MAURICE JACKSON v. HAR NED LUMBER and SFM; and HAR NED LUMBER and AM. MOTORIST/MIGA; and HAR NED LUMBER and LUMBER INS. CO.; and HAR NED LUMBER and WORKERS’ COMP. REINSURANCE ASSOC. No. WC15-5857 (April 20, 2016)
The Employer, together with SFM, one of four insurers, appealed the compensation judge’s dismissal of the Appellant’s Petition for a Hearing on the Interpretation and Enforcement of the Stipulation for Settlement, or alternatively, a Petition for Determination of Primary Liability.
Four workers’ compensation insurers entered into an agreement in which each of them would pay 25% of the employee’s ongoing permanent total wage loss benefits, weekly PTD benefits. Each insurer was also responsible for paying the assessment pursuant to Minn. Stat. § 176.129. One of the four insurers was insolvent and the Minnesota guarantee Association (MIGA) agreed to waive any defense under Minn. Stat. § 60C.09, subd.2. A second insurer continued to pay its share. A third insurer, SFM, agreed to be paying agent and simplify the administration of paying benefits to the employee. The fourth insurer, American Motorists, became insolvent.
Being bound by the responsibility of paying for the insolvent American Motorists/MIGA’s share, paying agent SFM filed its petition. The compensation judge dismissed SFM’s petition determining that he did not have jurisdiction under the WCA to hold a hearing to interpret and enforce a previously agreed-upon provision. He further concluded that once a stipulation for settlement is approved and awarded, he had no jurisdiction to go back and reevaluate the terms of the agreement. Once approved, the compensation judge determined that no jurisdiction existed to reopen the previously settled claims. SFM appealed.
SFM sought a solution to those situations in which an insurer who agrees to pay the employee a percentage of benefits can no longer pay because it becomes insolvent. Who pays under this scenario? Does SFM pick up the difference? Do other insurers split the difference equally?
THE WCCA held that where an insurer in a multi-insurer settlement becomes insolvent and MIGA has determined that the ongoing obligation of that insurer is not a covered claim under Minn. Stat. ch. 60C, the employer is obligated to pay the compensable workers’ compensation claim under Minn. Stat. § 176.185, subd. 8a. The provisions of item (b) of subdivision 8a must be followed to obtain relief.
Here, Har Ned was the sole employer, and is therefore liable for the insolvent insurer’s 25% share. The statute also provides a manner to pay benefits, pay assessments, request reimbursement from the special compensation fund, and request reimbursement from the Workers’ Compensation Reinsurance Association. In this matter, the petition for relief basically sought to redistribute responsibility between parties to a settlement that had not been vacated. The compensation judge properly refused to consider the request as the authority for vacating a settlement lies solely with the WCCA. Minn. Stat. § 176.461. In affirming the dismissal, the WCCA reaffirmed that the compensation judge retains the authority to hear and decide a properly presented petition for relief under chapter 176.