Gilroy v. General Motors Corp.

438 330 Mich REMAND) (AFTER GILROY v GENERAL MOTORS CORPORATION 4). (Calendar April Argued No. Decided Docket No. 87804. 4, 1991. September employer, Gilroy paid disability benefits her Gen- Luella was bargained Corporation, collectively benefit Motors under a eral plan, injuries during altercation with a result of received an as following sought paid, employee. She also and was fellow gm, compensation the from date settlement with workers’ injury, coordination of in accordance with the her reduced act, the MCL workers’ benefits 17.237(354), 418.354; the value of disabil- the after-tax However, hearing already ity referee received. pay fees in an amount ordered thirty already paid. equal percent The Work- Ap- Compensation Appeal affirmed. The Court of Board ers’ JJ., Wahls, Simon, P.J., peals, C. W. affirmed and Gims and 88424). (Docket Supreme per opinion Court No. an curiam (1988). appeal. initially On leave to denied reconsideration, Appeals to the Court the case remanded Compensation Disability Bureau of for remand Workers’ relationship proceedings the contractual be- to determine administrator, and trust tween its thereafter, and, Company, for reconsideration of Life Insurance (1988). remand, opinion. the Court of 431 Mich 855 On its JJ., McDonald, Wahls, P.J., again Appeals, and Gillis and (Docket 110651). per opinion Gm curiam No. affirmed an appeals. Griffin, opinion by joined by Chief Justice Justice In an Cavanagh Brickley, Riley, Mallett, Levin, and Justices Supreme Court held: liability imposes no The workers’ act question. employer provided by policy, such 1. A and accident as sickness supplement, gm, fringe intended to rather than is a compensation. duplicate, Typically, it does not cover References 2d, Compensation 644. Am Jur Workmen’s §§ Compensation. See Index to Annotations under Workers’ v Remand) (After disability. encourage work-related To interim employees during pursuit insurers to disabled claims, permitted, insurers are 418.821(2); 17.237(821X2), assignments MCL to take from entitling the worker-claimants them to reimbursement compensation made when and if workers’ is awarded. assignment, Where an pay insurer enforces such an it must portion attorney attorney fees of the who secured the compensation recovery. gm case, Metropolitan 2. In this neither nor Life enforced an assignment or received reimbursement from the compensation language clear, award. The is § precisely limiting application only its where there is enforce- assignment. enforcing assignment ment of an Rather then an 821(2), compensation under liability reduced § its workers’ by coordinating previously paid to the plaintiff securing 354. It cannot be said that in work- compensation plaintiff ers’ for the a benefit was conferred plaintiff’s attorney either on Life. Although §354(l)(b) provides 3. fees must be paid compensation to the who secured workers’ recov- ery, provision is conditioned on the enforcement of an assignment under 821. Boyle, concurring, Justice stated that and 821 are §§354 ambiguous. However, employer because the did not benefit plaintiff’s attorney, virtue of the efforts of the the result warranted. Reversed. (1989) 178; App

181 Mich NW2d reversed. Compensation — — 1. Workers’ Sickness and Accident Benefits Attorney — Coordination of Benefits Fees. employer compensation An who chooses to coordinate workers’ paid injured employee sickness and accident benefits to an pay is not liable to the fees of an who secures workers’ (MCL compensation 418.354, employee 418.821[2]; for the 17.237[354],17.237[821][2]). Compensation — — 2. Workers’ Sickness and Accident Benefits Assignment Attorney — of Benefits Fees. assignment An insurer who enforces an of workers’ benefits to obtain reimbursement of sickness and accident injured employee to an of its insured while pursued a workers’ claim must of the fees of the who secures the workers’ 438 the Court (MCL 418.354, 418.821[2]; recovery 17.237[354], 17.237[821][2]). Royal (Daryl and Mac- A. James Tanielian DonaldFitzgerald, P.C., Simon, & MacDonald counsel) plain- MacDonald, for the R. Duncan tiff. Dahling (by Longley Theodore

Bodman, & Tatone); Smith, J. Souris, and Vincent James A. counsel) (John Rahie, defendant. G. Curiae: Amicus Ducey, Chuhran, Benham,

Conklin, Listman & Critchell), Michigan (by Self- P.C. Martin L. Insurers’ Association. lawsuit, out of a which arose J. This

Griffin, compensation, about the claim for workers’ attorney’s and whether was fee award of an statutory presented is one of The issue authorized. construction. Because under in the circumstances Compensation Disability the this case Workers’ employer liability upon imposes for the Act1 no question, decision of reverse the fee we Appeals. Court I injured Gilroy in an alterca- Luella was Plaintiff May 27, 1982, tion with fellow employed by General Motors Cor- defendant while bargained disability collectively poration.2 Under a 17.237(101) seq. seq.; et et 418.101 MCL governed out, pointed case are As curiae has events amicus Disability Compensation by provisions Act that were of Workers’ 30,1985. 31, 1982, July in effect between March and (After Remand) v Opinion of the Court plan,3 plaintiff first received sickness per year, accident benefits of month for a $996.66 and then she received extended per plan, of not under the wdca.4 month. Under the benefits were $830 payable periods disability compensable plan, In order to fund this established two gm by Metropolitan trusts which were administered Company. arrangement, Life Insurance Under the paid particular if the total amount of claims in a month should exceed the amount which was gm required provide, paid by the excess was to be Accordingly, Life. was self- up trigger point, insured to a and it was insured by Metropolitan regard Life with to excess liabil- ity, any. aggregate if Because the of claims did not trigger point during period exceed the question, here in undisputed it is that all of the during period benefits disbursed were out funds. gm’s receiving disability While plan, plaintiff also filed a claim under the Work- Compensation initially Disability ers’ contesting Act. After agree- claim, gm, in a settlement plan bargaining agreement The benefit was of a collective Workers, plaintiff between and the United Auto of which member. plan provided part: The payable period by any any Benefits shall be reduced

payments employe Law period for time lost from work in that to which Compensation is entitled under Workers .... provided: also benefit(s) employe paid If to an it is determined that paid under this Article should not have been or should have amount, paid been in a lesser written notice thereof shall be given repay employe to he shall the amount of the such and company. overpayment to the insurance 438 Mich 330 the Court plaintiff’s 22, 1983, conceded ment dated June Compensation rate injury. at the to workers’ entitlement of The per her from the date of week $238.49 recognized agreement that under coordi- also act, total 3545 of the the nation amount of workers’ plaintiff due otherwise period date of her the

for the between injury agreement be reduced the date would and disability by the benefits value of the after-tax plan.6 plaintiff already by under the received settlement, claim for of the view however, dismissed; was workers’ the ment require- order included plaintiff’s attorney referee’s dismissal pay fee to disability thirty percent equal already the to collectively paid plaintiff the to bargained plan. disability plaintiff

Protesting the benefits received voluntarily without under the had been arguing plaintiff’s attorney, intervention authority statutory order existed no provides part: 354§ (1) section, provided employ- Except in this as otherwise paid weekly obligation or to be er’s cause . . these . be reduced amounts: shall (b) being or received The after-tax amount disability plan ... under a under a received insurance self-insurance provided by employer policy same .... If such policies plans ... or are self-insurance repayment in the of a worker’s entitled to event recovery, satisfy repayment shall such out benefit funds the carrier has received benefits the carrier through the coordination of 418.354; provided for under this section. [MCL 17.237(354).] per According plaintiff, value week $230.00 the after-tax by plaintiff year for one accident benefit received sickness and week, Disability per Bureau as calculated of Workers’ $190.13 Compensation. per month extended $830.00 The after-tax value of by plaintiff year after first June benefit received per $161.91 week. amounted (After Remand) v 335 Opinion of the Court requiring payment of such a fee to gm appealed.7 attorney, However, the order was by Compensation Ap- affirmed, first the Workers’ peal Appeals.8166 Board, and later the Court of (1987). App 609; Mich 420 NW2d 829 Initially, appeal. this Court denied leave to 430 (1988). However, Mich 872 remanded to the Court of we reconsidered and

Appeals with directions again, for that Court to consider its decision after remanding Compensation Disability to the Bureau of Workers’ hearing for a to obtain additional concerning information the contractual relation- ship between 431 Life. (1988). Following hearing, 855 the Court of Appeals again App 178; affirmed. 181 Mich 448 (1989). NW2d 777 7 argued Gm also its self-funded benefit is governed 29 related to sion of Employee Security Retirement Income Act of seq., application 1101 wdca, USC et and that insofar as it fees, precluded by preemption provi- § 1144(a). grounds, erisa, 29 USC Because we reverse on other we do not reach this issue. panel upon The board and the relied 354 and 821 of the wdca. 354(l)(b) provides part: Section ..., plans poli- If such self-insurance or insurance repayment cies are entitled to compensation repayment coordination of benefits in the event of a worker’s recovery, satisfy the carrier shall such through out of funds the carrier has received provided for under this section. Not- subsection,

withstanding of this paid pursuant shall be to section 821 to the who se- 418.354(l)(b); compensation recovery. cured the worker’s [MCL 17.237(354)(lXb).] 821(2)provides part: Section group hospitalization When a or company ment pursuant attorney sation organization assign- ... or successor enforces an section, given provided pay, it to as in this it shall director, rules established compen- fees of the who secured the worker’s 418.821(2); 17.237(821X2).] recovery. [MCL section, provides part: Section "As used in this 'insurance company’ includes self-insurer.” Mich Opinion of the Court granted appeal. Mich 880 then leave We (1990).

ii recognized, Legislature is not has As purchase group employers insur- uncommon for employ- regular payments provides ance which ees a sickness become disabled because who compensa- injury that not covered is explained that a sickness and acci- tion. We have policy, dent an & commonly A,” in the insurance field as "s known fringe benefit meant employer-provided an is duplicate, the state- supplement, rather than protection. It mandated workers’ covers non-work-related and, injuries] illnesses [and effect, helps gap fill the in the worker’s coverage. Ins v Life Co insurance [Aetna

Roose, 5; (1982).] n 318 NW2d 468 policy Although typical & a not s does cover put legislation disability, has been work-related encourage payments by place the & a s interim may who insurer while a disabled pursues a claim. to workers’ entitled employee-claim- taking assignment By an from the ant, reimburse- entitled to the insurer becomes payments if workers’ made when and ment compensation is awarded.

Ordinarily, employee’s to work- an entitlement assignable. MCL not ers’ 418.821(1); 17.237(821)(1). However, to en- by disability courage insurers interim Legislature described, has the circumstances against assignment provided that the rule validity of an apply not to or affect shall Remand) (After v Opinion op the Court assignment company made to an insurance making . . . an payment advance or to an em- ployee zation insurance group group hospitali- a

policy provides which that bene- payable fits shall not be policy under the for a period hospitalization resulting of disability or bodily injury arising from accidental or sickness out of or in the employment. course of [MCL 418.821(2); 17.237(821X2).] In Roose, 93-94, Aetna Life supra, pp Ins Co v our Court explained: 821(2) purpose is to allow encour-

age accident ate benefits to claim for companies carrying sickness and policies step forward and immedi- injured pursuing are workers who manner, compensation. worker, incurring the medical the storm while often unable to work and expenses, will be able to weather better waiting for determination bureau. point

The focal of this lawsuit is the final sen- tence of provides: which group disability hospitalization When a or insur- company assignment given ance . . . enforces an section, provided pay, to it as this shall director, pursuant rules established of the fees of the who compensation recovery. secured the worker’s [Em- phasis added.] language incorporated Reference to this is also provides 354 which for coordination of work- employer- ers’ with certain other Cavanagh recently funded benefits. Chief Justice explained that 354§ legislative package involving of a reform 438 Court of the workers’ amendments

a series related provisions The coordination compensation statute. compromise plan component of a essential were an payable to disabled restructured as a of this The result resources saved workers. the statute were reallocated coordination increase generally .... v benefit levels [Romein 521; Corp, 436 Mich Motors General (1990).] NW2d provides: In pertinent part, § (1) section, in this Except provided as otherwise obligation or cause to be employer’s specific loss bene- than paid weekly benefits other (3) reduced shall be fits under section amounts: these

(b) re- amount after-tax under a being or received self-insurance ceived plan, wage or under a plan, disabil- continuation provided by em- policy the same ity insurance 351, 361, under section from whom benefits ployer if the not contrib- or 835 are received ute premiums did directly payment or to the to the pol- regarding plans, wage continuation icy. plans, to tion benefit self-insurance If such policies entitled disability insurance are compensa- event a worker’s repayment in the satisfy such recovery, carrier shall funds the carrier has received repayment out of through the provided for of benefits coordination Notwithstanding this section. under of this subsection, shall attorney who se- 821 to the pursuant section recovery. the worker’s [MCL cured 17.237(354)(l)(b). 418.354(l)(b); Emphasis added.] case, reaching decision in its wcab nor

acknowledged that neither (After Remand) v GMC Opinion of the Court assignment Life had enforced an or received plaintiif’s compen- reimbursement out of Declaring, sation nevertheless, award. that plaintiff’s compensation benefits had been reduced through coordination "in the same manner” as though signed agree- she had a reimbursement panel employer ment, "inferred that place . . . stands in the of the s & a carrier under becoming responsible Section attorney thus for the represent- fee based on the s & a ing compensation.” the balance of workers’

In its case, first review of this the Court of Appeals Metropolitan reasoned that Life could not independent "be characterized as an insurer truly independent defendant since no company signment intentionally would fail to take an as-

from a worker reimbursement sickness and accident in the event of the worker’s entitlement benefits.” 166 Mich to workers’ App panel 615. The concluded place that defendant "stands [Metropolitan Life],” insurance carrier required reason, and for §821, "under portion plaintiff’s . . . .” App 614, 166 Mich 616.

Upon hearing remand, and after a at which the relationship between Life explored, Appeals applied the Court of similar reasoning opined and reached the same result. It payment "[t]o disallow the of a particularly fees, such in a case such as this in employer reaped which the the substantial benefit of a coordination credit for the plaintiff, unjust.” App would 181 Mich 184.

Against background, we turn now to con- applicability sider the attorney-fee provision. this case of the Mich 330 340 438 Opinion the Court III litigation, a workers’ com- in other civil As responsible pensation ordinarily claimant is personal attorney Larson, Workmen’s Com- fees. 3 Generally, pp pensation Law, § 83.11, at- 15-1270. compensa- torney of fees are out the weekly course, the established tion awarded. Of represented by an for a claimant benefit rate represented. attorney not so is the same as for one 858(2)9 provides, part, in of the act Section may prescribe by director, rule, maximum "[t]he attorney the and the manner which fees paid by employ- may determined or amount 17.237(858X2). 418.858(2); ee . . . .” MCL added.) (Emphasis plaintiff Clearly, filed for and recov- if this had receiving dis- without ered workers’ ability plan, or there under the if had effect, would have been been no such she charged responsible her compensation claim.10 connection with 821(2) exception provides only a narrow Section general provides rule. It that when a to this hospitalization group governing disputes attorney fee section has been construed as This disputes attorneys and their clients and not over between fees between the Corp, McDougall parties. v General Motors See Co, 509; (1990); App App P Mich v A & 463 NW2d 151 Gross (1978). 448; 274 NW2d 817 17.237(858). 408.44(2), AACS, 418.858; R See also 1980 MCL provides: which proofs compensa- completion with closed or In a case tried to fee, attorney, computing voluntarily paid,

tion an before the reasonable deduct from accrued shall expenses behalf. The fee that the admin- incurred may judge approve shall not be more than of istrative law the balance. 30% Remand) (After v GMC Court company assignment given . . . enforces an provided pay, pursuant section, as in this it shall director, to rules established the worker’s MSA fees of the who secured the 418.821(2); recovery. [MCL 17.237(821X2).Emphasis added.] guided interpretation are, course, We in our § 821 certain fundamental rules of construc- tion. Where the of a statute are clear unambiguous, applied they are to be as writ- ten without construction. Selk v Detroit Plastic (1984). Products, 1, 9; 419 Mich 354 NW2d 184 language exception set forth in precisely application. Finding clear and limits its provision that this to looks the realization of reim- requires payment bursement, we conclude that it portion attorney only of a of the claimant’s fees assignment. where there is enforcement of an argues Metropolitan Gm that neither it nor Life "disability hospitalization is a or insurance com- 821(2). meaning pany” § within the of We need not assuming arguendo address that contention. Even gm place disability that "stands in the of the App carrier,” 166 Mich 614—as charac- by panel undisputed terized the below—it is agent, Metropolitan Life, neither nor its en- gm, assignment. forced an enforcing assignment,

Rather than an as con- 821(2), gm templated by pursuant § §to acted compensa- which allowed it to reduce its workers’ liability by coordinating tion sickness and accident paid previously and extended benefits to plaintiff. The distinction between coordination un- assignment § 354 and der enforcement of an under important § is not without an difference. 354(l)(b), after an a Under recovers employer may award, the compensa- adjust liability or credit its for workers’ 438 Mich the of Court group only by tion the after-tax amount 821(2), previously paid.11However, benefits assignment enforcing to is entitled an insurer an pretax of amount for the entire reimbursement group paid less but "a who secured recovery.” worker’s our construction of We are convinced that attorney-fee provision policy is consistent with the encouraging which underlies it. addition pay- make advance interim insurers to employees, § 821 allows a claim- ments disabled fee from the of his ant’s insurer collect through reimbursement, where, it has ben- prosecution attorney’s efited from the successful require To claim. the workers’ reimbursed insurer to the proportionate share fair fee under those circumstances is giving insurer a "free ride.” and avoids presented by case, However, in the situation a benefit was conferred it cannot be said that gm attorney on either or claimant’s Life. Neither of them enforced assignment

an received reimbursement. panel’s reaped

Contrary to the view coordinating the "disabil- "substantial benefit” App ity plaintiff,” apparent only benefit received right not to twice the same disabil- was liability employer’s shall reduced being amount received or re- after-tax [t]he plan, wage plan, continuation ceived under a self-insurance disability policy provided by or employer the same under a insurance 351, 361, whom under section or 835 from directly if the did not to the are received plan contribute regarding payment premiums or to the 418.354(l)(b); 17.237(354)(l)(b).] policy. insurance [MCL Remand) v (After the Court ity. "right” provided by § That is law 354 and recognized bargained in the benefit agreed the United Auto Workers Union plaintiff’s behalf. argues independently §

Plaintiff also requires payment by attorney fee question. We turn now to consider contention.

IV 354(l)(b) pertinent part, provides: plans, wage If such self-insurance continuation plans, policies are entitled repayment compensa in the event of a worker’s recovery, satisfy tion benefit the carrier shall such repayment out of funds the carrier has received through under this section. of this provided the coordination of Notwithstanding subsection, fees shall be pursuant to section 821 to the who se compensation recovery. [MCL cured the worker’s 418.354(1)(b); 17.237(354)(1)(b). Emphasis added.] Although undisputed it is that neither nor assignment, plaintiff Life enforced an requires payment § contends that claimant’s ability of a a self-insured or dis- merely repay- if it insurer is "entitled to ment” in the event of a argument recovery. ignores However, this require the words of 354 which that such fees paid pursuant "be to section 821.” requirement We hold that fee triggered solely by repay- not ment”; rather, "entitle[ment] "pursuant conditioned,

it is also upon assignment. 821,” section enforcement of an Recognizing is a strict construction Mich 330 344 438 Opinion the Court that workers’ general to the rule exception own compensation claimants their fees, purpose it with the and we believe accords As underlying already 354. legislative history noted, designed to increase work- that section was re- generally by ers’ benefit levels compensation through allocating costs saved coordination. Legislature imperative believed was on Mich- burden increasing igan employers lightened.12 Accordingly, be sought 354 to cut which included package of bills high compensation by regulat- of workers’ cost and ing limiting expenses13 medical and fees,14 disabilities15 and tightening the definitions of coordinating compensable injuries,16 and and security benefits with social other collateral benefits.17 noteworthy

It is that while the wdca allows for to set maximum fees bureau’s director 1981 disputes,18 hearings of workers’ reform 196, pack- PA of the 1981 enacted as if the director based maximum age, directed rate, the rate weekly not, benefits, used could after coordination average state greater than two-thirds weekly injury. light at the time of the wage 12 Section, 7, Analysis (January Analysis SB See Senate First 1982). 13 supra. Analysis, n 12 582 See SB 582. See also Senate SB 1981 by into law 1981 PA 195. enacted 14 supra. Analysis, n 12 583 See 583. See Senate SB 1981 SB also by law 1981 PA 196. was enacted into Analysis, 15 1981 and 1981 590. See Senate n 12 SB 589 SB also supra. by by SB law 1981 PA SB 590 1981 589 was enacted into 200. PA Analysis, supra. SB 590 was 590. See also Senate n SB enacted 1981 PA 200. into law Analysis, 17 1981 595. See n 12 SB 591 1981 SB also Senate supra. law PA 203. SB 591 was SB 595 was enacted into by 1981 enacted into law PA 201. 17.237(858X2). 418.858(2); 18 MCL Remand) (After v Boyle, J. weekly then scheduled the increase appears was aimed this amendment 1982, it attorneys.”19 preventing a "windfall at ruling and the of the board that the believe We place, panel result a below, would if left require attorney. plaintiff’s To windfall for per- thirty plaintiff’s attorney fee a based paid already cent of the plaintiff plan ignores the fact under the securing attorney played those benefits no plaintiff. Furthermore, result would such a sought purpose salutary to be undermine pay- 821(2) encouraging advance achieved — help claimants ments the storm.” "weather requires clearly 354

Section pursuant "It 821.” to section are to "be the courts rule of construction settled well say legislature make the undertake to should not Springs Burdick v Harbor it has not said.” what (1911). 673, 681; 133 NW Co, Mich Lumber v deci- forth, reverse the we the reasons set For Appeals. Court of sion of the C.J., Brickley, Riley, Levin, Cavanagh, and J. JJ., Griffin, Mallett, with concurred agree (concurring). with I do not Boyle, J. 17.237(821) and majority 418.821; MSA that MCL 17.237(354) unambiguous. are 418.354; MCL major- agree the result the Nevertheless, ity with I do underlying purpose §821 reaches because January supra. Analysis, After n 12 See Senate per $300 week weekly $210 from rate increased benefit maximum per weekly Thus, fees on the maximum if the director based week. substantially rate, increased. fees would have 438 Mich Boyle, J. not a this is Since free riders. is to eliminate Corporation bene- Motors General where situation attorney, the efforts of fits virtue free rider. it is not a

Case Details

Case Name: Gilroy v. General Motors Corp.

Court Name: Michigan Supreme Court

Date Published: Sep 4, 1991

Citation: 475 N.W.2d 271

Docket Number: Docket 87804; Calendar 4

Court Abbreviation: Mich.