Opinion
No. C6-02-643.
Filed January 7, 2003.
Appeal from the Ramsey County District Court, File No. C6009074.
John E. Mack, Mack Daby P.A., (for appellant)
Mike Hatch, Attorney General, Rory H. Foley, Assistant Attorney General, (for respondents)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
Appellant argues that the district court erred by (1) finding that appellant's workers' compensation claims were barred by collateral estoppel; (2) finding that the court lacked jurisdiction to hear appellant's workers' compensation claims; (3) not allowing appellant to discontinue receipt of disability benefits and commence receipt of an ordinary retirement pension; and (4) finding that appellant was not entitled to state-paid health insurance benefits under a union contract with the department of corrections. Because collateral estoppel does not bar consideration of issues raised by appellant and because the district court has jurisdiction over those issues, we reverse. Moreover, because it appears that the parties now agree that appellant may presently elect to receive an ordinary retirement pension instead of disability benefits, we remand to enable the district court to address questions that remain regarding or resulting from that election.
FACTS
In 1989, appellant Dale Ruter began to work at the Minnesota correctional facility in St. Cloud as a vocational masonry teacher. As a correctional-facility employee, he contributed to the Minnesota State Retirement System Correctional Employees Retirement Fund (MSRS). Before he began working at the correctional facility, Ruter had teaching experience and had accumulated over 20 years of retirement service credits as a member of the Teachers Retirement Association (TRA).
On June 21, 1990, Ruter sustained a work-related injury. Although he initially missed little time from work, back problems caused by the injury progressively worsened, disabling him from September 1994 to February 1995.
Due to his work-related injury, Ruter received benefits from multiple sources — workers' compensation benefits from the Department of Employee Relations (DOER), TRA disability benefits, and finally, beginning in February 1996, MSRS disability benefits. See Minn. Stat. § 352.95, subd. 5 (1996).
Minn. Stat. § 352.95, subd. 5 (1996), states that
[t]he disability benefit paid to a disabled correctional employee under this section shall terminate at the end of the month in which the employee reaches age 62. If the disabled correctional employee is still disabled when the employee reaches age 62, the employee shall be deemed to be a retired employee.
After Ruter began receiving MSRS and TRA disability benefits, DOER offset his workers' compensation benefits by the amount of MSRS disability benefits paid to him. See Minn. Stat. § 176.021, subd. 7 (1990). As a result of the offset, Ruter received no workers' compensation payments.
Minn. Stat. § 176.021, subd. 7 (1990), states, in part, that
[i]f an employee covered by the Minnesota state retirement system receives total and permanent disability benefits pursuant to section 352.113 or disability benefits pursuant to sections 352.95 and 352B.10, the amount of disability benefits shall be deducted from workers' compensation benefits otherwise payable.
Ruter challenged the offset as violating the equal protection clauses of both the United States and Minnesota Constitutions. The Minnesota Supreme Court upheld the offset, holding that the offset prevented duplication of benefits. Ruter v. Minnesota Dep't of Corr., 569 N.W.2d 407 (Minn. 1997) ( Ruter I).
Following the decision in Ruter I, Ruter reached age 55 and sought to have his disability benefits converted to an ordinary retirement pension. Minn. Stat. § 352.93, subd. 1 (2000), states, in part, that
[a]fter separation from state service, an employee covered under section 352.91 who has reached age 55 years and has credit for at least three years of covered correctional service and regular Minnesota state retirement system service is entitled upon application to a retirement annuity under this section based only on covered correctional employees' service.
(Emphasis added.) Substitution of a retirement pension for disability benefits would be advantageous to Ruter because no workers' compensation benefit offsets would be made against a retirement pension. Thus, upon cessation of disability payments and commencement of receipt of retirement benefits, Ruter would be eligible to receive both workers' compensation benefits and his retirement pension.
Minn. Stat. § 176.021, subd. 7, specifically states that disability benefits "shall be deducted from workers' compensation benefits." But the statute is silent about retirement pensions. The parties agree that no offsets would be made against a retirement pension.
MSRS, however, denied Ruter's request to terminate disability benefits and commence receipt of a retirement pension. Believing that MSRS acted wrongfully in that denial, Ruter brought a declaratory judgment action. In addition to challenging the right of MSRS to deny ordinary retirement benefits after retirement age had been reached, Ruter also claimed that he should be eligible to receive state-paid health insurance benefits under the terms of his union contract with the department of corrections.
The district court, in denying any relief to Ruter, determined that (1) any workers' compensation claims were barred by collateral estoppel; (2) even if collateral estoppel did not apply, the court still lacked jurisdiction over the workers' compensation claims raised; (3) because Ruter voluntarily chose to receive disability benefits pursuant to Minn. Stat. § 352.95, subd. 5, he could not receive an ordinary retirement pension pursuant to Minn. Stat. § 352.93, subd. 1, until he reached the eligibility age; and (4) since Ruter received neither workers' compensation payments nor a retirement pension, he was not eligible for health insurance benefits under the terms of his union contract with the department of corrections. On appeal, Ruter challenges each of the decisions of the district court.
Statutory modification in 2001 raised the eligibility age for receiving disability benefits from age 62 to age 65. Although the circumstances of this case arose during the time that the eligibility age was 62, the district court referenced age 65 in its order. The parties have not raised an issue regarding the age of eligibility for disability benefits, and we conclude that the statutory changes raise no issue. If we misapprehend, however, we do not intend to foreclose the parties from arguing the applicable statute on remand.
DECISION I.
We address first the district court's determination that Ruter's workers' compensation claims were barred by collateral estoppel. Whether collateral estoppel is available is a mixed question of law and fact, subject to de novo review. Regents of the Univ. of Minn. v. Medical Inc., 382 N.W.2d 201, 207 (Minn.App. 1986), review denied (Minn. Apr. 18, 1986). Once it is determined that it is available, the decision to apply the doctrine is nonetheless left to the sound discretion of the district court. Id. The doctrine of collateral estoppel is employed to prevent "parties to an action from relitigating in subsequent actions issues that were determined in the prior action." NW Nat'l Life Ins. Co. v. County of Hennepin, 572 N.W.2d 51, 53 (Minn. 1997) (citation omitted). "As a flexible doctrine, the focus is on whether its application would work an injustice on the party against whom estoppel is urged." Johnson v. Consolidated Freightways, Inc., 420 N.W.2d 608, 613-14 (Minn. 1988).
To invoke collateral estoppel, the following circumstances must exist:
(1) The issue was identical to one in a prior adjudication;
(2) There was a final judgment on the merits;
(3) The estopped party was a party or in privity with a party to the prior adjudication; and
(4) The estopped party was given a full and fair opportunity to be heard on the adjudicated issue.
Bublitz v. Comm'r of Revenue, 545 N.W.2d 382, 385 (Minn. 1996). Collateral estoppel "operates only as to matters actually litigated, determined by, and essential to a previous judgment." In re Application of Hofstad to Register Title to Certain Land, 376 N.W.2d 698, 700 (Minn.App. 1985).
In Ruter v. Minnesota Dep't of Corr., 569 N.W.2d 407 (Minn. 1997) ( Ruter I), the issue of offsets was litigated. The supreme court rejected Ruter's argument that Minn. Stat. § 176.021, subd. 7 (1990), which allows a reduction in the amount of workers' compensation benefits paid by the amount of MSRS benefits actually being paid, violated the equal protection clauses of both the state and federal constitutions. Id. at 408.
Here Ruter raises a different issue. He no longer argues that offsets to workers' compensation benefits are unconstitutional. Instead, he now argues that he should be allowed to receive an ordinary retirement pension pursuant to Minn. Stat. § 352.93, subd. 1 (2000), and that receipt of this pension would prevent the department of employee relations from using Minn. Stat. § 176.021 (1990) to offset his workers' compensation benefits. This issue is not identical to the issue addressed in Ruter I. In fact, the issue presently before us could not have been argued in Ruter I because at the time the issue in Ruter I arose, Ruter had not yet reached the age of 55. He was, therefore, not then eligible to seek an ordinary retirement pension pursuant to Minn. Stat. § 352.93, subd. 1.
The district court erred in determining that collateral estoppel was available to prevent litigation of the issues raised by Ruter in this proceeding.
II.
The district court, in addition to invoking the doctrine of collateral estoppel, also concluded that it lacked jurisdiction to hear Ruter's workers' compensation claims. Whether a district court has subject-matter jurisdiction is a legal question subject to de novo review. Strange v. 1997 Jeep Cherokee, New Mexico Lic. No. 630-KLD, VIN No. 1J4FJ2881VL502086, 597 N.W.2d 355, 357 (Minn.App. 1999).
If Ruter were attempting to challenge here the workers' compensation offset, we would agree with the district court that, indeed, that issue would fall within the exclusive jurisdiction of the workers' compensation system. Ruter's argument, however, involves statutory interpretation. He claims that Minn. Stat. § 352.93, subd. 1 (2000), grants him the right to receive an ordinary retirement pension, but Minn. Stat. § 352.95, subd. 5 (1996), improperly denies him that right. There is no basis upon which this claim could fall under the jurisdiction of the workers' compensation system. That system cannot address issues arising under Minn. Stat. ch. 352. Jurisdiction is clearly in the district court.
III.
The district court, while invoking the doctrine of collateral estoppel and further deciding that it lacked jurisdiction, commendably addressed Ruter's arguments on their merits. The court determined that because Ruter voluntarily chose to receive disability benefits pursuant to Minn. Stat. § 352.95, subd. 5, he could not receive an ordinary retirement pension pursuant to Minn. Stat. § 352.93, subd. 1, until he reached the eligibility age.
Notably, at oral argument the state appeared to concede that Minn. Stat. § 352.93, subd. 1, does permit Ruter to discontinue receiving disability benefits and to commence receipt of his regular retirement pension. The parties now also appear to agree that if Ruter begins receiving his retirement pension he would not incur any future workers' compensation offsets, but instead would receive workers' compensation benefits in addition to his retirement pension.
If this court's understanding of the position of the parties on these issues is incorrect, both shall have the right to argue their respective positions before the district court on remand.
If we assume for the sake of further clarification and assistance to the district court that the parties have agreed Ruter is eligible to receive a retirement pension and workers' compensation benefits that will no longer be subject to setoff, it appears that at least two issues will remain for presentation of argument by the parties and decision by the court on remand.
First, will Ruter be entitled to receive his retirement pension under Minn. Stat. § 352.93, subd. 1, and workers' compensation benefits (without setoff) retroactive to the time he first sought to receive them? Second, if retroactive receipt is deemed appropriate, must Ruter, in order to avoid unjust enrichment, reimburse the state for disability benefits previously received under Minn. Stat. § 352.95, subd. 5?
Consistent with this court's earlier observation regarding the parties' positions, we do not intend to limit the discretion of the district court on remand to consideration of only the two issues that we identify.
IV.
Finally, Ruter argues that he is eligible to receive state-paid health insurance benefits under his union contract with the department of corrections. Two sections of the contract are relevant to this analysis. First, article 21, section 2(B)(4), of the contract states:
An employee who was off the state payroll due to a work-related injury or a work-related disability may continue to participate in the group insurance program as long as such employee receives workers' compensation payments or while the workers' compensation claim is pending.
Second, article 21, section 2(B)(6), of the contract states:
An employee who retires from state service, is not eligible for regular (non-disability) Medicare coverage, has five (5) or more years of allowable pension service, and is entitled at the time of retirement to immediately receive an annuity under a state retirement program, may continue to participate in the health and dental coverage offered through the group insurance program.
The district court, again, commendably addressed this issue and determined that because Ruter was not receiving workers' compensation payments and because his claims for such benefits were denied in Ruter I, he was not eligible to receive health insurance benefits under section 2(B)(4) of the contract. The district court then stated that because Ruter received disability benefits under Minn. Stat. § 352.95, subd. 5, he was not a retired employee and, therefore, not eligible to receive health insurance benefits under section 2(B)(6) of the contract.
As noted earlier, it appears that the state now agrees that Ruter may commence receipt of his ordinary retirement pension under Minn. Stat. § 352.93, subd. 1. This shift from disability to retirement may make him eligible to receive health insurance benefits under section 2(B)(6) of the contract as a retired employee. Furthermore, elimination of a workers' compensation offset may create eligibility for Ruter to receive health insurance benefits under section 2(B)(4) of the contract.
Again, we recognize that the strength of our analysis of the health insurance benefit issue depends on resolution of issues identified earlier in this opinion. If the parties are in agreement regarding Ruter's eligibility for a retirement pension and his eligibility for receipt of workers' compensation benefits without offset (or, alternatively, when those issues are resolved if still in dispute), the district court will be in a position to determine whether Ruter is eligible to receive state-paid health insurance benefits under the terms of the union contract.