Opinion ID: 1976846
Heading Depth: 3
Heading Rank: 2

Heading: Applicability of Kleinschrodt to Facts of This Case

Text: We find the rationale and principles of Kleinschrodt inapplicable to the facts before the WCAB and Court of Appeals in the Franks case. Mr. Franks filed the petition in this case on August 26, 1978. The hearing referee ordered payment of weekly benefits from August 2, 1977.... Plaintiff's employer, White Pine, filed an application for review of the referee's decision with the appeal board, alleging error in the finding of disability and the refusal to apply a setoff for unemployment compensation benefits. As no disability benefits had been ordered for time periods prior to August 2, 1977, there was no reason for the defendant to raise the defense of the two-year-back rule on appeal. The issue of benefits for any period earlier than two years before the petition was filed was not present to defend against. The claimant in this case filed no application for review or cross-application requesting review of the hearing referee's decision on the benefit commencement date. In his brief to the WCAB, he indicated that [t]his Brief is submitted in opposition to [the] appeal and in support of Judge Mikko's Decision. No oral argument was permitted or presented before the appeal board. Nevertheless, in its decision, the appeal board modified the hearing referee's order and changed the commencement date of the partial disability benefits from 1977 to 1971. Even though the question of benefits prior to 1977 had not been an issue before the hearing referee and had not been raised by cross-appeal, the board, concurrently with its award of benefits for additional time periods prior to 1977, held that the employer was barred from applicability of the two-year-back rule. It cited Kleinschrodt as the basis for finding that defendant had waived the defense. We disagree. Under the circumstances of this case, defendant could not have appealed a ruling on the two-year-back rule to the WCAB, because the decision of the hearing referee was favorable to its position on that rule. There was no reason to anticipate a need to argue that issue prior to the determination that Mr. Franks was entitled to additional benefits. Although the majority in Kleinschrodt viewed this defense as nonjurisdictional, there is no authority for requiring it to be raised in a void in the first responsive pleading or be waived. Compare MCR 2.116(D)(1) and 2.116(D)(2). See Piwowarski v Detroit Sulphite Pulp & Paper Co, 412 Mich 716, 727; 316 NW2d 719 (1982) (COLEMAN, C.J., dissenting ). We agree with the admonition of Justice COLEMAN that it would be a costly mistake to extend the holding in Kleinschrodt beyond the facts presented in that case. (The majority did not reach this issue in its resolution of the case.) [27] In addition, defendant White Pine never stipulated or specified that the only issue before the appeal board was one other than the two-year-back rule, as the defendant had in Kleinschrodt. For these reasons, we conclude that under the facts and circumstances of this case, the holding that this defense was waived was clearly erroneous.