Court Opinion

ID: 4399176
Source: CourtListenerOpinion
Date Created: 2019-05-22 09:05:09.307372+00
Date Added: 2024-06-11T14:52:20.313108
License: Public Domain

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
              revision until final publication in the Michigan Appeals Reports.

                      STATE OF MICHIGAN

                         COURT OF APPEALS

SEBASTIAN KUHLGERT, Conservator of                             FOR PUBLICATION
ELISABETH OSTENDORF,                                           May 21, 2019
                                                               9:15 a.m.
           Plaintiff-Appellee,
V                                                              Nos. 332442; 338363
                                                               Court of Claims
MICHIGAN STATE UNIVERSITY, and                                 LC No. 15-000047-MZ
BOARD OF TRUSTEES OF MICHIGAN
STATE UNIVERSITY,

           Defendants,

and

UNITED EDUCATORS,

           Intervening Defendant-Appellant.

ELISABETH OSTENDORF,

           Plaintiff-Appellee,

and

UNITED EDUCATORS,

           Intervening Plaintiff-Appellant,

and

STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY,

           Intervening Plaintiff,

                                              -1-
V                                                                No. 344533
                                                                 MCAC
MICHIGAN STATE UNIVERSITY,                                       LC No. 17-000013

              Defendant-Appellee.

Before: SWARTZLE, P.J., and CAVANAGH and CAMERON, JJ.

CAMERON, J.

         These consolidated appeals all concern whether the injuries that plaintiff Elisabeth
Ostendorf (hereinafter Ostendorf), a German national, suffered when a truck owned by Michigan
State University (MSU) struck her as she was walking on the campus triggers the exclusive-
remedy provision of the Worker’s Disability Compensation Act (WDCA), MCL 418.101 et seq.
See MCL 418.131(1) (except where an intentional tort is involved, benefits as provided by the
WDCA constitute an employee’s “exclusive remedy against the employer for a personal injury”).
If not, then MSU’s no-fault insurer, State Farm Mutual Automobile Insurance Company, and its
excess liability insurer, United Educators (hereinafter UE), are responsible for providing
insurance coverage for her injuries. We affirm.

                                         I. FACTS

        Ostendorf was a post-doctoral research associate at MSU and lead scientist involving a
project funded through a grant from the Advanced Research Projects Agency for the Department
of Energy. She was in the United States on a J-1 Visa as a participant in an exchange visitor
program as authorized under the Mutual Educational and Cultural Exchange Act (MECEA), 22
USC 2451 et seq. The goal of Ostendorf’s project was to screen plants for increased
photosynthetic capacity. She began her work in 2012 for a one-year term, with the anticipation
that the project could be renewed annually and last for three or more years. She was injured
during her third term.

        In October 2014, Ostendorf left the Food and Safety Toxicology Building where she
worked and walked towards her vehicle parked in a lot located elsewhere on the MSU campus.
She had walked approximately 900 feet when, while completing a text message, she emerged
from the sidewalk abutting a driveway and was struck by a truck. At that time, Cole Gibson was
backing up his truck—an MSU vehicle—toward a loading dock. Ostendorf suffered severe
injuries.

                            II. PROCEDURAL BACKGROUND

        This case involves a lengthy, complicated procedural history. In March 2015,
Ostendorf’s conservator, plaintiff Sebastian Kuhlgert (hereinafter “plaintiff”), commenced a
negligence action in the Court of Claims against MSU and its Board of Trustees. Plaintiff did
not file a claim for workers’ compensation benefits, and MSU did not report an injury to the
workers’ compensation bureau. MSU has an excess liability insurance policy through UE, and

                                             -2-
the policy does not provide coverage for any obligation for which the insured may be held liable
under any workers’ compensation law. Over a year after the complaint was filed, UE filed a
motion to intervene in the action because it believed that MSU failed to pursue the argument that
plaintiff’s claims were barred by the exclusive-remedy provision in the WDCA. The Court of
Claims held that the motion to intervene was untimely and that MSU had adequately represented
UE’s interests by raising the exclusive-remedy provision in its affirmative defenses. The court
further noted that the exclusive-remedy provision would not apply if, at the time of the accident,
Ostendorf was not on the premises of where her work was performed. We denied UE’s
application for leave to appeal, and UE filed an application for leave to appeal with the Michigan
Supreme Court.

       While the application for leave was pending in our Supreme Court, UE and State Farm
filed applications for mediation or petitions to intervene in a separate proceeding with the
Workers’ Compensation Board of Magistrates. At issue in that proceeding was not the extent to
which Ostendorf was engaged in her employment with MSU at the moment of her accident, but
rather whether she was exempted from workers’ compensation coverage through an exemption
of the definition of “employee” set forth in MCL 418.161(1)(b) for “[n]ationals of foreign
countries employed pursuant to section 102(a)(1)[1] of the mutual educational and cultural
exchange act of 1961 . . . .”

       In November 2016, our Supreme Court remanded the first case to this Court for
consideration as on leave granted with instructions to address the exclusive-remedy provision of
the WDCA and whether UE could intervene. Kuhlgert v Michigan State Univ, 500 Mich. 890
(2016). The Court ordered:

         The Court of Appeals shall consider: (1) whether the plaintiff’s claims are barred
         by the exclusive remedy provision of the [WDCA], see MCL 418.131(1); Sewell v
         Clearing Machine Corp, 419 Mich. 56, 62; 347 NW2d 447 (1984); and if not, (2)
         whether the Court of Claims erred by denying [UE’s] motion to intervene.
         [Kuhlgert, 500 Mich. at 890.]

In February 2017, UE moved this Court to stay the appeal pending the outcome of the workers’
compensation proceedings. We granted UE’s request and agreed to hold the appeal in abeyance
until the workers’ compensation magistrate issued a decision.

        In the Workers’ Compensation Board of Magistrates proceeding, the magistrate
examined the text and history of the pertinent legislation, along with Ostendorf’s documents
relating to her status as a foreign national in the United States. However, before the magistrate
issued its opinion, plaintiff sought relief from the Court of Claims in a third proceeding, asking
the Court of Claims to consider the issue that was currently before the magistrate—whether
Ostendorf’s employment status itself exempted her from the definition of “employee” for
purposes of the WDCA. UE requested that the Court of Claims decline to address the issue in
deference to the workers’ compensation proceedings, and again sought to intervene so that it

1
    22 USC 2452(a)(1).

                                                -3-
could challenge Ostendorf’s status as exempting her from coverage under the WDCA should the
court elect to decide that issue.

        Before the Court of Claims could render a decision, the WDCA magistrate issued an
opinion and concluded that Ostendorf “was a research scholar employed by MSU pursuant to . . .
the MECEA and therefore considered not to be an employee.” In March 2017, UE filed a claim
for review with the Michigan Compensation Appellate Commission (MCAC). In April 2017, the
Court of Claims again denied UE’s motion to intervene in the third case. UE then filed an
application for leave to appeal that decision in May 2017. After the appeal was filed, the Court
of Claims issued another opinion and order holding that “the errand that took Dr. Ostendorf to
the accident site was purely personal and in no way related to her employment at MSU” and,
alternatively, that Ostendorf “was employed by MSU under the United States J-1 Visa program
and as such was not eligible for workers [sic] compensation.” We granted leave to appeal,
consolidated the appeal from the third case with that in the first case, and ultimately stayed the
proceedings pending the outcome of the proceedings before the MCAC.2

       The MCAC issued its opinion and order on June 6, 2018, noting the lack of factual
disputes in the case and adopting in full the magistrate’s legal conclusion that Ostendorf “is not
considered an employee of Michigan State University covered under the Worker’s Disability
Compensation Act” because of her employment status. UE filed its application for leave to
appeal in this Court on July 5, 2018. This Court granted leave and also consolidated the appeal
with those in the other two cases. Ostendorf v Mich State Univ, unpublished order of the Court
of Appeals, entered September 6, 2018 (Docket No. 344533).

       Our Supreme Court has directed this Court to determine whether plaintiffs’ claims are
barred by the exclusive-remedy provision of the WDCA; and if not, whether the Court of Claims
erred by denying UE’s motion to intervene.

                    III. EXCLUSIVE REMEDY UNDER MCL 418.131(1)

       UE argues that the Court of Claims erred for two reasons when it concluded that
compensation under the WDCA was not Ostendorf’s exclusive remedy for her injuries as
provided under MCL 418.131(1). First, UE argues that Ostendorf is not exempted as a foreign
national under MCL 418.161(1)(b) of the WDCA. Second, UE argues that Ostendorf’s injuries
occurred while in the course of her employment, and therefore, workers’ compensation is her
exclusive remedy.

2
  This Court initially denied leave to appeal the Court of Claims decision, but our Supreme
Court, in lieu of granting leave, remanded the appeal with instructions to hold the cases in
abeyance pending the outcome of the proceedings before the MCAC. Kuhlgert v Mich State
Univ, 501 Mich. 950; 904 NW2d 866 (2018).

                                               -4-
           A. FOREIGN NATIONALS EXEMPTION UNDER MCL 418.161(1)(B)

       UE first argues that the Court of Claims and the MCAC erred when they concluded that
Ostendorf’s employment status removed her from coverage under the WDCA by way of MCL
418.161(1)(b)—which exempts “foreign nationals” from the definition of “employee.” We
disagree.

       This Court reviews a trial court’s findings of fact for clear error. MCR 2.613(C).
Questions of law, including statutory interpretation, are reviewed de novo. See Thompson v
Thompson, 261 Mich. App. 353, 358; 683 NW2d 250 (2004).

        The MCAC reviews a decision of the Workers’ Compensation Board of Magistrates for
whether the decision is supported by competent, material, and substantial evidence on the whole
record; absent fraud, the MCAC’s factual conclusions are conclusive on appeal if supported by
competent record evidence. Omian v Chrysler Group LLC, 309 Mich. App. 297, 306; 869 NW2d
625 (2015). A decision of the MCAC is subject to reversal if it is based on erroneous legal
reasoning or the wrong legal framework. Id. “Although judicial review of a decision by the
MCAC is limited, questions of law in a workers’ compensation case, including the proper
interpretation of a statute, are reviewed de novo.” Arbuckle v Gen Motors LLC, 499 Mich. 521,
531; 885 NW2d 232 (2016).

        It is undisputed that MSU, as an employer, generally comes under the protections and
requirements of the WDCA. The exclusive-remedy provision under the WDCA requires that
“[a]n employee” receive compensation as provided under the Act. See MCL 418.301(1)
(emphasis added). The WDCA defines “employee” broadly, see MCL 418.161, but in doing so
sets forth the following exemption: “Nationals of foreign countries employed pursuant to section
102(a)(1) of the [MECEA], shall not be considered employees under this act.” MCL
418.161(1)(b).

        It is also undisputed that, as the WDCA magistrate had found, “the Exchange Visitor
Program (EVP) is an international exchange program administered by the Department of State to
implement the MECEA by means of educational and cultural programs,” that “[t]he EVP
program is commonly known as the ‘J visa program’ as participants in the program are issued a
‘J’ non-immigrant visa for entry into the United States,” or that Ostendorf was “in the United
States under a ‘J-1 visa.’ ” Instead, UE maintains that Ostendorf was not an exempt employee
because MSU, not the State Department, paid her salary.

        The WDCA magistrate acknowledged that the MECEA was “subsequently codified in 22
USC Section 2451, et seq.” That section was incorporated by reference in MCL 418.161(1)(b),
which sets forth the activities authorized under the MECEA, and it is now designated as 22 USC
2452. The latter’s Subsection (a) authorizes the Director of the United States Information
Agency, in the interests of “strengthen[ing] international cooperative relations, to provide, by
grant, contract, or otherwise,” for the following:
              (1) educational exchanges, (i) by financing studies, research, instruction,
       and other educational activities—

              (A) of or for American citizens and nationals in foreign countries, and

                                              -5-
              (B) of or for citizens and nationals of foreign countries in American
       schools and institutions of learning located in or outside the United States;

       and (ii) by financing visits and interchanges between the United States and other
       countries of students, trainees, teachers, instructors, and professors . . . . [22 USC
       2452(a)(1) (emphasis added).

        The tribunals below thoroughly analyzed the pertinent statutory and legislative history in
concluding that Ostendorf’s employment excluded her from WDCA benefits under MCL
418.161(1)(b). We agree that 22 USC 2452(a)(1) is not limited to those educational exchange
employees paid directly by the State Department. Instead, by its plain language, the statute also
applies to those employees who are indirectly financed by that entity through its EVPs.

        UE now argues that “Ostendorf’s position was financed by MSU, not the Department of
State,” and so the MECEA does not apply and her exclusive remedy for recovery is under the
WDCA. In doing so, UE characterizes 22 USC 2452(a)(1) as authorizing the State Department
“to directly finance exchange programs.” Thus, UE attempts to bolster its position by inserting
the word “directly” before “finance,” though the legislation actually refers more generally to
mere “financing.” In its second brief, UE refrains from speaking of “direct” financing, but
nonetheless frames its argument as if the “financing” of an EVP participant necessarily requires
that the State Department, not an EVP, pay a participant’s compensation for attendant
employment. In neither brief does UE acknowledge that the State Department might finance its
EVP, including in connection with Ostendorf, by means other than directly paying salaries or
stipends. We agree with the MCAC that the language of 22 USC 2452(a)(1) is sufficiently broad
to permit the specified authority to allow or encourage another entity or EVP sponsor, “such as a
university, to pay, on behalf of the State Department, expenses of the participant, including
wages and benefits,” and “does not bar the State Department from providing financing through a
sponsor or some other benefactor.” The MCAC further noted that, in this case, “the sponsor is,
by contract with a federal government grant recipient, entitled to seek reimbursement from
federal grant funds for compensation and expenses it pays the foreign national.”

        UE musters legislative history in support of the proposition that 22 USC 2452(a)(1)
applies to Fulbright scholars, which is a program “financed by the Department of State.”
However, UE fails to appreciate that identifying Fulbright scholars as coming under the
provision at issue does not itself mean that no EVP participants less directly supported by the
State Department might also qualify. The regulations implementing the EVP include that “(a)n
exchange visitor may receive compensation from the sponsor or the sponsor’s appropriate
designee, such as the host organization, when employment activities are part of the exchange
visitor’s program,” 22 CFR 62.16(a), thus indicating that attendant salaries need not be funded
directly by the State Department but may in fact be provided by other entities participating in the
program.

        Also instructive is ASSE Intern, Inc v Kerry, 803 F3d 1059 (CA 9, 2015). In that case,
the Ninth Circuit recognized that entities other than the State Department itself are eligible to act
as sponsors of the EVP. See id. at 1064 (“The Department of State administers the EVP, with
the assistance of various third-party program sponsors.”).

                                                -6-
       For these reasons, we hold that the Court of Claims and the MCAC correctly concluded
that Ostendorf’s employment with MSU was exempted from WDCA coverage under MCL
418.161(1)(b).

                                B. COURSE OF EMPLOYMENT

        UE also argues that the Court of Claims erred when it concluded that Ostendorf’s injuries
did not arise out of her course of employment. We disagree.

       This Court reviews a trial court’s findings of fact for clear error. MCR 2.613(C).
Questions of law, including statutory interpretation, are reviewed de novo. See Thompson, 261
Mich. App. at 358. The question whether a tribunal has subject-matter jurisdiction is also
reviewed de novo. Adams v Adams, 276 Mich. App. 704, 708-709; 742 NW2d 399 (2007).

         Even assuming that Ostendorf is not exempt as a foreign national, the exclusive-remedy
provision of the WDCA still does not bar her negligence claim because she was not injured while
in the course of her employment. Not in dispute is that, for present purposes, MSU is an
employer subject to the provisions of the WDCA. Under MCL 418.131(1), except as concerns
intentional torts, “[t]he right to the recovery of benefits as provided in [the WDCA] shall be the
employee’s exclusive remedy against the employer for a personal injury or occupational
disease.” By extension, an employee who falls under the exclusive-remedy provision of the
WDCA may not recover from his or her employer in tort by way of the employer’s excess
liability insurer. MCL 418.301(1) specifies that compensation under the WDCA is available to
an employee “who receives a personal injury arising out of and in the course of employment by
an employer who is subject to this act at the time of the injury . . . .”
                The WDCA substitutes statutory compensation for common-law tort
       liability founded upon an employer’s negligence in failing to maintain a safe
       working environment. Under the WDCA, employers provide compensation to
       employees for injuries suffered in the course of employment, regardless of fault.
       In return for this almost automatic liability, employees are limited in the amount
       of compensation they may collect from their employer, and, except in limited
       circumstances, may not bring a tort action against the employer. [Herbolsheimer
       v SMS Holding Co, 239 Mich. App. 236, 240; 608 NW2d 487 (2000) (quotation
       marks and citations omitted).]

        “Because the Bureau of Worker’s Compensation is granted exclusive jurisdiction over
the only remedy available as a result of the exclusive remedy provision, . . . a party’s assertion of
the exclusive remedy provision as a defense to a claim necessarily constitutes a challenge to the
trial court’s subject-matter jurisdiction over the claim.” Harris v Vernier, 242 Mich. App. 306,
312-313; 617 NW2d 764 (2000). A court must respect the limits of its jurisdiction. Straus v
Governor, 230 Mich. App. 222, 225; 583 NW2d 520 (1998), aff’d 459 Mich. 526 (1999).

       Whether the Court of Claims erred when it did not defer to the administrative WDCA
proceedings depends on whether Ostendorf’s injury occurred while in the course of her
employment with MSU.

                                                -7-
               [A]s a general rule the question whether an injury arose out of and in the
       course of employment is a question to be resolved in the first instance by the
       bureau. However, there is an exception where it is obvious that the cause of
       action is not based on the employer/employee relationship. The question whether
       plaintiff’s injury arose out of and in the course of his employment may be a
       question of law or one primarily of fact, or a mixed question of law and fact.
       Thus, where the facts are undisputed, the question is one of law for the courts to
       decide. [Zarka v Burger King, 206 Mich. App. 409, 411; 522 NW2d 650 (1994)
       (quotation marks and citations omitted).]

        MCL 418.301(3) specially addresses the question of course of employment in connection
with a person injured while approaching, or departing from, the workplace. The statute provides:
               An employee going to or from his or her work, while on the premises
       where the employee’s work is to be performed, and within a reasonable time
       before and after his or her working hours, is presumed to be in the course of his or
       her employment. Notwithstanding this presumption, an injury incurred in the
       pursuit of an activity the major purpose of which is social or recreational is not
       covered under this act. . . . [Emphasis added.]

        As noted above, the Supreme Court’s remand order specified Sewell, 419 Mich. at 62, in
which the Court stated that the Bureau of Worker’s Disability Compensation “has exclusive
jurisdiction to decide whether injuries suffered by an employee were in the course of
employment,” but that “[t]he courts . . . retain the power to decide the more fundamental issue
whether the plaintiff is an employee (or fellow employee) of the defendant.” In Sewell, the Court
held that “the bureau’s exclusive jurisdiction is inapplicable ‘where it is obvious that the cause of
action is not based on the employer-employee relationship.’ ” Id. at 62 n 5. We conclude that,
just as the question whether an employer-employee relationship exists is a subset of the broader
question whether an injury took place in the course of employment, id., so is the question
whether the injury took place “on the premises where the employee’s work is to be performed.”

       In this case, the Court of Claims recited the following facts as not being in dispute:
       [Ostendorf] left her place of work, which was the Plant and Biology Laboratories
       Building and she traversed the campus. She was walking toward a University
       operated parking lot where she did in fact park her vehicle on a regular basis; that
       is uncontested. It’s also uncontested that she wasn’t required to use this lot. She
       was in the process of traversing the campus when she was struck.

In the course of explaining that it was not obliged to defer to workers’ compensation
proceedings, the court elaborated as follows:
               First, the Court would indicate that we have jurisdiction over the case as
       pled. Additionally, while we are deprived of subject matter jurisdiction, over
       Worker’s Disability Compensation, this Court finds that . . . we do have
       jurisdiction to decide a question of law where there are uncontested facts. . . .

                                                -8-
                                              * * *

       [T]here is no question, but that [Ostendorf] was an employee of the defendant.

                                              * * *

       [Ostendorf], while it may have taken her five or ten minutes, was at least 900 feet
       or three football fields away from the Plant Biology Laboratory where she
       actually worked. While the phrase “and for reasonable time after she leaves her
       work hours” might bring her within the Act, she is clearly not on the premises
       where the employee’s work is performed. Any assertion that she was in pursuit of
       a recreational activity is irrelevant to this case.

At issue, then, is whether the Court of Claims erred in concluding that, in light of those facts, the
evidence could not be interpreted to indicate that Ostendorf was still on her employer’s premises
when injured.

        UE points out that, even though Ostendorf parked some distance from her actual work
station, “there was no opportunity for Ostendorf to leave MSU’s property on her way to her car,”
thus recommending a broad view of what constitutes the employer’s premises. The large and
contiguous nature of MSU’s main campus weighs against looking to MSU’s premises generally,
and instead favors focusing more specifically on Ostendorf’s actual workplace within the
premises of the Biology Laboratories Building. See Hills v Blair, 182 Mich. 20, 27; 148 N.W. 243
(1914) (noting that a worker injured on “a railway stretching endless miles across the country . . .
might be on the premises of his owner and yet far removed from where his contract of labor
called him”).

        In Hills, the Supreme Court concluded an employee was not in the course of his
employment when injured on his employer’s premises, but 950 feet from where he discharged
his employment duties, and where he had finished his work day and was leaving the workplace
by way of a route he had chosen for himself. Id. at 29-30. Although Hills predates the effective
date of MCL 418.301(3), the latter’s specification of not just the employer’s “premises,” but
rather of “the premises where the employee’s work is to be performed,” comports with Hills in
distinguishing locations on the employer’s premises in the vicinity of the actual place of
employment from those that are far removed from it.

        For these reasons, the Court of Claims correctly concluded that Ostendorf, having
finished her work and walked approximately 900 feet from her worksite to where she had chosen
to park, was thereby removed from her employer’s premises, and thus outside the inclusive
provision of MCL 418.301(3). The Court of Claims therefore correctly recognized that there
was no need to consider whether Ostendorf intended to go straight home, as opposed to some
social or recreational activity, and thus that it was not necessary to address UE’s theory that

                                                -9-
Ostendorf’s immediate plan was to walk a friend’s dog.3 The exception for social or recreational
activity within MCL 418.301(3) concerns not what an employee departing the workplace
premises intends to do next, but rather recognizes that employees sometimes choose to use their
workplaces outside of working hours for their own social or recreational purposes. Therefore,
the purpose of the exception is to distinguish such purely personal activity from activity in the
service of the employer. See Buitendorp v Swiss Valley, Inc, 485 Mich. 879, 879-880 (2009) (the
inquiry over whether the statutory “social or recreational bar applies” concerns not whether the
injured person’s “overall activities were work-related,” but rather the injured person’s “activity
at the time of injury”).

      For these reasons, the Court of Claims did not err in its conclusion that Ostendorf was
removed from her employer’s premises at the time she was injured.

                                 IV. MOTION TO INTERVENE

       Finally, UE argues that the Court of Claims erred when it denied UE’s motions to
intervene. We disagree.

        We note that, as it concerns the issues addressed previously, UE’s intervention claim is
moot as it concerns the exclusive-remedy issues because UE has had the opportunity to litigate
those issues on appeal. However, our Supreme Court’s remand order directed this Court, if we
conclude that the Court of Claims action is not barred by the exclusive-remedy provision of the
WDCA, to consider whether the Court of Claims erred by denying UE’s motion to intervene.
Therefore, we will follow our Supreme Court’s directive, recognizing that UE may wish to
advocate other issues if the litigation in the Court of Claims continues.

        “This Court reviews a trial court’s decision on a motion to intervene for abuse of
discretion.” Auto-Owners Ins Co v Keizer-Morris, Inc, 284 Mich. App. 610, 612; 773 NW2d 267
(2009). “An abuse of discretion occurs when the decision results in an outcome falling outside
the principled range of outcomes.” Radeljak v DaimlerChrysler Corp, 475 Mich. 598, 603; 719
NW2d 40 (2006).

       Intervention is governed by MCR 2.209. MCR 2.209(A) provides:

       Intervention of Right. On timely application a person has a right to intervene in
       an action:

       (1) when a Michigan statute or court rule confers an unconditional right to
       intervene;

       (2) by stipulation of all the parties; or

3
   Although the Court of Claims did not make any such factual finding, the parties appear
prepared to agree that, as plaintiff put it, “Ostendorf left work early so that she could ‘babysit’ a
friend’s dog.”

                                                   -10-
       (3) when the applicant claims an interest relating to the property or transaction
       which is the subject of the action and is so situated that the disposition of the
       action may as a practical matter impair or impede the applicant’s ability to protect
       that interest, unless the applicant’s interest is adequately represented by existing
       parties. [MCR 2.209(A)(1) to (A)(3).]

As for permissive intervention, MCR 2.209(B) states:

       Permissive Intervention. On timely application a person may intervene in an
       action

       (1) when a Michigan statute or court rule confers a conditional right to intervene;
       or

       (2) when an applicant’s claim or defense and the main action have a question of
       law or fact in common.

       In exercising its discretion, the court shall consider whether the intervention will
       unduly delay or prejudice the adjudication of the rights of the original parties.
       [MCR 2.209(B)(1) and (B)(2).]

Thus, under Subsection (A)(3), a person may intervene in an action by right on timely
application where that person asserts an interest in the subject of the action “and is so situated
that the disposition of the action may as a practical matter impair or impede the applicant’s
ability to protect the interest, unless the applicant’s interest is adequately represented by existing
parties.” Importantly, under Subsection (B), a court deciding a request for permissive
intervention must “consider whether the intervention will unduly delay or prejudice the
adjudication of the rights of the original parties.” Hill v LF Transport, Inc, 277 Mich. App. 500;
746 NW2d 118 (2008).

         In this case, the Court of Claims found that, although UE had knowledge of the complaint
from the outset of the proceedings, UE waited more than a year to request to intervene. Not only
did the court conclude that UE’s motion to intervene was untimely, but because there was
nothing to suggest that MSU had exercised bad faith or failed to adequately represent UE’s
interests and to assert all affirmative defenses, the court concluded that UE had not shown that
intervention was necessary to ensure its interests were adequately represented or that intervention
would not delay or prejudice the adjudication of the rights of the original parties. UE does not
take issue with the Court of Claims’s concern that granting its motion to intervene would
occasion substantial delay in a case that had otherwise progressed to the eve of facilitation or
trial, except by implying that its imperatives for intervention justify the delay. In trying to make
the case regarding those imperatives, UE challenges the trial court’s conclusions concerning
timeliness as it relates to the extent to which UE’s interests were impeded by implying that its
imperatives for intervention justify the delay. We disagree.

                                       A. UNTIMELINESS

      MCR 2.209(A)(3) and (B) both condition intervention on timely application. At oral
argument below, UE’s attorney admitted that “we’re coming in late into the lawsuit,” but

                                                -11-
suggested that this should not weigh against intervention because “we’re raising a subject matter
jurisdiction issue and you’re never too late to raise . . . subject matter jurisdiction.” Similarly, in
this case, UE admits that it brought its motion “more than one year after the complaint was
filed,” but argues that the position it wished to advocate below was one challenging the
jurisdiction of the Court of Claims to hear the case. In so doing, UE relies on the familiar rule
that challenges to subject-matter jurisdiction may be raised at any time. See Adams, 276 Mich
App at 708-709. UE claims that it is not alleging an alternative theory of causation, but rather is
“seeking to intervene to implement a procedure that must occur in this tort action.” However,
UE cites no authority for its proposition that the criteria for determining whether a party or entity
may intervene in civil litigation are viewed more favorably when the prospective intervenor
challenges jurisdiction. Although parties have no time constraints when challenging subject-
matter jurisdiction, procedurally a nonparty wishing to do so must first be a party to the action in
the normal course.

        UE also acknowledges that MSU pleaded the WDCA among its affirmative defenses, but
asserts that “MSU didn’t inform UE until much later that it wasn’t pursing the exclusive-remedy
defense.” UE insists that MSU lacked an incentive in the matter because, while MSU would
have to fund any remedy under the WDCA, it could pass such costs on to its insurers in the event
of liability in tort. However, in light of UE’s admission that it knew of the litigation from its
inception, and its contractual right to participate in any attendant defense, UE was, at the very
least, on inquiry notice concerning the WDCA defense from the time the complaint was filed.
Therefore, UE could have timely filed its motion to intervene.

                   B. REPRESENTATION OF INTERVENOR’S INTEREST

       MCR 2.209(A)(3) allows intervention by right when an applicant’s interests are not
adequately represented by an existing party. In arguing that there was “clearly not” another party
advancing UE’s interests, counsel for UE argued below as follows:
       [T]he irony . . . is that you have plaintiffs saying this is MSU’s issue. MSU will
       stand up for this issue and take a position; and then you have MSU saying we’re
       not taking a position. . . . MSU is standing on the sidelines. Plaintiff clearly is
       opposed to our position. We are the only party speaking on behalf of this being a
       Worker’s Comp claim.

        MSU raised the workers’ compensation exclusive-remedy provision in its affirmative
defenses, but it did not pursue the defense beyond the pleading stage. Significantly, despite UE’s
protestations over MSU’s incentives in the matter, UE has stopped short of challenging as clearly
erroneous the Court of Claims’s finding that “[n]o one is asserting that Michigan State
University has exercised bad faith.”4 In light of this restraint on UE’s part, we presume good

4
 We note that MSU may not have ultimately pursued the affirmative defense under the WDCA
because it believed that the defense would not be successful, even though a workers’
compensation award would eliminate the possibility of tort liability. Of course, MSU also may
not have pursued the defense because MSU was self-insured through State Farm and UE.

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faith on MSU’s part and will not speculate as to why it abandoned the WDCA defense.
Moreover, in light of our holding on the exclusive-remedy issue, in which UE has participated
fully, we conclude that UE’s intervention argument is meritless.

         Further, relating to both the issue of MSU’s having represented UE’s interests for
purposes of intervention by right, and that of a common defense for purposes of permissive
intervention, is that the only interest that UE has put forward for this purpose is its obligation to
indemnify MSU to the extent that the latter ends up obliged to cover tort damages in excess of its
other sources of coverage. But a potential duty to indemnify a claimant for benefits is “separate
and distinct” from the underlying claim for benefits, which does not itself justify the potential
indemnitor’s intervention in litigation regarding that claim. See Black v Dep’t of Social Servs,
212 Mich. App. 203, 205-206; 537 NW2d 456 (1995). Because UE does not assert subrogation
rights in the matter, or any other contractual rights in connection with MSU beyond the latter’s
admitted duty of cooperation, UE’s interest in this case relates directly to that cooperation, not to
the possible competing theories of recovery or remedy. Ultimately, if MSU files a claim against
its policy with UE for excess coverage for tort liability, and UE remains persuaded that MSU did
not conscientiously defend itself or otherwise cooperate with UE in the matter, then UE may
defend the claim on such contractual bases.

        For these reasons, UE fails to show with its arguments relating to jurisdiction, or the
extent to which MSU represented its interests in the litigation below, that the Court of Claims
erred by denying its motion for intervention as untimely, either by right or permissively.

       Affirmed.

                                                              /s/ Thomas C. Cameron
                                                              /s/ Brock A. Swartzle
                                                              /s/ Mark J. Cavanagh

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