Allen v. Charlevoix Abstract & Eng'g Co., 339162

• Decision Date: 03 January 2019
• Docket Number: No. 339162,339162
• Citation: 929 N.W.2d 804,326 Mich.App. 658
• Parties: Jason ALLEN, Plaintiff-Appellee, v. CHARLEVOIX ABSTRACT & ENGINEERING COMPANY and Accident Fund Insurance Company of America, Defendants-Appellants.
• Court: Court of Appeal of Michigan — District of US

326 Mich.App. 658
929 N.W.2d 804

Jason ALLEN, Plaintiff-Appellee,
v.
CHARLEVOIX ABSTRACT & ENGINEERING COMPANY and Accident Fund Insurance Company of America, Defendants-Appellants.

No. 339162

Court of Appeals of Michigan.

Submitted December 11, 2018, at Lansing.
Decided January 3, 2019, at 9:00 a.m.
Amended by order of the Court of Appeals entered June 17, 2019.

Charters Tyler & Zack, PC (by Morrison Zack) for plaintiff.

Michael T. Reinholm for defendants.

Before: Swartzle, P.J., and Sawyer and Ronayne Krause, JJ.

Ronayne Krause, J.

326 Mich.App. 659

In this workers’ compensation matter, defendants appeal by leave granted the decision of the Michigan Compensation Appellate Commission (MCAC) that, in relevant part, declined to reform a "voluntary payment agreement" (VPA) between the parties. There is no dispute that the VPA constitutes a contract or that it contains a mathematical error. The MCAC concluded that the magistrate lacked the equitable

326 Mich.App. 660

authority to reform the parties' contract. We hold that the MCAC's determination was correct, but we choose to exercise our own equitable authority to reform the VPA. We therefore affirm, but we order the parties' VPA reformed and the matter remanded to the MCAC for entry of the corrected VPA.

I. FACTUAL BACKGROUND

On June 4, 2007, plaintiff was injured in a work-related automobile accident. Plaintiff was then employed by defendant Charlevoix Abstract & Engineering Company (Charlevoix). Defendant Accident Fund Insurance Company of America (Accident Fund) was Charlevoix's workers’ compensation insurance carrier. Nonparty Harleysville Insurance Company (Harleysville) was Charlevoix's automobile insurance carrier.

Initially, Accident Fund voluntarily paid benefits to plaintiff, but it eventually

929 N.W.2d 806

ceased payments, whereupon plaintiff commenced a workers’ disability compensation claim. Accident Fund promptly reinstated payment of plaintiff's weekly benefits. Shortly thereafter, plaintiff obtained a $450,000 judgment in a civil action against the driver of the other vehicle involved in the accident. Plaintiff only received $100,000 from the other driver, reflecting the limits of the other driver's insurance policy. Consequently, plaintiff collected the remaining $350,000 from Harleysville. Eventually, Accident Fund again discontinued plaintiff's disability payments, and plaintiff sought to reinstate those benefits.

The parties entered into negotiations, and they ultimately agreed that Accident Fund could set off $100,000 from plaintiff's future benefits pursuant to MCL 418.827. However, the parties were unable to agree whether Charlevoix or Accident Fund could set

326 Mich.App. 661

off the $350,000 recovery. Plaintiff and Accident Fund entered into the VPA on April 3, 2012. Under the VPA, Accident Fund would pay plaintiff $494.50 a week, but that amount would be "redeuced [sic] to $264.53 for 54.23 [weeks] beginning 3/29/12 based on Franges of $100,000.00 3rd party settlement." The parties also agreed to litigate the consequences of the $350,000 recovery. The word "Franges" in the VPA is a reference to Franges v. Gen. Motors Corp. , 404 Mich. 590, 274 N.W.2d 392 (1979). Franges set forth how to apportion credit to a workers’ compensation insurer when an employee receiving benefits also receives a money judgment against a third-party tortfeasor.

However, Accident Fund then discovered that the VPA contained a mathematical error. Stated briefly, Accident Fund argued that the VPA's " Franges worksheet" had made improper use of the benefits it had thus far paid to plaintiff. As a consequence, the remaining calculations derived from that amount were also wrong, culminating in an impossible result of negative 54.2328 weeks before full resumption of weekly workers’ compensation benefits. Accident Fund provided a corrected Franges worksheet, which showed that plaintiff's temporary reduction of benefits should have been for 131.7464 weeks, instead of 54.23 weeks. Defendants filed a motion to modify or correct the VPA.

The magistrate resolved the matter of the $350,000 recovery, which is not at issue in this appeal. The magistrate also determined that the VPA did in fact contain a mathematical error but that he lacked equitable jurisdiction and therefore could not modify the parties' agreement. However, the magistrate also stated that he would have modified the agreement if he had the power to do so and that "the correct Franges numbers to be applied ... would be a future weekly

326 Mich.App. 662

rate of $264.53 for 131.7464 weeks into the future before resumption of full weekly benefits." On appeal, the MCAC affirmed the magistrate's ruling that he lacked equitable power or authority to modify the VPA. The MCAC declined to address the magistrate's "dicta" detailing how he would have modified the VPA given the power to do so. Nevertheless, the MCAC did observe that the facts in the matter were essentially undisputed.

We likewise observe that nothing in plaintiff's brief submitted to this Court appears to challenge the magistrate's finding that the VPA contained a mathematical error and acceptance of Accident Fund's calculations as correct. To the contrary, in his brief submitted to the MCAC, plaintiff affirmatively conceded that "if the MCAC reverses the magistrate's ruling on the jurisdictional issue," the correct calculation would be a reduction of weekly benefits to $264.53 for 131.7464 weeks. We therefore treat as an established and undisputed fact

929 N.W.2d 807

that the VPA did contain a mathematical error, and Accident Fund's recomputation is objectively correct.

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