Warner v. Collavino Bros.

Decision Date04 May 1984
Docket NumberDocket No. 72386
Citation347 N.W.2d 787,133 Mich.App. 230
PartiesWilliam Thomas WARNER, Plaintiff-Appellant, v. COLLAVINO BROTHERS and Lumbermens Mutual Casualty Company, Defendants-Appellees. 133 Mich.App. 230, 347 N.W.2d 787
CourtCourt of Appeal of Michigan — District of US

[133 MICHAPP 232] Ripple, Chambers & Steiner, P.C. by Sanford L. Steiner, Kalamazoo, for plaintiff-appellant.

[133 MICHAPP 233] Smith, Haughey, Rice & Roegge by Lance R. Mather, Grand Rapids, for defendants-appellees.

Before HOLBROOK, P.J., and BRONSON and TAHVONEN, * JJ.

PER CURIAM.

Plaintiff sought leave to appeal to this Court from an order of the Workers' Compensation Appeal Board (WCAB) denying him recovery of a penalty payment. This Court denied plaintiff's application in an order dated September 24, 1982, Docket No. 65611, and plaintiff sought leave to appeal in the Supreme Court. On June 21, 1983, the Supreme Court, --- Mich. ---, 347 N.W.2d 694, entered an order remanding the instant case to this Court for consideration of whether the "no ongoing dispute" exception to the penalty provision of M.C.L. Sec. 418.801; M.S.A. Sec. 17.237(801), should be interpreted as requiring a good-faith dispute, 417 Mich. 1016 (1983).

Plaintiff was injured during the course of his employment with Collavino Brothers (hereinafter defendant) on January 23, 1980. Plaintiff was initially treated by a medical doctor and defendant began paying worker's compensation benefits. On February 5, 1980, plaintiff sought treatment with a chiropractor because he felt the medical doctor's treatment was "hurting worse than it was helping". Although plaintiff thereafter missed two sessions with the medical doctor, he saw him on March 3, 1980. On March 4, 1980, the medical doctor sent a report to defendant indicating that plaintiff was "disabled indefinitely". Nevertheless, on March 21, 1980, plaintiff's benefits were discontinued by defendant.

On April 7, 1980, plaintiff filed a petition for a hearing with the Bureau of Workers' Disability [133 MICHAPP 234] Compensation. On April 25, 1980, defendant filed a notice of dispute form stating that because it had not received medical verification of disability from plaintiff's chiropractor it had ceased making payments. Defendant resumed paying benefits on May 22, 1980.

On March 11, 1981, a hearing was held on plaintiff's claim that he was entitled to receive various late payment penalties because of the temporary suspension of his benefits in April and May of 1980. The hearing referee denied plaintiff's claim for a penalty payment. The referee's decision was affirmed by the appeal board which concluded that although defendant was not justified in terminating plaintiff's benefits, an "ongoing" dispute within the meaning of M.C.L. Sec. 418.801(2); M.S.A. Sec. 17.237(801)(2) existed between the parties and prevented plaintiff from recovering a penalty payment.

M.C.L. Sec. 418.861; M.S.A. Sec. 17.237(861) provides this Court authority to review questions of law involved in any final order of the WCAB. Aquilina v. General Motors Corp., 403 Mich. 206, 213, 267 N.W.2d 923 (1978). The question of law presented here is whether the WCAB correctly construed the "ongoing dispute" provision of M.C.L. Sec. 418.801(2); M.S.A. Sec. 17.237(801)(2) to preclude recovery by plaintiff of a penalty payment. The board held that, even though defendant's position in the dispute was "untenable", a dispute did exist and plaintiff was, therefore, barred from recovery of a penalty. We affirm.

Benefits are due and payable on the 14th day after the employer has notice of the employee's injury. M.C.L. Sec. 418.801(1); M.S.A. Sec. 17.237(801)(1). An employer who disputes an employee's claim, however, has the right to apply to the bureau for a [133 MICHAPP 235] hearing before a referee. M.C.L. Sec. 418.847; M.S.A. Sec. 17.237(847). An award is to be considered "in dispute" while review or appeal is pending and during the time periods permitted for filing a claim for review or of appeal. Charpentier v. Canteen Corp., 105 Mich.App. 700, 705, 307 N.W.2d 704 (1981), lv. den. 412 Mich. 887 (1981).

Plaintiff urges this Court to interpret M.C.L. Sec. 418.801(2); M.S.A. Sec. 17.237(801)(2) as requiring a "good faith" dispute in order to stay application of the penalty. This identical issue was before this Court in Couture v. General Motors Corp., 125 Mich.App. 174, 335 N.W.2d 668 (1983). In a per curiam opinion the panel held that the WCAB did not have "the power to make a qualitative determination of the merits of a defense for the purpose of assessing a penalty. The statute simply provides that there must be no ongoing 'dispute' ". Id., p. 178, 335 N.W.2d 668. The Court ruled that the statute did not authorize the WCAB to impose a penalty for an employer's bad faith refusal to pay a claim.

We agree with the Couture Court interpretation of the penalty provision. The cardinal rule of statutory construction is to ascertain and effectuate the intent of the Legislature. Melia v. Employment Security Comm., 346 Mich. 544, 562, 78 N.W.2d 273 (1956). This Court must first look to the specific language of the statutory provision, giving all terms their plain and ordinary meaning. Lamphere Schools v. Lamphere Federation of Teachers, 400 Mich. 104, 110, 252 N.W.2d 818 (1977). In construing a statute, this Court will presume that the Legislature is familiar with principles of statutory construction. People v. Hall, 391 Mich. 175, 215 N.W.2d 166 (1974). A statute unambiguous on its face will not be subject to further interpretation or construction. Detroit v. Redford Twp., 253 Mich. 453, [133 MICHAPP 236] 235 N.W. 217 (1931). On its face M.C.L. Sec. 418.801(2); M.S.A. Sec. 17.237(801)(2) merely requires an "ongoing dispute" and does not distinguish good faith disputes from bad faith or unreasonable disputes. Moreover, the plain and ordinary meaning of the word "dispute" does not encompass such a distinction.

The cases cited by plaintiff from other jurisdictions are inapposite. In each case where the penalty was enforced, the foreign court was guided by specific statutory language regarding the unreasonableness, vexatiousness, or frivolousness of the employer's position. See 3 Larson, Workmen's Compensation Law, Sec. 83.40. No such terms modify the "ongoing dispute" provision in the Michigan statute.

Plaintiff argues that implying a bad faith exception furthers the policies of the Worker's Disability Compensation Act. However, other provisions of the act explicitly reveal the Legislature's desire to further its purposes by imposing a "r...

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5 cases
  • Jackson v. Sedgwick Claims Mgmt. Servs., Inc.
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • 24 Septiembre 2013
    ...is an “ongoing dispute” over an employee's claim, regardless of the merits of the dispute. Id.; see also Warner v. Collavino Bros., 133 Mich.App. 230, 347 N.W.2d 787, 790 (1984) (“On its face [the statute] merely requires an ‘ongoing dispute’ and does not distinguish good faith disputes fro......
  • Brown v. Cassens Transp. Co.
    • United States
    • U.S. District Court — Eastern District of Michigan
    • 27 Septiembre 2010
    ...to pay benefits without regard to whether the claim is disputed in bad faith or for legitimate reasons. Warner v. Collavino Bros., 133 Mich.App. 230, 236–237, 347 N.W.2d 787 (1984) (affirming an administrative decision refusing to assess a penalty and holding that section 418.801(2) “merely......
  • Brown v. Cassens Transp. Co.
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • 6 Abril 2012
    ...no distinction is to be made among good faith disputes, bad faith disputes, and unreasonable disputes. See Warner v. Collavino Bros., 133 Mich.App. 230, 347 N.W.2d 787, 790 (1984) (“On its face M.C.L. § 418.801(2) ... merely requires an ‘ongoing dispute’ and does not distinguish good faith ......
  • Nezdropa v. Wayne County
    • United States
    • Court of Appeal of Michigan — District of US
    • 16 Octubre 1986
    ... ... Warner v. Collavino ... Page 451 ... Bros., 133 Mich.App. 230, 235, 347 N.W.2d 787 (1984), lv. den ... ...
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