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Hufnagel v. Deer River Health Care Center

Supreme Court of Minnesota

July 18, 2018

Janet Hufnagel, Respondent,
v.
Deer River Health Care Center and MHA Insurance Co., Respondents, and Essentia Health-Deer River and Berkley Risk Administrators Co., Relators, and Midwest Spine & Brain Institute and Essentia Health, Intervenors.

         Workers' Compensation Court of Appeals Office of Appellate Courts

          Scott Wilson, Minneapolis, Minnesota; and Timothy J. McCoy, McCoy Peterson, Ltd., Minneapolis, Minnesota, for respondent Janet Hufnagel.

          Edward Q. Cassidy, Fredrikson & Byron, P.A., Minneapolis, Minnesota, for relators.

         SYLLABUS

         1. Where the evidence demonstrated that a dispute exists between two or more employers or insurers as to which employer or insurer is liable in a proceeding regarding an employee's claim for benefits for a work-related injury, it was error for the compensation judge to deny a request for an award for reasonable attorney fees under Minn. Stat. § 176.191, subd. 1 (2016).

         2. An award of reasonable fees should adequately compensate the employee's attorney for the representation provided, recognizing the attorney's obligation to be appropriately prepared to address alternative theories.

          OPINION

          HUDSON, JUSTICE.

         Respondent Janet Hufnagel filed a workers' compensation claim in 2015 for work-related aggravations to a low-back condition that resulted from an admitted work-related injury in 2009. At all relevant times, Hufnagel worked at the same job, performing the same duties, at the same physical location. But between the 2009 injury and the later aggravations sustained in 2014 and 2015, Hufnagel's employer and its insurer changed. When Hufnagel sought benefits for the later aggravations, the 2009-injury employer denied liability, asserting that the 2014 and 2015 injuries were subsequent injuries for which the new employer and its insurer were liable. The new employer also denied liability, declaring that the aggravations were a continuation of the 2009 injury and therefore the responsibility of the original employer and its insurer. Following a hearing on Hufnagel's petition for benefits, the compensation judge concluded that Hufnagel's 2009 work-related injury was a substantial contributing factor to the later aggravations but held the new employer liable for reasonable medical and other benefits for the 2014 and 2015 injuries.

         Hufnagel's post-hearing motion for an award of contingent and excess attorney fees was granted in part and denied in part. As it relates to Hufnagel's claim for fees under Minn. Stat. § 176.191, subd. 1 (2016), the compensation judge concluded that the dispute presented by Hufnagel's 2015 claim petition was only whether the 2009 injury "continued to be a substantial contributing factor" to Hufnagel's later aggravations, and was not a dispute between employers. Accordingly, the compensation judge denied the motion for fees under this statute. The Workers' Compensation Court of Appeals (WCCA) reversed, holding that the compensation judge failed to fully consider the extent to which each employer sought to shift liability to the other employer and that it was error to deny the motion for fees under Minn. Stat. § 176.191, subd. 1. Concluding that the attorney had not been adequately compensated for the time spent providing effective representation to Hufnagel, the WCCA vacated the compensation judge's fee award and remanded for reconsideration in light of the correct legal standard. We affirm the decision of the WCCA.

         FACTS

         This appeal arises out of workers' compensation claims filed by Janet Hufnagel for back injuries she sustained while working as a certified nursing assistant. Hufnagel was employed by Deer River Health Care in 2009 when she suffered a work injury to her low back. Deer River and its insurer, MHA Insurance Co., (collectively "Deer River") paid Hufnagel's medical benefits incurred in connection with treating the 2009 work-related injury. In 2010, 2011, and 2012, Deer River's independent medical examiner evaluated Hufnagel, concluded that her back condition arose out of the 2009 work-related injury, and determined that the recommended medical treatments were reasonable and would allow Hufnagel, who continued to work with restrictions, to return to work without restrictions. In January 2014, after a fourth independent medical examination, Deer River's independent medical examiner again concluded that Hufnagel's low-back condition was related to the 2009 work-related injury. In early 2014, Hufnagel and Deer River entered into a stipulation to resolve the remaining issues related to Hufnagel's claim for medical benefits and temporary total disability benefits for the 2009 injury.

         In 2013, while Hufnagel continued to work as a certified nursing assistant, her employer, Deer River, was acquired and became Essentia Health-Deer River ("Essentia") and also changed its workers' compensation insurer. In August 2014, now working for Essentia, Hufnagel experienced increased low-back pain, which required time off work and medical treatment. When notified of this injury, Essentia denied liability, concluding that Hufnagel's "current need for medical treatment is a continuation of the prior work injury from 2009 which is under a different insurer." Hufnagel then suffered an additional aggravation to her low-back condition in June 2015. In July 2015, Hufnagel filed a claim petition, seeking temporary total disability and medical benefits for the 2014 and 2015 injuries.

         In October 2015, Hufnagel returned to the same doctor who had completed the four previous independent medical examinations for Deer River. On this occasion, for the first time, the independent medical examiner concluded that Hufnagel's 2009 low-back injury had "resolved"; the 2014 low-back injury was "temporary in nature" and had also resolved; and the 2015 injury was a substantial contributing cause to Hufnagel's current condition and, thus, the responsibility of Essentia, not Deer River. Deer River therefore denied liability for Hufnagel's claimed benefits and moved to join Essentia and its insurer as parties in the proceeding before the compensation judge after Hufnagel declined to do so.

         After Essentia was joined as a party, Hufnagel underwent a sixth independent medical examination, this time with Essentia's medical expert. This examiner concluded that Hufnagel's "subjective" complaints of pain were "unsubstantiated" by the physical examination. Thus, the examiner reported that no medical treatment or care was necessary for the 2009, 2014, and 2015 injuries. In the alternative, the examiner opined that the "worst-case scenario" was a mild back strain in 2009 that was resolved within 6 weeks or less. After this report was received, Hufnagel's attorney reminded Essentia that Essentia denied liability for the 2014 injury, explicitly attributing liability for Hufnagel's low-back condition to the "significant work injury of 2009." The attorney noted that he did not ask Essentia to do ...


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