Charboneau v. Beverly Enterprises, Inc.

• Decision Date: 27 February 2001
• Docket Number: Docket No. 220008.
• Citation: 244 Mich. App. 33,625 N.W.2d 75
• Parties: Mary H. CHARBONEAU, Plaintiff-Appellee, v. BEVERLY ENTERPRISES, INC., Defendant-Appellee, and Second Injury Fund (70% Reimbursement Provision), Defendant-Appellant, and Medical Benefits Reimbursement Fund, Amicus Curiae.
• Court: Court of Appeal of Michigan — District of US

625 N.W.2d 75

244 Mich. App. 33

Mary H. CHARBONEAU, Plaintiff-Appellee, v. BEVERLY ENTERPRISES, INC., Defendant-Appellee, and Second Injury Fund (70% Reimbursement Provision), Defendant-Appellant, and Medical Benefits Reimbursement Fund, Amicus Curiae.

Docket No. 220008.

Court of Appeals of Michigan.

Submitted October 18, 2000, at Detroit.

Decided December 26, 2000, at 9:00 a.m.

Released for Publication February 27, 2001.

Jennifer M. Granholm, Attorney General, Thomas L. Casey, Solicitor General, and Morrison Zack, Assistant Attorney General, for Second Injury Fund.

Lacey & Jones (by Gerald M. Marcinkoski), Birmingham, for Beverly Enterprises, Inc.

Jennifer M. Granholm, Attorney General, Thomas L. Casey, Solicitor General, and Mitchell J. Wood, Assistant Attorney General, for amicus curiae Medical Benefits Reimbursement Fund.

Before BANDSTRA, C.J., and SAAD and METER, JJ.

BANDSTRA, C.J.

This case has been remanded by our Supreme Court for consideration as on leave granted. Defendant Second Injury Fund (SIF) appeals a decision by the Worker's Compensation Appellate Commission (WCAC) reversing the decision of the magistrate that denied defendant Beverly Enterprise's (Beverly's) request for reimbursement of benefits paid to plaintiff Mary H. Charboneau.¹ We conclude that the WCAC decision was based on a misreading of the applicable statute and that Beverly was not entitled to reimbursement under the facts of this case. We reverse.

This case has a long and complex procedural history. In May 1982, plaintiff filed a petition for worker's compensation benefits, alleging that she injured her back and sustained emotional injuries during the course of her employment with Beverly. In a decision mailed on February 18, 1986, the magistrate granted plaintiff an open award of benefits in the amount of $102.54 a week. Beverly commenced paying plaintiff seventy percent benefits at the rate of $71.78 a week, as required by M.C.L. § 418.862(1); MSA 17.237(862)(1).

Beverly filed a claim for review of the February 18, 1986, decision with the Worker's Compensation Appeal Board (WCAB). While the claim for review of the magistrate's decision was still pending, Beverly also filed a separate petition to stop benefits and to recoup the benefits previously paid. In a decision mailed on April 21, 1988, the magistrate denied the petition to stop. On or about May 16, 1988, Beverly filed a claim for review of that decision with the WCAB.

On November 20, 1990, while the claim for review of the denial of the petition to stop was pending, the WCAB issued a decision affirming with modification the open award of benefits. Beverly did not seek leave to appeal the WCAB's decision; therefore, it became final. In January 1991, Beverly paid the accrued compensation owing with interest, as required by subsection 862(1), and began paying full weekly benefits.

On August 28, 1992, the WCAC, the successor to the WCAB, entered a decision affirming the magistrate's denial of Beverly's petition to stop benefits. Beverly's application for leave to appeal the WCAC's decision to this Court was denied. Beverly was granted leave to appeal by our Supreme Court, which entered an order on September 20, 1993, remanding the case to the WCAC. Charboneau v. Beverly Enterprises, 443 Mich. 888, 508 N.W.2d 495 (1993). The WCAC remanded the case with instructions that a magistrate prepare a supplemental opinion.

In a decision mailed on April 27, 1994, the remand magistrate denied Beverly's petition to stop. In a decision entered on October 7, 1994, the WCAC reversed the magistrate's decision and granted the petition to stop benefits, effective May 1, 1986. Both this Court and the Supreme Court denied plaintiff's applications for leave to appeal.

On the basis of the October 7, 1994, decision, Beverly filed both an application for reimbursement of excess compensation with the SIF, and a petition for determination of rights with the bureau. The matter was submitted to the magistrate on stipulated facts. In a decision mailed on November 13, 1996, the magistrate denied Beverly's request for reimbursement. The issue for resolution involved the interpretation of subsection 862(1), which states in part that "[i]f the weekly benefit is reduced or rescinded by a final determination, the carrier shall be entitled to reimbursement in a sum equal to the compensation paid pending the appeal in excess of the amount finally determined." Noting that the petition for benefits filed by plaintiff and the petition to stop benefits filed by Beverly were never consolidated, the magistrate found that the "final determination" was the WCAB's November 20, 1990, decision affirming the open award of benefits, and not the WCAC's October 7, 1994, decision granting the petition to stop benefits.

Beverly appealed, and in a decision entered on February 24, 1998, the WCAC reversed the decision of the magistrate and ordered reimbursement. The WCAC noted that in Hiltz v. Phil's Quality Market, 417 Mich. 335, 353, 337 N.W.2d 237 (1983), our Supreme Court held that pursuant to subsection 862(1), if an award of benefits is reduced or rescinded, the employer/carrier is entitled to reimbursement for any amount that exceeds its final liability. The WCAC read Hiltz as not limiting this right to reimbursement to causes of action arising out of a petition filed by a claimant. The WCAC concluded that the magistrate's interpretation of subsection 862(1) deprived Beverly of its statutory right to reimbursement of excess amounts paid to plaintiff.

The SIF sought leave to appeal the WCAC's decision, but this Court denied the application for lack of merit. The SIF sought leave to appeal to our Supreme Court. The Supreme Court remanded the case for consideration as on leave granted, and instructed that we decide whether Beverly was entitled to reimbursement of the seventy percent benefits paid while the direct appeal from the original open award of benefits was pending. Charboneau v. Beverly Enterprises, Inc., 459 Mich. 999, 595 N.W.2d 853 (1999). This Court was specifically directed to consider "whether the final disposition of Beverly's separate petition to stop payment of benefits constitutes `a final determination' triggering the right to reimbursement" under subsection 862(1). Id.

This Court reviews de novo a question of law raised by any final order of the WCAC. Oxley v. Dep't of Military Affairs, 460 Mich. 536, 540-541, 597 N.W.2d 89 (1999). The issue of statutory construction here presents a question of law. Subsection 862(1) provides:

A claim for review filed pursuant to section 859, 859a, 860, 861, or 864(11) shall not operate as a stay of payment to the claimant of 70% of the weekly benefit required by the terms of the award of the worker's compensation magistrate or arbitrator. Payment shall commence as of the date of the worker's compensation magistrate's or arbitrator's award, and shall continue until final determination of the appeal or for a shorter period if specified in the award. Benefits accruing prior to the award shall be withheld until final determination of the appeal. If the weekly benefit is reduced or rescinded by a final determination, the carrier shall be entitled to reimbursement [from the SIF] in a sum equal to the compensation paid pending the appeal in excess of the amount finally determined. Reimbursement shall be paid upon audit and proper voucher from the second injury fund established in [MCL 418.501 et seq.; MSA 17.237(501) et seq.]. If the award is affirmed by a final determination, the carrier shall pay all compensation which has become due under the provisions of the award, less any compensation already paid. Interest shall not be paid on amounts paid pending final determination. Payments made to the claimant during the appeal period shall be considered as accrued compensation for purposes of determining attorneys' fees under the rules of the bureau. [MCL 418.862(1); MSA 17.237(862)(1).]

The SIF argues that the WCAC erred in reversing the decision of the magistrate and holding that Beverly was entitled to reimbursement of compensation paid to plaintiff. It contends that the phrase "final determination" in subsection 862(1) refers in all instances to the final determination of the employer's liability for benefits as resolved in an appellate proceeding. That is, only the final appellate decision in the original case, i.e., the claim for benefits filed by the claimant, determines whether an award of benefit stands, and thus whether the employer is entitled to reimbursement of the seventy percent benefits already paid to the claimant. Such a final determination is only rendered as part of the appeal process. Therefore, because the WCAB's November 20, 1990, decision did not reduce or rescind the award to plaintiff, the seventy percent benefits issue became moot when Beverly did not seek leave to appeal the WCAB's decision. The SIF argues that Beverly's petition to stop benefits was a separate action from that filed by plaintiff and that the order granting that relief cannot properly be considered a "final determination of the appeal" authorizing reimbursement to Beverly.

In response, Beverly relies heavily on the fact that, while the statute uses the phrase "final determination of the appeal" three times, the sentence of the statute providing for reimbursement from the SIF speaks only of "a final determination." Beverly argues that the order granting the petition to stop payment was "a final determination" establishing that it had made excessive payments to Charboneau and that it was thus entitled to reimbursement for those payments from the SIF. That is the case, argues Beverly, regardless of the fact that the order granting the petition to stop payment was not an appellate decision reviewing the original award granted to Charboneau.

This is a case of first impression. In reversing the decision of the magistrate, the WCAC relied on Hiltz, supra, and Beverly...