Arnett v. General Motors Corp., Docket Nos. 7179

• Decision Date: 26 March 1970
• Docket Number: Docket Nos. 7179,Nos. 1,8227,2,s. 1
• Parties: Kenneth G. ARNETT and Mae Ellen Arnett, Plaintiffs-Appellees, and Liberty Mutual Insurance Company, Intervening Plaintiff-Appellant, v. GENERAL MOTORS CORPORATION, Defendant-Appellee. Henry RUTKOWSKI and Lucille Rutkowski, Plaintiffs-Appellants, and Liberty Mutual Insurance Company, Intervening Plaintiff-Appellee, v. GENERAL MOTORS CORPORATION, Defendant-Appellant
• Court: Court of Appeal of Michigan — District of US

Page 704

177 N.W.2d 704

22 Mich.App. 658

Kenneth G. ARNETT and Mae Ellen Arnett, Plaintiffs-Appellees, and Liberty Mutual Insurance Company, Intervening Plaintiff-Appellant, v. GENERAL MOTORS CORPORATION, Defendant-Appellee.

Henry RUTKOWSKI and Lucille Rutkowski, Plaintiffs-Appellants, and Liberty Mutual Insurance Company, Intervening Plaintiff-Appellee, v. GENERAL MOTORS CORPORATION, Defendant-Appellant.

Docket Nos. 7179, 8227.

Court of Appeals of Michigan, Division Nos. 1, 2.

March 26, 1970.

Released for Publication June 26, 1970.

Reginald S. Johnson, Detroit, for Liberty Mutual in both appeals.

Sherwin Schreier, Detroit, for Arnett.

William D. Booth, Detroit, for Rutkowski.

Robert W. Goulet, Detroit, for GMC in 7179.

Before QUINN, P.J., and R. B. BURNS and FITZGERALD, JJ.

FITZGERALD, Judge.

These cases, bearing the identical question for decision, were consolidated for opinion. The Rutkowski case, having been previously dismissed for procedural reasons, was reinstated and will not be dealt with in depth save for the ultimate consideration of the question.

Kenneth Arnett was an employee of J. S. Fredman Construction Company and was injured during the course of his employment at a General Motors plant. Liberty Mutual Insurance Company was the workmen's compensation insurance carrier for the Fredman Construction Company and paid medical expenses and workmen's compensation benefits to and on behalf of the injured employee Kenneth Arnett. Thereafter, Kenneth Arnett and Mae Ellen Arnett began third-party litigation in Wayne County against General Motors Corporation and Liberty Mutual Insurance Company intervened.

Before judgment, plaintiffs Arnett compromised their claim against the third-party defendant. Intervening plaintiff then demanded full reimbursement out of the recovery obtained by plaintiffs.

Intervening plaintiff then made a motion for summary judgment against plaintiffs Arnett and defendant General Motors Corporation, asserting that Liberty Mutual Insurance Company had the right to be reimbursed in full out of the recovery obtained by reason of the third-party settlement. The trial court denied the motion. Thereupon, the intervening plaintiff refused to proceed and the case was dismissed. This appeal followed.

The Rutkowski case, on substantially similar facts, was begun in Oakland County and resulted in a decision directly opposite from Arnett. The Oakland trial court held that Liberty Mutual had a first right to monies paid by defendant. Appeal followed from this decision.

The single issue in these cases is whether the intervening plaintiff may enforce its claim to recover workmen's compensation benefits paid to the injured employee against the settlement made by the plaintiff and third-party defendant.

The question presented calls for determination of legislative intent as expressed in M.C.L.A. § 413.15 (Stat.Ann.1968 Rev. § 17.189), the pertinent part being the first five paragraphs:

'Where the injury for which compensation is payable under this act was caused under circumstances creating a legal liability in some person other than a natural person in the same employ or the employer to pay damages in respect thereof, the acceptance of compensation benefits or the taking of proceedings to enforce compensation payments shall not act as an election of remedies, but such injured employee or his dependents or their personal representative may also proceed to enforce the liability of such third party for damages in accordance with the provisions of this section. If the injured employee or his dependents or personal representative does not commence such action within 1 year after the occurrence of the personal injury, then the employer or its compensation insurance carrier may, within the period of time for the commencement of actions prescribed by statute, enforce the liability of such other person in the name of that person. Not less than 30 days before the commencement of suit by any party under this section, such party shall notify, by registered mail at their last known address, the workmen's compensation commission, the injured employee, or in the event of his death, his known dependents, or personal representative or his known next of kin, his employer and the workmen's compensation insurance carrier. Any party in...