Gruman v. Hendrickson
| Decision Date | 15 December 1987 |
| Docket Number | No. C6-87-1452,C6-87-1452 |
| Citation | 416 N.W.2d 497 |
| Parties | Thelma GRUMAN, Respondent, v. Ralph HENDRICKSON, Burlington Northern Railroad, Respondents, and Western Fire Insurance Company, Intervenor, Appellant. |
| Court | Minnesota Court of Appeals |
Syllabus by the Court
1. The trial court did not commit reversible error in denying appellant no-fault carrier's motion to intervene as of right when appellant's subrogation right did not mature.
2. The trial court did not err in refusing to vacate the arbitration award given the deference afforded arbitrators.
Joel A. Fisher, Murrin Metropolitan Legal Center, Minneapolis, for Thelma Gruman.
Marlene R. Tschida, Gislason, Martin & Varpness, Edina, for Ralph Hendrickson.
Susan D. Thurmer, Burlington Northern Railroad, St. Paul, for Burlington Northern Railroad.
Daniel J. Roth, Austin & Roth, Minneapolis, for Western Fire Ins. Co., intervenor.
Heard, considered and decided by HUSPENI, P.J., and SEDGWICK and LOMMEN, * JJ.
Respondent Gruman's personal injury claim against Hendrickson and Burlington Northern was submitted to arbitration. Appellant no-fault carrier moved to intervene, but that motion was denied. Following the arbitration award, appellant again attempted to intervene and vacate the arbitration award. Appellant further requested, upon judgment entered in favor of Gruman, it receive the amount of no-fault benefits paid to Gruman. The trial court denied appellant's motion and this appeal followed.
Appellant argues the trial court erred because (1) appellant has met the four-part test for intervention as a matter of right, (2) the arbitration award does not reflect appellant's statutorily protected subrogation claim, and (3) the arbitrator erred by deducting the value of no-fault benefits paid to plaintiff from the award. We affirm.
Respondent Thelma Gruman (Gruman) initiated a lawsuit against defendants Ralph Hendrickson (Hendrickson) and Burlington Northern Railroad (Burlington Northern). Gruman alleged to have sustained personal injuries while a passenger in a motor vehicle owned and operated by Hendrickson. Hendrickson was operating his automobile over railroad tracks owned by Burlington Northern. Gruman's injuries occurred when Hendrickson's vehicle struck allegedly defective tracks of Burlington Northern.
On the date of the accident, Gruman was insured by appellant, Western Fire Insurance Company. Appellant paid Gruman medical expense benefits totaling $2,951.41 and wage loss replacement service benefits of $6,052.33, for a total no-fault benefit payment of $9,003.74.
In order to protect its subrogation claim, appellant made a motion to intervene. On January 31, 1986, the trial court issued an order denying appellant's request for intervention on the basis the motion was premature and that appellant had no subrogation claim for basic economic loss benefits.
On March 27, 1987, the case proceeded to arbitration pursuant to rule 5 of the Special Rules of Practice for the Fourth Judicial District. An award filed April 7, 1987 gave judgment for Gruman against Hendrickson and Burlington Northern for $12,000 jointly and severally. Hendrickson was assessed 15% at fault and Burlington Northern 85%. The award expressly provided that while all parties stipulated to amounts paid, Hendrickson and Burlington Northern contested the propriety or reasonableness of the payments. The award also specifically provided it was a net award and did not include basic economic loss benefits paid to date. No request for a trial de novo was made on behalf of any party and judgment was entered May 8, 1987.
By motion and amended motion dated May 1, 1987 and June 5, 1987, appellant renewed its motion to intervene and requested the arbitration award and judgment be vacated or amended to reflect appellant's subrogation claim.
By order filed June 25, 1987, the trial court denied appellant's motion and amended motion. The trial court found appellant's cause of action, if any, was against Gruman and that appellant's claim for subrogation had not arisen because there had been no double recovery by Gruman.
This appeal followed.
1. Did the trial court err in refusing to allow appellant to intervene in this suit as a matter of right?
2. Did the trial court err in refusing to vacate the arbitration award?
1. Appellant argues the trial court erred in denying appellant's motion to intervene. Appellant's intervention was sought pursuant to Rule 24.01, which provides:
Upon timely application anyone shall be permitted to intervene in an action when the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.
Minn.R.Civ.P. 24.01. In reviewing orders concerning intervention as of right, this court will independently assess the appropriateness of the order. Norman v. Refsland, 383 N.W.2d 673, 676 (Minn.1986). We are not held to a standard of review requiring a clear abuse of discretion before we may reverse a trial court's denial of a motion to intervene as a matter of right. Id.
Rule 24.01 establishes a four-part test a nonparty must meet before being allowed to intervene as a matter of right: (1) a timely application for intervention; (2) an interest relating to the property or transaction which is the subject of the action; (3) circumstances demonstrating the disposition of the action may as a practical matter impair or impede the party's ability to protect that interest; and (4) a showing the party is not adequately represented by the existing parties. Minneapolis Star & Tribune v. Schumacher, 392 N.W.2d 197, 207 (Minn.1986).
The spirit behind Rule 24 is to encourage all legitimate interventions, and the rule is to be liberally applied. Engelrup v. Potter, 302 Minn. 157, 166, 224 N.W.2d 484, 489 (1974). Rule 24 is designed to protect nonparties from having their interests adversely affected by litigation conducted without their participation. Erickson v. Bennett, 409 N.W.2d 884, 887 (Minn.Ct.App.1987).
Appellant argues it has met all four tests of Rule 24.01 and therefore should have been allowed to intervene. We agree. The Minnesota Supreme Court has held a subrogation claim is sufficient to support intervention. Miller v. Astleford Equipment Co., Inc., 332 N.W.2d 653, 654 (Minn.1983). Miller involved a fact situation very similar to this case in which the supreme court concluded the deduction of the value of basic economic loss benefits from any recovery could destroy the asserted subrogation right. Id. at 655. The supreme court recognized the insurer's interest would only be adequately protected by intervention. Id. Again in Milbrandt v. American Legion Post of Mora, 372 N.W.2d 702 (Minn.1985), the supreme court stated the appellant insurance company should have been allowed to intervene when it claimed a subrogation interest in the suit. Id. at 704 n. 1.
We conclude appellant should have been allowed to intervene in this suit. However, that right of intervention is only for the purposes of protecting appellant's statutory right of subrogation, if and when it arises.
Respondent argues an insurer paying basic economic loss benefits to its insured under the No-Fault Automobile Insurance Act has a subrogation right only against its insured and only when the recovery represents in some measure a duplication of those benefits.
According to the No-Fault Automobile Insurance Act:
A reparation obligor paying or obligated to pay basic economic loss benefits is subrogated to a claim based on an intentional tort, strict or statutory liability, or negligence other than negligence in the maintenance, use, or operation of a motor vehicle. This right of subrogation exists only to the extent that basic economic loss benefits are paid or payable and only to the extent that recovery on the claim absent subrogation would produce a duplication of benefits or reimbursement of the same loss.
Minn.Stat. Sec. 65B.53, subd. 3 (1986). In Milbrandt, the supreme court affirmed a summary judgment against an insurer who brought a subrogation claim to recover basic economic loss benefits. The court stated Although subdivision 3 indicates that the legislature intended reparation obligors to recover from tortfeasors basic economic loss benefits paid to insureds, the legislature clearly limited this right to cases where insureds recover duplicate benefits from tortfeasors.
The court went on to state in strong language:
The statute * * * means exactly what it says: a reparation obligor may assert a subrogation claim to recover basic economic loss benefits paid only when the insured has received a double recovery. Because the insurer's right to recover benefits paid its insured exists only when the insured obtains double recovery, the right of recovery recognized in subdivision 3 may be asserted only against the insured. When seeking to recover under subdivision 3, the burden is on the insurer to show that the insured has been overcompensated.
Id. (footnote omitted). The court noted the right of the insurer against the insured arises only in the event of a double recovery by the insured, not by reason of tort. Id. n. 2. The reference to the right of recovery as a subrogation right is a statutorily created right and is not true subrogation. Id.; see Miller v. Astleford Equipment Co., Inc., 378 N.W.2d 820, 822 (Minn.Ct.App.1985), pet. for rev. denied (Minn. Feb. 14, 1986).
Respondent argues appellant's statutory right of subrogation is not against Burlington Northern and Hendrickson because subrogation in terms of a claim against the tortfeasor does not exist in Minnesota. Therefore, an insurance company can only recover benefits paid when the insured obtains...
To continue reading
Request your trial
-
Principal Financial Group v. Allstate Ins. Co.
...Ins. Co. v. Vanman, 453 N.W.2d 48, 49-50 (Minn.1990); Mohs v. Parrish's Bar, 418 N.W.2d 494, 496-97 (Minn.1988); Gruman v. Hendrickson, 416 N.W.2d 497, 500-01 (Minn.App.1987); Peters v. B.P. & E., Inc., 397 N.W.2d 449, 451 (Minn.App.1986); Miller v. Astleford Equip. Co., 378 N.W.2d 820, 821......
- Mohn v. Independent School Dist. No. 697, Eveleth
-
Seiberlich v. Burlington Northern R. Co., C2-89-478
...Minnesota Supreme Court. Seiberlich maintains that Pearce is inconsistent with two other decisions of this court, Gruman v. Hendrickson, 416 N.W.2d 497 (Minn.Ct.App.1987) and Great American Insurance Companies v. Lemieux, 439 N.W.2d 733 (Minn.Ct.App.1989), pet. for rev. denied (Minn. July 1......
-
Clark Fork Coalition v. Dep. of Envir. Qua.
...nonparties from having their interests adversely affected by litigation conducted without their participation." Gruman v. Hendrickson, 416 N.W.2d 497, 500 (Minn. App.1987). However, the language of the rule carefully distinguishes between an "applicant" or "person desiring to intervene" and......