Daniel v. DEPT. OF CORRECTIONS

• Decision Date: 26 March 2003
• Docket Number: Docket No. 120460, Calendar No. 5.
• Citation: 468 Mich. 34,658 N.W.2d 144
• Parties: Tony J. DANIEL, Plaintiff-Appellee, v. DEPARTMENT OF CORRECTIONS, Defendant-Appellant.
• Court: Michigan Supreme Court

658 N.W.2d 144

468 Mich. 34

Tony J. DANIEL, Plaintiff-Appellee, v. DEPARTMENT OF CORRECTIONS, Defendant-Appellant.

Docket No. 120460, Calendar No. 5.

Supreme Court of Michigan.

Argued December 10, 2002.

Decided March 26, 2003.

Ryan, Podein & Joyce, P.C. (by James M. Joyce), Grand Rapids, MI, for the plaintiff-appellee.

Michael A. Cox, Attorney General, Thomas L. Casey, Solicitor General, George H. Weller, Assistant Attorney General, and David DeGraw, Special Assistant Attorney General, Lansing, MI, for the defendant-appellant.

Martin L. Critchell, Detroit, MI, for the Michigan Manufacturers' Association and the Michigan Self-Insurers' Association.

WEAVER, J.

In this case we address whether plaintiff, who was disciplined by, the Department of Corrections (his employer), for sexually harassing female attorneys, and who suffered depression as a result of the disciplinary proceedings, is barred from worker's compensation benefits pursuant to M.C.L. § 418.305. MCL 418.305 provides, "If the employee is injured by reason of his intentional and wilful misconduct, he shall not receive compensation under the provisions of this act." We hold that M.C.L. § 418.305 precludes benefits in this case and, therefore, we reverse the judgment of the Court of Appeals and reinstate the Worker's Compensation Appellate Commission's (WCAC's) order denying plaintiff benefits.

I

Plaintiff worked as a probation officer with defendant Department of Corrections beginning in 1984. His employment required him to attend probation violation hearings held in circuit court several times a month to interact with defense attorneys representing probationers.

In February 1995, a female defense attorney filed a complaint with plaintiff's immediate supervisor alleging that plaintiff sexually harassed her in August 1994 and February 1995. The attorney testified that it was plaintiff's failure to take her rejection of his advances seriously that prompted her to file her complaint.¹ The attorney's complaint was soon followed by allegations of sexual harassment by plaintiff from three other female defense attorneys.² Plaintiff's supervisor initiated an investigation into the complaints. Over the following months, she interviewed the attorneys and other witnesses. When questioned, plaintiff denied all the allegations. At the close of her investigation, plaintiff's supervisor recommended that a disciplinary conference be held regarding five separate counts of sexual harassment.

A disciplinary conference was held on June 20, 1995. Plaintiff continued to deny the allegations. On the advice of his union representative, however, plaintiff offered nothing in his own defense. The plaintiff was informed that the possible discipline ranged from a written reprimand to dismissal. At the conclusion of the conference, the presiding official found "a strong basis" on which to conclude that plaintiff violated Michigan Department of Corrections work rules as described in all five counts.³ Ultimately, plaintiff was disciplined for the two counts of sexual harassment arising from the August 1994 and February 1995 incidents. He was suspended for ten days without pay.⁴

After his return to work in August 1995, plaintiff testified that he felt harassed by both his immediate supervisor and the defense attorneys who had accused him of sexual harassment. He felt "out of control," and, on January 27, 1996, began being treated by psychologist Daniel DeWitt. Dr. DeWitt diagnosed plaintiff as suffering from depression caused by the disciplinary investigation and proceedings as well as the subsequent stresses at work. As a result, plaintiff began a leave of absence in February 1996. In March 1996, Dr. DeWitt felt that plaintiff could work again, but at a different job for a different supervisor. Plaintiff submitted a request for reasonable accommodation in the form of a transfer to another part of the Department of Corrections. His request was rejected by the department's Americans with Disabilities Act Coordinator because plaintiff's disability was deemed temporary and not substantially limiting in nature. In June 1996, plaintiff filed a claim for worker's compensation benefits premised on a mental disability arising from the disciplinary proceedings. During the time leading to the trial, plaintiff saw three other doctors at the state's request.

After four days of trial between March and September of 1998, the magistrate concluded that the "discipline, and post-discipline employment events up to February 2, 1996, contributed in a significant manner to [plaintiff's] development of a disabling condition of depression, anxiety, and uncontrolled anger." The magistrate did not address M.C.L. § 418.305 or make specific findings regarding whether plaintiff's conduct was intentional and wilful or otherwise not compensable under that section. Rather, the magistrate's conclusion that plaintiff was entitled to benefits was based on the finding that plaintiff's injury arose out of his employment pursuant to Gardner v. Van Buren Public Schools, 445 Mich. 23, 517 N.W.2d 1 (1994), overruled in part by Robertson v. DaimlerChrysler Corp., 465 Mich. 732, 641 N.W.2d 567 (2002). However, the magistrate commented:

It is clear to me that Plaintiff's problems started with his discipline for the improprieties of which he was accused.

It is difficult to have much sympathy for this claimant, since he brought these troubles on himself by his own misconduct. But compensation, like the rain, falls on the just and the unjust alike.

The magistrate awarded plaintiff a closed award of worker's compensation benefits.

Defendant appealed, raising M.C.L. § 418.305 as an affirmative defense. The WCAC agreed with the essence of the magistrate's finding that the plaintiff's injury was self-inflicted, but concluded that M.C.L. § 418.305, "puts up an umbrella to prevent compensation from falling on this particular `unjust' claimant."⁵ The WCAC found that plaintiff was on notice of the rules that prohibited the conduct for which he was ultimately accused and disciplined, but had done "it anyway, in a consistent and repeated pattern over a long period of time." The WCAC concluded that plaintiff's injury arose from his own intentional and wilful misconduct and, therefore, that M.C.L. § 418.305 precluded an award of benefits.

Plaintiff appealed and, as will be discussed below, the Court of Appeals reversed the WCAC decision in a two-to-one decision. The Court of Appeals majority concluded that plaintiff's acts did not rise to the level of intentional and wilful misconduct contemplated by M.C.L. § 418.305. 248 Mich.App. 95, 638 N.W.2d 175 (2001).

In dissent, Judge O'Connell noted that "whether an individual engaged in wilful and intentional misconduct is a factual determination" and "that the Legislature, through M.C.L. § 418.861a(14), has provided the WCAC with the authority to make factual findings." 248 Mich.App. at 109-110, 638 N.W.2d 175. Moreover, Judge O'Connell noted, the WCAC's finding in this case that plaintiff engaged in wilful and intentional misconduct was conclusive and binding in the absence of fraud. Id. at 110, 638 N.W.2d 175, citing Mudel, supra at 701, 711, 712, 614 N.W.2d 607. Judge O'Connell opined "that the WCAC's conclusion that plaintiff engaged in wilful and intentional misconduct was well-grounded," 248 Mich.App. at 110, 638 N.W.2d 175, in the record and that, therefore, the Court of Appeals was required to affirm its decision.

We granted defendant's application for leave to appeal. 466 Mich. 889, 649 N.W.2d 71 (2002).

II

We review de novo questions of law. DiBenedetto v. West Shore Hosp., 461 Mich. 394, 401, 605 N.W.2d 300 (2000). Whether plaintiff's injury arose by reason of intentional and wilful misconduct as contemplated by M.C.L. § 418.305 is a question of fact. McMinn v. C Kern Brewing Co., 202 Mich. 414, 429, 168 N.W. 542 (1918); Day v. Gold Star Dairy, 307 Mich. 383, 390, 12 N.W.2d 5 (1943). On judicial review, "[t]he findings of fact made by the commission acting within its powers, in the absence of fraud, shall be conclusive...." M.C.L. § 418.861a(14).

III

The focus of our inquiry is solely on the proper application of M.C.L. § 418.305.⁶ As quoted above, M.C.L. § 418.305 provides, "If the employee is injured by reason of his intentional and wilful misconduct, he shall not receive compensation under the provisions of this act." This provision has remained essentially unchanged since it was first adopted by the Legislature in 1912 as part of the original worker's compensation legislation. See 1912 (1st Ex Sess) PA 10, part 2, § 2.⁷

The Court of Appeals majority below divided its analysis of M.C.L. § 418.305 into two parts. It focused first on whether plaintiff's mental injury arose "by reason of" his misconduct, and, second, on whether plaintiff's misconduct was "intentional and wilful." We address and reject the panel majority's analysis of each of these questions.

A

"By reason of"

The panel majority first focused on what it termed the question of causation, i.e., whether plaintiff was injured "by reason of" his intentional and wilful misconduct. The majority rejected the WCAC's finding that plaintiff's injury was "the direct result of his intentional and wilful misconduct," by concluding that the question of "who started it?" was "inapposite to the intention of the WDCA." 248 Mich.App. at 103, 638 N.W.2d 175. The majority concluded that plaintiff's injury was "too attenuated for [it] to have occurred `by reason of his acts," id., p. 102, 638 N.W.2d 175, and that plaintiff "was not injured at the time of his act," but was "injured solely because of his status as an employee...." Id., p. 103, 638 N.W.2d 175.

To support its conclusion, the majority analogized to two cases in which fighting or horseplay between employees escalated and resulted in physical injuries. See, e.g., Crilly v. Ballou, 353 Mich. 303, 91 N.W.2d 493 (1958), and Andrews v. Gen. Motors...