Brown v. Beckwith Evans Co.

• Decision Date: 02 December 1991
• Docket Number: No. 120595,120595
• Citation: 480 N.W.2d 311,192 Mich.App. 158
• Parties: Ernest H. BROWN, Plaintiff-Appellant, v. BECKWITH EVANS COMPANY and American Guaranty & Liability, Defendants-Appellees. 192 Mich.App. 158, 480 N.W.2d 311
• Court: Court of Appeal of Michigan — District of US

Page 311

480 N.W.2d 311

Ernest H. BROWN, Plaintiff-Appellant, v. BECKWITH EVANS COMPANY and American Guaranty & Liability Defendants-Appellees.

No. 120595.

192 Mich.App. 158, 480 N.W.2d 311

Court of Appeals of Michigan.

Submitted June 18, 1991, at Detroit.

Decided Dec. 2, 1991, at 9:25 a.m.

Released for Publication March 10, 1992.

[192 MICHAPP 159] Thurswell, Chayet & Weiner by Lenny Segel, Southfield (Daryl Royal, of counsel, Dearborn Heights), for plaintiff-appellant.

Zamplas, Johnson, Walker & Cavanaugh, P.C. by Gary J. Nystrom, Troy, for defendants-appellees.

Before MARILYN J. KELLY, P.J., and WAHLS and SHEPHERD, JJ.

SHEPHERD, Judge.

Plaintiff appeals by leave granted [192 MICHAPP 160] from an August 10, 1989, decision of the Workers' Compensation Appeal Board modifying a hearing referee's award to plaintiff. We vacate the WCAB decision in part and remand for findings of fact and conclusions of law.

I

This matter commenced with plaintiff's filing of a petition for hearing in the Bureau of Workers' Disability Compensation. The petition was the standard one-page form that alleges little more than that plaintiff suffered a personal injury or disablement from occupational disease that occurred because plaintiff was exposed to repetitive strenuous work that involved causes and conditions peculiar to and characteristic of the defendant employer's business, and the nature of the disability ("back, neck, hand and arm"). Defendants filed an answer with various specific denials of liability and a document entitled "Affirmative Defenses." ¹

At the hearing, plaintiff testified that he began working for the defendant employer in 1949 and, with relatively short periods in managerial and other positions, drove trucks and unloaded rolls of carpeting until January 27, 1984. In 1982, plaintiff began to experience pain and numbness in his left hand and aching in his left forearm. In February 1983, plaintiff stopped working and surgery was [192 MICHAPP 161] performed on his left elbow. Plaintiff testified that, although he did not feel physically capable, he returned to defendant's employ in October 1983 because his "sick benefits from the Teamsters" ran out. He returned to his previous duties because no light work was available. Plaintiff testified that he tried to use his left hand as little as possible, but that the soreness and aching returned. He stopped working for the defendant employer on January 27, 1984. Medical testimony also was introduced.

The hearing referee found plaintiff totally disabled, ordered defendants to pay compensation for the period from February 27, 1983, to October 16, 1983, and awarded benefits for the open period from January 28, 1984, until further order of the Bureau of Workers' Disability Compensation.

On appeal to the WCAB, defendants argued (1) that plaintiff failed to prove by a preponderance of the evidence that his disability was causally related to his employment and (2) that he voluntarily left work within his ability to perform. In their argument regarding the second issue, defendants mentioned Sec. 373 of the Workers' Disability Compensation Act, M.C.L. Sec. 418.373; M.S.A. Sec. 17.237(373), which imposes a higher standard of disability upon certain "retirees," and argued that plaintiff fell within its provisions and failed to meet the higher standard. The WCAB affirmed the award for the closed period, but found that plaintiff failed to qualify for the open award under Sec. 373. The WCAB decision states:

If we were to analyze this case under Chapter 3 of the Act under normal circumstances, we should find that plaintiff has preponderated in proving a continuing disability of the hand, wrist and arm. Aquilina v General Motors Corp, 403 Mich 206 (1978)....

* * * * * *

[192 MICHAPP 162] Unfortunately for the plaintiff, the above analysis is only a prelude to the real analysis in this case. On appeal, the defendants raise the relevancy of Section 373 of the Act. We believe it is clear from the record of this case that plaintiff sought a nondisability retirement and receives a pension in that regard. [Emphasis in original.]

The decision of the WCAB then applies the disability standard set forth in Sec. 373 and concludes that plaintiff is not compensably disabled under that standard.

II

Section 373 reads:

(1) An employee who terminates active employment and is receiving nondisability pension or retirement benefits under either a private or governmental pension or retirement program, including old-age benefits under the social security act, 42 USC 301 to 1397f, that was paid by or on behalf of an employer from whom weekly benefits under this act are sought shall be presumed not to have a loss of earnings or earning capacity as the result of a compensable injury or disease under either this chapter or chapter 4. This presumption may be rebutted only by a preponderance of the evidence that the employee is unable, because of a work related disability, to perform work suitable to the employee's qualifications, including training or experience. This standard of disability supersedes other applicable standards used to determine disability under either this chapter or chapter 4.

(2) This section shall not be construed as a bar to an employee receiving medical benefits under section 315 upon the establishment of a causal relationship between the employee's work and the need for medical treatment.

[192 MICHAPP 163] By its plain language, Sec. 373 is applicable in a proceeding for weekly benefits under the WDCA where the following have been established: (1) the employee seeking the benefits has terminated active employment, (2) the employee receives a nondisability pension or retirement benefits under either a private or governmental pension or retirement program, and (3) the employee's pension or retirement program "was paid by or on behalf of" the employer from whom the weekly benefits are sought.

It is generally recognized that the legislative history of Sec. 373 evinces an intent to remedy--at the behest of employers--perceived abuses by retirees who sought to supplement their pensions with wage-loss benefits under the WDCA. See White v. General Motors Corp., 431 Mich. 387, 408, 429 N.W.2d 576 (1988) (concurring opinion by Justice Archer); Frasier v. Model Coverall Service, Inc., 182 Mich.App. 741, 745-746, 453 N.W.2d 301 (1990); Peck v. General Motors Corp., 164 Mich.App. 580, 417 N.W.2d 547 (1987), rev'd in part on other grounds 432 Mich. 892, 438 N.W.2d 80 (1989).

When Sec. 373 is applicable, a "presumption" applies; the employee falling within the section "shall be presumed not to have a loss of earnings or earning capacity as the result of a compensable injury under either" chapters 3 or 4 of the WDCA. M.C.L. Sec. 418.373(1); M.S.A. Sec. 17.237(373)(1). "This presumption may be rebutted only by a preponderance of the evidence that the employee is unable, because of a work related disability, to perform work suitable to the employee's qualifications, including training or experience." Id.

As noted in the lead opinion in White, supra, 431 Mich. at p. 393, 429 N.W.2d 576, this is not a true presumption because it "does not shift the claimant's burden of producing evidence." Rather the presumption language [192 MICHAPP 164] "merely classifies those persons entitled to benefits under Sec. 373." Id. The final sentence of Sec. 373(1) reads: "This standard of disability supersedes other applicable standards used to determine disability under either this chapter [chapter 3] or chapter 4." This sentence supports the White plurality's reading of Sec. 373 and makes it plain that Sec. 373 simply replaces the generally applicable standard of disability with a higher standard in proceedings for weekly benefits brought by retirees (i.e., employees falling within the class defined in the first sentence of Sec. 373 ).

III

On appeal, plaintiff argues that the WCAB erred in applying the standard of disability set forth in Sec. 373 because the record does not demonstrate that plaintiff is receiving a nondisability pension or that any such pension is being paid to plaintiff "by or on behalf of" the defendant employer. Rather, plaintiff argues (a) that his testimony and that of his supervisor, Donald Martin, establishes that Sec. 373 is inapplicable or (b) that the defendant employer has failed to meet its burden of establishing that Sec. 373 is applicable.

Defendants counter with the argument that because claimants always bear the burden of proving entitlement to benefits, Aquilina v. General Motors Corp., 403 Mich. 206, 211, 267 N.W.2d 923 (1978), it follows that plaintiff should have the burden of producing evidence that he is not within the presumptively noncompensable class created by Sec. 373. Thus, defendants argue, plaintiff's failure to present evidence regarding the type and source of the pension he is receiving is a failure to establish an essential element of his claim. Because of this failure of proof, defendants further argue, we are [192 MICHAPP 165] bound to uphold the (implicit) factual findings upon which the WCAB predicated its conclusion that Sec. 373 is applicable.

Initially, we disagree with the parties' respective contentions that the facts are sufficient to establish either the applicability or the inapplicability of Sec. 373. Accordingly, as will be explained below, the WCAB's decision must be vacated.

Plaintiff urges us to reinstate the open award by the referee. Because we have concluded that the inapplicability of Sec. 373 cannot be ascertained from the present record, our only basis for reinstating the referee's award at this point would be the defendant employer's failure to meet its burden of proving that Sec. 373 is applicable. While we ultimately agree with plaintiff that an employer in a workers' compensation hearing bears the burden of establishing the applicability of Sec. 373, we note that this is a question of first impression, and we...