892 N.W.2d 848
Minn. Ct. App.2017Background
- First Class Valet hired Raleigh Gleason as a parking valet in January 2015; Gleason negligently damaged two cars within days, causing First Class to reimburse the owners (≈ $4,820 and $7,931).
- First Class sued Gleason for negligence to recover the amounts it paid to indemnify the car owners.
- Gleason moved to dismiss under Minn. R. Civ. P. 12.02(e), arguing Minn. Stat. § 181.970 requires employers to defend and indemnify employees and thus bars First Class’s claim.
- The district court granted dismissal, concluding § 181.970 precludes First Class’s suit; First Class appealed.
- The parties agree § 181.970 required First Class to indemnify Gleason for the owners’ claims and that First Class in fact paid those claims.
- First Class relied on common-law employer subrogation/indemnity rights that existed pre-1993; the court examined whether § 181.970 abrogates that common-law right.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Minn. Stat. § 181.970 bars an employer’s negligence claim to recover amounts paid to indemnify an employee | First Class: the statute does not abrogate common-law employer right to recover from employee after indemnifying third-party claims | Gleason: § 181.970 requires employer to defend and indemnify employee and thus precludes employer from recouping those payments from the employee | Court: § 181.970, by its plain language and use of “indemnify,” abrogates the common-law right and bars First Class’s claim |
Key Cases Cited
- Baker v. Best Buy Stores, LP, 812 N.W.2d 177 (Minn. App. 2012) (standard of review for Rule 12.02(e) dismissal)
- Am. Tower, L.P. v. City of Grant, 636 N.W.2d 309 (Minn. 2001) (statutory ambiguity and plain-meaning rules)
- State v. Cannady, 727 N.W.2d 403 (Minn. 2007) (use of term of art carries accepted legal meaning)
- Schneider v. Buckman, 433 N.W.2d 98 (Minn. 1988) (recognition of common-law employer right to recover from negligent employee prior to statutory change)
- Brekke v. THM Biomedical, Inc., 683 N.W.2d 771 (Minn. 2004) (statutory abrogation of common law requires express wording or necessary implication)
- Hanson v. Bailey, 83 N.W.2d 252 (Minn. 1957) (indemnity shifts entire loss to another who should bear it)
- Kronzer v. First Nat’l Bank of Minneapolis, 235 N.W.2d 187 (Minn. 1975) (dismissal where indemnity arrangements would render suit fruitless)