Sershen v. Met. Council

Sershen v. Met. Council, No. WC21-6395 (W.C.C.A. June 24, 2021)

From 1986 through 2017 the employee worked in a variety of different capacities for several employers, including Streater, Truth Hardware, SPX, ATEK, and the Metropolitan Council. He was exposed to occupational noise and subsequently made an occupational hearing loss claim.

The employee’s expert concluded his exposure to noise at all five employers was a substantial contributing factor to his hearing loss. He rated 2% PPD and agreed the employee needed hearing aids.

The Metropolitan Council’s IME with Dr. Hopfenspirger found 7% PPD, but found multiple factors contributed to the hearing loss including his age, medical history, and that it was impossible to determine the contributions of these many factors and whether any one was a substantial contributing factor.

Prior to hearing the employee entered into a Pierringer settlement with SPX and ATEK and their insurers. The employee’s claims against the remaining employers and insurers proceeded to hearing. The compensation judge found the employee’s exposure to workplace noise was a substantial contributing factor to his hearing loss, and that the last significant workplace noise exposure was during his employment with SPX. The judge also found the work at subsequent employers of ATEK and the Metropolitan Council were not significant exposure. The judge then ordered the Metropolitan Council, the last employer where any occupational exposure took place, to pay the medical expenses and intervenor.

Metropolitan Council appealed on the grounds that substantial evidence did not support the judge’s decision, as well as the finding of liability for medical expenses. Metropolitan Council tried to argue that because the judge did not find the exposure at Metropolitan Council to be significant, she must have rejected all of the employee’s expert’s opinion. The court found that it is within the judge’s discretion to resolve conflicts between medical causation opinions and that she can accept all or parts of any one expert and all or parts of different experts.

The second argument centered on interpretation of Minn. Stat. 176.66, subd. 10, which provides in cases of occupational disease with multiple employers “the insurer who was on the risk during the employee’s last significant exposure to the hazard of the occupational disease is the liable party.” The WCCA went on to state that Minn. Stat. § 176.135, subd. 5, however, modifies the occupational disease statute.  It states that regardless of Minn. Stat. § 176.66, payments for medical expenses for an occupational disease “shall be made by the employer and insurer on the date of the employee’s last exposure to the hazard of the occupational disease.”  Minn. Stat. § 176.135, subd. 5 (emphasis added).  In other words, for medical expenses related to an occupational disease, it does not matter whether the employee’s last exposure was significant, and the employer and insurer on the risk during the time of the last exposure must make payment of the medical expenses. The court noted this last insurer then would have a right to seek reimbursement under Minn. Stat. § 176.66, subd. 10, from the insurer on the risk during the last significant exposure, but “only in the case of disablement.”  The court interpreted this as the legislature having contemplated that there might be some circumstances, specifically cases where there is not disablement, when the insurer during the last exposure would pay medical expenses but not receive reimbursement from the insurer during the last significant exposure.

Metropolitan Council argued that because there was a specific finding from the compensation judge that the occupational exposure while employed with the Metropolitan Council was not significant, and thus the order for them to pay medical expenses is contrary to the spirit of the Workers’ Compensation Act. The WCCA applied a plain reading of the statute and rejected this argument. It notes Minn. Stat. 176.135, Subd. 5 calls for the insurer during the ‘last exposure’, even if not significant, to make payments. The WCCA further noted that when the payer is not the insurer during the last significant exposure, they can be reimbursed by other insurers – but only in cases of disablement.

The appellant argues that the compensation judge’s failure to rule on the extent of the employee’s PPD rating combined with the Pierringer settlement effectively bars it from being able to make a petition for contribution again SPX.  This argument proceeds in several steps.  First, it asserts that an employee’s PPD constitutes a “disablement” as discussed in Minn. Stat. § 176.135, subd. 5.  Second, it asserts that a disablement would provide it a right of reimbursement from SPX under the same statute for medical payments it was ordered to make.  Third, it asserts that the compensation judge therefore erred in failing to determine PPD, thereby precluding it from being able to assert there is a disablement which would allow it to seek reimbursement from SPX.  Fourth, it argues that even if there is a disablement, it is still wrongfully precluded from seeking reimbursement from SPX due to the Pierringer settlement, to which it was not a party, thereby making it such that the employee and SPX effectively conspired to limit the Metropolitan Council’s right to reimbursement. The WCCA disagreed with these arguments and noted the judge could not award PPD because the employee had settled with SPX (the last significant exposure) so it was a moot point.

The WCCA found that the Metropolitan Council’s arguments related more to a future claim for reimbursement against SPX on a petition for contribution and that the issues surrounding PPD and disablement were still preserved for future litigation as the compensation judge did not find that there was no PPD rating, just that she didn’t need to address it given the other findings. The WCCA also found the issues surrounding the Pierringer settlement and its impact on the responsibilities of SPX and the employee were also reserved.

The WCCA affirmed the compensation judge’s decision. This decision is on appeal to the Supreme Court.

On appeal before the Supreme Court, it was affirmed that the Employee sustained the occupational disease of hearing loss. With respect to the analysis of § 176.135, subd. 5, the Supreme Court found that the Compensation Judge’s award of medical benefits under this section was not inappropriate. They determined that the statute provides for an award of benefits “in spite of” the occupational disease statute, and states that “shall” means mandatory that the last exposure pay, without any requirement that it be significant. They did clarify in footnote 11, however, that exposure to an occupational disease hazard is not enough, and there still must be a finding of an occupational disease in general under § 176.011, subd. 15(a) as a prerequisite for application of the medical benefits statute.

Lastly the court reversed and remanded on the issue of Pierringer. As a threshold matter they indicated they were not asked to determine whether Pierringer applies in a workers’ compensation setting and since the parties proceeded with the Pierringer settlement as if it did, they would not be addressing that issue at this time. They determined that the Compensation Judge’s finding that all issues other than the award of medical benefits was moot was in error. The court highlighted that the proper analysis following a Pierringer settlement is that although the settling defendant should be dismissed, their negligence should nevertheless be submitted to the jury. In other words in this case they determined the Judge should have applied all liability as if SPX and Atek were still parties and then carved out the portion of the actual award which could not be awarded as against them due to the Pierringer. Second, they highlighted the fact that the Judge should have resolved whether Metropolitan Council had a right to be reimbursed by SPX who had been judicially determined to represent the last significant exposure. They rejected the employee’s argument that a claim for reimbursement must be pled, however the Court found that such a requirement in this context would run counter to the principles of Pierringer. They went on to state that as a practical matter courts do not require nonsettling defendants to pay the plaintiff the judgment, and then bring an action for contribution against the settling defendant, who is in turn indemnified by the plaintiff, since the plaintiff is ultimately responsible for the settling defendant’s share of liability.

The Court remanded the matter back to the Compensation Judge to determine whether the employee suffered “disablement” and whether Metropolitan Council is entitled to reimbursement and if so, how that reimbursement is to be made consistent with Pierringer principles.