Rodriguez v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 02 July 2018
• Docket Number: A17-1800
• Parties: Jennifer RODRIGUEZ, claimant, Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., Respondent.
• Court: Minnesota Court of Appeals

916 N.W.2d 870

Jennifer RODRIGUEZ, claimant, Appellant,

v.STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., Respondent.

A17-1800

Court of Appeals of Minnesota.

Filed July 2, 2018

Matthew J. Barber, James S. Ballentine, Cole J. Dixon, Schwebel, Goetz & Seiben, P.A., Minneapolis, Minnesota (for appellant)

Chris Angell, David M. Werwie & Associates, St. Paul, Minnesota (for respondent)

Isaac I. Tyroler, TSR Injury Law, Bloomington, Minnesota (for amicus curiae Minnesota Association for Justice)

Considered and decided by Peterson, Presiding Judge; Halbrooks, Judge; and Kirk, Judge.

PETERSON, Judge

In this appeal from an order granting respondent automobile insurer’s motion to vacate an arbitration award, the parties dispute whether appellant insured, who was injured in a motor-vehicle accident in the course of her employment, is entitled to basic economic loss benefits for chiropractic treatment that she received for the injury after her employer’s workers’ compensation insurer determined that additional chiropractic treatment was excessive. We reverse.

FACTS

While driving a school bus for her employer, appellant Jennifer Rodriguez was injured when a stolen vehicle crashed into the bus. Old Republic Insurance Company, her employer’s workers’ compensation insurer, paid for 12 weeks of chiropractic treatment that Rodriguez received at ChiroFirst, P.A. Old Republic then notified ChiroFirst that, because additional chiropractic treatment was not indicated under the treatment parameters set forth in Minn. R. 5221.6200, subp. 3(A) (2017), it would not pay for additional treatment, except as permitted under Minn. R. 5221.6200, subp. 3(B) (2017). In response, ChiroFirst refused to provide additional treatment.

Rodriguez then began receiving chiropractic treatment from Core Health Chiropractic and provided notice of an uninsured-motorist claim to her personal automobile insurer, respondent State Farm Mutual Automobile Insurance Co. Because it appeared to State Farm that Rodriguez was in the course and scope of her employment when she was injured, State Farm sought information about Rodriguez’s injuries and treatment and about what benefits she was requesting under her automobile policy. Rodriguez responded that she was claiming no-fault benefits for her chiropractic treatment, and she requested an application for benefits.

After State Farm failed to pay Rodriguez’s bills for chiropractic treatment, Rodriguez filed a petition for no-fault arbitration. During arbitration, State Farm did not dispute the reasonableness or the necessity of the chiropractic treatment that Rodriguez received, but argued that, under the circumstances of this case, the workers’ compensation system is the exclusive source for any health care benefits sought in connection with the accident. The arbitrator ruled for Rodriguez and awarded her the full amount claimed, plus costs and interest.

State Farm brought a motion in the district court to vacate the arbitrator’s award on the ground that the arbitrator exceeded her authority. The district court concluded that the plain language of Minn. Stat. § 176.83, subd. 5(c) (2016), precluded no-fault benefits. Based on this conclusion, the district court granted State Farm’s motion to vacate. This appeal followed.¹

ISSUE

Does Minn. Stat. § 176.83, subd. 5(c), relieve an insurer of its obligation to pay no-fault benefits to an insured who was injured in the course and scope of her employment when there has been no determination by the commissioner of labor and industry or a compensation judge whether the insured is entitled to receive workers’ compensation benefits for treatment of the injury?

ANALYSIS

An arbitrator’s findings of fact are final. Johnson v. American Family Mut. Ins. Co. , 426 N.W.2d 419, 421 (Minn. 1988). But, "[t]o achieve the consistency desired in interpreting the no-fault act, [appellate] court[s] and the district court review de novo the arbitrator’s legal determinations necessary to granting relief."

Weaver v. State Farm Ins. Cos. , 609 N.W.2d 878, 882 (Minn. 2000).

The Minnesota Workers’ Compensation Act states:

[T]he commissioner [of labor and industry] shall adopt rules establishing standards and procedures for health care provider treatment. ... The rules shall be used to determine whether a provider of health care services and rehabilitation services, including a provider of medical, chiropractic, podiatric, surgical, hospital, or other services, is performing procedures or providing services at a level or with a frequency that is excessive, unnecessary, or inappropriate under section 176.135, subdivision 1, based upon accepted medical standards for quality health care and accepted rehabilitation standards.

Minn. Stat. § 176.83, subd. 5(a) (2016).

In accordance with this statutory directive, the commissioner adopted rules that set forth treatment parameters for various health care services, including treatment of low-back pain. Minn. R. 5221.6200, subp. 3 (2017). Under these rules, chiropractic treatment is generally limited to 12 weeks of treatment. Minn. R. 5221.6200, subp. 3(A). But additional treatment beyond 12 weeks may be provided if certain conditions are met. Minn. R. 5221.6200, subp. 3(B). There has been no determination whether the conditions for additional treatment of Rodriguez’s injury beyond 12 weeks have been met, and Old Republic cited this 12-week limit as the reason why it would not pay for additional chiropractic treatment, except as permitted under Minn. R. 5221.6200, subp. 3(B).

The workers’ compensation act also provides:

If it is determined by the payer that the level, frequency, or cost of a procedure or service of a provider is excessive, unnecessary, or inappropriate according to the standards established by the rules, the provider shall not be paid for the procedure, service, or cost by an insurer, self-insurer, or group self-insurer, and the provider shall not be reimbursed or attempt to collect reimbursement for the procedure, service, or cost from any other source, including the employee, another insurer , the special compensation fund, or any government program unless the commissioner or compensation judge determines at a hearing or administrative conference that the level, frequency, or cost was not excessive under the rules in which case the insurer, self-insurer, or group self-insurer shall make the payment deemed reasonable .

Minn. Stat. § 176.83, subd. 5(c) (emphasis added).

Old Republic determined that additional chiropractic treatment was excessive because, according to the standards established by Minn. R. 5521.6200, subp. 3(A), treatment beyond 12 weeks was not indicated. Thus, because there has been no hearing or administrative conference at which the commissioner of labor and industry or a compensation judge determined that chiropractic treatment beyond 12 weeks was not excessive under the rules, section 176.83, subdivision 5(c), provides that Core Health Chiropractic shall not be paid by Old Republic for chiropractic treatment.

But Rodriguez did not seek payment from Old Republic, her employer’s workers’ compensation insurer; she sought payment from State Farm, her personal automobile insurer. The district court, however, concluded that State Farm is "another insurer," and, therefore, under the plain language of section 176.83, subdivision 5(c), State Farm, like Old Republic, "cannot be required to pay for chiropractic treatment Old Republic determined to be excessive except as provided within the Workers’ Compensation Act."

Although we agree that, when considered in isolation, the plain language of section 176.83, subdivision 5(c), provides that Core Health Chiropractic shall not be reimbursed by any insurer, this case involves the interplay between the workers’ compensation act and the Minnesota No-Fault Act, and the district court’s plain-language construction of section 176.83, subdivision 5(c), conflicts with provisions of the no-fault act. To resolve the parties’ dispute, we must address the conflict between the two acts.

Under the no-fault act, "[e]ach plan of reparation security shall provide for payment of economic loss benefits." Minn. Stat. § 65B.49, subd. 2 (2016). Basic economic loss benefits "provide reimbursement for all loss suffered through injury arising out of the maintenance or use of a motor vehicle." Minn. Stat. § 65B.44, subd. 1(a) (2016). A person entitled to basic economic loss benefits is entitled to medical expense benefits, which "shall reimburse all reasonable expenses for necessary ... chiropractic ... services." Minn. Stat. § 65B.44, subd. 2(a)(1) (2016). Thus, under the no-fault act, because, during arbitration, State Farm did not dispute that the chiropractic services that Rodriguez received were reasonable and necessary, Rodriguez is entitled to reimbursement for the expense of the services.

The no-fault act also provides:

Basic economic loss benefits shall be primary with respect to benefits, except for those paid or payable under a workers’ compensation law, which any person receives or is entitled to receive from any other source as a result of injury arising out of the maintenance or use of a motor vehicle.

Minn. Stat. § 65B.61, subd. 1 (2016). Under this provision, if Rodriguez is entitled to receive workers’ compensation benefits for the chiropractic treatment that she received beyond the 12-week limit, those benefits, rather than her basic economic loss benefits, are the primary source of payment for the treatment. But, at this point, Rodriquez is not entitled to receive additional workers’ compensation benefits for chiropractic treatment because there has been no determination by the commissioner of labor and industry or a compensation judge that the treatment she received was not excessive under the workers’ compensation rules.

Another provision of the no-fault act specifically addresses this...