTUAL INSURANCE COMPANY, APPELLANT, DELBERT DOUBRAVA, ET AL., RESPONDENTS,
v.
JACK MEAD, ET AL., RESPONDENTS, KANE TRANSPORT, INC., RESPONDENT.



Lyon County District Court, File No. C7-03-0818.

Considered and decided by Shumaker, Presiding Judge, Randall, Judge, and Halbrooks, Judge.

SYLLABUS BY THE COURT

To protect its subrogation interest in an underlying tort action that has not been settled on a Naig basis and pursuant to a proper and timely motion, a workers' compensation insurer must be permitted to intervene under Minn. Stat. § 176.061, subd. 8a (2004), before the district court approves or disapproves a settlement motion.

The opinion of the court was delivered by: Halbrooks, Judge

Affirmed in part, reversed in part, and remanded; motion denied

OPINION

Appellant insurance company challenges the district court's order denying its motion to intervene, arguing (1) that it is entitled to party status because respondents do not adequately represent and protect its workers' compensation subrogation interest in the lawsuit and (2) that it should be allowed to intervene so it can conduct discovery concerning the tortfeasor's assets. Appellant also moves to dismiss issues allegedly raised by respondent on appeal for the first time. Respondents separately argue that the district court erred in denying their request for attorney fees and costs. Because we conclude that the district court did not abuse its discretion by denying respondents' motion for attorney fees, we affirm in part. But because we conclude that the district court erred by denying appellant's motion to intervene as of right, we reverse in part and remand. Appellant's motion to dismiss issues on appeal is denied because it is now moot.

FACTS

In June 2000, respondent Delbert Doubrava sustained serious injuries as a result of a motor-vehicle accident caused by respondent Jeremy Mead. At the time of the accident, Doubrava was working in the course and scope of his employment with Kane Transport, Inc. (Kane).

Mead was driving a vehicle owned by his father and that was insured by Federated Mutual Insurance Company (FMIC), with a policy limit of $300,000. Kane was insured for workers' compensation coverage by appellant State Fund Mutual Insurance Company (State Fund). Soon after the accident, Delbert and his wife, Judy Doubrava, initiated both a workers' compensation claim against Kane and a personal-injury claim against Mead.

In mid-2003, the Doubravas secured a settlement offer from Mead for his adjusted policy limits in the amount of $296,390.*fn1 The Doubravas moved for approval of the settlement and provided the district court with the results of an asset search that revealed that Mead "ha[d] no assets of significance which could be pursued if a judgment in excess of the underlying insurance policy limits was obtained." Mead subsequently confirmed this information in a sworn affidavit.

State Fund moved to intervene in order to block the settlement and the potential exhaustion of its workers' compensation subrogation interest,*fn2 asserting that Mead had other financial resources which had not yet been disclosed, including future wages. After the Doubravas' counsel was properly notified of State Fund's motion to intervene, they objected within 30 days, as required by Minn. R. Civ. P. 24.03.*fn3

The district court found that it was not reasonable to allow State Fund to intervene for the primary purpose of blocking the settlement offer and ultimately concluded that the motion to intervene was premature because the district court had not yet ruled on the settlement motion. In addition to denying State Fund's request for intervention, the court also denied its motions to compel discovery and for sanctions against the Doubravas' attorney. The court further denied the Doubravas' request for attorney fees. This appeal follows.

ISSUES

1. Did the district court err by denying State Fund's motion for intervention of right?

2. Did the district court abuse its discretion by denying the Doubravas' ...


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