Metropolitan Transit Commission v. Bachman's
311 N.W.2d 852
Minn.
1981
Check Treatment
PETERSON, Justice.

The issue for decision is whether the Minnesota workers’ compensation and no-fault automobile insurance acts precludе an employer, who has paid nonmedieal temporary total disability benefits to an employee injured in a motor vehiсle accident with a third party, from seeking reimbursement from the third party. We hold that the statutes preclude an employer from sеeking reimbursement.

On December 30, 1978, Metropolitan Transit Commission (MTC) employee Francis Charpenter, while driving an MTC bus, was involved in an accident with a van owned by Bachman’s. Pursuant to the Minnesota workers’ compensation and no-fault insurance acts, MTC paid Charрenter for the personal injuries he sustained in the accident. In particular, MTC paid Charpen-ter $740.40 for workers’ compensation medical expenses, $4,765.20 of workers’ compensation temporary total disability benefits, and $32.80 of no-fault insurance benеfits. Charpenter also agreed to a settlement with Bachman’s without MTC’s knowledge or consent. The settlement concerned claims only for noneconomic loss and did not involve claims for medical expenses or lost wages.

MTC subsequently brought a subrogation action against Bachman’s in Hennepin County District Court to recover the benefits paid to its employee. Bachman’s moved the district court for partial ‍​‌‌‌​‌​‌​​​​​​​​‌​‌​‌‌​‌‌​​​‌‌​​‌‌‌‌​‌​‌​‌‌‌​​​‌‍summary judgment. The district court granted the motion and dismissed MTC’s claim for reimbursement of the temporary total disability benefits. MTC now appeals to this court. We affirm.

This case presents the court with another opportunity to examine the perplexing relationships among employers, employees, and third-party tortfeasors under the Minnesota workers’ compensation act and the no-fault automobile insurance act. The sole issue concerns MTC’s claim for reimbursement of *854 its temporary total disability benefit payments. 1

Minn.Stat. § 176.061, subds. 3 and 5 (1978), provides that if an injured employee elects to receive compensation benefits from the employer, the employer is subro-gated to the rights of the employee. MTC asserts a right of subrogation, pursuant to section 176.061, subds. 3 and 5, against Bachmаn’s for its disability payments to its employee and does not assert any other type of claim, such as a right of indemnity. Indeed, this court has held that the right of an employer’s workers’ compensation carrier to recover workers’ compensation benеfits made to an injured employee from a third-party tortfeasor is limited to subrogation to the rights of the injured employee; the employer’s carrier has no right of indemnity independent of its right to subro-gation. American Mutual Liability Ins. Co. v. Reed Cleaners, 265 Minn. 503,122 N.W.2d 178 (1963). We recognized a narrow exception to this rule, grаnting the employer’s carrier an independent cause of action to ‍​‌‌‌​‌​‌​​​​​​​​‌​‌​‌‌​‌‌​​​‌‌​​‌‌‌‌​‌​‌​‌‌‌​​​‌‍recover workers’ compensation mediсal expense payments made to an injured employee from a third-party tortfeasor, in Travelers Ins. Co. v. Springer, 289 N.W.2d 131 (Minn.1979). However, in deciding that the language of Minn.Stat. § 176.061, subd. 7 (1978), expressly creates a separate, additional cause of action for recovery of medicаl expense payments, we reaffirmed that in section 176.061, subd. 5, “the legislature tied the compensation carrier’s rights to receivе reimbursement for its compensation expenses to the employee’s ability to collect from the third party. In fact, at one point the legislature actually stated ‘the employer (carrier) is subrogated to the rights of the employee.’ ” Id. at 133.

The scope of this right of subrogation is clearly defined. Because the subro-gee “steps into the shoes” of the subrogor, the former is entitled to no greater rights than the latter. Travelers Indemnity Co. v. Vaccari, 310 Minn. 97, 102, 245 N.W.2d 844, 847 (1976); Great Northern Oil Co. v. St. Paul Fire & Marine Ins. Co., 291 Minn. 97, 99, 189 N.W.2d 404, 406 (1971); Employers Liability Assurance Corp. v. Morse, 261 Minn. 259, 263, 111 N.W.2d 620, 624 (1961). Thus, an employer who pays workers’ compensation benefits to an injured employeе is ordinarily entitled to bring ‍​‌‌‌​‌​‌​​​​​​​​‌​‌​‌‌​‌‌​​​‌‌​​‌‌‌‌​‌​‌​‌‌‌​​​‌‍a subrogation action against the third party, who negligently injured the employee, for reimbursement of those рayments. See, e. g., Henning v. Wineman, 306 N.W.2d 550 (Minn. 1981); Paine v. Water Works Supply Co., 269 N.W.2d 725 (Minn.1978); City of St. Paul v. Sorenson, 283 Minn. 158, 167 N.W.2d 17 (1969).

The problem arises when the employer’s subrogation rights under the workers’ compensation act appear to conflict with the provisions of the no-fault automobile insurance act. We have previously commented on the interaction of these two statutes as follows:

To the extent that both the no-fault and workers’ compensation acts provide for сompensation for personal injuries arising from motor vehicle accidents, the statutes are in pari materia. The presumption thereby аrises that the same general legislative policy underlies these ‍​‌‌‌​‌​‌​​​​​​​​‌​‌​‌‌​‌‌​​​‌‌​​‌‌‌‌​‌​‌​‌‌‌​​​‌‍two statutes and that together they constitute a harmonious аnd uniform system of law.

Record v. Metropolitan Transit Commission, 284 N.W.2d 542, 546 (Minn.1979).

Under the “uniform system” of workers’ compensation and no-fault insurance, the payment of workers’ compensаtion benefits is primary. Minn.Stat. §§ 65B.54, subd. 3, .61, subds. 1-2 (1978); Griebel v. TriState Ins. Co., 311 N.W.2d 156 (Minn., 1981). Thus, when an employee receives *855 benefits under workers’ compensation and no-fault, the no-fault benefits must be reduced by the amount of workers’ compensation benefits paid. Griebel v. TriState Ins. Co., 311 N.W.2d 156 (Minn., 1981); Roepke v. Western National Mut. Ins. Co., 302 N.W.2d 350, 353 (Minn. 1981). Because the no-fault act requires that workers’ compensation benefits be deduсted from any of the employee’s recovery, MTC’s employee could not have recovered nonmedical temporary total disability ‍​‌‌‌​‌​‌​​​​​​​​‌​‌​‌‌​‌‌​​​‌‌​​‌‌‌‌​‌​‌​‌‌‌​​​‌‍benefit payments from Bachman’s. Since MTC is entitled to no greater rights than its employee, it follows that MTC’s claim fоr reimbursement of its disability benefit payments was properly dismissed. See Note, Subrogation and Indemnity Rights Under the Minnesota No-Fault Automobile Insurance Act, 4 Wm. Mitchell L.Rev. 119, 148-52 (1978).

It may be thought that our decision today imposes losses upon an already overburdened workers’ compensation system whiсh ought more properly to be placed upon the no-fault system. However, our interpretation of the overlapрing provisions of the workers’ compensation and no-fault automobile insurance acts compels this result. We bring this matter to thе attention of the legislature so it may take action should it determine that different treatment of cases arising under similar facts is appropriate.

Affirmed.

Notes

1

. Because of the complexity of the claim in controversy, it is necessary to emphasize what is not at issue here. Bachman’s concedes that MTC has a separate and independent right of action for recovery of medical expense payments. Both parties agree that appellant’s no-fault insurance payments may be reсovered only by way of arbitration. Furthermore, Bachman’s does not assert that its settlement with Charpenter is a defense to, or has any bearing on, MTC’s remaining claim for reimbursement of its temporary total disability benefit payments.