Court Opinion

ID: 9850548
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:59:06.89558+00
Date Added: 2024-06-11T09:20:38.999898
License: Public Domain

Levin, P. J.
{dissenting). Roberts v. I. X. L. Class Corp. (1932), 259 Mich 644, held tha.t, since the con*319tract of employment there had been entered into in Michigan, Michigan’s workmen’s compensation act covered the ont-of-state injury even though it was intended that the services be rendered without the State and the employee was not a resident of Michigan.
Those are essentially the facts in the case here for decision. Nevertheless, because I do not think the place of contracting has the importance once attached to it, I cannot agree that decision here is controlled by Roberts.
However, while not controlling, Roberts cannot be ignored. I agree that Clarence Austin was not automatically disqualified for coverage under the Michigan act because he was not a Michigan resident. It is now 35 years since Roberts was decided. Whatever may have been the legislative intention at the time of adoption of the residency requirement (CL 1948, §413.19 [Stat Ann 1960 Rev §17.193]), it would be inappropriate at this late date to attempt to breathe new life into a statutory provision which was aborted so long ago.1 If the legislature desired to insist on a residency requirement,2 it could have done so at any time within the last 35 years; it was inferentially invited to do so in Roberts, p 649.
1 do not think — and this is the area of disagreement — Roberts governs what foreign injuries are subject to the act or, to be more specific, that merely because Austin’s contract of employment was entered into in Michigan he is automatically entitled to the protection of our act without regard to the other circumstances of the employment relationship.
*320First, part 3, § 19 of the act does not mandate that all hired under contracts made in this State who suffer injuries are ipso facto entitled to compensation. Rather it says the hoard shall have “jurisdiction over all controversies arising out of injuries suffered without the territorial limits of this State, in those cases where the injured employee is a resident of this State at the time of the injury, and the contract of hire was made in this State.” CL 1948, §413.19 (Stat Ann 1960 Rev §17.193) (Emphasis supplied.) From the fact of “jurisdiction” to award compensation it does not follow necessarily that the board must award compensation without regard to the other circumstances of the employment relationship.
Second, Roberts should not be read today as eliminating only the residency requirement of part 3, § 19. Roberts may properly be viewed as having eliminated section 19 altogether with the result that the board and the appellate courts of this State, unrestricted by a truncated section 19, are free to evolve sensible rules of law concerning the extraterritorial application of Michigan’s act.
Place of contracting was put forth as the governing criterion in Crane v. Leonard, Crossette & Riley (1921), 214 Mich 218, the first case which considered the extraterritorial application of Michigan’s workmen’s compensation act. The employee ’ was hired in Michigan, his services to be performed within and without the State, and he met his death in Illinois during the course of his employment. The question was whether our act applied to an injury that ocurred outside the State, i.e., whether the act applied extraterritorially at all. The Court rejected cases from other jurisdictions limiting their acts to local injuries. The Court expressed no policy requiring preference for the place of contracting over the place of injury, but rather seemed *321impelled to its result because coverage was optional, not compulsory, at the time. Hence, said the Court, the relationship was contractual (p 228):
“The authorities, and particularly the later ones, lead irresistibly to the conclusion that where the act is an optional one, as is ours, the relations are contractual and the provisions of the act become a part of the contract of employment.” (Emphasis supplied.)
Since rights under the act were contractual, they (p 231) “accompanied the employee wherever he went within the ambit of his employment.” The following year, the Conrt explained Crane “held that as our compensation act was voluntary the relation was one of contract, and that the provisions of the act must be read into the contract between the employer and employee.” (Emphasis supplied.) Hulswit v. Escanaba Manufacturing Co. (1922), 218 Mich 331, 333. On that basis, the Hulswit Court held that our act covered a case where “the services contracted for [in Michigan] were [as in Roberts] entirely performed outside of the State.”
Then came Roberts.3 The Roberts Court was confronted by the conflict between the (1) amendatory language of section 19 adopted in 1921 (PA 1921, No 173) limiting the board’s jurisdiction of controversies arising out of injuries suffered outside Michigan to those cases where the contract of hire was made within Michigan and the employee was a resident of this State, and (2) its holdings, also dating from 1921, adopting the place of contracting as determinative. In eliminating section 19’s residency requirement the Court stressed that its enforcement would work “a radical change in the scope and effect *322of the act.” (p 648) There had not as yet been any change in the optional nature of the coverage; the Court, understandably, continued to focus on its underlying premise that the “relations are contractual,” and to see the matter in terms of protecting the employee wherever he might go in performance of the contract. "When coverage was entirely optional, treating the matter as one of quid pro quo must have appeared no more than fair.
The inadequacy of the contractual theory became apparent in Thiede v. G. D. Searle & Co. (1936), 278 Mich 108, where the Court was confronted by a claim in respect to a deceased employee resident of this State whose dependent widow also resided in this State. The employer asserted that the employment contract was entered into in Illinois and, in reliance on the Court’s prior holdings that made the acts extraterritorially turn on whether the employment contract was made in Michigan, argued that the Michigan act did not apply. The employment contract was to be performed exclusively in Michigan and the employee lost his life in Michigan in the course of employment. In this case, still governed by the old act (before the 1943 amendments making the act compulsory), the Court declared (p 111):
“The deceased was under a contract of hire and by reason of his employer’s election to become subject to the act, he, the employee, became covered and protected by the act. It therefore makes no difference where the contract of employment was made.” (Emphasis by the Court.)
While the Thiede Court continued to speak in contractual terms, I do not suppose it intended to cover under our act employees everywhere without regard to the presence or absence of Michigan contacts. The Court ignored place of contracting. On the *323basis of the obviously significant Michigan contacts, the Court simply held the act applied. A short time later, in Conover v. Rust Engineering Co. (1937), 279 Mich 16, on the authority of Thiede, the Court declared the Michigan act applied where the contract was entered into in Pennsylvania, the services were to be performed in different States and Canada, the employee and his family resided in Colorado, and the employee lost his life in Michigan in the course of the employment.
Thus, prior to the change from optional to compulsory coverage, the Court had completed the circle from complete rejection of place of injury to complete adoption of the place of injury, provided that place was Michigan.4 In doing so, the Court abandoned place-of-contracting as the sole approach to the complex question of the act’s extraterritoriality.6 And it thereby widened the inquiry beyond that considered, or necessary to decision, in Roberts.
The 1943 amendments to the act making- coverage compulsory also eliminated language emphasized in Roberts, Thiede and Conover, declaring that an electing employer agrees “to cover and protect all employees in any and all of his businesses.” PA 1943, No 245 (CL 1929, § 8412). (Emphasis supplied.) Thereupon, it ceased to be a matter of choice and contract.
In Daniels v. Trailer Transport Co. (1950), 327 Mich 525, the Court moved further away from the contract approach, holding that even though the *324parties contracted to be bound by the Michigan act, the Michigan act did not apply.6
The majority opinion here stresses the continuing inclusion in the act of the following definition of “employee”: “Every person in the service of another, under any contract of hire, express or implied.” CL 1948, § 411.7 (Stat Ann 1960 Rev § 17-.147).7 The argument proves too much. Every person under every contract of hire with an employer, even a Michigan employer, is not covered by the Michigan act. Nor do I think every person under every contract of hire made in Michigan is covered. It would obviously be unsound to hold, for example, that a nonresident injured out-of-state who was hired for work to be performed entirely without the State for a foreign based employer is necessarily covered by the Michigan act merely because the employment was agreed upon in Michigan.8 Larsen criticizes the cases which let the matter turn wholly on the place of contracting, and speaks of:
“the unrealistic character of the place-of-contract test when construed to depend upon the sheer formality of being physically present in a particular *325geographical subdivision when a signature is scrawled or a word spoken into a telephone mouthpiece. There is nothing in this technicality of relevance to the choice of an appropriate statute for practical compensation purposes.” 2 Larsen, Workmen’s Compensation Law, § 87.34, p 389.
Larsen advocates9 the approach enunciated in 1930 by the New York court of appeals10 and the Wisconsin supreme court.11 The New York and Wisconsin test, explains Larsen, looks for the situs of the employment relationship. If that relationship has a local situs, the local act applies to out-of-state injuries unless the situs of the relationship becomes fixed in a foreign State. Recently the New York court of appeals in Rutledge v. Kelly and Miller Bros. Circus (1966), 18 NY2d 464 (223 NE2d 334), reviewed its earlier holding in Cameron v. Ellis Construction Co. (1930), 252 NY 394 (169 NE 622) and the cases following Cameron. A distinction had developed between work which had a fixed place in another State [coverage ordinarily denied] and out-of-state work which was only transitory [coverage allowed]. Applied rigidly, the Cameron test had been used to deny compensation where there existed a significant number of contacts with New York but where the court thought employment “fixed” outside the State. In Nashko *326v. Standard Water Proofing Company (1938), 4 NY 2d 199 (173 NYS2d 565, 149 NE2d 859), the Cameron test of fixed employment situs was expanded to include out-of-state injuries where there were “significant contacts” with New York. This “significant contacts” test proved fairly serviceable for ont-of-state injury cases but, when applied diversely, it could exclude New York jurisdiction of accidents occurring within its borders. Literally, the Cameron-Nashko test required that where another State had more “significant contacts” with the employment relationship than did New York, although the injury was in New York, New York should not take jurisdiction. That was the specific problem facing the Rutledge court. It held the Cameron-Nashko test should not he applied to result in the mutually exclusive jurisdiction of one State over another, and judged the case before it according to its view of the extent of New York’s interest therein.
The lesson of experience, our own and that of our sister States, is that any attempt to establish a talisman good for all cases will ultimately prove unequal to the task of fairly deciding all cases. The varied factual situations that arise do not lend themselves to codification. The simplistic place-of-contraeting test, like any test that exalts one element to the exclusion of all others, is unworkable as a guideline to decision in all cases.12
In eliminating the optional nature of coverage under the act and making coverage compulsory, and *327in eliminating the former statutory language that an electing employer agrees “to cover and protect all employees employed in any and all of his businesses”, the legislature eliminated the fundamental bases of the Crane, Hulswit, and Roberts holdings. The early decisions of the Michigan Supreme Court construing the act before coverage thereunder became compulsory do not confine the inquiry to location of the place of contracting. The workmen’s compensation appeal board and the appellate courts are free to develop case-by-case the scope of the extraterritorial applicability of Michigan’s act.
In this case the workmen’s compensation appeal board found:
“The evidence before us establishes that the contract of employment entered into between plaintiff and defendant was consummated when plaintiff contacted Jack Vaden in Ecorse, Michigan. Plaintiff was then assigned as a regular employee on the Upjohn project in Kalamazoo for about two weeks. While still in Kalamazoo, he was contacted by Mr. Haynes who assigned him as a foreman of the out-of-state crews, and he has since that date been so assigned to various jobs in other States. It was during the course of such employment that the injury here in question occurred. It is not disputed that the injury arose out of and in the course of his employment. The proofs before us having established that the contract of hire was entered into in the state of Michigan, our jurisdiction lies foursquare within the rules expressed by the Supreme Court in the claim of Roberts v. 1. X. L. Glass Gorp., 259 Mich 644.”
It is apparent that the appeal board considered place of contracting determinative. In so doing, an erroneous rule of law was, in my opinion, applied. I would remand to the appeal board for further findings concerning the employment relationship *328and other relevant criteria, and for a redetermination thereon whether the injuries are covered by Michigan’s act. The parties should have an opportunity to offer additional proofs.

 I do not read tbe dictum in Daniels v. Trailer Transport Co. (1950), 327 Mich 525, 530, heavily relied on by the appellant, concerning part 3, § 19 of the act (CL 1948, § 413.19 [Stat Ann 1960 Eev §17.193]), as a declaration that Roberts has been overruled.

 Pew States have and enforce a local residency requirement as a condition of foreign-injury coverage. 2 Larsen, Workmen’s Compensation Law, § 87.11, p 376, § 87.60, pp 394, 396.

 In the interim the eouft, in reliance on § 19, Crane and Sulswit, allowed recovery to one who apparently came within the literal wording of § 19. Klettke v. C. & J. Commercial Driveaway (1930), 250 Mich 454.

 Recently the Court rejected the claim that the full faith and credit clause of the United States Constitution prevents an Indiana resident employed in Indiana by an Indiana employer, injured during employment in Michigan, from recovering under the Michigan act after an award had been made by Indiana. Schenkel v. Towers Builders Company, Inc. (1968), 380 Mich 492.

 See, e. g., Crider v. Zurich Insurance Company (1965), 380 US 39 (85 S Ct 769, 13 L Ed 2d 641).

 The employer’s home office was in Michigan; the employee was a resident of Illinois; the contract of hire was made in Texas and the injury suffered in -Tennessee. The Court ruled that (p 531) “the responsibilities and benefits provided under the aet cannot be enlarged or diminished by agreement of the parties.”

 That the language of the aet must be adapted to its purpose, see Crane v. Leonard, Crossette & Riley, supra, p 230, where the court held Michigan’s aet covered foreign injuries despite the act’s requirements that hearing be held at the locality where the injury occurred and a certified eopy of the award be presented to the circuit court for the county in which the accident occurred.

 Place of contracting is surely a relevant factor, but to make it determinative in every case might well deny due process in a particular case. Compare Alaska Packers Association v. Indiistrial Accident Commission of the State of California (1935), 294 US 532, 543 (55 S Ct 518, 79 D Ed 1044), holding constitutional the application of California’s statute to injury suffered by a Mexican migrant worker hired in California for work in Alaska on the ground that under ,the^ “special circumstances” there disclosed the statute, as applied,, did not lack a rational basis or involve any arbitrary or unreasonable exercise of State power.

 2 Larsen, Workmen’s Compensation Law, § 87.42, p 390.

 Cameron v. Eillis Construction Co., supra. See, also, Nashko v. Standard Water Proofing Company, supra.

 Val Blatz Brewing Co. (1930), 201 Wis 474 (230 NW 622). See, also, McKesson-Fuller-Morrison Co. v. Industrial Commission (1933), 212 Wis 507 (250 NW 396); Interstate Power Co. v. Industrial Commission (1931) 203 Wis 466 (234 NW 889). In Fay v. Industrial Commission (1941), 100 Utah 542 (114 P2d 508, 511) the Utah Supreme Court construed the statutory requirement that an employee be “hired in this State” to mean that the “status of employer and employee [be] maintained and localized in this State,” and in House v. State Industrial Accident Commission (1941), 167 Or 257 (117 P2d 611), the Oregon supreme court held the site-of-the-employment-relationship test required the employee to perform a “substantial part of his work” within the State.

 A one- or two-element test has been tried, and not happily so, in many jurisdictions. The various elements relied upon as determinative have included, sometimes in varying combinations, place of contract, place of injury, place where the employee does most of his work, place of residence of employee, place of employer’s residence [whieh might be construed as place of home office, place where the greater part of the business is done, place of executive hiring offiee, et cetera] and place of the employer-employee relationship. See eases collected in Annotation: Extraterritorial Operation of Workmen’s Compensation Act, Conflict of Laws, 82 ALR 709, and, supplementing that annotation, 90 ALR 119.