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State Fund Mutual Insurance Co. v. Mead2/1/2005
and costs is whether the district court abused its discretion. Minn. Council of Dog Clubs v. City of Minneapolis, 540 N.W.2d 903, 904 (Minn. App. 1995), review denied (Minn. Jan. 25, 1996).
The Doubravas submitted their motion for attorney fees and sanctions under Minn. R. Civ. P. 11 and Minn. Stat. § 549.211 (2004). The motion was based on State Fund's attempts to depose the Doubravas' attorney and conduct other allegedly improper discovery, prior to having been granted intervention status in the underlying liability action. The district court summarily denied the request without discussion in its opinion.
Minn. Stat. § 549.211, subd. 2, provides that an attorney who presents any document to the court must certify four things:
(1) it is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation;
(2) the claims, defenses, and other legal contentions are warranted by existing law or by a non-frivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;
(3) the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and
(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief.
Id. The dispute here seems to center around State Fund's initial failure to give notice to the Doubravas' counsel of its motion to intervene in the case. See n.3 (above). When State Fund gave notice of intervention to the Doubravas--but not their counsel--it proceeded with discovery on the "reasonable cost of collection" issue under Minn. Stat. § 176.061, subd. 6(a) ("After deducting the reasonable cost of collection, including but not limited to attorneys fees . . ."). This was presumably done in an effort to challenge the Doubravas' projected attorney fees under the proposed settlement as "unreasonable." See City of Minnetonka v. Carlson, 298 N.W.2d 763, 766-67 (Minn. 1980) (articulating factors to be considered in determining the reasonableness of attorney fees). But under these facts, and given the potential misunderstanding, we determine that the district court did not abuse its broad discretion by denying the Doubravas' request for attorney fees.
III.
In a motion filed with this court just before oral argument, State Fund seeks to dismiss issues that it alleges the Doubravas raised for the first time on appeal in their brief. State Fund claims that the Doubravas did not argue to the district court (1) that Minn. Stat. § 176.061 refers only to "employer" and not to "insurer," thereby precluding statutory rights to a workers' compensation insurer, and (2) that State Fund's intervention was untimely. But given our decision to permit State Fund's intervention on the merits, we deny State Fund's motion as moot.
DECISION
Because the district court erred by denying State Fund's motion to intervene, we reverse and remand with instructions for the district court to permit the intervention, as required by Minn. Stat. § 176.061, subd. 8a (2004). In addition, we affirm the district court's denial of attorney fees and deny State Fund's motion to dismiss issues allegedly raised on appeal for the first time.
Affirmed in part, reversed in part, and remanded; motion denied.
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