Scott Koehnen v. Flaship Marine Co., et. al

Scott Koehnen v. Flaship Marine Co., et. al, No. A20-0053 (Minn. Supreme Court. August 12, 2020).

Employee Scott Koehnen suffered a work injury on May 30, 2017 while working for his Employer, Flagship Marine Company. The Employee received chiropractic treatment from Mr. Johnson Keith Johnson at Johnson Chiropractic Clinic resulting in $9,476.01 in medical bills.

Mr. Johnson submitted his charges to Auto-Owners requesting payment. At that time, Employer/Insurer had denied liability. Mr. Johnson’s bills were not paid.

On September 25, 2017, the Employee filed a claim petition requesting workers’ compensation benefits including payment of the treatment received at Johnson Chiropractic. On the same day, the Employee’s attorney mailed a Notice to Potential Intervenors letter to Mr. Johnson informing him of his right to intervene under Minn. Stat. 176.361.

Mr. Johnson acknowledged that he did receive the Notice but “chose to exercise his right to not intervene.” He did not move to intervene under Minn. Stat. 176.361, subd 2. The proceeding continued without him. He conceded that the notice he received was timely and adequate as a matter of law.

In April of 2018, the Employee, Employer and Insurer entered into a settlement agreement, which resolved the Employee’s claims for benefits, settled the interests of an intervening health care provider, and extinguished the claims of the potential intervenors who received adequate notice, but did not intervene, including Mr. Johnson. The settlement agreement did not resolve the liability dispute between the Employee and Employer and Insurer.

On April 23, 2018, the compensation judge approved the Stipulation for Settlement and issued an Award on Stipulation. The Award on Stipulation provided: “More than 60 days has expired and pursuant to Minn. Stat. § 176.361, subd. 2, any potential interest[] of Johnson Chiropractic Clinic . . . [is] hereby extinguished.”  The Office of Administrative Hearings mailed a copy of the Award on Stipulation to Johnson on April 25, 2018.

On January 2, 2019, more than 8 months later, Mr. Johnson filed a Petition for Payment of Medical Expenses with the Office of Administrative Hearings pursuant to Minn. Stat. §§176.271, .291, which address the initiation of workers’ compensation proceedings by petition, and Minn. R. 1420.1850, subp. 3B, which addresses the remedies available to intervenors.

Mr. Johnson claimed that (1) the Employee and Employer failed to comply with Minn. Stat. 176.521, (2) that because he was “completely excluded from all settlement negotiations,” he was entitled to automatic reimbursement of his charges for the Employee’s treatment, with statutory interest, in accordance with  Brooks v. A.M.F., Inc., 278 N.W.2d 310, 315 (Minn. 1979), and (3)  asserted that the compensation judge lacked the authority to extinguish his interests and, in the alternative, that any statute purporting to grant a compensation judge this authority was invalid and unenforceable.

The Employee and Employer/Insurer moved to dismissed Mr. Johnson’s petition. The compensation judge granted their motion, holding that the Mr. Johnson’s interest was properly extinguished under Minn. Stat.176.361 subd. 2 the W.C.C.A affirmed. Minnesota Supreme Court Affirmed.


  1. Minn. Stat. 176.271. Mr. Johnson lacks standing. Under Tatro v. Hartmann’s Store 204 N.W.2d 125 (Minn. 1973), “while a health or disability insurer has a right of reimbursement, it cannot initiate a claim on its own. It can only intervene in an existing proceeding.” See Le v. Kurt Mfg., 557 N.W.2d 202, 204 (Minn. 1996); Mann v. Unity Med. Ctr., 442 N.W.2d 291, 293 n.3 (Minn. 1989); Freeman v. Armour Food Co., 380 N.W.2d 816, 820 (Minn. 1986); Johnson v. Blue Cross & Blue Shield of Minn., 329 N.W.2d 49, 52 (Minn. 1983).The Court concluding that the holdings apply with equal force to all potential intervenors, including the health care provider in this case.

Here, the interest Mr. Johnson seeks to assert by initiating a proceeding for reimbursement is the same interest that he had the opportunity to protect through intervention. His choice to “exercise his right to not intervene” does not shield him from the reality that he was afforded the opportunity to intervene precisely because he had something to lose.

  1. Minn. Stat.176.291 The Court found that specific references for providers’ right to intervene provides alternatives for providers and does not provide a separate cause of action for them. “When interpreting a statute to determine if it creates a cause of action, we do not ask whether the statute imposes a limitation on an otherwise unlimited claim, but instead determine whether the statute actually provides a cause of action to a particular class of persons.” See, e.g., Krueger, 781 N.W.2d at 863.

The Court concluded that the general language of section 176.291 does not create a cause of action for health care providers.

  1. Right to file a petition under Minn. Stat. 176.291 “if the intervenor claims to have been effectively excluded…from settlement negotiations.”

Mr. Johnson is not an “intervenor” under Minn. Stat. 176.291 because he chose not to intervene, therefore he is not an intervenor and the procedural protections under subp. 3 do not apply.

Takeaway: It’s imperative to identify all potential intervenors, make sure Notices to Potential Intervenors have been sent out, and that all non-intervening providers are extinguished in the stipulation for settlement. If a potential intervenor chooses not to intervene, they do not need to be notified of the settlement negotiations.