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:

(1) the party must show that it would be inequitable to enforce the stipulation;
(2) 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;
(3) the party must subsequently introduce facts that show that the stipulation was made inadvertently;
(4) the court must examine the impact of enforcing the stipulation; and
(5) 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.