Court Opinion

ID: 9706496
Source: CourtListenerOpinion
Date Created: 2023-08-26 01:44:57.234342+00
Date Added: 2024-06-11T18:22:22.600588
License: Public Domain

Cavanagh, J.
(dissenting). In overruling this *640Court’s previous decision in Pennington v Whiting Tubular Products, Inc, 370 Mich 590; 122 NW2d 692 (1963), the majority ignores the clear evidence of legislative acquiescence in that decision, thereby overstepping the appropriate constraints on our judicial function. Accordingly, I dissent.
i
The doctrine of legislative acquiescence is well established in our jurisprudence. See McEvoy v City of Sault Ste Marie, 136 Mich 172, 182-183; 98 NW 1006 (1904). We have characterized it as "a wisely self-imposed limitation of the appellate process.” Magreta v Ambassador Steel Co, 380 Mich 513, 518; 158 NW2d 473 (1968). The doctrine is grounded in our "duty ... to ascertain and give effect to the legislative intent” and the presumption that, when revising or amending a statute, the Legislature is aware of previous interpretations of that statute by the appellate judiciary. Gwitt v Foss, 230 Mich 8, 12; 203 NW 151 (1925); Magreta, supra at 519-520. The controlling precept of the doctrine is that when the Legislature amends or otherwise revises a statute, failure to revise provisions of that statute previously construed by the appellate judiciary compels our "assumption] that it was content with the construction which had been placed on th[ose] . . . provisions . . . .” Gwitt, supra at 12.
A
The majority attempts to undermine the authoritative effect of the Pennington decision by opining that the Court "held, in what may be characterized as dicta, that it was error for the trial judge to instruct the jury that payments received by the *641employee under the Employment Security Act, MCL 421.1 et seq.; MSA 17.501 et seq., must be deducted from a damage award for breach of employment contract . . . .” Ante at 633-634 (citing Pennington, supra at 600-601).
Dictum is defined as "an observation or remark . . . concerning some rule, principle, or application of law, or the solution of a question suggested by the case at bar, but not necessarily involved in the case or essential to its determination; any statement of the law enunciated by the court merely by way of illustration, argument, analogy, or suggestion.”1 We have previously taken notice of the sage counsel of Justice Cardozo with regard to obiter dicta:
"There is the constant need, as every law student knows, to separate the accidental and the non-essential from the essential and inherent.” [Breckon v Franklin Fuel Co, 383 Mich 251, 270; 174 NW2d 836 (1970) (quoting Benjamin Cardozo, The Nature of the Judicial Process, pp 29, 30).]
Justice Cardozo’s pragmatic standard is more logical and realistic than the distinction between holding and dictum employed by the majority, especially under the specific circumstances of the Pennington decision.
The majority opines that the Pennington Court’s conclusion of law "that the trial judge was in error in his direction to the jury [that any unemployment compensation benefits received by the plaintiffs should be deducted from any damages award],” id. at 600, "was unnecessary . . . because the Court held that the verdict could not stand.” Ante at 633-634, n 24. In my opinion, the majority ignores the true procedural context of the Pen*642nington decision, which, briefly, is as follows: Upon conclusion of the trial, the jury returned a verdict in favor of plaintiffs and awarded damages in an aggregate amount. The plaintiffs’ subsequent motion for entry of judgment on the jury verdict was denied because the damages were not proved with respect to each plaintiff. Consequently, the defendant’s motion for judgment notwithstanding the verdict was granted, and judgment was entered in the defendant’s favor. Pennington, supra at 597-598. On appeal, this Court held as follows:
Judgment may not properly be entered on the verdict of the jury for the reasons stated. It is equally apparent that the judgment entered in circuit court in favor of defendants may result in injustice to at least some of these plaintiffs. With the thought in mind that such a result should be avoided if possible, this Court will exercise its inherent authority to grant the right to a new trial.
The case is remanded with directions to set aside the judgment entered in defendants’ favor, and for further proceedings in the trial court. [Id. at 603.]
Considered in its true context, then, it is obvious that the Pennington Court’s legal conclusion with regard to the propriety of deducting unemployment benefits from the ultimate damages awards was stated in anticipation of the remand for further proceedings. The majority’s narrow definition of that holding denies us the authority to decide legal questions that necessarily will be at issue in the subsequent proceedings.
The majority’s assertion that the Pennington opinion "acknowledged” that it was unnecessary to reach the issue whether unemployment benefits should be deducted evidences a misapprehension of *643that opinion. The majority relies on the following sentence, taken out of context:
" 'Whether such course should be pursued under proper circumstances does not call for discussion at this time.’ ” [Ante at 634, n 24 (quoting Pennington, supra at 600).]
The "course” of action referred to was the plaintiffs’ argument "that in the event of a decision by this Court that judgment should be entered on the verdict of the jury, the amount of such deductions should be added and this Court should order the entry of judgment in the increased amount.” Pennington, supra at 600. The reason the Pennington Court did not need to discuss that suggested course of action was because "the report by the jury with reference to the awards of damages made to the individual plaintiffs receiving such made no mention of deductions, but it may be presumed that the direction of the court was followed.” Id. As demonstrated above, the Pennington Court’s legal determination that unemployment benefits need not be deducted from the ultimate damages awards was stated with the intent that it be heeded by the trial court on remand.
B
The majority further supports its attack on Pennington with defendant’s argument that the Legislature’s enactment of a setoff provision in the Worker’s Disability Compensation Act2 evinces "a clear legislative intent to also characterize unemployment compensation as a wage-loss benefit .... On this basis, it appears that the Legislature’s enactment of MCL 418.358; MSA 17.237(358) *644alone undermines Pennington” Ante at 635-636. I strongly disagree.
This setoff provision provides that any benefits payable under the relevant provisions of the wdca "shall be reduced by 100% of the amount of benefits paid or payable to the injured employee under the Michigan employment security act . . . ” MCL 418.358; MSA 17.237(358). The superficial appeal of the majority’s reliance on this provision, however, does not survive close analysis.
In Bartels v Ford Motor Co, 292 Mich 40; 289 NW 322 (1939), this Court rejected the defendant’s claim that it should not be required to make disability payments to the claimant for the period during which the claimant was also receiving unemployment compensation benefits. In rejecting the defendant’s claim, this Court noted that "[t]he legislative intent was to set up two independent organizations for the administration of two kinds of compensation, payable from different funds or sources. . . . The contingency which has arisen in this case has come about by reason of the passage of the unemployment compensation act. The remedy lies with the Legislature.” Id. at 46 (emphasis added).3 The Bartels opinion also cited this Court’s opinion in Henry v Ford Motor Co, 291 Mich 535; 289 NW 244 (1939), with regard to the issue of the *645simultaneous receipt of unemployment benefits and worker’s compensation, benefits: "Both awards are purely statutory and, while there is no question about some incongruity in the provisions, nevertheless we are bound by the wording of the statutes. The remedy is with the' legislature who alone can provide for deductions or denial of compensation under one act or the other.” Id. at 541 (emphasis added). After these two decisions, the Legislature passed the setoff provision of the wdca, which obviously resulted in Bartels and Henry no longer being good law.4 Just as obviously, however, the Legislature has not taken similar action with regard to Pennington, even though that decision has been on the books for over thirty years. This conscious failure to express any disagreement with Pennington in any of . the numerous revisions5 of the Employment Security Act gives rise to a paradigmatic situation for application of the legislativé acquiescence doctrine.6
The Employment Security Act also contains a *646setoff provision, MCL 421.62(a); MSA 17.566(a), which, in relevant part, provides:
If the commission determines that a person has obtained benefits to which the person is not entitled, the commission may recover a sum equal to the amount so received ....
This provision applies only in cases in which the beneficiary was not entitled to unemployment benefits in the first place, a situation clearly inapplicable to the case at bar. Even defendant concedes that this provision is inapplicable to this case.
In general, these two setoff provisions weigh heavily against judicial imposition of such a setoff in the case at bar because they provide unequivocal evidence that the Legislature is aware of the possibility of arguably overlapping benefits and knows how to correct those situations it feels are improper or unwise. And in light of this Court’s recent affirmation of "the distinct character and objectives” of the worker’s compensation and unemployment compensation systems, see Paschke v Retool Industries, 445 Mich 502, 511-512; 519 NW2d 441 (1994), the setoff provision of the wdca is particularly persuasive evidence that the Legislature sees no need to reduce damage awards in wrongful discharge cases by the amount of unemployment compensation benefits received.
c
The majority’s final attempt to discredit Pennington is the assertion that "its underpinnings remain suspect. In Pennington, the Court stated that an analogous issue was decided in Kurta v *647Probelske, 324 Mich 179, 188; 36 NW2d 889 (1949). Kurta, however, involved an action for personal injuries arising out of a pedestrian-vehicle collision. ... In contrast, Pennington involved a breach of a collective bargaining agreement, which cannot be analogized to a tort action for personal injuries.” Ante at 637.
The majority apparently believes that the Pennington Court’s reference to Kurta was inadvertent, that all eight members of this Court who joined the Pennington opinion were unaware that Kurta dealt with a personal injury claim. This belief, however, is gainsaid by the actual language of Pennington: "An analogous question was decided in Kurta v Probelske, 324 Mich 179, an action for damages for personal injuries . . . .” Pennington at 601. The Pennington Court’s analogy to Kurta was conscious and deliberate.
The majority’s substantive disagreement with this analogy must be based on the assumption that all contracts are fungible for purposes of fashioning a remedy for breach, that commercial contracts between merchants are representative of all contracts, and that tort and contract are totally discrete bodies of doctrine with no overlap whatsoever. This assumption is not supported by our case law.
In Kewin v Massachusetts Mut Life Ins Co, 409 Mich 401, 420; 295 NW2d 50 (1980), we expressly recognized the distinction between commercial contracts and marriage contracts and noted that "[t]here are exceptions to the general rule limiting the recovery for breach of contract.” Id. at 415 (citing, inter alia, 5 Corbin, Contracts, § 1076, p 427). We also referred to "an exception recognized in Stewart v Rudner, 349 Mich 459; 84 NW2d 816 (1957),” which involved a contract between a doc*648tor and a patient.7 Kewin at 415. I would not hold that an employment contract, even a just-cause employment contract, is identical to marriage contracts or doctor-patient contracts. But I would hold —indeed, I believe we could take judicial notice of the fact—that just-cause employment contracts entail greater expectations8 by the parties, especially employees, than do run-of-the-mill commercial contracts between merchants.9
In my opinion, the Pennington Court purposefully established another exception, and did so in accord with the previously established principle that there are exceptions to the general, but not immutable, rule of recovery in breach-of-contract actions. Therefore, because of the clear evidence of legislative acquiescence in that decision, I would affirm the judgment of the Court of Appeals.
ii
As a general consideration, the evidence of legislative acquiescence alone is sufficient to compel our continued application of the rule established in Pennington. However, the specific facts in this case also argue against the result reached by the majority.
The majority correctly notes that a breach-of-*649employment-contract claim sounds in contract, as opposed to tort, and then notes the basic principle that the "remedy for breach of contract is to place the nonbreaching party in as good a position as if the contract had been fully performed.” Ante at 625, n 7 (citing Kewin, supra, 409 Mich 415). Proper application of this principle, however, requires a proper determination of exactly what will place the nonbreaching party in as good a position as if the contract had been fully performed. The majority’s analysis is premised on its mistaken belief that payment of wages is the sole consideration an employee receives from an employer pursuant to an employment contract.10
The legislative purpose of the Employment Security Act is to combat the "[economic insecurity due to unemployment [that] is a serious menace to the health, morals, and welfare of the people of this state.” 11 The majority apparently adopts defendant’s express argument that "[l]oss of wages is the 'economic insecurity’ created by unemployment.” (Emphasis in original.) There are, however, other benefits provided to employees (e.g., life and health insurance, paid sick leave, pension contributions, etc.) that are part of the total employment package in addition to wages.12 The economic insecurity resulting from unemployment manifests itself "in terms of lost wages [and] other possible incidents of a layoff which may affect a worker at an earlier or later point in time.” General Motors *650Corp v Erves, 47 Mich App 591, 595; 209 NW2d 713 (1973).
in
My colleagues in the majority apparently agree with the view of the circuit court and the Court of Appeals that the Pennington rule seems illogical, but, unlike those courts, feel they are not bound to accede to policy determinations made by the Legislature. Because of the unequivocal evidence that the Legislature knowingly has chosen not to require the setoff mandated by the majority, and because recouping wages alone does not put plaintiff in as good a position as he would have been had the employment contract been fully performed, I dissent.
Levin, J., concurred with Cavanagh, J.

 Black’s Law Dictionary (6th ed), p 454.

 MCL 418.358; MSA 17.237(358).

 The majority characterizes my reliance on Bartels as "misleading” because Bartels dealt with two statutory benefits (unemployment and disability), whereas one of the benefits in the case at bar (damages for breach of contract) "is a judicially created benefit.” Ante, p 636, n 29. Therefore, the majority concludes, "[i]n the present case, . . . the remedy lies with the judiciary.” Id. Even assuming that this argument is theoretically sound (which I do not), it still is unavailing to the result sought by the majority because the question presented here is whether the statutory benefit (unemployment compensation) should be deducted from the breach-of-contract damages award. The focus is on what should be done with regard to the statutory benefit, and therefore the remedy lies with the Legislature. Accordingly, because the Legislature has shown that it knows how to require setoffs it deems necessary or proper, the majority’s reasoning actually weighs in favor of the legislative acquiescence doctrine.

 I note, however, that we recently have stated unequivocally that "the underlying premise of Bartels remains valid . . . .” Paschke v Retool Industries, 445 Mich 502, 512; 519 NW2d 441 (1994). This underlying premise is "the distinct character and objectives of the two institutions [i.e., the worker’s disability compensation system and the unemployment compensation system].” Id.

 A nonexhaustive survey of the Michigan Compiled Laws Annotated reveals that the Employment Security Act was revised at least once in each of the following years: 1965, 1966, 1967, 1970, 1971, 1974, 1975, 1976, 1977, 1978, 1980, 1982, 1983, 1989, 1992 and 1993.

 The majority claims that the setoff provision in the wdca shows that "there has not been legislative acquiescence to Pennington.” Ante, p 634, n 25. The majority’s focus, however, is too narrow. Pennington held that unemployment benefit payments need not be deducted from damage awards for breach of an employment contract, the same scenario presented in the instant case. Viewed in this context, the Legislature’s subsequent action, mandating reduction of disability benefits by the amount of unemployment benefits, but declining to mandate a similar deduction from breach-of-employment-contract damages awards, compels the conclusion of legislative acquiescence to Pennington.

 The exception discussed in these two cases was the propriety of allowing a claim for mental or emotional distress, a claim sounding in tort, in a breach-of-contract action. In addition to marriage and doctor-patient contracts, we acknowledged the propriety of the exception in regard to contracts of carriers and innkeepers with passengers and guests. Kewin at 415, n 1.

 These greater expectations are described in part ii.

 This reasoning applies to just-cause employment contracts that arise from collective bargaining agreements or by implication under Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich 579; 292 NW2d 880 (1980), and its progeny. However, I consider this conclusion even more accurate in the context of an implied just-cause contract because of the high threshold established by the Toussaint line of cases. .

 This analysis includes all types of employment contracts: collective bargaining agreements, individually negotiated contracts, implied "just-cause” contracts, etc.

 MCL 421.2; MSA 17.502 (declaration of policy).

 The Employment Security Act provides that the term "wages” does not include amounts paid by an employer for insurance or annuities payable on account of an employee’s retirement, sickness, or accidental disability; or for related medical or hospitalization expenses; or for moving expenses. See, generally, MCL 421.44(5); MSA 17.548(5).