Comp court can't apply out-of-state laws to determine validity of contract

In Minnesota, the Workers' Compensation Court of Appeals has jurisdiction to determine whether an insurance contract provides Minnesota workers' compensation coverage under Minnesota law.

Case name: Martin v. Morrison Trucking, Inc., No. A10-0446 (Minn. 08/03/11).

Ruling: The Minnesota Supreme Court held that the Workers' Compensation Court of Appeals did not have the authority to declare an insurance contract invalid and unenforceable based on its view of Wisconsin laws.

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What it means: In Minnesota, the Workers' Compensation Court of Appeals has jurisdiction to determine whether an insurance contract provides Minnesota workers' compensation coverage under Minnesota law.

Summary: A truck driver, who lived in Minnesota, worked for a company based on Wisconsin. He sustained an injury to his ankle while working in Minnesota. He sought workers' compensation in both Wisconsin and Minnesota. The company's insurer covered the driver's Wisconsin benefits but denied the claim for Minnesota benefits, based on an exclusion of Minnesota coverage in the company's workers' compensation insurance policy.

The special compensation fund settled the driver's Minnesota claim and sought reimbursement from the company. The company claimed the insurer was obligated to cover liability because the exclusion of Minnesota coverage was invalid and ineffective. The Minnesota Supreme Court held that the Workers' Compensation Court of Appeals did not have the authority to declare the insurance contract invalid and unenforceable because of its view of Wisconsin law.

The court explained that the Workers' Compensation Court of Appeals is not authorized to consider questions of law arising under the laws of other states. Here, the compensation judge found the company was not insured in Minnesota for the driver's injury and that the insurance policy unambiguously excluded coverage of accidents in Minnesota. The court said these findings were appropriate.

The court said the Workers' Compensation Court of Appeals then "reached across the border" to determine whether the company should have been insured for the Minnesota liability, under Wisconsin law, and declared the policy invalid. The court said this was beyond the authority of the Workers' Compensation Court of Appeals. The company did not have to reimburse and pay a penalty to the special compensation fund.

A concurring justice expressed concern about the validity of the policy under Wisconsin law.

Read more at the WorkersComp Forum homepage.

September 12, 2011

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