Opinion ID: 2086616
Heading Depth: 1
Heading Rank: 3

Heading: Hlady

Text: Our point of departure in deciding these two cases is the longstanding rule in this jurisdiction that, absent a change in the claimant's physical condition, the doctrine of res judicata applies to workers' compensation law. Hlady v Wolverine Bolt Co, 393 Mich 368; 224 NW2d 856 (1975); Besonen v Campbell, 243 Mich 209; 220 NW 301 (1928); 24 Michigan Law & Practice, Workmen's Compensation, § 234. There is a distinction, however, between the scope of the doctrine's application to workers' compensation and the scope of its application to other areas of the law. As noted by the Court of Appeals in Stokes v Lakey Foundry Corp, 20 Mich App 217, 219; 173 NW2d 832 (1969):  Except for workmen's compensation cases, Michigan has held that the doctrine of res judicata applies not only to issues which were determined on the merits, but also to matters which the parties had the opportunity to present for adjudication on the merits. Strech v Blissfield Community Schools District, 357 Mich 620 [99 NW2d 545 (1959)]; Gursten v Kenney, 375 Mich 330 [134 NW2d 764 (1965)]. [4] (Emphasis added.) That case then went on to correctly set forth the scope of res judicata's application to the law of workers' compensation as of its 1969 decisional date, as follows: While the doctrine of res judicata does apply to workmen's compensation cases ( Willis v Michigan Standard Alloy Casting, 367 Mich 140 [116 NW2d 222 (1962)]), in Michigan it has been limited to issues that were actually litigated as a matter of fact. Hebert v Ford Motor Co, 285 Mich 607 [281 NW 374 (1938)]; White v Michigan Consolidated Gas Co, 352 Mich 201 [89 NW2d 439 (1958)]. Stokes, supra, 219. Subsequent to Stokes, in Hlady v Wolverine Bolt Co, 393 Mich 368, 376; 224 NW2d 856 (1975), a case which was twice before this Court for resolution of differing issues, this Court slightly broadened the scope of application of res judicata in workers' compensation cases. In Hlady the plaintiff lost four fingers in 1945 when her hand got caught in a punch press. In 1947, upon expiration of benefits under the statutory 100-week specific loss schedule, plaintiff filed an application for further benefits alleging industrial loss of use of her right hand and/or general disability. The employer appealed a WCAB award of compensation alleging there was no entitlement to benefits under the test existing at the time. We agreed with the appellant and reversed the award of compensation stating: The record is devoid of testimony tending to prove that plaintiff has suffered any different or greater loss than normally results from the amputation of 4 fingers of a hand. Notwithstanding plaintiff claimed that the amputation of her fingers resulted in disabling `sequelae' and `general disability,' the commission found none except disability which normally follows such amputations.  (Emphasis added.) Hlady v Wolverine Bolt Co, 325 Mich 23, 25; 37 NW2d 576 (1949). Approximately eight years later, this Court in another case reconsidered the test under which Ms. Hlady had been denied benefits. In an evenly divided vote, four Justices would have adopted a more liberal test under which Ms. Hlady could have recovered, Van Dorpel v Haven-Busch Co, 350 Mich 135; 85 NW2d 97 (1957). In light of Van Dorpel, in 1967 plaintiff Hlady repetitioned for benefits. Plaintiff therein subsequently appealed to this Court from a Court of Appeals decision affirming the WCAB's denial of benefits based on res judicata. On appeal, this Court adopted the more liberal test set forth in Van Dorpel, but affirmed the application of res judicata to deny plaintiff benefits. The rule utilized to resolve the res judicata dispute in Hlady, however, added another dimension to the doctrine not articulated in the more recent case law, [5] e.g., White v Michigan Consolidated Gas Co, 352 Mich 201, 211; 89 NW2d 439 (1958), and Hebert v Ford Motor Co, 285 Mich 607, 613; 281 NW 374 (1938). Instead of merely limiting res judicata to questions which were litigated in fact, this Court went further, stating that the doctrine of res judicata applies not only to facts previously litigated, but also to points of law which were necessarily adjudicated in determining and deciding the subject matter of the litigation.  (Emphasis added.) Hlady, supra, 376. [6] This expanded rule, enunciated in Hlady, constitutes this Court's most recent application of the doctrine to workers' compensation law in Michigan, and is the rule which necessarily controls the cases at bar. [7] This limited scope is consistent with the nature of workers' compensation. Although the general policy rationale for the doctrine of res judicata is to ensure finality in litigation, 46 Am Jur 2d, Judgments, § 395, p 559, workers' compensation is remedial legislation which is to be liberally construed. Given the remedial nature of the legislation, the policy favoring finality is not always consistent with the purpose behind workers' compensation, which is to maintain the fiscal integrity of persons whose wage-earning capacity has been suspended or terminated. See Hlady, supra, 390-391 (opinion of LEVIN, J.); see, generally, Lahti v Fosterling, 357 Mich 578, 589; 99 NW2d 490 (1959). It is for this reason that res judicata is narrowly applied in workers' compensation cases. It is for this same reason we today reaffirm the Hlady limited application of res judicata vis-a-vis workers' compensation.