Title: TONY J DANIEL V DEPT OF CORRECTIONS

State: michigan

Issuer: Michigan Supreme Court

Document:

____________________________________________________________________________________________ 
____________________________________________________________________________________________________________________________ 
____________________________________ 
Michigan Supreme Court 
Lansing, Michigan 48909 
Chie f Justice 
Justices 
Maura D. Corrigan 
Michael F. Cavanagh 
Elizabeth A. Weaver 
Marilyn Kelly 
Clifford W. Taylor 
Robert P. Young, Jr. 
Opinion 
Stephen J. Markman 
FILED MARCH 26, 2003  
TONY J. DANIEL,  
Plaintiff-Appellee,  
v 
No. 120460  
DEPARTMENT OF CORRECTIONS,  
Defendant-Appellant.  
BEFORE THE ENTIRE COURT  
WEAVER, J.  
In this case we address whether plaintiff, who was  
disciplined by, the Department of Corrections (his employer),  
for sexually harassing female attorneys, and who suffered  
depression as a result of the disciplinary proceedings, is  
barred from worker’s compensation benefits pursuant to MCL  
418.305.  MCL 418.305 provides, “If the employee is injured by  
reason of his intentional and wilful misconduct, he shall not  
receive compensation under the provisions of this act.”  We  
hold that MCL 418.305 precludes benefits in this case and,  
 
 
therefore, we reverse the judgment of the Court of Appeals and  
reinstate the Worker’s Compensation Appellate Commission’s  
(WCAC’s) order denying plaintiff benefits.  
I  
Plaintiff worked as a probation officer with defendant  
Department of Corrections beginning in 1984. His employment  
required him to attend probation violation hearings held in  
circuit court several times a month to interact with defense  
attorneys representing probationers.  
In February 1995, a female defense attorney filed a  
complaint with plaintiff’s immediate supervisor alleging that  
plaintiff sexually harassed her in August 1994 and February  
1995.  The attorney testified that it was plaintiff’s failure  
to take her rejection of his advances seriously that prompted  
her to file her complaint.1  The attorney’s complaint was soon  
followed by allegations of 
sexual 
harassment 
by 
plaintiff from  
1The attorney alleged that in August 1994 plaintiff 
obscenely propositioned her.  She testified that when she  
rejected plaintiff’s advances, he told her that they would 
have to be “discreet” since he was married with children.  
Then, in the middle of a probation hearing that day, he showed 
her a note stating that she would have to lose ten pounds 
first.  The attorney testified that she and her boss 
successfully arranged her schedule to avoid further contact 
with plaintiff.  However, in February 1995, she was again 
scheduled with plaintiff.  The attorney testified that 
plaintiff doggedly pursued his previous proposition.  When  
rejected, plaintiff told the attorney that she’d need to lose 
twenty pounds and said to her, “[y]ou want me; you know you 
want me.”  
2  
 
 
  
three other female defense attorneys.2  
Plaintiff’s supervisor initiated an investigation into  
the complaints.  Over the following months, she interviewed  
the attorneys and other 
witnesses. 
 
When 
questioned, plaintiff  
denied 
all 
the 
allegations. 
At 
the 
close 
of 
her  
investigation, plaintiff’s supervisor recommended that a  
disciplinary 
conference 
be 
held 
regarding 
five 
separate 
counts  
of sexual harassment.  
A disciplinary conference was held on June 20, 1995.  
Plaintiff continued to deny the allegations.  On the advice of  
his union representative, however, plaintiff offered nothing  
in his own defense.  The plaintiff was informed that the  
possible discipline ranged from a written reprimand to  
dismissal.  At the conclusion of the conference, the presiding  
official found “a strong basis” on which to conclude that  
plaintiff violated Michigan Department of Corrections work  
rules as described in all five counts.3  Ultimately, plaintiff  
2It was alleged that plaintiff told one attorney that he 
was attracted to Caucasian women and that he was turned on by 
a woman’s thighs.  It was alleged by another that plaintiff 
asked if she would date a black man.  A third attorney alleged 
that when she was pregnant, plaintiff had asked her if she was 
having a girl or boy.  When she replied that she was having a 
girl, she alleged that plaintiff said, “too bad, a boy means 
you had deep penetration.”  
3The work rules at issue prohibit “[s]peech, action, 
gesture 
or 
movement 
that 
causes 
physical 
or 
mental  
intimidation, humiliation, or harassment,” and “conduct of an 
employee which may adversely affect the reputation of the 
Department . . . .”  
3  
was disciplined for the two counts of sexual harassment  
arising from the August 1994 and February 1995 incidents.  He  
was suspended for ten days without pay.4  
After his return to work in August 1995, plaintiff  
testified that he felt harassed by both his immediate  
supervisor and the defense attorneys who had accused him of  
sexual harassment.  He felt “out of control,” and, on  
January 27, 1996, began being treated by psychologist Daniel  
DeWitt.  Dr. DeWitt diagnosed plaintiff as suffering from  
depression caused by the disciplinary investigation and  
proceedings as well as the subsequent stresses at work.  As a  
result, plaintiff began a leave of absence in February 1996.  
In March 1996, Dr. DeWitt felt that plaintiff could work  
again, but at a different job for a different supervisor.  
Plaintiff submitted a request for reasonable accommodation in  
the form of a transfer to another part of the Department of  
Corrections.  His request was rejected by the department’s  
Americans 
with 
Disabilities 
Act 
Coordinator 
because  
plaintiff’s 
disability 
was 
deemed 
temporary 
and 
not  
substantially limiting in nature.  In June 1996, plaintiff  
filed a claim for worker’s compensation benefits premised on  
a 
mental 
disability 
arising 
from 
the 
disciplinary 
proceedings.  
4Plaintiff subsequently filed a grievance with his union, 
claiming the discipline was without just cause and in 
violation of his contractual rights.  The resolution of the  
grievance does not appear in the record.  
4  
During the time leading to the trial, plaintiff saw three  
other doctors at the state’s request.  
After four days of trial between March and September of  
1998, the magistrate concluded 
that 
the 
“discipline, 
and post­
discipline employment events up to February 2, 1996,  
contributed 
in 
a significant 
manner 
to 
[plaintiff’s]  
development of a disabling condition of depression, anxiety,  
and uncontrolled anger.” The magistrate did not address MCL  
418.305 
or 
make 
specific 
findings 
regarding 
whether  
plaintiff’s conduct was intentional and wilful or otherwise  
not compensable under that section.  Rather, the magistrate’s  
conclusion that plaintiff was entitled to benefits was based  
on the finding that plaintiff’s injury arose out of his  
employment pursuant to Gardner v Van Buren Public Schools, 445  
Mich 23; 517 NW2d 1 (1994), overruled in part by Robertson v  
DaimlerChrysler Corp, 465 Mich 732; 641 NW2d 567 (2002).  
However, the magistrate commented:  
It is clear to me that Plaintiff’s problems 
started with his discipline for the improprieties 
of which he was accused.  It is difficult to have  
much sympathy for this claimant, since he brought 
these troubles on himself by his own misconduct. 
But compensation, like the rain, falls on the just 
and the unjust alike.  
The magistrate awarded plaintiff a closed award of worker’s  
compensation benefits.  
Defendant 
appealed, 
raising 
MCL 
418.305 
as 
an 
affirmative  
defense.  The WCAC agreed with the essence of the magistrate’s  
5  
finding that the plaintiff’s injury was self-inflicted, but  
concluded that MCL 418.305, “puts up an umbrella to prevent  
compensation from falling on this particular ‘unjust’  
claimant.”5  The WCAC found that plaintiff was on notice of  
the rules that prohibited the conduct for which he was  
ultimately accused and disciplined, but had done “it anyway,  
in a consistent and repeated pattern over a long period of  
time.”  The WCAC concluded that plaintiff’s injury arose from  
his own intentional and 
wilful 
misconduct 
and, 
therefore, that  
MCL 418.305 precluded an award of benefits.  
Plaintiff appealed and, as will be discussed below, the  
Court of Appeals reversed the WCAC decision in a two-to-one  
decision.  The Court of Appeals majority concluded that  
plaintiff’s acts did not rise to the level of intentional and  
wilful misconduct contemplated by MCL 418.305. 248 Mich App  
95 (2001).  
In dissent, Judge O’Connell noted that “whether an  
individual engaged in wilful and intentional misconduct is a  
factual determination” and “that the Legislature, through MCL  
418.861a(14), has provided the WCAC with the authority to make  
factual findings.” 248 Mich App 109-110.  Moreover, Judge  
5The WCAC is empowered to make independent findings of 
fact on matters where the magistrate’s findings are lacking, 
as long as the record is sufficient for administrative 
appellate review and the WCAC is not forced to speculate. 
Mudel v Great Atlantic & Pacific Tea Co, 462 Mich 691, 730;  
614 NW2d 607 (2000).  
6  
 
O’Connell noted, the WCAC’s finding in this case that  
plaintiff engaged in wilful and intentional misconduct was  
conclusive and binding in the absence of fraud. Id. at 110,  
citing Mudel, supra at 701, 711, 712. Judge O’Connell opined  
“that the WCAC’s conclusion that plaintiff engaged in wilful  
and intentional misconduct was well-grounded,” 248 Mich App  
110, in the record and that, therefore, the Court of Appeals  
was required to affirm its decision.  
We granted defendant’s application for leave to appeal.  
466 Mich 889 (2002).  
II  
We review de novo questions of law. DiBenedetto v West  
Shore Hosp, 461 Mich 394, 401; 605 NW2d 300 (2000). Whether  
plaintiff’s injury arose by reason of intentional and wilful  
misconduct as contemplated by MCL 418.305 is a question of  
fact. McMinn v C Kern Brewing Co, 202 Mich 414, 429; 168 NW  
542 (1918); Day v Gold Star Dairy, 307 Mich 383, 390; 12 NW2d  
5 (1943).  On judicial review, “[t]he findings of fact made by  
the commission acting within its powers, in the absence of  
fraud, shall be conclusive. . . .” MCL 418.861a(14).  
III  
The focus of our inquiry is solely on the proper  
application of MCL 418.305.6  As quoted above, MCL 418.305  
6The Court of Appeals majority and dissent debated the 
relevance of Calovecchi v Michigan, 461 Mich 616; 611 NW2d 300 
(continued...)  
7  
  
  
provides, “If the employee is injured by reason of his  
intentional and wilful misconduct, he shall not receive  
compensation under the provisions of this act.”  This  
provision has remained essentially unchanged since it was  
first adopted by the Legislature in 1912 as part of the  
original worker’s compensation legislation.  See 1912 (1st Ex  
Sess) PA 10, part 2, § 2.7  
The Court of Appeals majority below divided its analysis  
of MCL 418.305 into two parts.  It focused first on whether  
plaintiff’s mental injury arose 
“by 
reason 
of” 
his misconduct,  
and, 
second, 
on 
whether 
plaintiff’s 
misconduct 
was  
“intentional and wilful.”  We address and reject the panel  
majority’s analysis of each of these questions.  
A  
“By reason of”  
The panel majority first focused on what it termed the  
6(...continued) 
(2000), to the interpretation of MCL 418.305.  In Calovecchi, 
an 
employee’s 
alleged misconduct off the job 
was 
investigated, 
but the allegations were ultimately dismissed.  Calovecchi  
held that mental injuries caused by acts of discipline may be 
compensable under MCL 418.301(1), because “acts of employer­
imposed discipline are a predictable part of the working 
environment.” 
Calovecchi, supra, p 625. 
The majority and 
dissent speculated whether Calovecchi would somehow encourage 
employers to find employees guilty of alleged misconduct.  In  
response, we note that MCL 418.305 was not raised by the 
parties or addressed at any level in Calovecchi and that such  
policy considerations are properly left to the Legislature, 
not the courts.  
7The only change has been to the word “employee,” which 
was originally spelled “employe.”  
8  
 
  
 
question of causation, i.e., 
whether 
plaintiff 
was 
injured “by  
reason of” his intentional and wilful misconduct.  The  
majority rejected the WCAC’s finding that plaintiff’s injury  
was “the direct result of his intentional and wilful  
misconduct,” by concluding that the question of “who started  
it?” was “inapposite to the intention of the WDCA.”  248 Mich  
App 103. The majority concluded that plaintiff’s injury was  
“too attenuated for [it] to have occurred ‘by reason of’ his  
acts,” id., p 102, and that plaintiff “was not injured at the  
time of his act,” but was “injured solely because of his  
status as an employee . . . .” Id., p 103.  
To support 
its 
conclusion, 
the 
majority analogized to two  
cases in which fighting or horseplay between employees  
escalated and resulted in physical injuries.  See, e.g.,  
Crilly v Ballou, 353 Mich 303; 91 NW2d 493 (1958), and Andrews  
v Gen Motors Corp, 98 Mich App 556; 296 NW2d 309 (1980).8  Our  
review of those cases reveals that they do not support the  
panel majority’s causation analysis.  Indeed, neither case,  
8Crilly involved an injury caused by employees throwing 
shingles and nails at one another.  The Court conducted an  
exhaustive review of cases involving on-the-job “sportive 
assaults” and concluded 
that 
injuries 
received 
are not outside 
the realm of the course of employment and were compensable as 
long as they did not rise to the level of intentional and 
wilful misconduct.  Crilly, supra, pp 326-327. 
Andrews  
involved injuries sustained during a fight between employees. 
The Court of Appeals 
affirmed 
the 
Worker’s 
Compensation Appeal 
Board’s award of benefits, concluding that the conduct did not 
involve “such a degree of ‘moral turpitude’ . . . so as to 
preclude” benefits. Andrews, supra, p 561.  
9  
 
nor any other we have found, addressed whether the injuries  
were “by reason of” misconduct pursuant to MCL 418.305.  
Rather, the causation inquiry in those cases, and our case  
law, pertains to the question whether such misconduct can be  
said to have arisen out of the course of the employment as  
required by MCL 418.301. See Crilly, supra, pp 324-327, and  
Andrews, supra, pp 558-559.9 
 Significantly, defendant no longer disputes, and the  
magistrate, the WCAC, and the Court of Appeals agreed, that  
plaintiff’s mental disability arose out of and in the course  
of his employment pursuant to MCL 418.301(1).  Thus, the  
majority’s reliance on Crilly and Andrews was misplaced.  
Moreover, we decline to impose a more direct causation  
requirement than that plainly expressed by the statute. “By  
reason of” is defined as “[b]y means, acts, or instrumentality  
of.”  Black’s Law Dictionary (6th ed). As noted by the Court  
of Appeals dissenter, the phrase does not require that an  
injury arise contemporaneously with the misconduct. Rather,  
as stated by Judge O’Connell:  
[I]t cannot be disputed that [plaintiff’s] 
misconduct was the starting point for the resultant  
9Whether misconduct that causes an injury arose out of 
and in the course of employment under MCL 418.301(1) is a 
preliminary question that must be answered affirmatively 
before the issue whether that misconduct was “intentional and  
wilful” in light of MCL 418.305 is reached.  See Bischoff v  
American Car & Foundry Co, 190 Mich 229, 231; 157 NW 34 
(1916); Clem v Chalmers Motor Co, 178 Mich 340, 344-345; 144 
NW 848 (1914).  
10  
  
disciplinary proceedings that ultimately caused his 
injury.
 Had plaintiff not engaged in sexual 
harassment, he would not have been subjected to the 
disciplinary proceedings, and he would not have 
been suspended from his job. . . . [T]he 
disciplinary proceedings, from which plaintiff’s 
mental disability arose, flowed directly and  
predictably from plaintiff’s misconduct as surely 
as night follows day. [248 Mich App 115-116.]  
We agree with Judge O’Connell and conclude that the  
record amply supports the WCAC’s finding that plaintiff was  
injured “by reason of” his intentional and wilful misconduct.  
Because the magistrate failed to address the applicability of  
§ 305 to plaintiff’s claim, the WCAC acted within its  
authority in engaging in supplemental fact-finding and in  
concluding that plaintiff’s injury—although it may well have  
arisen out of employment events—was nevertheless barred  
because it occurred by reason of his intentional and wilful  
misconduct.10
 Therefore, as constrained by our limited  
judicial appellate review, we abide by the findings of fact by  
the WCAC. Mudel, supra, p 700.  
B  
“Intentional and Wilful”  
The Court of Appeals majority next concluded that  
plaintiff’s acts did not amount to “intentional and wilful  
10Indeed, the WCAC’s fact-finding in this regard is 
consistent with the magistrate’s finding that plaintiff 
“brought these troubles on himself by his own misconduct.” 
Therefore, we cannot agree with Justice Cavanagh, who opines 
in dissent that the WCAC improperly substituted its own 
findings for those of the magistrate.  
11  
 
  
misconduct” under MCL 418.305.  The majority reasoned that  
plaintiff’s 
conduct, 
though 
“voluntary, 
crude, 
and  
unprofessional,” did not rise to “intentional and wilful  
misconduct” as it has been interpreted in this state.  248  
Mich App 104.  
Our case law has consistently distinguished “intentional  
and wilful misconduct” from acts of negligence and gross  
negligence.  Benefits are awarded despite MCL 418.305 where an  
employee is injured by his own negligence.  See, e.g., Gignac  
v Studebaker Corp, 186 Mich 574; 152 NW 1037 (1915); Day,  
supra. However, this Court has held that benefits are  
precluded under the statute where an employee was injured by  
conduct of a quasi-criminal nature.  Fortin v Beaver Coal Co,  
217 Mich 508, 510; 187 NW 352 (1922).  Fortin described  
“quasi-criminal” conduct as “involving the intentional doing  
of something with knowledge that it is dangerous and with  
wanton disregard of consequences . . . .” Id.  
Although plaintiff denies that he made the comments of  
which he is accused, his denials were not believed at any  
level reflected in the record. 
At the disciplinary  
conference, “a strong basis” was found to support the  
allegations. 
 
The 
magistrate found that plaintiff had 
“brought  
these troubles on himself by his own misconduct.”  The WCAC  
found that “[p]laintiff knew what he was doing was wrong” and  
yet he persisted. Even the Court of Appeals majority called  
12  
 
 
the 
plaintiff’s 
behavior 
“voluntary, 
crude, 
and  
unprofessional.”  248 Mich App 104.  Nevertheless, the  
majority decided that plaintiff’s behavior did not rise to a  
level of moral turpitude that could be called “intentional and  
wilful.” Id.  
In our view, the WCAC’s conclusion that plaintiff’s  
misconduct was voluntary is amply supported by the record.  
His repeated acts of sexual harassment were well beyond the  
realm of mere negligence or gross negligence. That said, it  
has long been understood that the question whether misconduct  
is “intentional and wilful” is one of fact.  McMinn, supra, p  
429, and Day, supra, p 390.11
 On judicial review, “[t]he  
findings of fact made by the commission acting within its  
powers, in the absence of fraud, shall be conclusive.”  Mudel,  
supra, p 700. 
Thus, the Court of Appeals panel majority’s  
rejection 
of 
the 
WCAC’s 
findings 
regarding 
whether 
plaintiff’s  
misconduct was “intentional and wilful” and its substitution  
of its own fact-finding on the issue does not comport with its  
11In Crilly, supra, p 327, we noted:  
[T]his exclusion of acts of a degree of moral 
turpitude, it will be observed, is by the  
legislature itself, not a judicial retrogression to 
principles of tort. 
Further than this in  
definition we do not attempt to go.  The precise 
future line of demarcation will be marked out, in 
the 
traditional 
manner, 
by 
the 
case-to-case  
decision. [Emphasis supplied.]  
13  
 
limited judicial appellate review. 
 
We, 
therefore, 
reverse the  
judgment of the Court of Appeals.  
C  
We note one final disagreement with the panel majority’s  
reasoning. Regarding whether the plaintiff knew his conduct  
was prohibited, the panel majority found persuasive the fact  
that, although plaintiff’s comments were alleged to have been  
made over several years, he “suffered no adverse consequences  
from his behavior” until 1995.  248 Mich App 103. It reasoned  
that “[p]laintiff’s history of conduct in this case indicates  
that the rule was not strictly enforced and there are no facts  
in the record indicating otherwise.”  Id., p 105. While this  
Court has concluded that MCL 418.305 does not operate to  
preclude benefits where an employee was injured while  
violating a work rule that had not been enforced by the  
employer, see, e.g., Rayner v Sligh Furniture, Co, 180 Mich  
168; 146 NW 665 (1914), the record in this case reflects that  
plaintiff’s immediate supervisor had conducted several  
investigations into other alleged violations of work rules by  
other employees during her supervisory tenure. 
More  
critically, that plaintiff’s accusers did not file formal  
complaints 
triggering 
the 
enforcement 
process 
is 
not  
demonstrative 
of 
the 
defendant’s 
enforcement, 
or 
lack 
thereof,  
of workplace rules.  
IV  
14  
For the reasons stated, we reverse the judgment of the  
Court of Appeals and reinstate the WCAC order denying benefits  
to this plaintiff.  
Elizabeth A. Weaver  
Maura D. Corrigan 
Clifford W. Taylor 
Robert P. Young, Jr. 
Stephen J. Markman  
15  
 
 
___________________________________ 
 
v 
S T A T E 
O F 
M I C H I G A N  
SUPREME COURT  
TONY J. DANIEL,  
Plaintiff-Appellee,  
No. 120460  
DEPARTMENT OF CORRECTIONS,  
Defendant-Appellant.  
CAVANAGH, J. (dissenting).  
I respectfully disagree with the majority’s conclusion  
that 
plaintiff 
is 
precluded 
from 
receiving 
worker’s  
compensation benefits for his mental injury.  The majority  
relies on the intentional and wilful misconduct exclusion in  
MCL 418.305 to hold that, though plaintiff’s depression was a  
result 
of 
defendant’s 
disciplinary 
proceedings, 
such  
disciplinary proceedings were necessitated by plaintiff’s  
intentional and wilful misconduct, i.e., plaintiff’s sexual  
harassment of female attorneys. I would affirm the decision  
of the Court of Appeals and award benefits to plaintiff.  
I agree with the Court of Appeals majority that the  
 
connection between plaintiff’s acts and his injury is too  
attenuated for the injury to have occurred “by reason of” his  
acts.  The majority rejects this position, fearing it would  
impose a requirement that the injury arise contemporaneously  
with the employee’s misconduct. 
However, saying that  
plaintiff’s acts of sexual harassment and his injury are “too  
attenuated,” does not necessarily impose a requirement that  
the injury arise contemporaneously with the misconduct.  
In this case, plaintiff’s injury followed not only  
plaintiff’s own conduct, but also action taken by defendant.  
One must consider not only the amount of time that elapsed  
between the employee’s conduct and the injury, but also the  
events that occurred during that time.  The disciplinary  
proceedings 
conducted 
by 
defendant in this case occurred 
after  
plaintiff’s misconduct, but before his mental injury.  
Therefore, one could conclude, as the magistrate did, that the  
discipline was the cause of plaintiff’s mental injury.  
Additionally, 
the 
Worker’s 
Compensation 
Appellate  
Commission improperly substituted its own findings for those  
of the magistrate. The magistrate found that “[p]laintiff’s  
problems started with his discipline,” and that “plaintiff’s  
discipline and post-discipline employment events up to  
February 2, 1996, contributed in a significant manner to”  
plaintiff’s mental injury.  Findings of fact by the magistrate  
are to be considered conclusive by the WCAC if supported by  
2  
 
“competent, material, and substantial evidence on the whole  
record.”  MCL 418.861a(3); Holden v Ford Motor Co, 439 Mich  
257, 261; 484 NW2d 227 (1992).  
The WCAC majority found that the record supported the  
magistrate’s 
finding 
that 
defendant’s 
discipline 
of 
plaintiff,  
which followed the sexual harassment, was the direct cause of  
plaintiff’s injury.  Its review should have ended there, but  
the WCAC improperly replaced the magistrate’s finding that  
plaintiff’s injury was caused by defendant’s disciplinary  
proceedings with its own finding that plaintiff’s injury was  
caused by his intentional and wilful conduct.  The WCAC  
exceeded the scope of its review; therefore, the magistrate’s  
finding that plaintiff’s injury was the result of the  
disciplinary proceedings should be upheld.  
Because I would affirm the judgment of the Court of  
Appeals and reinstate plaintiff’s benefits, I, respectfully,  
dissent.  
Michael F. Cavanagh 
Marilyn Kelly  
3