Michigan Supreme Court Lansing, Michigan

Marilyn Kelly,
Chief Justice

Michael F. Cavanag h

Elizabeth A. Weave r

Maura D. Corriga n Robert P. Young, Jr. Stephen J. Markma n Diane M. Hathaway,

J ustices 

# Order

December 2, 2009

137402

RICHARD E. HARVLIE, Plaintiff-Appellee, and

BLUE CROSS/BLUE SHIELD, Intervening Plaintiff-Appellee,

v SC: 137402 COA: 276044 WCAC: 04-000445 JACK POST CORPORATION and ST. PAUL FIRE & MARINE INSURANCE COMPANY, Defendants-Appellants.

________________ _______________ __________/

By order of January 27, 2009, the appli cation for leave to a ppeal the August 21, 2008 judgment of the Court of Appeals was held in ab eyance pending the decision in Petersen v Magna Corp (Docket Nos. 136542-3). On order of the Court, the case having been decided on July 31, 2009, 484 Mich 300 (2009), the application is again considered, and it is DENIED, because we are not persuaded that the que stions presented should be reviewed by this Court.

C ORRIGAN , J. ( dissenting ).

I respectfully dissent from the order deny ing defendants’ application for leave to appeal. Because th e split decision in Petersen v Magna Corp , 484 Mich 300 (2009), failed to provide a workable standard co ncerning the circumstances under which a magistrate “may” prorate attorney fees, I woul d remand this case to the Court of Appeals to consider defendants’ argument that the aw ard of an attorney fee on unpaid medical

benefits was erroneous.

MCL 418.315(1) provides that “[t]he worker’s compensation magistrate may prorate attorney fees at the contingent fee rate paid by the employee.” In Petersen , a majority of this Court mere ly agreed on the re sult: workers’ comp ensation magistrates may prorate attorney fees among employers and their insurance carriers. The five2

opinions did not offer a controlling rationale. Moreover, the five separate opinions in

Petersen do not establish a standard agreed on by a majority of justices under which workers’ compensation magistrates may exercise their discretionary au thority in the first

instance. Petersen merely tells us that a magistrate “m ay prorate” attorney fees but that

an award is not automatic. See Petersen, supra at 309 (opinion of Kelly, C.J.) (“Hence, magistrates are allowed to awar d attorney fees, but they ar e not required to do so.”). Consequently, Petersen does not explain how magistrate s could abuse their discretion in awarding attorney fees, much less specify how magistrates may exercise their discretion.

In MCL 418.315(1), the Legislature differentiated between magistrates’ discretionary authority to prorate attorney fees and their mandatory duty to order reimbursement for reasonable medical expens es that an employer fails, neglects, or refuses to pay. See MCL 418.315(1) (“If the em ployer fails, neglects, or refuses so to do, the employee shall be reimbursed for the re asonable expense paid by the employee, or payment may be made in behalf of the employ ee to persons to whom the unpaid expenses may be owing, by order of the worker’s co mpensation magistrate.”). Accordingly, MCL 418.315(1) mandates reim bursement for medical bills that the employer does not pay. In contrast, the award of attorney fees under MCL 418.315(1) is discretionary. Because the award of attorney fees is a discretionary determination, magistrates presumably must make some additional finding before ex ercising their authority. Yet neither Petersen nor the statutory language assists a workers’ compensation magist rate in determining whether to exercise that discretionary authority in a given case.

The dearth of guidance fro m this Court concerning th e standard under which a magistrate may exercise discretion under MCL 418.315(1) will c ontinue to confound

members of the bench and bar. In this case , for example, defendants challenge the award of attorney fees when payment was delayed for approximately three months because of typical processing lags and plaintiff’s failure to submit evidence in a timely manner. Defendants contend that the magi strate abused his discretion in awarding attorney fees under the unique facts of this case. Assuming arguendo that a three-month delay is an appropriate circumstance for the magistrate to have exercise d his discretionary authority, it remains unclear whether the magistrate woul d necessarily have reached the same result if payment had been delayed fo r two months or two weeks. Similarly, it is unclear what

additional factors would be relevant to the magistrate’s discretionary determination. Indeed, the lack of any workable standard complicates the appellate review of such awards as well because a reviewing court has no meaningful basis to consider whether a magistrate abused his discreti on in awarding attorney fees.

Because Petersen failed to resolve th ese issues, I would remand this case to the Court of Appeals for reconsid eration of defendants’ argum ent that the award of an attorney fee on unpaid medical benefits was e rroneous. Specifically, I would order the Court of Appeals to consider whether th e workers’ compensation magistrate madeI, Corbin R. Davis, Clerk of the Mi chigan Supreme Cour t, certify that the foregoing is a true and complete copy of the order entered at the direction of the Court.

_______________________________________ __ Clerk December 2, 2009

1124 3

sufficient findings and offered adequate analys is to show that he engaged in a proper exercise of discretion in requiring defe ndants to pay attorney fees under MCL 418.315(1). See Petersen, supra at 310, 335-336. Moreover, I would ask the Court of Appeals to address defendants’ argument that the magistrate erred by awarding attorney fees on medical bills that plaintiff failed to prove were not diligentl y paid after defendants

received notice of them. Unless this Court or the Court of Appeals clarifies the standard under which a magistrate may exercise discre tion, the award of attorney fees under MCL 418.315(1) will become auto matic. Plainly, the Legislature did not authorize the

automatic assessment of attorney fees.

Accordingly, I would remand this case to the Court of Appeals to consider defendants’ argument that the award of an a ttorney fee on unpaid medical benefits was

erroneous.

Y OUNG and M ARKMAN , JJ., join the statement of C ORRIGAN , J.