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Zurich American Insurance Co. v. Bjelland12/28/2004
itate appellate review of the issue. The stipulated conclusion was erroneous, as demonstrated by the amendments to Minn. Stat. § 176.06, subds. 3, 5, 7, 10, and the judgment entered on that conclusion must be reversed.
Subrogation
Bjelland based his argument, now conceded by Zurich, on the premise that Zurich's rights are co-extensive with Bodeker's survivors' rights and thus are subject to the Wrongful Death Act because Zurich obtains its rights only through subrogation.
Under common-law subrogation, the subrogee stands in the shoes of the subrogor and obtains no greater right than the subrogor had. Share Health Plan, Inc. v. Marcotte, 495 N.W.2d 1, 3 (Minn. App. 1993), review denied (Minn. Mar. 30, 1993). The logical extension of the subrogation principle is that Zurich would be limited to Wrongful Death Act damages just as Bodeker's survivors would be limited in a wrongful-death action against Bjelland. Kaiser v. Northern States Power Co., 353 N.W.2d 899, 903 (Minn. 1984).
But just as the workers' compensation laws are entirely statutory, the employer derives its right to recover any amount from a third-party tortfeasor only and solely through the workers' compensation statutes. Even though the employer's right is referred to as that of "subrogation," it is a right created by statute. That right now includes an unlimited recovery of provable damages.
Furthermore, the employer's right is not limited even to subrogation but rather is also referred to as "a right of indemnity." Minn. Stat. § 176.061, subds. 3, 10. As an indemnitee, the employer is entitled to be made whole. Lunderberg v. Bierman, 241 Minn. 349, 354, 63 N.W.2d 355, 359 (1954). Thus, either through the principle of statutory subrogation as defined by the workers' compensation amendments or the principle of indemnity, Zurich is entitled to recover, without limit, such damages as it may prove it is entitled to. Here, it appears that the parties have bound themselves to stipulated liability and damages, and the matter needs to be remanded to the district court to effectuate the stipulation.
DECISION
Because the 2000 amendments to Minn. Stat. § 176.061 (2000), the subrogation provisions of the Workers' Compensation Act, have effectively redefined the measure of recovery in workers' compensation subrogation actions as the full amount of benefits paid and payable to the employee, appellant is entitled to the $104,319 paid to employee Eugene Bodeker's surviving spouse.
Reversed and remanded.
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