Beauchamp v. Dow Chemical Co., Docket No. 75578

• Court: Supreme Court of Michigan
• Writing for the Court: LEVIN; WILLIAMS; BOYLE
• Citation: 427 Mich. 1,398 N.W.2d 882
• Parties: Ronald BEAUCHAMP and Karen Beauchamp, Plaintiffs-Appellees, v. DOW CHEMICAL CO., Defendant-Appellant. 427 Mich. 1, 398 N.W.2d 882, 55 U.S.L.W. 2424
• Decision Date: 23 December 1986
• Docket Number: Docket No. 75578

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398 N.W.2d 882 Ronald BEAUCHAMP and Karen Beauchamp, Plaintiffs-Appellees,
v.
DOW CHEMICAL CO., Defendant-Appellant. Docket No. 75578.
427 Mich. 1, 398 N.W.2d 882, 55 U.S.L.W. 2424 Supreme Court of Michigan. Argued Feb. 7, 1986.
Decided Dec. 23, 1986.

[427 MICH 3]

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Steve J. Polich, P.C., Roy P. Polich (by James D. Masur, II), Iron River, for plaintiffs-appellees.

Braun, Kendrick, Finkbeiner, Schafer & Murphy by Bruce L. Dalrymple, and Scott C. Strattard, Saginaw, McNeil, Mouw, Celello & Torreano (by John A. Torreano), Iron Mountain, for defendant-appellant.

Davidson, Breen & Doud, P.C. (by Richard J. Doud), Saginaw, for Eaton Corp. and its following subsidiaries, Marshall Fluid Div., Saginaw Engine Components Div., Vassar Foundry Div., Galesburg Transmission Div.; American States Ins. Co.; CNA Ins. Co.; Farm Bureau Ins. Co.; Hartford Ins. Co.; Michigan Mut. Ins. Co.; Western Cas. Ins. Co.; Yeager & Co., Inc.; Crawford & Co.; and Michigan Claims Service.

Bodman, Longley & Dahling, Theodore Souris, Kim Michael Lavalle, Detroit, for amicus curiae Michigan Manufacturers Assn.

[427 MICH 4] Crary E. Grattan, Dykema, Gossett, Spencer, Goodnow & Trigg by Richard D. McLellan, William J. Perrone, Frederick J. Hood, Lansing, for Michigan State Chamber of Commerce amicus curiae.

Conklin, Benham, McLeod, Ducey & Ottaway, P.C. by Martin L. Critchell, Detroit, for amicus curiae Michigan Self-Insurers's Ass'n.

LEVIN, Justice.

The questions presented are whether the exclusive remedy provision of the Workers' Disability Compensation Act bars an employee from commencing a civil action against his employer where the employee alleges (1) that the employer committed an intentional tort against the employee, and (2) that the employer breached its contract to provide a safe work place.

I

Plaintiff Ronald Beauchamp was employed for two years as a research chemist by defendant Dow Chemical Company. He applied for workers' compensation benefits, alleging impairment of normal bodily functions caused by exposure to tordon, 2, 4-D, and 2, 4, 5-T ("agent orange").

Ronald Beauchamp and his wife, Karen, thereafter commenced this civil action against Dow. The complaint alleged that Ronald Beauchamp had been physically and mentally affected by exposure to "agent orange" and that Karen Beauchamp had suffered loss of consortium. ¹ The complaint further alleged that Dow intentionally misrepresented and fraudulently concealed the potential danger, that Dow intentionally assaulted Ronald Beauchamp, [427 MICH 5] that Dow intentionally inflicted emotional distress, and that Dow breached its contract to provide safe working conditions. The circuit court granted summary judgment for Dow on all four counts on the basis that the complaint failed to state a claim on which relief could be granted. It

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does not appear that there had been any discovery.

The decision of the Court of Appeals, 140 Mich.App. 699, 364 N.W.2d 286, reversing in part and affirming in part, was "premised on ... [its] understanding that an allegation of a 'true' intentional tort is not within the exclusive remedy provision of the [Workers' Disability Compensation Act]." ² A "true" intentional tort, as defined by the Court of Appeals, is one in which the injury, as well as the act, was intended. Apparently applying this distinction, the Court of Appeals reversed the judgment of the circuit court and remanded the cause for trial on the intentional infliction of emotional distress count. The Court of Appeals also reversed and remanded for trial on the breach of contract claim, stating that a contract claim was not barred by the exclusive remedy provision of the act. The Court of Appeals affirmed the dismissal by the circuit court of the other two tort counts.

We conclude that the contract claim is barred by the exclusive remedy provision and remand for further proceedings on the intentional tort claims.

II

In reviewing a dismissal for failure to state a claim, we accept as true all well-pleaded facts ³ and determine whether the claim is so clearly unenforceable[427 MICH 6] as a matter of law that no factual development can possibly justify a recovery. ⁴

III

The origin and evolution of the workers' compensation act indicates that the legislation, including the exclusive remedy provision, was designed to provide an alternative compensation system respecting accidental and not intentional injuries.

A

In 1911, the Legislature created a "commission of inquiry to make the necessary investigation, and to prepare and submit a report ... setting forth a comprehensive plan and recommending legislative action providing compensation for accidental injuries or death of workmen arising out of and in the course of employment...." ⁵

The commission's "creation resulted from a wide dissatisfaction with the present system of employers' liability for negligence as to employes [sic]." ⁶ At the end of the nineteenth century, "the industrial accident rate had reached alarming proportions." ⁷ As plants grew larger and more dangerous, injuries became more frequent, and proof that injury was due to the fault of the employer without contributory fault of the employee was more difficult. ⁸[427 MICH 7] 8] An increasing number of injuries were left uncompensated. ⁹ Dean Prosser wrote that between seventy and ninety-four per cent of the injuries were uncompensated. ¹⁰ A national commission found that workers recovered for fifteen per cent of their injuries even though seventy per cent were caused

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by employer negligence or workplace conditions. ¹¹

Negligence by the employer was not enough to assure recovery by an employee injured in an accident, because of three defenses: assumption of risk, the fellow-servant doctrine, and contributory negligence. The Michigan commission reported that these "three defenses have been the subject of much criticism, and the discussion that has arisen concerning them plays an important part in the agitation for a change in the system of employers liability." ¹² These defenses, it is noteworthy, did not apply to intentional torts, only to negligence. The problem addressed in the report was reparations for "accidental" ¹³ injury under the existing system of negligence liability. There is no discussion in the report of intentional torts by employers.

427 MICH 8

B

The workers' compensation act enacted in 1912 put into effect the proposals made by the commission. The act provided compensation for the "accidental injury to or death of employes." ¹⁴ Although workers' compensation coverage was made elective for those in the private sector, the "so-called right of choice to come or not to come under this statute was something less than real" because whether the employer elected coverage or not the three common-law defenses were abolished for employment injuries. ¹⁵ If the employer elected coverage, however, he was not subject "to any other liability whatsoever, save as herein provided for the death of or personal injury to any employe for which death or injury compensation is recoverable under this act...." ¹⁶ The Legislature had essentially rewritten the law governing accidental injuries in employment by addressing the criticisms of the existing system of liability for negligence in employment.

The employer was given two choices on how to handle accidental injuries: choose the workers' compensation system and provide a certain remedy that did not consider the negligence of either the employer or the employee or reject the workers' compensation system and risk uncertain remedies determined by whether or not the employer was negligent regardless of negligence of the employee or fellow servants. When the system became compulsory for all employers in 1943, ¹⁷ both [427 MICH 9] employer and employee negligence had ceased to be a consideration. For accidents, an insurance scheme had replaced the former system of employer liability based on negligence. Legislatures in this and other states had come to view industrial accidents as the natural accompaniment of the industrial system. ¹⁸ The costs of accidental injury were to be borne by industry. ¹⁹

C

Among the most litigated questions following the passage of the act was the definition of accident. The question was whether an accident included an unexpected injury that occurred without a mishap as well as an unexpected injury caused

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by a mishap: Would an employee who slipped a disc picking up a barrel recover or just the employee hit by the barrel falling off a shelf? In Adams v. Acme White Lead & Color Works, 182 Mich. 157, 148 N.W. 485 (1914), this Court held that an unexpected injury (lead poisoning) that occurred without a mishap was not compensable. The decision concerned an occupational disease, but the holding was extended to "strain" cases. ²⁰

In 1937, an occupational disease amendment was adopted. In 1943, the act was again amended, and the words "accident" and "accidental" were removed in approximately fifty places in the act. ²¹ [427 MICH 10] The word "accident," however, still remained in the title, and in a few places in the text. Thedeletion of the word "accidental" generated confusion in the case law. On one side, it was suggested that the change was merely cosmetic, that is, the removal of the word "accidental" or "accident" was merely to clarify that recovery also could be had for occupational diseases. ²² On the other side, it was suggested that the removal of the word "accident" in the 1943 amendments "completely wiped out the requirement of 'accidental' injury as our Court had theretofore erroneously construed it." ²³ The "erroneous" interpretation was that an "accidental" injury did not include the unexpected result--the slipped disc when lifting a barrel--as well as the unexpected cause, the barrel falling off the shelf and hitting the employee. In 1955, this Court in Sheppard v. Michigan National Bank, 348 Mich. 577, 83 N.W.2d 614 (1957), resolved...