King v. State Second Injury Fund

• Decision Date: 03 September 1969
• Docket Number: No. 21,21
• Citation: 382 Mich. 480,170 N.W.2d 1
• Parties: Eva KING, Plaintiff and Appellant, v. STATE of Michigan SECOND INJURY FUND, Defendant and Appellee, and Ford Motor Company, Defendant.
• Court: Michigan Supreme Court

Page 1

170 N.W.2d 1

382 Mich. 480

Eva KING, Plaintiff and Appellant, v. STATE of Michigan SECOND INJURY FUND, Defendant and Appellee and Ford Motor Company, Defendant.

No. 21.

Supreme Court of Michigan.

Sept. 3, 1969.

Kelman, Loria, Downing & Schneider, Detroit, for plaintiff-appellant.

Frank J. Kelley, Atty. Gen., Robert A. Derengoski, Sol. Gen., John J. Long, Asst.

Atty. Gen., for State of Michigan Second Injury Fund.

Before the Entire Bench.

KELLY, Justice.

On January 16, 1948, Eva King was employed by the Ford Motor Company at an average weekly wage of $55.80. On that date, in the course of her employment, her left arm was amputated while she was operating a straddle milling machine.

Her claim for workmen's compensation resulted in the Workmen's Compensation Commission's decision of May 13, 1949, awarding benefits of $21 per week compensation.

Plaintiff's amended application requesting benefits for total and permanent disability against Ford Motor Company and the Second Injury Fund was granted, and the referee's order of February 19, 1964 (not appealed) provided that Ford Motor Company pay compensation at the rate of $21 per week from February 1, 1957 to August 16, 1957, and for total and permanent disability at the rate of $21 per week from August 17, 1957 to June 1, 1962. The hearing referee further ordered that:

'Plaintiff is totally and permanently disabled as of January 16, 1948 within the meaning of part 2, § 10(b) of the workmen's compensation act (MSA 17.160) and the Second Injury Fund shall pay differential benefits to plaintiff at the rate of $11 per week from 6/25/55 to 7/31/56, inclusive; at the rate of $12 per week from 8/1/56 to 6/1/62, inclusive; at the rate of $33 per week from 6/2/62 and continuing until further order of the Department.'

We are here concerned with part 2, § 9, para. (a), of the workmen's compensation statute ¹ as amended in 1955 ² and 1965. ³ The amendments with which we are concerned are set forth in the appendix attached to this opinion.

After the 1965 amendment increasing maximum benefits, the director of the Second Injury Fund denied plaintiff's request that she be allowed the current $58 benefit rate provided for a totally and permanently disabled employee with no dependents, and limited the payments so that the total weekly amount paid to plaintiff would not exceed 66 2/3% Of her average weekly rate at the time of injury.

On November 4, 1965, plaintiff filed anotther application for hearing and adjustment of claim, which resulted in a June 1966 decision by the hearing referee, stating:

'It is further ordered that the correct compensation rate payable from defendant, Second Injury Fund, from September 1, 1965, until the further order of the Department is $37.20 (2/3 of average weekly wage at time of injury previously determined to be $55.80).'

Plaintiff's appeal to the Workmen's Compensation Appeal Board resulted in four opinions and a 4 to 3 decision affirming the hearing referee. ⁴

Application for leave to appeal and to bypass the Court of Appeals was granted by this Court.

The majority opinion of the Workmen's Compensation Appeal Board, written by Member Trentacosta, stated:

'I agree with Member Storie that the basic question presented to this Appeal Board is whether the benefits payable from the Second Injury Fund are limited to an amount not to exceed two-thirds of plaintiff's weekly wage of 1948 ($37.20) Member Storie was the first to write, and we quote from his opinion as follows:

or whether she is entitled to receive, from the Second Injury Fund, the maximum amount provided for an employee[382 Mich. 484] with no dependents on and after September 1, 1965 ($58.00). This question, in turn, is answered by determination of what the legislature intended and meant by use of the words 'according to the full rate provided in the schedule of benefits' in the last sentence of Section 9(a) of part 2 of the workmen's compensation act.'

'Act No 44 of the Public Acts of 1965 increased the schedule of benefits to provide an employee with no dependents a compensation rate of $58 per week beginning September 1, 1965. Plaintiff herein has no dependents so 'appropriate application' of the provisions of paragraphs (b), (c), (d) and (e) since date of injury is not relevant. Had plaintiff been working in the same capacity at current pay for this job at Ford Motor Company on September 2, 1965 and been injured, she would have in all probability been paid compensation at the rate of $58 per week. She is a person defined to be permanently and totally disabled. She was entitled to receive compensation from her employer after June 25, 1955 in amounts per week of less than is presently provided in the workmen's compensation schedule of benefits for permanent and total disability. 'Any' such permanently and totally disabled person 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 and the amount now provided for his permanent and total disability. 'Any' such person would include plaintiff, and there are no contingencies placed upon the direction that she receive the present schedule of benefits. The plain terms of the 1955 enactment and subsequent amendments direct that any permanently and totally disabled person defined as such by the statute is entitled to receive the difference between the amounts his employer is obligated to pay and the sums he would now be entitled to receive for permanent and total disability. This includes the weekly sum payable as well as the period payable which no one questions is a period different from that controlling at time of the injury here in question. The statute says these benefits are payable when the amount received from the employer is less than presently provided and/or for a period of a lesser number of weeks. Such unambiguous directives require that we hold that plaintiff's proper weekly rate after September 1, 1965 was $58 per week. * * *

'Fortunately, a vast majority of all industrial injuries cause disability of short duration and changes in our economic structure are of insignificant consequence to such an injured employee. However, when injuries cause disability for many years, it stands to reason that the $21 per week paid to Eva King in 1948 would not now buy the same amount of food in 1965. * * *

'If Eva King had earned $100 per week in 1948, there would be no argument here about her right to receive $58 per week beginning on September 1, 1965. Suppose the $21 per week rate that was payable to Eva King in 1948 represented two-thirds of the weekly wage she was receiving at that time ($31.50), would her need for additional sums in 1965 be nil, or did the legislature intend to ignore such an employee's needs simply because her earnings were too small in 1948? I am of the opinion that the legislature's use of the term 'schedule of benefits' was a deliberate choice of words to correct the economic status and reguire the Second Injury Fund to pay 'any' person defined 'Larson's work described the underlying social philosophy behind compensation liability as follows: (Section 2.20, Larson's Workmen's Compensation Law)

to be permanently and totally disabled the sums which the legislature [382 Mich. 486] determined to be the needs of an employee, at today's market place. * * *

'The ultimate social philosophy behind compensation liability is belief in the wisdom of providing, in the most efficient, most dignified, and most certain form, financial and medical benefits for the victims of work-connected injuries which an enlightened community would feel obligated to provide in any case in some less satisfactory form, and of allocating the burden of these payments to the most appropriate source of payment, the consumer of the product."

Member Mahinske signed Storie's opinion.

Chairman Iverson concurred with Member Storie with the second write, and we quote from his opinion:

'When the legislature enacts language in 1965 that grants differential benefits on two conditions, one being where 'the Weekly benefit for permanent and total disability is Increased,' thus effectively creating the situation where one is receiving payments 'in amounts per week of less than is presently provided * * * in the schedule of benefits,' I can only conclude that the legislature has to mean rates are to be the sole limitational feature when dealing with the Second Injury Fund after 800 weeks. Weekly benefits could and have only been increased by rate changes, not by amending the two-thirds limitation.

'I believe it must be admitted that to retain the two-thirds limitation in such cases would defeat the theory underlying the creation of the Second Injury Fund and its responsibilities. In dealing with cases beyond 800 weeks, we are confronted with weekly wages scaled to an economy 15 years past. To apply the two-thirds limit, therefore, does injustice to those whose earning power was cruelly halted at that time, stopping them cold while co-workers continued to gain in earning and purchasing power which enables them to live in the increasingly expensive and inflationary economy of today. Applying the two-thirds limit of a 15-year-old weekly wage does not even slightly accomplish for these unfortunate cast-asides what the purpose of the Second Injury Fund presumed to do. Thus when effectuating that purpose, I feel we must read the legislature's intention in requiring the Second Injury Fund to pay for permanent and total disability 'according to the full rate provided in the schedule of benefits' to be as defined by Member Storie. To do otherwise keeps those persons on a woefully...