Abbey v. Campbell, Wyant & Cannon Foundry

• Decision Date: 18 May 1992
• Docket Number: Docket No. 139329
• Citation: 194 Mich.App. 341,486 N.W.2d 131
• Parties: Charles ABBEY, Plaintiff-Appellee, v. CAMPBELL, WYANT & CANNON FOUNDRY, and Aetna Casualty & Surety Company, Defendants-Appellants, and Silicosis, Dust Disease and Logging Industry Compensation Fund, Defendant-Appellee. (On Remand).
• Court: Court of Appeal of Michigan — District of US

Page 131

486 N.W.2d 131

194 Mich.App. 341

Charles ABBEY, Plaintiff-Appellee, v. CAMPBELL, WYANT & CANNON FOUNDRY, and Aetna Casualty &

Surety Company, Defendants-Appellants,

and

Silicosis, Dust Disease and Logging Industry Compensation

Fund, Defendant-Appellee. (On Remand).

Docket No. 139329.

Court of Appeals of Michigan.

Submitted May 5, 1992, at Grand Rapids.

Decided May 18, 1992, at 9:45 a.m.

Released for Publication Aug. 3, 1992.

Frank J. Kelley, Atty. Gen., Gay Secor Hardy, Sol. Gen., and Morrison Zack, Asst. Atty. Gen., for the Silicosis, Dust Disease, and Logging Industry Compensation Fund.

Cholette, Perkins & Buchanan by Stephen C. Oldstrom, Grand Rapids, for Campbell, Wyant & Cannon Foundry and Aetna Cas. & Sur. Co.

Before HOOD, P.J., and CONNOR and KAUFMAN, ^* JJ.

ON REMAND

CONNOR, Judge.

Aetna Casualty & Surety Company and Campbell, Wyant & Cannon Foundry appeal by leave granted from a decision of the Workers' Compensation Appellate Commission. This Court originally denied the application for leave to appeal. In lieu of granting leave to appeal, the Supreme Court remanded the case back to this Court for consideration as on leave granted. 437 Mich. 929, 466 N.W.2d 926 (1991). We affirm the decision of the Workers' Compensation Appellate Commission in part, but modify its calculation of benefits that must be paid.

I

The facts of this case are generally agreed upon by the parties. No one disputes the fact that plaintiff has a work-related disability and therefore qualifies for workers' compensation. Plaintiff's employer was Campbell, Wyant & Cannon Foundry. Aetna Casualty & Surety Company is Campbell's workers' compensation insurance carrier. The Silicosis, Dust Disease, and Logging Industry Compensation Fund was named a party in this case as a result of the plaintiff's dust disease disability.

On the first scheduled day of trial in this case, Campbell and Aetna agreed to pay benefits to plaintiff at the full compensation weekly rate of $314.63. Plaintiff's last day of work was September 16, 1986. Plaintiff suffered from a dual disability: an injury to his back, attributable to lifting on the job, and a lung disease, attributable to an exposure to dust. Campbell, Aetna, and the fund agreed that sixty-five percent of plaintiff's disability was attributable to his lung disease, while the other thirty-five percent was attributable to his back injury.

The only dispute between the parties was how much Campbell and Aetna had to pay before the fund would reimburse them for plaintiff's weekly benefits. The parties were also able to agree that once the threshold amount was paid, the fund would reimburse Campbell and Aetna for sixty-five percent of plaintiff's weekly rate, or $204.51 a week.

The magistrate ruled in favor of the fund in a decision issued on March 31, 1989, that under M.C.L. Sec. 418.531; M.S.A. Sec. 17.237(531) and M.C.L. Sec. 418.535; M.S.A. Sec. 17.237(535) Aetna and Campbell must pay $50,340.80 before the fund would be required to reimburse them for sixty-five percent of the weekly rate. This figure was arrived at by multiplying a weekly rate of $314.63 times 104 weeks and dividing that figure by sixty-five percent. Aetna and Campbell had argued that they should have to pay only $32,721.52 in weekly benefits before being entitled to reimbursement by the fund. Under Aetna and Campbell's position, the total amount of weekly benefits that they paid, including the portion attributable to the back disability, would be considered in determining when the threshold for reimbursement had been reached.

Campbell and Aetna appealed the magistrate's decision to the Workers' Compensation Appellate Commission. It was argued before the WCAC that the magistrate's calculation of the threshold limit was erroneous as a matter of law.

The WCAC affirmed the magistrate's decision, in a decision issued on March 27, 1990, by a two-to-one vote. Campbell and Aetna appeal from that decision.

II

Under the Workers' Disability Compensation Act (WDCA), employers involved in certain injuries are entitled to have some benefits paid to employees reimbursed through a fund. M.C.L. Sec. 418.531; M.S.A. Sec. 17.237(531) is the statute that establishes the right to reimbursement. Subsection 1 of that statute provides as follows:

In each case in which a carrier including a self-insurer has paid, or causes to be paid, compensation for disability or death from silicosis or other dust disease, or for disability or death arising out of and in the course of employment in the logging industry, to the employee, the carrier including a self-insurer shall be reimbursed from the silicosis, dust disease, and logging industry compensation fund for all sums paid in excess of $12,500.00 for personal injury dates before July 1, 1985, and for all compensation paid in excess of $25,000.00 or 104 weeks of weekly compensation, whichever is greater, for personal injury dates after June 30, 1985, excluding payments made pursuant to sections 315, 319, 345, and 801(2), (4), and (5) which have been paid by the carrier including a self-insurer as a portion of its liability. [M.C.L. Sec. 418.531(1); M.S.A. Sec. 17.237(531)(1).]

M.C.L. Sec. 418.535; M.S.A. Sec. 17.237(535) discusses apportionment involving disabilities for dust diseases:

If an employee's disability is caused by a combination of silicosis or other dust disease, or arose in the course of employment in the logging industry, and other compensable causes, a hearing referee or worker's compensation magistrate, as applicable, shall apportion the amount of disability between that due to silicosis or other dust disease, or to employment in the logging industry, and other compensable causes. The trustees of the silicosis, dust disease, and logging industry compensation fund shall reimburse the employer liable for compensation for that portion of compensation paid in excess of $12,500.00 for personal injury dates before July 1, 1985, and for all compensation paid in excess of $25,000.00 or 104 weeks of weekly compensation, whichever is greater, for personal injury dates after June 30, 1985, that the silicosis or other dust disease disability, or disability arising out of and in the course of employment in the logging industry, bears to the total disability. [Emphasis added.]

The issue before this Court is how the threshold, after which reimbursement is available to the employer or insurer, should be computed where there is only one employer but two contributing causes of the disability, one covered by the fund and another not covered by the fund.

Aetna and Campbell argue that the total amount of workers' compensation weekly benefits paid to plaintiff, without apportionment between the two causes of disability, should be used. Under this interpretation, the threshold for reimbursement would be reached earlier. The fund, however, contends that because the disability is subject to apportionment with regard to the causes, the weekly benefits paid should be apportioned similarly, with the figure of sixty-five percent representing the dust disease disability. This would extend the amount of benefits that need to be paid by Aetna and Campbell before the threshold will be reached.

Although this precise issue has not been addressed by this Court previously, other panels have addressed similar problems. In Cotton v. Campbell, Wyant & Cannon Foundry, 57 Mich.App. 52, 57-58, 225 N.W.2d 187 (1974), this Court held that Campbell could not combine the amount of benefits that it was paying the plaintiff for a dust disease disability with the benefits paid by another employer for a disability not attributable to a dust disease, in order to reach the threshold faster.

Recently, in Nelligan v. Gibson Insulation Co., 193 Mich.App. 274, 277-278, 483 N.W.2d 460 (1992), the effect of recoupment of benefits under M.C.L. Sec. 418.827; M.S.A. Sec. 17.237(827) was considered in association with the threshold limit of M.C.L. Sec. 418.531; M.S.A. Sec. 17.237(531). The Court held that before an employer or its insurer could obtain reimbursement from the fund, the employer or insurer had to demonstrate that they suffered an out-of-pocket loss exceeding the threshold amount after subtracting any monies recouped, or entitled to be recouped, from a third party pursuant to MCL 418.827; MSA 17.237(827). Nelligan at 282, 483 N.W.2d 460.

In its opinion, the Nelligan panel noted that in interpreting statutes, the primary rule is to determine and effectuate the Legislature's intent. To do this, the statute should be given a reasonable construction, considering the purpose of the statute and the object to be accomplished. Id. at 280, 483 N.W.2d 460. An act should be read in its entirety, so that the meaning given to one section is harmonious with that given to other sections and to avoid absurd consequences. Id. Because of the WCAC's expertise, its decision is given due deference. Id. at 281, 483 N.W.2d 460.

After reviewing the language of M.C.L. Sec. 418.535; M.S.A. Sec. 17.237(535), and reading that statute as a whole, we believe the magistrate and the WCAC reached the correct result. The purpose behind the establishment of the fund is to compensate employees for certain industry-wide diseases by spreading the cost of benefits in those industries to all Michigan employers, thereby protecting the specified employers from financial ruin. Stottlemeyer v. General Motors Corp., 399 Mich. 605, 611-612, 250 N.W.2d 486 (1977). "The fund was created to cushion threatened industries, not to limit the liability of all employers if by happenstance an employee should suffer from a dust disease." Id. at 612, 250 N.W.2d 486.

The last sentence of M.C.L. Sec. 418.535; M.S.A. Sec. 17.237(535) states that reimbursement is available from the fund "for all compensation paid in excess of $25,000.00 or 104 weeks of weekly compensation, whichever is greater, ... that the silicosis or other dust disease disability ... bears to...