Title: Arnold v. General Motors Corp.

State: michigan

Issuer: Michigan Supreme Court

Document:

575 N.W.2d 540 (1998)
456 Mich. 682
Alice A. ARNOLD, Executor of the Estate of Bernetta C. Arnold, Deceased, Plaintiff-Appellant,
v.
GENERAL MOTORS CORPORATION, Defendant-Appellee.
Docket No. 108178.

Supreme Court of Michigan.
April 1, 1998.
*541 Kelman, Loria, Downing, Schneider & Simpson by Rosemary E. Jabbour, Detroit, for Plaintiff-Appellant.
Conklin, Benham, Ducey, Listman & Chuhran, P.C. by Martin L. Critchell, Detroit, for Defendant-Appellee.
PER CURIAM.
Bernetta Arnold[1] suffered a work-related injury while employed by defendant General Motors Corporation. Despite her partial disability, she performed lighter duty work, both for General Motors and for a subsequent employer, Suburban Mobility Authority for Regional Transportation (SMART). Her work for SMART aggravated a back condition to the point that she could no longer work.
The issue raised by the present appeal is whether, under subsection 301(5) of the Worker's Disability Compensation Act,[2] Ms. Arnold is entitled to benefits from General Motors based on her wages at the time of the original injury. The Worker's Compensation Appellate Commission and the Court of Appeals have answered in the negative and found that plaintiff is entitled to benefits based only on her later employment with SMART, which aggravated her back condition. We conclude that because plaintiff was disabled by her injury at General Motors, and her subsequent employment was in the nature of "favored work," she is entitled to benefits from General Motors based on her wage at the time of the original injury.
The facts surrounding plaintiff's employment history and back condition and the magistrate's findings were summarized by the WCAC:
Decedent began work with defendant in 1976 performing various strenuous assembly jobs. The Magistrate found that on *542 October 24, 1986, decedent hurt her back while applying a piece of rubber weighing approximately 25 pounds under a dashboard on the assembly line at defendant. The Magistrate also found that as a result of this injury, decedent was never again able to return to the physically strenuous assembly work she had performed for defendant prior to her injury. Following this injury, decedent returned to work performing lighter duties. She took a sick leave for nonwork-related foot surgery in early 1987, and upon her return to work was laid off. The Magistrate found that decedent was laid off from favored work.
On appeal, the WCAC affirmed with modifications.[3] It said that because the new aggravation injury took place while plaintiff was employed by SMART, liability for disability was the exclusive responsibility of that employer. The WCAC reasoned:
The Court of Appeals denied the plaintiff's application for leave to appeal,[4] and the *543 plaintiff filed an application for leave to appeal to this Court. In lieu of granting leave to appeal, we remanded the case to the Court of Appeals for consideration as on leave granted.[5]
On remand, a divided Court of Appeals affirmed.[6] The majority noted the plaintiff's contention that the WCAC should have applied subsection 301(5)(e), but said that the plaintiff misconstrued the effect of subsection 301(5):
The Court of Appeals majority premised its decision on the rules governing subsequent injuries and aggravations of previous injuries. These rules apply when the injury in the first employment did not, by itself, render the employee disabled, or the employee had recovered sufficiently so as not to be disabled until suffering the injury in the later employment. As the Court of Appeals majority noted, in these situations, Michigan law places the entire liability for benefits on the last employer.
The flaw in applying that principle in this case is that the plaintiff remained disabled by *544 the injury suffered while employed by General Motors. In the aggravation cases, although the plaintiff suffered an injury at the previous employer, the injury was not disabling. See, e.g., Dressler v. Grand Rapids Die Casting Corp, supra:
The provisions of subsection 301(5) apply to persons who are disabled, but nonetheless obtain other employment. The various subsections spell out in detail the benefits payable by the original employer both during and after such employment. In this case, the plaintiff worked less than one hundred weeks after her injury at General Motors, making subsection 5(e) applicable. This subsection establishes that with subsequent employment of that duration, the employee does not establish a new wage-earning capacity, and is entitled to receive "compensation based upon his or her wage at the original date of injury." We can find no basis in the language of the section to conclude that the phrase, "If the employee ... loses his or her job for whatever reason," should be read to exclude situations involving aggravation of an injury by the new, favored employment.
Though the language of the statute is clear, we additionally note that this interpretation is consistent with the objective of the statute. Section 301 is intended to encourage disabled workers to seek employment within their limitations, which benefits everyone concerned, including the former employer. As the dissenting judge in the Court of Appeals noted, under the approach of the Court of Appeals, a claimant who returns to work at lower wages risks a drastic reduction in worker's compensation benefits if a subsequent injury occurs.
The Court of Appeals majority said that the subparts of subsection 301(5) deal only with the level of benefits paid, not whether they are to be paid in a particular circumstance. However, that oversimplifies the analysis of the statute. Section 301(5)(e) designates the "wage at the original date of injury" as the basis for setting benefits. Under the circumstances presented here, we hold that the statute contemplates that the original employer is to pay benefits computed *545 using wages at the time of the original injury.[8]
Accordingly, pursuant to MCR 7.302(F)(1), in lieu of granting leave to appeal, we reverse the judgment of the Court of Appeals and remand this case to the Worker's Compensation Appellate Commission for entry of an order directing General Motors to pay the difference between benefits computed using wages at the time of the original injury and the benefits paid by SMART and the Second Injury Fund.[9]
MALLETT, C.J., and BRICKLEY, MICHAEL F. CAVANAGH, BOYLE, WEAVER, MARILYN J. KELLY, and TAYLOR, JJ., concurred.
[1]  Ms. Arnold died during the pendency of the appeal, and her estate was substituted as the plaintiff. We will continue to refer to Bernetta Arnold as the "plaintiff."
[2]  M.C.L. § 418.301(5); M.S.A. § 17.237(301)(5).

These provisions, initially added to the statute by 1981 P.A. 200, constitute a partial codification of the judicially created favored-work doctrine. See, generally, Pulver v. Dundee Cement Co., 445 Mich. 68, 74-75, 515 N.W.2d 728 (1994). Relevant to the instant case are subsections (4) and (5):
(4) As used in this chapter, "disability" means a limitation of an employee's wage earning capacity in work suitable to his or her qualifications and training resulting from a personal injury or work related disease. The establishment of disability does not create a presumption of wage loss.
(5) If disability is established pursuant to subsection (4), entitlement to weekly wage loss benefits shall be determined pursuant to this section and as follows:
(a) If an employee receives a bona fide offer of reasonable employment from the previous employer, another employer, or through the Michigan employment security commission and the employee refuses that employment without good and reasonable cause, the employee shall be considered to have voluntarily removed himself or herself from the work force and is no longer entitled to any wage loss benefits under this act during the period of such refusal.
(b) If an employee is employed and the average weekly wage of the employee is less than that which the employee received before the date of injury, the employee shall receive weekly benefits under this act equal to 80% of the difference between the injured employee's after-tax weekly wage before the date of injury and the after-tax weekly wage which the injured employee is able to earn after the date of injury, but not more than the maximum weekly rate of compensation, as determined under section 355.
* * * * * *
(e) If the employee, after having been employed pursuant to this subsection for less than 100 weeks loses his or her job for whatever reason, the employee shall receive compensation based upon his or her wage at the original date of injury.
[3]  It modified the magistrate's decision to require General Motors to pay benefits through plaintiff's last day of work at SMART, with credit for wages paid by SMART.
[4]  Docket No. 174816, order of September 2, 1994.
[5]  448 Mich. 913, 533 N.W.2d 583 (1995).
[6]  220 Mich.App. 494, 497-498, 560 N.W.2d 59 (1996).
[7]  Circuit Judge John F. Foley, sitting on the Court of Appeals by assignment, dissented. He argued that the fact that a worker aggravates a condition during subsequent employment should not result in a reduction of benefit rates:

The fact that the deceased aggravated her condition during her subsequent employment should not result in a reduction of her weekly benefit rate under § 301(5)(e), M.C.L. § 418.301(5)(e); M.S.A. § 17.237(301)(5)(e). To so hold would result in an absurdity. A worker who is fired or laid off during the first one hundred weeks of subsequent employment would be in a better position than a worker who had to stop working because of an aggravation of a preexisting work-related condition. If such were the law, any claimant who is employed by a subsequent employer at lower wages is taking serious risk, because if an aggravation occurred, the motivation and effort involved in seeking subsequent employment would result in a drastically reduced worker's compensation rate, as here. This is clearly not what the Legislature intended. Nor would such a result be consistent with the remedial nature of the Worker's Disability Compensation Act. [Note 6 supra at 499-500, 560 N.W.2d 59.]
[8]  It would make no sense whatsoever for the subsequent employer, who was paying wages at a lower rate, to be liable for benefits based on the higher wages of the previous employment.
[9]  We note that none of the parties argued that the subsequent employer is entitled to reimbursement from the original employer of benefits paid. That is, none of the parties argued that, under "favored work" principles, General Motors is responsible for the full amount of benefits to which plaintiff was entitled after leaving SMART. Accordingly, we express no opinion on this issue.