Wojciak v. Northern Package Corp., 81-181.
| Decision Date | 09 October 1981 |
| Docket Number | No. 81-181.,81-181. |
| Citation | 310 NW 2d 675 |
| Parties | Michael E. WOJCIAK, Respondent, v. NORTHERN PACKAGE CORPORATION, Defendant and third party Plaintiff, Respondent, and National Surety Corporation, et al., third party Defendants, Appellants. |
| Court | Minnesota Supreme Court |
Cragg & Bailly and Gary J. Gordon, Minneapolis, for National Surety Corp. et al.
John T. Anderson, Minneapolis, for Wojciak.
Phillips, Gross & Aaron, Minneapolis, for Northern Package Corp.
Considered and decided by the court en banc without oral argument.
Michael Wojciak brought an action in Hennepin County District Court against Northern Package Corporation seeking damages for wrongful discharge, alleged to have been a retaliation for his making a claim for workers' compensation. Northern tendered defense of the action to National Surety Corporation, which had furnished it a standard workers' compensation and employers' liability policy, and to American Insurance Company, which had furnished it a general liability policy. Upon the insurers' refusal to defend, Northern served an answer denying the alleged retaliatory discharge and then commenced a third-party action against the insurers seeking a declaratory judgment that they are required to defend Northern in the Wojciak action and to pay any judgment attained by Wojciak. The insurers interposed answers denying coverage and alleging that the intent of Minn.Stat. § 176.82 (1980), upon which Wojciak based his action, was to deter employers from retaliatory dismissals of employees seeking compensation and that public policy therefore precludes indemnification of such employers by insurance.
Upon cross-motions for summary judgment, the trial court granted Northern's motion, holding that each insurer's policy furnished coverage of Wojciak's claim and required defense of the action by the insurer, that Northern was entitled to be reimbursed for reasonable attorney fees expended in defense of the action, and that Northern was entitled to attorney fees of $4,000 in the third-party action. Both insurers have appealed. We affirm the judgment against National, the workers' compensation insurer, and reverse it against American, having concluded that National's policy required it to defend the Wojciak action and to pay any recovery made by him, that American's policy did not so require, and that the coverage afforded by National is not violative of public policy because of the unique character of the statute authorizing the employee's action and because of the relationship existing between a workers' compensation insurer and its insured.
As stated, the Wojciak action was premised upon Minn.Stat. § 176.82 (1980), which provides:
Any person discharging or threatening to discharge an employee for seeking workers\' compensation benefits or in any manner intentionally obstructing an employee seeking workers\' compensation benefits is liable in a civil action for damages incurred by the employee including any diminution in workers\' compensation benefits caused by a violation of this section including costs and reasonable attorney fees, and for punitive damages not to exceed three times the amount of any compensation benefit to which the employee is entitled. Damages awarded under this section shall not be offset by any workers\' compensation benefits to which the employee is entitled. (Emphasis added).
National's denial that its policy extended coverage for any recovery Wojciak might make against Northern requires review of its policy. The pertinent provisions of the policy include the following:
Northern's position is that the policy affords coverage of the Wojciak claim and required National to provide a defense in that action because the damages the employee might recover therein are "other benefits required of the insured by the workmen's compensation law" within the meaning of Coverage A and because National agreed to provide defense for such an action in Paragraph II(a), quoted above. National argues that the compensatory and punitive damages sought by Wojciak are not "compensation and other benefits required of the insured by the workmen's compensation law." It relies in part on the definition of compensation in Minn.Stat. § 176.011, subd. 8 (1980):
"Compensation" includes all benefits provided by this chapter on account of injury or death. (emphasis added).
National insists that "other benefits" is exactly the same as "compensation" in its policy definition. It relies on St. Martin v. KLA Enterprises, Inc., 269 N.W.2d 59 (Minn.1978), in which this court stated that compensation and benefits are terms used synonymously in the Workers' Compensation Act. In that case we held that the Special Compensation Fund was required to pay an additional award pursuant to Minn. Stat. § 176.225 (1980) for the employer's refusal to pay compensation and rejected the special fund's argument that the additional compensation was not a "benefit" within the meaning of Minn.Stat. § 176.183, subd. 1 (1980), for which the special fund was liable. We said:
In reliance on this decision, National claims that "other benefits" in its policy means in effect "compensation"; it then argues that any recovery the employee obtains from an action brought under Minn. Stat. § 176.82 (1980) cannot be "compensation and other benefits" within the meaning of the policy because that statute provides for recovery of "damages" and "punitive damages" and further provides that they shall not be offset by any "workers' compensation benefits to which the employee is entitled." There is a certain logic in the argument since section 176.82 could have provided that damages "awarded under this section shall not be offset by any other workers' compensation benefits" if such damages were included in the definition of compensation in Minn.Stat. § 176.011, subd. 8 (1980).
We have concluded, however, that "compensation" and "benefits," although used as synonyms in the Workers' Compensation Act, were not so used in the policy. Had they been, there would have been no need for the reference in Coverage A to "other benefits." And, if "compensation" and "benefits" meant exactly the same thing, the word "other" would have no function. Instead, assuming that compensation and benefits are synonymous when they relate to wage loss, medical treatment, vocational rehabilitation, and awards under Minn.Stat. § 176.225 (1980), and resolving reasonable doubt as to the meaning of the policy language in favor of the insured, we construe the policy to encompass such benefits in the word "compensation" and to describe other rights granted an employee by the Workers' Compensation...
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