Bennett v. Mackinac Bridge Auth.

• Decision Date: 31 August 2010
• Docket Number: Docket No. 287628.
• Citation: 289 Mich.App. 616,808 N.W.2d 471
• Parties: BENNETT v. MACKINAC BRIDGE AUTHORITY.
• Court: Court of Appeal of Michigan — District of US

289 Mich.App. 616

808 N.W.2d 471

BENNETT

v.MACKINAC BRIDGE AUTHORITY.

Docket No. 287628.

Court of Appeals of Michigan.

Submitted Feb. 3, 2010, at Lansing.Decided Aug. 31, 2010, at 9:05 a.m.

Daryl Royal and Moher & Cannello, P.C. (by Timothy S. Moher), Sault Ste Marie, for Ricky S. Bennett.

Michael A. Cox, Attorney General, B. Eric Restuccia, Solicitor General, and Morrison Zack, Assistant Attorney General, for the Mackinac Bridge Authority.

Varga & Varga, P.C., Cheboygan, (by Judith Fleming Varga), for American Painting Company, Inc., and Amerisure Insurance Company.

Before: K.F. KELLY, P.J., and JANSEN and ZAHRA, JJ.

JANSEN, J.

In this workers' compensation case, plaintiff appeals as on leave granted ¹ the decision of the Workers' Compensation Appellate Commission (WCAC) affirming the magistrate's dismissal of his claim against defendants, the Mackinac Bridge Authority (the Authority) and American Painting Company, Inc., on the ground of res judicata. We reverse the decision of the WCAC and remand this case to the magistrate for reinstatement of plaintiff's claim against defendants ² consistent with this opinion.

I

For more than 25 years, plaintiff worked as a painter on the Mackinac Bridge. Throughout that time, he worked for various employers. In May 2005, plaintiff was working for Allstate Painting Company, Inc. While at work on May 6 and 9, 2005, plaintiff injured his right knee. Allstate did not have workers' compensation insurance.

Although plaintiff was apparently aware that his employer lacked workers' compensation insurance at the time, he nonetheless filed a petition seeking benefits from Allstate. Allstate did not appear in the action. On May 26, 2006, the magistrate granted plaintiff an open award of benefits. Allstate did not appeal the magistrate's decision. However, plaintiff was unable to collect under the magistrate's award.

Plaintiff thereafter filed the instant action seeking benefits from American Painting and the Authority pursuant to § 171 of the Worker's Disability Compensation Act (WDCA),³ MCL 418.171, the statutory employment provision. MCL 418.171(1) provides:

If any employer subject to the provisions of this act, in this section referred to as the principal,⁴ contracts with any other person, in this section referred to as the contractor, who is not subject to this act or who has not complied with the provisions of [ MCL 418.611], and who does not become subject to this act or comply with the provisions of [ MCL 418.611] prior to the date of the injury or death for which claim is made for the execution by or under the contractor of the whole or any part of any work undertaken by the principal, the principal shall be liable to pay to any person employed in the execution of the work any compensation under this act which he or she would have been liable to pay if that person had been immediately employed by the principal. If compensation is claimed from or proceedings are taken against the principal, then, in the application of this act, reference to the principal shall be substituted for reference to the employer, except that the amount of compensation shall be calculated with reference to the earnings of the person under the employer by whom he or she is immediately employed. A contractor shall be deemed to include subcontractors in all cases where the principal gives permission that the work or any part thereof be performed under subcontract.

Defendants requested, among other things, that the magistrate dismiss plaintiff's § 171 claim against them because res judicata barred plaintiff's second action. In response, plaintiff argued that res judicata did not bar his second action because no mandatory joinder of parties exists in workers' compensation cases, because defendants had not been parties to the first action, and because defendants were not in privity with Allstate.

The magistrate acknowledged that a plaintiff is not generally required to bring all possible workers' compensation claims in one single action. Nevertheless, she noted that a broad application of res judicata would bar certain workers' compensation claims that a plaintiff could have brought, but did not bring, in the first action. The magistrate concluded that plaintiff could have brought his § 171 claim against defendants in the earlier action:

The statutory employer theory was available for pursuit in the original litigation against Allstate Painting ... if Plaintiff had “exercised reasonable diligence” and added the alleged statutory employers to that litigation. Plaintiff testified at his first trial that he has worked painting the Mackinaw Bridge for approximately 27 years and has worked for a number of different employers, whether private companies or the State of Michigan directly. That fact, in combination with Plaintiff's knowledge that Allstate Painting lacked Michigan Worker's Compensation Insurance coverage would give a reasonable man pause to consider exploring the theory of statutory employment to identify a contractor with insurance coverage. Therefore, reasonable diligence by Plaintiff and his counsel would have revealed that the State of Michigan and A [merican] Painting had insurance coverage and could have and should have been added to the original litigation.

Additionally, the litigation Plaintiff advanced against Allstate Painting is the same transaction for which Plaintiff is now trying to advance against American Painting Inc. and Mackinaw Bridge Authority.... [T]he same facts are being asserted in the case against American Painting and Mackinaw Bridge Authority as were asserted against Allstate Painting. These facts arise out of the same time, space, and origin. The only difference is the motivation.

Plaintiff admits in his brief that the motivation for pursuing the current litigation against American Painting and Mackinaw Bridge Authority is that Allstate Painting has failed to pay benefits pursuant to the Open Award authored by [the initial magistrate]. Plaintiff is now seeking enforcement of the Order through Circuit Court. This is not a sufficient legal explanation for Plaintiff's failure to add American Painting and Mackinaw Bridge Authority to the original litigation against Allstate Painting.

“Res judicata bars every claim arising from the same transaction that the parties, exercising reasonable diligence, could have raised but did not.” Adair [ v. Michigan, 470 Mich. 105, 123, 680 N.W.2d 386 (2004) ]. For the reasons outlined above, the pending litigation of Ricky S. Bennett versus American Painting and Mackinaw Bridge Authority is hereby dismissed pursuant to res judicata.

Plaintiff appealed the magistrate's dismissal of his claim to the WCAC, which affirmed in a 2–1 decision. The WCAC majority agreed with the magistrate's determination that res judicata barred plaintiff's action against the alleged statutory employers:

We agree with the magistrate. The claims against the direct employer and the statutory employers are virtually the same. Both claims involve the same two alleged knee injuries, occurring on the same two alleged dates. They involve the same medical, disability and wage loss proofs. Both claims seek weekly wage loss benefits and medicals benefits for the same time periods. The claims against the direct employer and the statutory employers certainly would have made a convenient trial unit.

The plaintiff does not even argue there was an impediment to adding the statutory employers in the first litigation. He knew the direct employer was uninsured, but did not add the statutory employers until he was unable to collect against the uninsured employer. [ Bennett v. Mackinac Bridge Auth, 2008 Mich. ACO 163, p. 9.]

In his arguments to the WCAC, plaintiff relied on Viele v. DCMA, 167 Mich.App. 571, 423 N.W.2d 270 (1988), modified in part on other grounds 431 Mich. 898, 432 N.W.2d 171 (1988), in which this Court ruled that res judicata did not bar the plaintiff's claim against his alleged statutory employers even though his direct employer had already been ordered to pay benefits after a separate hearing. However, the WCAC majority distinguished the facts of the present case from those presented in Viele:

We do not believe Viele supports ... plaintiff's position. Viele involved a situation where the plaintiff tried to proceed against the direct employer and the statutory employers. The Bureau [of Workers' Disability Compensation] decided to proceed to trial against the direct employer, even though the plaintiff had filed an amended petition adding the statutory employers before trial. The Court noted the plaintiff was not able to pursue the claims against the statutory employers in [the] first trial. The reason the plaintiff could not have “raised” the statutory employment issue in the first trial was because the Bureau bifurcated the issues by insisting on separate trials.

There is another reason we cannot accept [dissenting Commissioner Martha M. Glaser's] reasoned interpretation of Viele. If the only reason the Court in Viele ruled in the plaintiff's favor was because proving statutory employment required a bit more evidence than proving direct employment, then the Court would have been violating the “same transaction” test outlined in Gose [ v. Monroe Auto Equip. Co., 409 Mich. 147, 294 N.W.2d 165 (1980) ]. We do not believe the decision in Viele was contrary to the Gose “same transaction” test. To the contrary, the Viele decision cites and follows the Gose standard. We believe [Commissioner Glaser's] interpretation of Viele forces Viele into conflict with Gose and the later decision in Adair, by adopting a “same evidence” standard. [ Bennett, 2008 Mich. ACO 163, at 9–10.]

WCAC Commissioner Glaser dissented, concluding that plaintiff's subsequent § 171 claim against defendants was not identical to the claim raised against Allstate in the first action:

[T]he instant claim is not identical for res judicata purposes because the facts or evidence...