Case Law Update 2008
Table of Contents
ARISING OUT OF AND IN THE COURSE OF EMPLOYMENT
Vaughn v Severstal North American, Inc., 2007 ACO #35
On December 20, 2002, while the Plaintiff, James Vaughn, was sitting in his car eating lunch in his employer’s parking lot, a man and a woman approached his car. The man approached the driver’s side window, tapped the gun against the window and then shot him in the abdomen. The Plaintiff did not know his assailants and they have never been caught.
The Defendant argued that the Plaintiff failed to show his injury occurred both in the course of and arising out of his employment. However, the WCAC affirmed the magistrate’s finding that the Plaintiff’s injuries occurred both in the course of and arose out of his employment.
The magistrate found the Plaintiff was in the parking lot within a reasonable time before his working hours and that the he was not engaged in an activity for which the major purpose was social or recreational. Specifically, the magistrate indicated that the major purpose of the Plaintiff’s activity, at the time he was shot, was waiting for his shift to begin and therefore the Plaintiff was entitled to the presumption under MCL 418.301(3).
MCL 418.301 (3) states as follows:
An employee going to or from his work, while on the premises where the employee’s work is to be performed, and within a reasonable time before and after his working hours, is presumed to be within the course of his employment. Notwithstanding this presumption, an injury incurred in the pursuit of an activity the major purpose of which is social or recreational is not covered under this act. Any cause of action brought for such an injury is not subject to section 131.
After finding the injury occurred in the course of employment, the magistrate found the injury also arose out of the Plaintiff’s employment. There was no evidence that the Plaintiff knew his assailants and there was no evidence that the Plaintiff was engaged in any illegal activity. As such, the magistrate found that the injury arose out of a neutral or positional risk and not out of a personal risk.
The WCAC affirmed the magistrate’s findings and reiterated that the case law holds that the relevant “premises” includes the Defendant’s employee parking lot. A risk is positional if the employment brought the employee to the place at the time he was injured. In this case, it was the employment that required the Plaintiff to be at the place where the exposure to the risk occurred.
Both the Court of Appeals and the Michigan Supreme Court denied leave to hear this matter on appeal.
Bowman v R.L. Coolsaet Construction Co., 275 Mich App 188 (2008)
This case involves the “Traveling Employee” doctrine and whether or not it exists in Michigan. The general rule is that injuries sustained while going to or coming from work are not compensable under the WDCA, with a few exceptions to the contrary.
The Plaintiff worked as a journeyman pipe fitter since 1960. He rarely worked jobs within a commuting distance from his home in Big Rapids. As a result, he usually lived in either a motel or his travel trailer in a campground close to the job site. In June 2000, the Plaintiff accepted work from the defendant at a job site 200 miles from his home in Big Rapids. The Plaintiff brought his travel trailer to a KOA campground near the job site and lived in it during the week. He drove his truck home over the weekend. On September 14, 2000, the claimant worked until 3:00 p.m. when a heavy rain caused the operation to shut down for the day. As he was returning to the campground, he ran a stop sign at an intersection and struck another vehicle rendering him a paraplegic.
The magistrate denied the Plaintiff’s Application for benefits under the general rule regarding travel to and from work and the WCAC affirmed. The Plaintiff’s no-fault insurance carrier, Auto Club Insurance Association appealed the WCAC’s opinion to the Court of Appeals as an intervening Plaintiff. The Court of Appeals reversed and remanded the WCAC, adopting the “Traveling Employee” doctrine. This doctrine stands for the proposition that employees on a business trip are considered to be continuously within the scope of their employment during their trip, except when a distinct departure for a personal errand can be found.
Last year, the Michigan Supreme Court reversed the finding of the Court of Appeals, as noted in the 2007 Case Law Updated. The Supreme Court failed to adopt the Traveling Employee doctrine in this case because the Plaintiff was traveling to his “temporary home,” thus triggering the general rule. The Court of Appeals received this matter again on remand to determine if any of the other exceptions to the general rule applied.
The exceptions to the general rule exist if:
(1) the employee is on a special mission from the employer, (2) the employer derives a special benefit from the employee’s activity at the time of the injury, (3) the employer paid for or furnished employee transportation as part of the employment contract, (4) the travel comprised a dual purpose combining employment-related business needs with the personal activity of the employee, (5) the employment subjected the employee to excessive exposure to traffic risks, or (6) the travel took place as a result of a split-shift working schedule or employment requiring a similar irregular nonfixed working schedule.” Collier v J A Fredman, Inc, 183 Mich App 156 (1990), quoting Thomas v Staff Builders Health Care, 168 Mich App 127 (1988).
The only exception that potentially applied was exception 3. In this matter, the Plaintiff used his own truck for transportation, but his employer paid the Plaintiff for using it pursuant to a “rig rental” lease agreement. This was not a part of the Plaintiff’s employment contract, but the employer did give the Plaintiff a credit card to purchase not only gasoline used for work, but also for personal use. The income Plaintiff earned from this agreement was reported for tax purposes as a separate business income, as opposed to personal income. It was found that although the employer technically “paid” for the Plaintiff’s transportation, it was not part of the employment contract the exception did not apply. Because the Plaintiff did not meet any of the exceptions to the general rule, his injury was found to be not arising out of and in the scope of his employment.
Thomas v Ferguson Enterprises, Inc., 2008 ACO #12
The Plaintiff, Kennedy Thomas, testified that before he left for work the morning of October 6, 2004, Mr. Ferguson called him at home and asked him to bring the video camera he had used at a job site to the office. When he arrived at work, Mr. Ferguson invited him into his office. Apparently an argument ensued and Mr. Ferguson questioned the Plaintiff as to why he had called his wife at 1:00 a.m. At some point Mr. Ferguson pulled out a gun and began hitting the Plaintiff in the head with the gun. The Plaintiff suffered serious injuries and suffered a permanent disability.
The magistrate held that the Plaintiff’s injuries arose out of and in the course of employment. The Defendants appealed and argued that the Plaintiff’s injuries did not arise out of and in the course of employment in that the dispute between the Plaintiff and Mr. Ferguson was personal and not work related.
The Commission advised that assaults at work are generally categorized as either horseplay or malicious assaults. The general rule is that if an assault is unconnected with the employment, and the assault is motivated by personal reasons, it usually does not arise out of employment. DeVault v General Motors Corp., 149 Mich App 765 (1986).
The WCAC held that while the nature of the dispute was personal, the Plaintiff’s employment contributed to and facilitated the assault. The Commission advised that the working relationship between the Plaintiff and Mr. Ferguson afforded Mr. Ferguson the opportunity to lure the Plaintiff into his private office and ultimately assault him. Mr. Ferguson was acting in a supervisory capacity when he lured the Plaintiff into a trap. In conclusion, the WCAC felt that is was improper to categorize this as a “neutral risk” case when a supervisor, because of his status, can increase the risk of harm during an assault by placing his victim where he wants him, away from the eyes and help of co‑workers.
This matter is currently being appealed to the Michigan Court of Appeals.
EMPLOYEE / INDEPENDENT CONTRACTOR
Leon v A-3, Inc., 2007 ACO #147
The Plaintiff, Henry Leon testified that A-3 is a distributor or franchisee of Kirby Vacuum Cleaners. He was hired in October 2002 as a dealer to sell Kirby Vacuum Cleaners to residential customers. He also considered himself to be a crew leader whereby he would recruit dealers and obtain Commissions from the dealers’ sales. His income was based directly on sales Commissions.
The Plaintiff’s sole income in 2002 and 2003 was derived from selling Kirby Vacuum Cleaners. He did not advertise in the yellow pages. The Plaintiff was not required to limit his employment to A-3. However, he never set up a d/b/a, corporation, or limited liability company. No tax withholdings were collected by A-3. He filed his taxes as a self-employed person. He did not have any fringe benefits. Trainings or sales meetings were not mandatory. He picked his own sales locations.
The Plaintiff paid $50.00 per week for the use of a van owned by A-3. He would take the van home and was free to use it for his personal use from October 2002 through April 8, 2003.
On April 8, 2003, the Plaintiff started his workday by driving the Chevy Astro Van to the Grand Rapids office of A-3 where he picked up his supplies and vacuums. At some point during the day, he was injured in an automobile accident.
The magistrate held that the Plaintiff was an employee and not an independent contractor for purposes of the Act. The WCAC affirmed the magistrate’s decision based on the fact that the Plaintiff did not maintain a separate legal entity and did not derive income from any other source other than the Defendant, and disregarded all other evidence that the Plaintiff had created an independent contractor relationship between himself and A-3.
Commissioner Przybylo in his dissenting opinion acknowledged the overwhelming evidence that the Plaintiff intentionally created an independent contractor relationship between himself and A-3 and reiterated the following: the Plaintiff controlled his own hours; the Plaintiff established his own sales territory; the Plaintiff could hire salespeople to perform the actual vacuum sales; the Plaintiff leased a van under terms that allowed him to use it as he pleased; and that the Plaintiff’s tax forms declared his independent contractor status.
SEASONAL EMPLOYMENT
Reece v Event Staffing, 2008 ACO #40
The Plaintiff, Travis Reece, alleged injuries to his right shoulder due to repetitive athletic activities as a professional football player. A specific event injury occurring on February 5, 2005 was later added, whereby the claimant alleged that he collided with an opposing player during a tackling maneuver causing and/or aggravating, accelerating and contributing to an injury to his right shoulder.
The magistrate granted the Plaintiff an open award on a finding of a work-related shoulder injury resulting in disability.
On appeal, the Defendants, citing Raybon v DP Fox Holdings, decided July 17, 2007, (Docket No. 268364), argued that the Plaintiff was barred from receiving any worker’s compensation weekly benefits during the off-season, as he was engaged in seasonal employment.
The magistrate relied on the Supreme Court case of Gasparick v H C Price Construction Co., 398 Mich 483 (1976) to award the Plaintiff benefits in the off-season.
In affirming the magistrate’s opinion, the WCAC advised that Gasparick was controlling and that the Raybon case was unpublished and therefore did not have precedential status. In addition, the WCAC noted that the statutes provide that compensation shall be paid for the duration of the disability and that there is nothing in the statutory changes, following Gasparick, which addresses seasonal employment and treats such employees differently.
In his dissenting opinion, Commissioner Przybylo indicates that the Commission’s reliance on Gasparick is in contrast to the most recent Supreme Court decisions. The more recent interpretations allow compensation for actual lost wages reduced by post-injury wage earning capacity. Commissioner Przybylo would have remanded to the magistrate for application of the Raybon standard.
Raybon v D.P. Fox Football Holdings, LLC, Court of Appeals No. 268634 (July 17, 2007, unpublished)
The Plaintiff alleged that he suffered from work-related plantar fascitis, was in need of medical treatment and was disabled, for a finite period of time. He also suffered a minor MCL sprain that limited his ability to play football and required medical treatment. The Plaintiff was granted benefits for two closed periods.
The Defendant argued that was unfair to extend benefits beyond the normal arena football season. The magistrate held that the Plaintiff should not be treated any differently than other Michigan seasonal workers, be they school teachers, life guards, restaurant workers in resort towns, etc.
The magistrate, citing Branch v Flint Board of Education, 1991 ACO 140; Dube v Industrial Maintenance Services, Inc., 1999 ACO 480, advised that a seasonal worker’s entitlement to wage loss benefits extends through the period of disability.
The WCAC affirmed the magistrate’s opinion and indicated that Gasparick was controlling in that a seasonal worker, who sustains a work-related injury in season, is entitled to weekly disability benefits during off-season periods or even year-round.
The Defendants appealed to the Court of Appeals. In an unpublished opinion, the Court of Appeals held that the Plaintiff’s loss of wages must be attributable to his work-related injuries rather than to the end of the football season and that he cannot receive wage loss benefits for time in the off-season when he would not be otherwise earning wages.
Therefore, if a seasonal employee is employed elsewhere during the off-season, and the work-related injury during the in-season disables that employee from performing work in the off-season, that employee is entitled to weekly wage loss benefits. Conversely, if an employee is not typically employed during the off-season, the employee would not be entitled to weekly wage loss benefits during the off-season season.
Publication was requested by the Defendant in this case and was denied.
INJURY (RAKESTRAW)
Simpson v Borbolla Construction & Concrete Supply, Inc.,274 Mich App 40 (2007)
The Plaintiff was an iron worker and suffered a work-related injury in 1979 involving a fracture of the lunate bone of his left wrist. The fracture went untreated and his left wrist progressively worsened.
The Plaintiff worked for the defendant one day on October 23, 2000. The work bothered his wrist, but he was able to finish the one-day job. The Plaintiff did not work after that day.
In Rakestraw, the Michigan Supreme Court held that where an employee has a pre-existing condition which he/she claims was injured or aggravated by a subsequent work related injury, the employee must prove that the new injury or condition is “medically distinguishable” from the pre-existing condition in order for it to be compensable.
The Appellate Commission initially determined that the claimant did need to satisfy the Rakestraw requirement, i.e. a change in pathology, and that the Rakestraw requirement did apply to the establishment of a new injury date when evaluating a pre-existing, work-related condition. In doing so, the Appellate Commission determined that the claimant established a change in pathology, thus meeting the Rakestraw burden, and affirmed the magistrate’s finding of a new last date of work injury.
The Court of Appeals held that the facts in Simpson were distinguishable from the facts in Rakestraw, in that in Rakestraw, the pre-existing condition was not due to a work related injury. In Mr. Simpson’s case, the prior injury was work related. Therefore, the court held that Rakestraw’s requirement of a medically distinguishable injury does not apply to the present case, and more specifically, to prior work related injuries. This Court of Appeals decision was subsequently appealed to the Michigan Supreme Court.
Simpson v Borbolla Construction & Concrete Supply, Inc., 480 Mich 964 (2007)
In this Supreme Court opinion decided December 7, 2007, the court offers much needed clarification as to whether the Rakestraw requirement applies to pre-existing, work‑related conditions.
One of the questions posited in the Simpson case was whether the claimant needed to satisfy the Rakestraw “medically distinguishable” standard to establish an October 2000 last date of work injury in light of the fact that the Plaintiff’s underlying condition was clearly due to a work-related injury in 1979, versus a pre-existing, non-work related condition.
The Michigan Supreme Court has now provided clarification with its recent order in Simpson. The Supreme Court determined that the Court of Appeals erroneously held that Rakestraw did not apply to the facts involved in the Simpson case. Further, the Supreme Court affirmed the grant of Plaintiff’s benefits for the reasons articulated by the Workers’ Compensation Appellate Commission.
Thus, for all practical purposes, when the Supreme Court accepted the reasoning of the Workers’ Compensation Appellate Commission and rejected that of the Court of Appeals, it further clarified that the Rakestraw standard, i.e. “medically distinguishable,” does not apply only to non-work related pre-existing conditions, but also to work related pre-existing conditions.
Based upon the Supreme Court’s decision in Rakestraw and the court’s recent orders in Fahr and Simpson, when a claimant suffers from a pre-existing condition, whether it is work related or non-work related, he or she must establish by a preponderance of the evidence that the condition is medically distinguishable from the pre-existing condition. In other words, there must be a change in pathology or other record evidence from which a legitimate inference may be drawn that the Plaintiff’s underlying condition has pathologically changed as a result of the work event or activity.
Fahr v General Motors Corp., 478 Mich 922 (2007)
By an order issued on June 22, 2007, the Michigan Supreme Court addressed what is required to show a “medically distinguishable” condition pursuant to Rakestraw. The court stated that the WCAC erred by asserting that Rakestraw does not require a “pathological change in a pre-existing condition” for a Plaintiff to establish a work‑related injury has occurred. Instead, in the event that there is a pre-existing condition, Rakestraw clearly requires that the claimant must prove his work caused an injury that is medically distinguishable from the progression of the underlying pre existing condition. It must be shown that the pathology of that condition had changed and that cannot be accomplished by merely showing a worsening of symptoms.
DISABILITY
Hogan v Michigan Youth Correctional Facility, 2007 ACO #216
The magistrate found that the Plaintiff had suffered four work-related injuries to his left shoulder; however, the magistrate denied wage loss benefits to the Plaintiff finding that he had failed to prove he was disabled pursuant to Sington v Chrysler Corp., 467 Mich 144 (2002).
The magistrate theorized that the Sington case defines disability as a physical limitation that affects a worker’s ability to earn maximum wages at available work within his qualifications and training.
The magistrate did not believe that the Plaintiff was disabled because he could no longer work in the corrections field, where he earned his maximum wage. The Plaintiff had qualifications and training to work as a car salesman. No evidence was presented that he could not work as a car salesman despite his physical limitations.
The magistrate advised that when a plaintiff is capable of performing a job within his qualifications and training, despite his work-related condition, he must prove either 1) that the job does not pay maximum wages; or 2). that the job is not reasonably available.
The magistrate opined that the real issue is “what a car salesman in the Plaintiff’s geographic area pays today” and indicated that vocational testimony would probably be necessary to establish the earnings of a car salesman. No such evidence was presented. In the alternative, the magistrate advised that the Plaintiff could have established that a job as a car salesman was not reasonably available. However, the Plaintiff did not present any evidence that he looked for a job as a car salesman.
On appeal, the WCAC, relying on Stokes v DiamlerChrysler Corp., 272 Mich App 571 (2006), indicated that when the employee’s testimony and medical evidence establish that the employee is disabled from performing all jobs within his qualifications and training, the Sington standard is met. Unless the employer shows that, contrary to the employee’s proof, there are real jobs within the employee’s qualifications and training that pay the maximum wage, disability is established.
The WCAC, in review of the magistrate’s opinion, advised that the magistrate did not find that the Plaintiff lacked credibility pertaining to his past earnings as an automobile salesperson and held that pursuant to Stokes, the Plaintiff had established a prima facie case of disability pursuant to Sington.
Therefore, the Plaintiff’s testimony that his work as a car salesman, in the past, paid less
than his work with the Defendant, was enough to establish disability.
In his dissenting opinion, Commissioner Przybylo, writes that the lead opinion proposes a standard that would relieve the Plaintiff from a specific element of proof that the Stokes court mandates; the current pay for every job the Plaintiff previously performed. Commissioner Przybylo would have remanded this matter for additional proofs that address this issue.
This matter has been appealed to the Michigan Court of Appeals.
HORSEPLAY/MISCONDUCT
Barton v NWS Michigan, Inc., 2007 ACO #75
The Plaintiff, Mathew Barton, worked third shift for a liquor wholesaler in the bottle room in the warehouse. Employees were allowed to take their breaks outdoors, in the parking area outside of the garage. The Plaintiff testified that he and other employees were allowed to sit in their own lawn chairs during their outdoor breaks.
On October 4, 2005, during his break, the Plaintiff decided to play a practical joke on his supervisor. He placed his lawn chair in the middle of the driveway of the garage. His supervisor had just pulled a truck into the garage and the Plaintiff anticipated the supervisor’s next move would be to pull a different truck out of the garage. The Plaintiff wanted to block his supervisor’s path. Instead of pulling another vehicle out of the garage the supervisor backed up the first truck and ran over the Plaintiff. Mr. Barton suffered serious injuries that kept him off work for more than six months.
The magistrate held that the Plaintiff’s behavior was a sufficient deviation from his employment and that he was injured by reason of his intentional and willful misconduct, barring his right to recovery.
In support of his decision, the magistrate relied on the four factors established in Petrie v General Motors Corp., 187 Mich App 198 (1991) to determine whether the horseplay in question constituted a deviation from the course of employment. The factors are as follows: 1) the extent and seriousness of the deviation, 2) the completeness of the deviation, 3) the extent to which the practice of horseplay had become an accepted part of the employment, and 4) the extent to which the nature of the employment may be expected to include some such horseplay.
The WCAC affirmed the magistrate’s decision and his conclusion that the Plaintiff’s actions at the time of the injury were a serious deviation from his employment. The Plaintiff was not at his workstation at the time of the incident. The incident involved a complete deviation from the Plaintiff’s employment duties. There was no evidence that the horseplay in question was an accepted part of the Plaintiff’s employment duties. Lastly, there was no evidence that the nature of the Plaintiff’s employment, as a general warehouse worker, was expected to include the horseplay that the Plaintiff engaged in at the time of the incident.
In conclusion, the Commission indicated that the deviation was serious in that the Plaintiff intentionally placed himself in a dangerous position.
TESTIMONY
Stivers v DiamlerChrysler Corp., 2007 ACO #214
This matter came before Magistrate Sloss on October 12, 2004 and December 7, 2004. Magistrate Sloss granted the Plaintiff an open award. However, in making his decision, the magistrate excluded the testimony of the Defendant’s expert witness, vocational consultant, Mr. Hostetler.
The Defendant appealed and the WCAC remanded this matter to the magistrate with instructions that the magistrate consider the testimony of the vocational expert.
The Commission, citing Carnoskes v Aetna Ind., 2004 ACO #376, emphasized that the claimant’s testimony is a vital element to consider in the Sington analysis with vocational testimony as a helpful guide to the magistrate in some cases.
On remand, the magistrate explained that he believed that the Commission found that his exclusion of Mr. Hostetler’s testimony to be proper, and that the matter was actually remanded for consideration of Mr. Hostetler’s testimony as a lay witness.
The Defendant filed its brief on remand, seeking a second remand, stating that the magistrate did not comply with the remand directives set forth by the Commission.
The Commission fired back, “while it is true that the Commission in its October 4, 2006, Order did not use the magic words “expert testimony” and we did not specifically tell the magistrate that he abused his discretion in excluding the testimony of Mr. Hostetler as expert testimony sua sponte, such was our unstated intent.”
The Commission cites the Court of Appeals decision in Stokes which takes the position that vocational testimony is expert testimony, especially where the claimant’s qualifications and training are concerned.
The Commission remanded this matter once again to the magistrate to consider the testimony of the vocational consultant as expert testimony.
OFFSETS
Link v Thomas Electric, LLC, 2007 ACO #32
The Plaintiff, Benjamin Link, alleged a Chapter 3, last day of work personal injury arising out of and in the course of his employment with the Defendant. The Magistrate held that the Plaintiff’s work for the Defendant caused a significant aggravation of his bilateral carpal tunnel syndrome.
Testimony at the time of trial established that the Plaintiff had returned to work on two occasions. He had delivered newspapers and he had performed painting and light maintenance. He had earned approximately $8.00 per hour at each job. As a result, the magistrate gave the Defendant credit in the amount of 8.00 per hour.
The Plaintiff appealed and argued that the magistrate’s opinion that allowed for a reduction in the Plaintiff’s weekly benefits, when the Plaintiff had no actual earnings, must be modified to provide that benefits can only be reduced when the Plaintiff is in receipt of actual earnings.
The WCAC concluded that the Magistrate’s order did not contemplate a reduction of wage loss benefits unless there were actual earnings to base the reduction, and advised that it is the order that counts, rather than the opinion. In so finding, the WCAC held that the Plaintiff was entitled to wage loss benefits reduced by actual earnings only.
The Court of Appeals reversed the ruling of the WCAC that the magistrate’s order did not provide for an offset to the Plaintiff’s worker’s compensation benefits, except in the case of actual earnings. The Court of Appeals indicated that the magistrate in his opinion clearly gave the employer credit for the Plaintiff’s ability to earn $8.00 an hour, 25 hours per week, and the WCAC clearly erred in ruling that the magistrate’s order did not grant such credit. As such, this case was remanded.
The Supreme Court of Michigan reversed the ruling of the WCAC that the magistrate’s order did not provide for an offset to the Plaintiff’s worker’s compensation benefits except in the case of actual earnings. The Supreme Court held that the Magistrate’s order incorporated by reference all of the rulings attached in his opinion, which gave the employer credit for the Plaintiff’s ability to earn. This matter was remanded for consideration of the Plaintiff’s cross-appeal.
DEPENDENCY IN DEATH CASES
Coleman v Buehrle Engineering Co., 2006 ACO #301
At the time of his death, the employee was living with his mother and brother. The issues in this case were whether his mother, Carrie, and his brother, Charles, were partially dependent on the decedent and, if so, at what rate the partial dependents’ benefits should be paid.
The defendants argued that the Magistrate erred by finding Carrie and Charles partially dependent on the deceased based on errors in his calculations. The Commission held that in death cases, there is no requirement that it be shown the decedent contributed over 50% of the dependant’s support. All that must be shown in a death case is that the decedent contributed to their support. (Note: please contrast this with Sec. 353 of the WDCA. That section requires a showing that the worker contribute over 50% of the dependant’s support when calculating benefits in non-death cases).
Section 321 of the WDCA provides that death benefits equaling 80% of the decedent’s after-tax average weekly wage should be paid to wholly dependents. If there are no whole dependents, partial dependents should receive a proportional amount of the 80% after-tax average weekly wage that the decedent contributed to the partial dependents out of his annual earnings.
The Commission was now left with the daunting task of trying to calculate the decedent’s contribution to each dependent. It was determined that the controlling case law on this issue is Lesner v Liquid Disposal, Inc, 466 Mich 95 (2002). The Commission determined that the Magistrate erred by failing to consider the decedent’s contribution to the total household income. The Commission used their fact-finding authority to calculate the appropriate benefits.
The Commissioners used the following information contained in the trial record to calculate the decedent’s contribution:
HOUSEHOLD CONTRIBUTIONS
| Mortgage |
$1980.00/year |
| Home insurance |
$128.00 |
| Property taxes |
$648.00 |
| Property insurance |
$264.00 |
| Cable |
$413.88 |
| Telephone |
$377.88 |
| Electric |
$420.00 |
| Gas |
$390.00 |
| Water |
$110.00 |
| Stove |
$700.00 |
| Sink |
$4000.00 |
| Total |
$9731.79/year x .66 = $6,487.84 |
Based on this information, the Commission found that the decedent contributed at least $9731.76 annually to the combined household. They also concluded that the three of them lived in a common household, with each benefiting equally. Therefore, of the $9731.76 contributed by the decedent, 2/3 (.66) of that amount was for the benefit of Carrie and Charles.
Individually, the Commission also found that the decedent contributed an additional $5688.00 to Charles for medicine and auto related expenses. To his mother, Carrie, he contributed an additional $7524.00 for hair, clothing, lawn and pet car, and spending money. Therefore, in total, the decedent’s contribution to his partial dependents was $19,699.84 annually.
To determine the total weekly benefit, the following formula is used:
Benefit = (decedent’s contribution)(.64)(decedents average weekly wage after taxes)
(decedent’s annual earnings)
The decedent’s average weekly wage was $477.60. His annual earnings were calculated at $32,188.00. Therefore:
Benefit = ($19,699.84)(.64)($477.60)
$32,188.00 = $187.00 week (rounded)
(Note: in the event there is a statutory minimum or maximum average weekly wage issue, that minimum or maximum is placed in the formula).
Because there are more than one partial dependent, Sec. 331(b) of the WDCA requires that the death benefit be divided among the partial dependents according to the “relative extent of their dependency.”
Carrie received from her son $7524 and $3243.92 (half of the decedent’s household contribution) totaling $10,767.92. This equaled 54.5% of the $19,699.84 total decedent contribution.
Charles’ $5688 and $3243.92 equaled $8931.92, or 45.5% of the total.
Therefore, of the $187.00 per week, Carrie was entitled to 54.5% of it ($101.92) and Charles was entitled to 45.5% of it ($85.08).
STATUTORY EMPLOYEE / SHOOT THROUGH PROVISION
Loos v J.B. Installed Sales, Inc., 2006 ACO #309
In this case, James Loos needed to prove that he was an employee of Robinson Roofing, an uninsured subcontractor of J.B. Installed Sales, to reap the benefits of Sec. 171, the shoot-through provision of the act. Sec. 171 allows for an employee to impose liability on a principal if they are working for an uninsured subcontractor. For Sec. 171 to apply, an individual must be an employee.
The magistrate in this case found that the Plaintiff was not entitled to benefits from J.B. Installed Sales because he failed to prove that he was an employee of Robinson Roofing. In support of his conclusion, the magistrate noted that the Plaintiff’s earnings from Robinson Roofing were reported on 1099 forms and assumed that, had he been an employee, he would have been paid on a W-2 and his earnings would have been reported to the Social Security Department. Also, an emphasis was made that the Plaintiff stated to the hospital personnel after his injury that he was “self-employed.”
In reversing the magistrate and finding that the Plaintiff was an employee of Robinson Roofing, the WCAC stated that it is the statutory definition of an employee as noted in Sec. 161(1)(n) of the act that controls, not how the parties label each other. Sec. 161(1)(n) defines an employee as “every person performing service in the course of the trade, business, profession, or occupation of an employer at the time of the injury” as long as he did not do any of the following: 1) maintain a separate business; 2) hold himself out to and rendered services to the public; or 3)was an employer subject to the Act.
When reviewing the trial transcript, the only testimony on whether or not the Plaintiff maintained a separate roofing business, that he held himself out to the public to render roofing services, or that he had any employees was the Plaintiff’s testimony itself, answering all of the questions in the negative. Neither Robinson Roofing nor J.B. Installed Sales presented testimony contesting the Plaintiff’s testimony.
The Commission stated that the factors relied upon by the Magistrate in determining that the Plaintiff was not an employee are not irrelevant, the statutory language makes it clear that the proper focus is on the Plaintiff’s actions and not on the parties’ labels. Therefore, the evidence only supported the conclusion that the Plaintiff was an employee of Robinson Roofing.
JURISDICTION
Karaczewski v Farbman Stein & Co., 478 Mich 28 (2007)
Mr. Karaczewski was hired by Farbman Stein & Co in Southfield in 1984. In 1986 he was transferred to Fort Lauderdale, Florida and became a Florida resident. In 1995, he fell from a ladder in the course of his employment with the defendant and suffered a disabling injury. After receiving some workers’ compensation benefits in Florida, he filed a workers’ compensation claim in Michigan. In Michigan, he could receive benefits for additional future surgeries, something that was not afforded to him under Florida law.
The magistrate found that the Plaintiff was entitled to benefits under the laws of Michigan, despite being a resident of Florida and his injury occurring in Florida, because his contract of hire was made in Michigan. On appeal by the defendants, the WCAC affirmed the magistrate’s decision, relying on Boyd v W G Wade Shows, 443 Mich 515 (1993). The Court of Appeals affirmed.
The Michigan Supreme Court reversed the Court of Appeals and expressly overruled their previous decision in Boyd on the basis that the plain language of Sec. 845 of the WDCA conferring jurisdiction to Michigan for out-of-state injuries only if (1) the employee is a resident of Michigan when the injury occurs and (2) the contract of hire was made in Michigan.
The Supreme Court expressly said that Sec. 845 addresses jurisdiction only for out-of-state injuries and the overruling of Boyd only affects resident of other states who are injured outside of Michigan.
Therefore, for an out-of-state injury to be compensable in Michigan, the requirements are based on the clear and unambiguous language of Sec. 845. The employee must be a resident of Michigan at the time of the injury AND the contract for hire must have been made in Michigan.
SIGNIFICANT MANNER TEST
Dekesis v DaimlerChrysler Corp., 2007 ACO #16
In this en banc decision, three of the five Workers’ Compensation Appellate Commissioners reversed the findings of the magistrate that the Plaintiff suffered from a right knee condition that was significantly aggravated by her employment or that the right knee conditions constituted a personal injury.
In her scathing controlling opinion, Commissioner Grit highlighted numerous errors in the magistrate’s analysis. She stated that the magistrate incorrectly identified the pathology, diagnoses, and medical chronology of the Plaintiff’s condition, and even if he had not, there was not testimony supporting a work injury or a significant aggravation. Sec. 301(2) of the WDCA states that conditions of the aging process are compensable only if the work activities contributed to or aggravated or accelerated the condition in a significant manner. In this case, the only testimony in favor of the magistrate’s finding was that of the Plaintiff’s expert. He stated “I believe that the injury had contributed to the progressive deterioration of her knee and the need for the procedures that were performed.” This alone could not support a finding that a work injury significantly contributed to the Plaintiff’s preexisting arthritis.
Commissioner Grit continued by finding that even if the higher standard required by Sec. 301(2) did not apply, the Plaintiff still failed to show she suffered a compensable injury that arose out of and in the course of her employment. According to the Commissioner, there is a difference between an “event” and an “injury.” The testimony in this case was enough to prove an “event” occurred, but it is an “injury” that generates an award of workers’ compensation benefits and that was not proven. Lay testimony can establish that an event happened at work, but it takes medical testimony to explain that the event damaged the employee in some way and that there is a causal nexus between the event that is the injury and the employment such that benefits are appropriate.
In this case, the Commissioner noted that the Magistrate identified work injuries that did not exist, thus invalidating his entire analysis, because it was evaluating a nonexistent injury. There was absolutely no substantial evidence on the record supporting the doctor’s conclusion, thus necessitating a reversal of his award of benefits.
The Michigan Court of Appeals denied leave to hear this matter on the issues presented.
VOLUNTARY PAY AGREEMENTS
Birchmeier v General Motors Corp., 2007 ACO #107
After an initial trial in this matter, the defendant was ordered to pay benefits related to the Plaintiff’s work-related injury. Another application was filed 5 years later after a dispute arose regarding the reasonableness of a certain medical treatment. This dispute was for payment of the medical treatment and for attorneys fees related to same. In an attempt to resolve the disagreement, the defendant sent a check for $6,460.00 directly to the medical provider. However, the dispute was not resolved and the parties eventually executed a voluntary pay agreement requiring defendant to pay the medical provider $1,300.00 and Plaintiff’s attorney $2,698.32.
After the voluntary payment agreement was entered, the defendants learned that they had already paid the full amount of the medical bills before the agreement was executed. The defendants wished to have the agreement set aside. The Magistrate affirmed the agreement and the defendants appealed the order to the WCAC.
Citing Borgman v Bultema, 212 Mich 70 (1920), the court enumerated five prerequisites that must be established before a court may excuse a party from its obligation under a stipulation:
- the party must show that it would be inequitable to enforce the stipulation;
- the party must prove that it entered the stipulation under a mistake of fact or mistake of circumstances connected with the subject matter of the stipulation;
- the party must subsequently introduce facts that show that the stipulation was made inadvertently;
- the court must examine the impact of enforcing the stipulation; and
- the court must examine the impact of setting aside the stipulation. It must be determined that the enforcement will injure one of the parties and that setting aside the stipulation will not materially prejudice the other party.
After weighing the evidence, the Commission affirmed the Magistrate’s opinion. It rejected the opinion that the defendants inadvertently entered the stipulation because no one knew that it had paid all the costs when the VP was entered. However, this claim would require a hearing to develop evidence and testimony regarding actual knowledge. Because that evidence was not available, the WCAC could not make those findings.
However, the WCAC further stated that a hearing would not be necessary setting aside the agreement would materially prejudice the Plaintiff because the application was for payment of the medical bills in addition to the attorney’s fees. Therefore, the payment of the bills did not end the dispute, the dispute was ended when the VP was entered the attorney’s fees were paid. Essentially, the realization that the defendant would have prevailed at trial because it had already paid the attorney’s fees does not justify setting aside the agreement. The Plaintiff would be prejudiced by losing the right to the attorney’s fees and would incur additional litigation expenses if forced to litigate. Additionally, the defendants failed to show injury because it admitted that the medical provider returned the $1,300.00 from the voluntary pay agreement.
SUBSTANCE ABUSE
Williams v General Motors Corp., 2007 ACO #116
In this case, the magistrate placed a very large emphasis on the Plaintiff’s history of substance abuse when coming to a determination on the Plaintiff’s credibility. The magistrate determined that the Plaintiff was “moderately credible” because his substance abuse and resultant psychological problems from same required the corroboration of his testimony with the medical records and other evidence entered at the time of trial. Because the magistrate found that the Plaintiff’s disability was based on his substance abuse and not his alleged back injury, he denied the Plaintiff’s claim for benefits.
The Plaintiff appealed to the WCAC who correctly noted the long-standing principle that when the magistrate finds that the Plaintiff’s credibility is suspect, the Plaintiff’s burden of proof to establish all the elements of his case becomes difficult, it not impossible, to carry. Ultimately, with barely any legal analysis, the WCAC affirmed the magistrate’s decision solely on the issue that the magistrate’s credibility was reasonable in light of the evidence. Because the credibility was limited, the magistrate’s determination was logical and appropriate.
In a concurring opinion, Commissioner Ries cautioned against using emotion problems and substance abuse as a reason to deny benefits under the act because, according to Miklik v Michigan Special Machine Co, 415 Mich 364 (1982), a non-work related health problem, even one that is disabling to an extensive degree, does not bar the payment of benefits under the Act. Therefore, the Plaintiff’s substance abuse and emotional disability neither justifies nor bars the payment of compensation. However, the difference in this case is that, despite these arguments, the Plaintiff failed to prove that his back condition disabled him pursuant to the Act.
