Bobby Lykins, by George Duranske, conservator, Respondent, vs. Anderson Contracting, Inc., and SFM Mutual Insurance Co., Relators (A24-0548). Bobby Lykins, by John Hoscheid, conservator, Relator, vs. Anderson Contracting, Inc., and SFM Mutual Insurance Co., Respondents (A24-0549).
A24-0548 A24-0549
STATE OF MINNESOTA IN SUPREME COURT
May 21, 2025
Procaccini,
Workers’ Compensation Court of Appeals
John P. Bailey, Bailey Law Offices, Ltd., Bemidji, Minnesota, for respondent Bobby Lykins, by George Duranske, conservator, and relator Bobby Lykins, by John Hoscheid, conservator.
Timothy P. Jung, Rebecca M. Scepaniak, Lind, Jensen, Sullivan & Peterson P.A., Minneapolis, Minnesota, for relators/respondents Anderson Contracting, Inc., and SFM Mutual Insurance Co.
David O. Nirenstein, Sydney J. Harris, Fitch Johnson Larson, P.A., Roseville,
SYLLABUS
- The Workers’ Compensation Court of Appeals has discretion under
Minnesota Statutes section 176.521, subdivision 3 (2024) , to set aside a workers’ compensation award made upon a settlement that is not valid undersection 176.521, subdivision 1(a) (2024) . - Substantial evidence in the employee‘s petition to set aside an award supported a prima facie showing that the employee was an incapacitated person when he signed agreements to settle his workers’ compensation claims.
Minnesota Statutes section 176.092, subdivision 3 (2024) , does not apply when the employee already has a conservator.- In a workers’ compensation proceeding involving allegations that an employee was an incapacitated person when they signed a workers’ compensation settlement, the workers’ compensation courts have subject-matter jurisdiction to determine whether the employee was incapacitated.
Affirmed in part; vacated in part.
OPINION
PROCACCINI, Justice.
The parties ask us to clarify how the Workers’ Compensation Court of Appeals (WCCA) should address an employee‘s claims that they were incapacitated and did not have the benefit of a conservator when they settled their workers’ compensation claims. In 2015, Bobby Lykins suffered life-changing physical and cognitive injuries due to an explosion at work. In 2017, Lykins, his employer, and his employer‘s insurer, agreed to a workers’ compensation-related settlement. Roughly a year later, the parties agreed to an addendum to supplement the original settlement. Each time, a compensation judge approved and issued an award based on the parties’ agreement. In 2022, the district court appointed a conservator for Lykins. The conservator petitioned the WCCA to set aside the settlements. The petition alleged that the settlements between the parties are invalid or should be set aside based on fraud because, when the parties signed the settlements and submitted them to the court, the attorneys failed to abide by certain statutory safeguards designed to protect the interests of incapacitated employees. See
After a hearing on the petition, the WCCA decided that further fact-finding by a compensation judge was necessary to address the issues presented. Specifically, the WCCA directed a compensation judge to determine whether Lykins appeared to be incapacitated at the time of the settlements and, if so, to refer the matter to district court for a determination of incapacity. Both parties have appealed and, for different reasons, dispute the WCCA‘s directions to the compensation judge. We take this opportunity to clarify the statutory requirements in a situation like this, affirming the WCCA‘s decision to refer the matter to a compensation judge for fact-finding but vacating the part of the WCCA‘s decision contemplating referral to district court.
FACTS
Bobby Lykins‘s life changed in September 2015, when he suffered a traumatic brain injury and other physical injuries from an explosion. His injuries required extensive medical care and supervision. Because the explosion happened while he was working, he was eligible for workers’ compensation benefits. See
Lykins‘s employer, Anderson Contracting, Inc., and its insurer, SFM Mutual Insurance Co., (collectively, Anderson) admitted liability for the injuries and paid temporary total disability benefits, medical expenses, and nursing services of $5,000 per month to Lykins‘s wife. Ultimately, the parties disagreed about the amount of home nursing care that Lykins needed. Anderson requested that Mitchell Disability Assessments conduct a home care evaluation and prepare a report. A September 2016 report from Mitchell Disability Assessments stated that Lykins did not need constant supervision at home but did need supervision and assistance for around 25 hours per week due to his cognitive deficits. The report also noted that Lykins‘s cognition had improved earlier in the year, while his physical abilities had declined.
Unable to agree on the necessary amount of home nursing care, the parties attended a mediation in April 2017. Summarizing the mediation results in an email, the mediator noted that the parties had reached a tentative settlement of $630,000 and that Anderson‘s attorney, Thomas Davern, would discuss the proposed terms with the insurer, SFM. The mediator also stated that the parties would stipulate to the reasonableness of attorney Ellig‘s excess fees given the complexity of the issues and Lykins‘s “intense need for guidance and support throughout this process.” Less than a month later, however, the parties agreed to settle the case for $438,000—a sum that was $192,000 less than the tentative amount set at the mediation.
The parties’ agreement included a full, final, and complete settlement of all past or future claims for: “temporary total disability, temporary partial disability, permanent impairment/permanent partial disability, permanent total disability . . . and nursing services by either a family member or custodial service.” The settlement also included a stipulation of $93,000 for Ellig‘s fees divided into three categories: $26,000 in contingency fees; $55,000 in excess fees; and $12,000 in non-contingent Roraff fees.2 The parties agreed that the contingency fees and the excess fees would be subtracted from the $438,000 payment to Lykins, but the Roraff fees would be paid by Anderson.
On May 18, 2017, Ellig sent Davern a letter requesting that, when filing the settlement with the compensation judge, Davern include “the Statement of Attorney Fees and Excess Fee Exhibit with several attachments” (the Statement and Exhibits)
The compensation judge approved the settlement and issued an award on May 22, 2017. That same day, Ellig filed a request for excess fees, including the Statement and Exhibits, with the Workers’ Compensation Division of the Department of Labor and Industry.
In 2018, the parties agreed to an addendum to the settlement. Anderson agreed “to purchase one pair of hearing aids for [Lykins]” and to pay an additional $1,000 in Roraff fees to Ellig.
In July 2022, attorney John Bailey petitioned for appointment of a conservator to represent Lykins in proceedings before the WCCA and the Office of Administrative Hearings. The district court approved the appointment of a conservator3 for those proceedings as well as “in any other litigation that may be undertaken on [Lykins‘s] behalf,” effective September 22, 2022.
On August 30, 2023, Conservator filed a petition asking the WCCA to set aside the 2017 settlement and the 2018 addendum (collectively, the Settlements).4 Conservator asserted two reasons for setting aside the Settlements. First, Conservator alleged that the Settlements are invalid because, when Lykins signed them, he was an incapacitated person and could not settle his claims without a conservator. See
Anderson responded, denying both claims. Anderson filed exhibits that it alleges show that Lykins was not incapacitated when he signed the Settlements.
After a hearing, the WCCA concluded that “[t]he evidence submitted with the petition . . . raises significant questions of fact regarding [Lykins‘s] capacity” when he signed the Settlements. Lykins v. Anderson Contracting, Inc., No. WC23-6532, 2024 WL 1183511, at *5 (Minn. WCCA Mar. 8, 2024). The WCCA recognized that “[u]nder Minnesota workers’ compensation law“—specifically
Both sides appealed the WCCA‘s order on different grounds, asking for clarity and challenging the authority of the WCCA to issue the order as drafted.
ANALYSIS
This case requires us to examine the interplay between several provisions of the Workers’ Compensation Act (the Act),
The parties challenge the WCCA‘s order on various bases. We start by addressing Anderson‘s contentions that the WCCA erred when it requested additional fact-finding because, as a matter of law, the petition and evidence fail to establish grounds for setting aside the Settlements. Because we conclude that the WCCA did not err when it requested fact-finding, we then address whether the WCCA erred when it ordered a referral to the district court to determine whether Lykins was incapacitated when he signed the Settlements.6 We further conclude that the evidence submitted to support the petition to
set aside the awards made a sufficient prima facie showing that Lykins was incapacitated when he signed the Settlements. The WCCA, however, incorrectly concluded that
I.
Conservator‘s petition presented the WCCA with two paths to set aside the award: The WCCA could conclude that the Settlements are invalid under
Anderson argues that the WCCA erred when it requested fact-finding because the petition and evidence submitted fail as a matter of law to establish that the Settlements are invalid under
To resolve this issue, we must interpret
To start,
And the scope of
If the Legislature intended to restrict the “pursuant to” language in
In a similar vein, interpreting
In recognition of the broad language of
II.
Because we conclude that
We begin by clarifying the applicable law.
“Where settlements must conform to the law at the time of settlement, the law at the time of settlement applies for purposes of reopening awards.” Monson v. White Bear Mitsubishi, 663 N.W.2d 534, 539 (Minn. 2003). Further, when an act incorporates a provision of another statute, the act includes the language of the incorporated statute as if it had been written into the act itself. See, e.g., State v. Robinson, 921 N.W.2d 755, 759 (Minn. 2019).
Although the WCCA applied the wrong version of the statute, we decline
We next consider Anderson‘s argument that the WCCA erred when it concluded that Conservator made a prima facie showing that Lykins was an incapacitated person when he signed the Settlements. See
Here, when the WCCA referred the question of whether Lykins was an incapacitated person when he signed the Settlements, it implicitly found that the evidence submitted made a prima facie showing. And the WCCA expressly found that there was no dispute that the evidence demonstrated that Lykins could not meet his personal needs when the Settlements were signed and that there was “compelling evidence in the record to put into9 question whether [Lykins] lacked the understanding or capacity to make personal decisions at the time of the [Settlements].” Lykins, 2024 WL 1183511, at *5.
We review a WCCA order to determine whether its factual findings “were unsupported by substantial evidence in view of the entire record as submitted.”
Anderson‘s contention that Lykins does not meet the definition of an incapacitated
For these reasons, we cannot conclude that the WCCA‘s findings—that there is no dispute that Lykins could not meet his personal needs and there was sufficient evidence in the record to create a dispute of fact as to Lykins‘s capacity to make personal decisions when he signed the Settlements—are “manifestly contrary to the evidence.” Sershen, 974 N.W.2d at 7 (citation omitted) (internal quotation marks omitted).
III.
Having determined that the claims alleged in Conservator‘s petition to set aside the award—and the evidence submitted to support those claims—made a prima facie showing that Lykins was an incapacitated person when he signed the Settlements, we next address whether the WCCA nonetheless erred in its instructions to the compensation judge. The WCCA directed that, if the compensation judge makes a preliminary finding that Lykins appeared to be incapacitated when he signed the Settlements, the compensation judge must refer the matter to the district court to determine whether Lykins was in fact incapacitated. The WCCA relied on
To resolve this issue, we interpret
The plain language of
IV.
A final question remains: If the referral language in
As a threshold matter, the WCCA has clear authority to refer questions of fact to a compensation judge.
To answer the specific question of whether the workers’ compensation courts may determine whether Lykins was incapacitated when he signed the Settlements, we must examine the subject matter jurisdiction of the workers’ compensation courts. This is a question of law that we review de novo. Giersdorf v. A & M Constr., Inc., 820 N.W.2d 16, 20 (Minn. 2012).
“Subject matter jurisdiction is the court‘s authority to hear the type of dispute at issue and to grant the type of relief sought.” Musta v. Mendota Heights Dental Ctr., 965 N.W.2d 312, 317 (Minn. 2021) (citation omitted) (internal quotation marks omitted). The subject matter jurisdiction of the workers’ compensation courts is limited by statute and “does not extend to interpretation of laws outside of legal questions and facts arising under the workers’ compensation law.” Id. at 320. The workers’ compensation courts’ “powers are plenary” in cases arising under the Workers’ Compensation Act, allowing those courts to hear and determine the legal and factual questions presented by a case. Hagen v. Venem, 366 N.W.2d 280, 283 (Minn. 1985). The workers’ compensation courts lack authority, however, to construe Minnesota statutes other than the Workers’ Compensation Act. Martin v. Morrison Trucking, Inc., 803 N.W.2d 365, 369 (Minn. 2011); see also
Here, resolution of the issues presented in Conservator‘s petition to set aside the award requires only interpretation and application of the Workers’ Compensation Act. As discussed above, an agreement to settle workers’ compensation claims is invalid “if a guardian or conservator is required under section 176.092 and an employee or dependent has no guardian or conservator.”
Because the Act incorporates the definition of “incapacitated person,” whether Lykins was an incapacitated person when he signed the Settlements presents an issue that arises under the Act.10 For this reason, we conclude that the workers’ compensation courts have the authority to decide the issue in these circumstances.11
* * *
In summary, we hold that the WCCA correctly concluded that an evidentiary hearing can and should be held to determine the fact issues presented.
CONCLUSION
For the foregoing reasons, we affirm in part and vacate in part the decision of the WCCA. We vacate the WCCA‘s instructions
Affirmed in part; vacated in part.
Notes
A. Parton, P. Malhotra & M. Husain, Hemispatial Neglect, 75 J. Neurology, Neurosurgery & Psychiatry, Jan. 2004 at 13, 13.a common disabling condition following unilateral brain damage . . . . Patients with neglect often fail to be aware of or acknowledge items on their contralesional side (the left side for patients with right brain damage) and attend instead to items towards the same side as their brain damage—their ipsilesional side. Their neglect may be so profound that they are unaware of large objects, or even people, in extrapersonal space.