Court Opinion

ID: 9667792
Source: CourtListenerOpinion
Date Created: 2023-08-24 01:55:09.951042+00
Date Added: 2024-06-11T18:15:40.876535
License: Public Domain

Levin, J.
(dissenting). A statute enacted in 19551 provided that any permanently and totally disabled person receiving workmen’s compensation payments in amounts per week less than the present schedule and for a lesser number of weeks than the duration of such disability shall be paid at the current rate of compensation for the duration of such disability. Formerly, compensation was payable to persons permanently and totally disabled for 750-800 weeks;2 an increase in the rate of compensation benefits did not benefit those previously injured.3
The burden of this enhancement of benefits was not imposed on the employer. The cost was spread among all employers; the Second Injury Fund *35(financed by assessments on insurance carriers and self-insurers) was required to pay differential benefits — the difference between what the permanently and totally disabled employee was then receiving from his employer and the compensation presently provided for such disability4 — for the duration of *36the disability.
In these consolidated appeals the employers disputed whether the employees were entitled to workmen’s compensation benefits as permanently and totally disabled persons. The claims for such compensation against the employers were adjusted without adjudication when the department approved redemption agreements settling the claims.
The redemption agreements with the employers did not cover the liability of the Second Injury Fund for differential benefits. At the redemption hearing in White the fund declared that if the redemption was approved it would deny liability on the ground that the liability of the employer had not been adjudicated. The redemption was approved on the understanding that the question whether the fund was subject to liability would be determined in subsequent proceedings. The redemption agreements in Moorhouse, Boyko and Pitts5 were also approved on the understanding that the question whether the fund was subject to liability for differential benefits was unresolved.
Hearings were held on the claims for differential benefits.
The referee in White concluded that White’s claim was "dependent” upon a showing that the employer "had made a payment of the initially required disability benefits and had admitted liability or that they had been found liable to make *37such disability payments”. By reason of the redemption agreement, no such showing had been made. The factual issue whether White was a permanently and totally disabled person entitled to workmen’s compensation benefits was not decided.
The referee in Moorhouse concluded that the redemption of the employer’s liability "also redeemed any rights he might have against the Second Injury Fund”.
The referees in Boyko and Pitts, however, found that the employees were permanently and totally disabled and ordered the Second Injury Fund to pay differential benefits.6
The Workmen’s Compensation Appeal Board concluded that the fund had no liability in these cases. In White, the board found "the fund’s liability to be derivative, the employee’s cause of action single”7 and said that "an establishment of liability prior to redemption is an absolute prerequisite to Second Injury Fund liability”. (Emphasis supplied.) The board disposed of Moorhouse, Boyko and Pitts on the authority of White and did not reach the factual issues decided for the employees in Boyko and Pitts.
The Court of Appeals affirmed "the holding of the Workmen’s Compensation Appeal Board that the establishment of employer liability, either by admission or adjudication prior to redemption, is an absolute prerequisite to Second Injury Fund liability”.8
*38We conclude that it is inconsistent with the legislative purpose in requiring the payment of differential benefits to extend those benefits to permanently and totally disabled persons who establish employer liability before redemption but deny those benefits to permanently and totally disabled persons who are able to establish employer liability after redemption.
We would reverse the Court of Appeals and remand these causes to the appeal board for resolution of the factual issues whether each plaintiff was permanently and totally disabled and entitled to workmen’s compensation benefits in amounts less than provided in subsequent schedules or for a lesser number of weeks than the duration of such disability.9
I
The apparent legislative purpose in requiring the payment by the Second Injury Fund of differential benefits is to extend to permanently and totally disabled persons entitled to workmen’s compensation the benefit of legislative improvements in the amount and duration of such compensation and to spread the cost among all employers.10
It is not contended that permanently and totally disabled persons who receive lump sum settlements are less in need of the supplementation provided by differential benefits than are permanently and totally disabled persons who receive weekly payments. The Second Injury Fund accepts *39the decision of the Court of Appeals in Derouin v Director of Workmen’s Compensation Department, 19 Mich App 309; 172 NW2d 463 (1969), where an agreement to redeem the liability of the employer was approved after separate orders had been entered by the referee against the employer (for permanent and total disability) and against the fund (for differential benefits). The Court of Appeals rejected the fund’s contention that its liability is so "derivative” that a redemption of the employer’s liability serves to relieve the fund of adjudicated liability.11
A permanently and.totally disabled person has two potential sources of recovery:
(a) his employer: workmen’s compensation benefits in accordance with the schedule in effect at the time of injury;
(b) the fund: differential benefits on account of subsequent increases in the level or duration of benefits.
To simply state that the injured worker has one or two claims or that his claim is single or divisible begs the question whether he can settle with his employer before as well as after adjudication or admission12 and still seek recovery from the fund.
The injured employee’s claim or cause of action is "indivisible” in the sense that a final adjudica*40tion that the employee is not entitled to workmen’s compensation benefits as a permanently and totally disabled person would preclude recovery from the fund of differential benefits.
The fund’s liability is "derivative” in the sense that it has no liability unless the employer was liable. It does not follow, however, that the question whether the employer was liable is not susceptible of proof and adjudication after redemption.
In most cases the unresolved issue settled by the redemption will be whether the disability is permanent and total within the meaning of the act. The factual issues in such cases are primarily medical and susceptible of current appraisal based on the employee’s physical condition preceding the hearing. In Boyko and Pitts, fund investigators were able to obtain medical testimony in support of the fund’s denial of permanent and total disability. In White and Pitts the fund, aware of the proposed redemptions, was in a position to have requested, as a precondition to approval of the redemption, the referee’s assistance in obtaining the proofs assembled by the employer in support of its denial of liability.
We perceive no intractable problems for the fund in defending claims after redemption. It appears that the fund has both the investigative and legal resources to defend its interests adequately.
Whether the Second Injury Fund should receive notice of permanent and total disability claims and an opportunity to defend is not an issue in these appeals.13 We see no reason why it should not be *41enabled to or why it could not intervene to protect its interests.
The fund asserts that it has been its practice to regard admission by an employer or adjudication against an employer as establishing entitlement to permanent and total disability benefits which is binding on it. This practice appears to have developed in the processing of claims by employers who asserted that by reason of a second injury the fund —not the employer — was responsible for permanent and total disability benefits.14
It was not until late 1965 that the fund sought to extend the asserted practice to permanent and totally disabled claimants generally. Differential benefits were not in fact payable for the period between August 11, 1956 and September 1, 1965.15 The redemption hearing in White was held soon after differential benefits first became payable. The fund cannot point to a history of settled practice in support of its contention that the policy it followed in adjusting the claims of employers for reimbursement for second injury benefits establishes that the injured worker’s claim is "indivisible” and he cannot settle with the employer and then seek an adjudication against the fund of his entitlement to differential benefits.
Employers and employees alike are constrained for a variety of reasons to enter into redemptions. White feared impending death. The amount offered, $75,000, provided him and his family financial security. At the time of their redemption hearings, Moorhouse was 81, Boyko was 71 and *42Pitts was 63. The amounts paid Moorhouse, Boyko, and Pitts, while relatively small, represented a substantial portion of the employer’s total liability payable weekly if the employees had prevailed after perhaps years of litigation. The purpose of the Workmen’s Compensation Act — to compensate injured workers — is not served by a construction which would discourage settlement in favor of years of litigation with concomitant deferral of payment of benefits to a time beyond, in some cases, the employee’s lifetime.
II
The contention that large arrearages in differential benefits may have accumulated since September 1, 1967 to an untold number of claimants is a cause of concern. The delay in adjudication of this question is part of the cause;16 the failure of some claimants to assert their claims is another. We appreciate that there is no statute of limitation. Whether some accommodation on that account may be in order is a question we need not now decide. If the arrearages are as large as the fund and the amicus claim, the Legislature might conclude that some limitations should be imposed; if the Legislature does not act, this Court may be persuaded to provide relief.17 The relevant facts on *43the "retroactivity” issue have not been developed. The resolution of that question should not deter us from the correct construction of the statutory language as it affects these appeals and the future application of this remedial legislation.
We would reverse and remand to the appeal board.
Kavanagh, C. J., and Williams, J., concurred with Levin, J.

 1955 PA 250.

 1953 PA 198 changed the duration of benefits for permanent and total disability from 750 to 800 weeks. The 750 week duration was established in 1943 (1943 PA 245; 1948 CL 412.9; MSA 17.159). The 1955 act (1955 PA 250) substituted the current provision (see MCLA 418.351; MSA 17.237[351]): "the conclusive presumption of total and permanent disability shall not extend beyond 800 weeks from the date of injury, and thereafter the question of permanent and total disability shall be determined in accordance with the fact, as the fact may be at that time”.

 The concept that an individual’s benefits should be adjusted in subsequent years was extended to injured workers generally by the 1969 act (1969 PA 317). The burden of this obligation was imposed on the employer. MCLA 418.355; MSA 17.237(355).

 See 1948 CL 412.9(a); MSA 17.159.
As originally enacted, the provision read:
"Any person who is permanently and totally disabled and who is receiving payments of workmen’s compensation which are payable to such person under this act in amounts per week of less than is presently provided in the workmen’s compensation schedule of benefits for permanent and total disability and for a lesser number of weeks than the duration of such permanent and total disability shall hereafter receive weekly, without application, from the second injury fund, an amount equal to the difference between what he is now receiving per week and the amount per week now provided for permanent and total disability with appropriate application of the provisions of paragraphs (b), (c), (d) and (e) of this section since the date of injury. Payments from this second injury fund shall continue after the period fos which any such person is otherwise entitled to compensation under this act for the duration of such permanent and total disability according to the full rate provided in the schedule of benefits.” 1955 PA 250.
In 1956, the opening language was changed to read:
“Any permanently and totally disabled person as defined in sections 8a and 10 who, on or after June 25, 1955, is entitled to receive payments of workmen’s compensation under this act in amounts per week of less than is presently provided in the workmen’s compensation schedule of benefits for permanent and total disability and for a lesser number of weeks than the duration of such permanent and total disability shall after the effective date of this amendatory act receive weekly, * * * .” 1956 PA 195.
The provision took its present form in 1965 when it was amended to read:
“Any permanently and totally disabled person as defined in this act who, on or after June 25, 1955, is entitled to receive payments of workmen’s compensation under this act in amounts per week of less than is presently provided in the workmen’s compensation schedule of benefits for permanent and total disability and for a lesser number of weeks than the duration of such permanent and total disability shall after the effective date of any amendatory act, by which his disability is defined as permanent and total disability or by which the weekly benefit for permanent and total disability is increased, receive weekly, without application, from the second injury fund, an amount equal to the difference between what he is now or shall hereafter be entitled to receive from his employer under the provisions of this act as the same was in effect at the time of his injury and the amount now provided for his permanent and total disability by this or any other amendatory act with appropriate application of the provisions of *36paragraphs (b), (c), (d) and (e) of this section since the date of injury. Payments from this second injury fund shall continue after the period for which any such person is otherwise entitled to compensation under this act for the duration of such permanent and total disability according to the full rate provided in the schedule of benefits.” 1965 PA 44, 1948 CL 412.9; MSA 17.159.
The present statutory provision is MCLA 418.521; MSA 17.237(521).

 The redemption was approved in White September 19, 1966; in Moorhouse October 13, 1966; in Boyko September 10, 1968; and in Pitts December 4, 1969.

 The referee’s order in White was dated May 22, 1967; in Moorhouse May 8, 1967; in Boyko January 2, 1970; and in Pitts March 1, 1971.

 The appeal board framed the question: "Is the liability of the Second Injury Fund derivative or independent, the injured employee’s cause of action single or divisible?”

 White v Weinberger Builders, Inc, 49 Mich App 430, 438-439; 212 NW2d 307 (1973).

 The fund has paid nothing to these plaintiffs in settlement of its potential liability. Our order of remand does not preclude the fund from entering into an agreement to redeem. See 1 OAG, 1955, No 2244, p 475 (Sept 20, 1955).

 See Rasar v Chrysler Corp, 382 Mich 169; 169 NW2d 303 (1969).

 The statutory language "who * * * is entitled to receive payments of workmen’s compensation under this act * * * for permanent and total disability” establishes the criteria of eligibility for differential benefits: the employee must be permanently and totally disabled and his disability must be compensable under the act. Current receipt of weekly benefits is not a criterion of eligibility. Derouin v Director of Workmen’s Compensation Department, 19 Mich App 309; 172 NW2d 463 (1969).

 The fund states that it is liable for differential benefits where the employer’s liability for total and permanent disability has been established through adjudication or admission by the employer.

 The Attorney General says that even if the employee’s claim against the employer for total and permanent disability benefits does not name the Second Injury Fund, the Workmen’s Compensation Bureau notifies the fund of the claim.

 This practice was extended when benefits were enlarged from 750 to 800 weeks for permanently and totally disabled persons [see fn 2] and the fund was made responsible for payment for the additional 50 weeks.

 Differential benefits in Boyko were ordered commencing September 1, 1965 and in Pitts commencing March 2, 1968.

 The redemption in White was approved September 19, 1966. The referee decided against differential benefits May 22, 1967. The appeal board affirmed July 7, 1972. The Court of Appeals affirmed September 23, 1973. The case was submitted to this Court November 4, 1974. See fns 5 and 6.

 In Baldwin v Chrysler Corp, 67 Mich App 61; 240 NW2d 266 (1976), the Court of Appeals held that the one-year-back rule (MCLA 418.833[1]; MSA 17.237[833] [1]) applies to a claim against the Second Injury Fund where specific loss benefits were voluntarily paid for a period ending on July 5, 1947 and the workman first petitioned for total and permanent disability benefits on February 10, 1972; the appeal board’s award of benefits from January 12, 1946 was erroneous insofar as it required payments prior to February 10, 1971. The Court *43of Appeals declared that while the one-year-back rule was not a statute of limitation, it was a limitation on the appeal board’s authority to order the payment of benefits.
Compare Anaya v Sante Fe, 80 NM 54; 451 P2d 303 (1969), with Industrial Commission v Carpenter, 102 Colo 22; 76 P2d 418 (1938), on the question whether an unduly delayed proceeding seeking workmen’s compensation may be barred by laches.