Minn. Top Court Sends Incapacity Question to Workers’ Compensation Judge under State Law

Case File

Is incapacity something that a workers' compensation court or a district court should handle in Minnesota? According to the state's top court, the answer comes down to the question of whether it's an issue under the Workers' Compensation Act. Simply Research subscribers have access to the full text of the case.

Case

Lykins v. Anderson Contracting, Inc., Nos. A24-0548, A24-0549 (Minn. 05/21/25)

What Happened

Due to an explosion at work, a worker suffered "life-changing physical and cognitive injuries." The employer and employer's insurer agreed to a workers' compensation settlement.

Roughly a year later, the parties agreed to an addendum. About five years later, the court appointed a conservator for the worker, and the conservator petitioned to set aside the settlements.

According to the petition, the settlements were invalid because they were based on fraud due to the attorneys' failure to abide by statutory safeguards designed to protect the interests of incapacitated employees.

The Minnesota Workers' Compensation Court of Appeals directed a compensation judge to determine whether the worker appeared to be incapacitated at the time of the settlements. Both parties appealed to the Minnesota Supreme court.

Rule of Law

Under Minnesota workers' compensation law, an agreement to settle a claim is not valid if a conservator is required and the employee doesn't have a conservator.

What the Minnesota Supreme Court Said

According to the Minnesota Supreme Court, the WCCA should have referred the matter to a compensation judge for a determination of the worker's capacity when he signed the settlements.

Nonetheless, the court agreed with the WCCA regarding the worker's incapacity, noting that his "medical provers were concerned about his cognitive functioning at the relevant time."

Workers' Comp 101: In Minnesota, an "incapacitated person" is someone who lacks sufficient understanding or capacity to make or communicate responsible personal decisions and who has demonstrated deficits in behavior that evidence an inability to meet personal needs."

The court found sufficient evidence to support the WCCA's findings that there was no dispute that the worker could not meet his personal needs and to create a dispute of fact as to the worker's capacity make personal decisions when he signed the settlements.

So, what was the solution, according to the court?

The workers' compensation judge had authority to determine incapacity due to the fact that Minnesota's Workers' Compensation Act incorporates the definition of "incapacitated person," making it an issue that arose under the act.

Where the WCCA went wrong, in the Minnesota Supreme Court's eyes, was when it required the compensation judge to refer the matter to the district court for an ultimate determination of incapacity.

"Instead, the WCCA should have referred the matter to a compensation judge to determine whether [the worker] was an incapacitated person ... when he signed the settlements," the court wrote.

The court vacated the WCCA's instructions to the compensation judge requiring referral of the capacity issue to the district court.

Takeaway

In Minnesota, issues of incapacity require only interpretation and application of the state's Workers' Compensation Act and are thus justiciable before workers' compensation courts.

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