Catherine Kleven, et al., Respondents, vs. Steven C. Elm, Respondent, BlueCross BlueShield of Minnesota, Appellant.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (1998).

IN COURT OF APPEALS

Catherine Kleven, et al.,
Respondents,
 
vs.
 
Steven C. Elm,
Respondent,
 
BlueCross BlueShield of Minnesota,
Appellant.

Reversed and remanded; motion denied

Dakota County District Court

File No. C4996843

Sharon L. Van Dyck, James S. Ballentine, Leo M. Daly, Schwebel, Goetz & Sieben, P.A., 5120 IDS Center, Minneapolis, MN 55402-2246 (for respondents Kleven, et al.)

Blake W. Duerre, Paul A. Banker, Arthur, Chapman, Kettering, Smetak & Pikala, 500 Young Quinlan Building, 81 South Ninth Street, Minneapolis, MN 55402-3214 (for respondent Elm)

Eric J. Magnuson, Doreen A. Mohs, Rider, Bennett, Egan & Arundel, Suite 2000, 333 South Seventh Street, Minneapolis, MN 55402 (for appellant)

            Considered and decided by Shumaker, Presiding Judge, Crippen, Judge, and Davies, Judge.

CRIPPEN, Judge

            Appellant BlueCross BlueShield of Minnesota disputes the adequacy of a three-day notice of a motion that the health carrier be excluded from a settlement on behalf of respondent Jason Kleven, a minor.  Under the circumstances, the denial of a continuance for presentation of appellant's case constituted an abuse of discretion, and we reverse and remand to permit further proceedings on appellant's contention that it is entitled to a subrogation recovery.

            Respondent was injured in February 1997, and early in August 1999 a tort claim on his behalf was settled, with a structured settlement valued at approximately $100,000.  On August 24, 1999, respondent's counsel faxed a notice to counsel for BlueCross, advising them that a motion would be heard on August 27, 1999, to determine whether the carrier should be excluded from the proposed settlement and to otherwise get court approval for distribution of the settlement funds. 

At the court hearing on August 27, BlueCross pleaded for time "to become involved" in the case, stating that at that time it was unable to produce information on respondent's medical history, his injury, his treatment or recovery.  Tacitly denying appellant's request for a delay in the proceedings, the trial court concluded the proceedings and filed an order on August 31, 1999, stating a finding that respondent "has not made a full recovery of damages for his injuries" and concluding that appellant BlueCross was denied subrogation against respondent's recovery.

            The parties agree that appellant has subrogation rights "after the covered person has received a full recovery from another source."  Minn. Stat. § 62 A. 095, subd. 2(1) (1998).  Appellant sought an opportunity to present to the trial court the claim that the settlement on respondent's behalf more than fully compensated him.  The trial court has discretion as to whether or not to grant a continuance, and this court will reverse only for an abuse of discretion.  Cherne Contracting Corp. v. Wausau Ins. Co., 572 N.W.2d 339, 346 (Minn. App. 1997), review denied (Minn. Feb. 19, 1998). 

Under the circumstances of this case, it is evident beyond dispute that appellant BlueCross had little or no opportunity to investigate or present evidence respecting its subrogation rights.  Its request for more time was of fundamental importance, having regard for its procedural due process right that it not be deprived of property without notice and an opportunity to be heard.  See Ruberto v. County of Washington, 572 N.W.2d 293, 298 (Minn. 1997) (noting that due process rights require, at a minimum, that a person cannot be deprived of property without notice and an appropriate hearing).  It was an abuse of discretion on the part of the trial court to determine appellant's rights without a continuance.

            Respondent suggests on appeal that appellant did not make a motion for a continuance.  This argument requires an overly constrained reading of the record, which makes it clear appellant was seeking an opportunity from the court to investigate and seek evidence relative to the amount that would constitute a "full recovery" for respondent's injuries.

            Respondent also contends that appellant had earlier notice of respondent's tort claim.  The record indicates that on August 11, 1999, appellant was advised that a settlement was being negotiated, but there was no evidence in the record that prior to August 24, 1999, appellant had any notice that a settlement was being concluded that would exclude it from pursuing its subrogation rights.  Moreover, there is no evidence that appellant was given any information to identify pending legal proceedings such that appellant even had an opportunity to move to intervene.

            Respondent also suggests that appellant was advised in early 1998 that respondent was seeking recovery from an alleged tortfeasor.  The only evidence of such notice is a witness's statement that she believed it probably occurred in early 1998.  This testimony is not sufficient to permit a trial court finding that appellant was advised of tort claim proceedings in which its subrogation interests might be eliminated.

2.         Motion to strike

            We deny appellant's motion to strike a letter filed by counsel for defendant Elm, treating the letter as an informal brief and concluding that its factual assertions are only as to matters that are otherwise evident in the record.

Reversed and remanded; motion denied.