Estate of Eddington v. Eppert Oil Co.

• Decision Date: 04 December 1991
• Docket Number: Docket Nos. 90273,90274
• Parties: ESTATE OF Bobby Gene EDDINGTON, by Charlotte Eddington, Personal Representative, Plaintiff-Appellant, and The Budd Company, Intervening Plaintiff-Appellee, v. EPPERT OIL COMPANY, a Michigan corporation; Ashland Chemical, Inc., a Delaware corporation and Ashland Oil, Inc., a Kentucky corporation, Defendants.
• Court: Michigan Supreme Court

Page 872

490 N.W.2d 872

441 Mich. 200

ESTATE OF Bobby Gene EDDINGTON, by Charlotte Eddington,

Personal Representative, Plaintiff-Appellant, and The Budd Company, Intervening Plaintiff-Appellee, v. EPPERT OIL COMPANY, a Michigan corporation; Ashland

Chemical, Inc., a Delaware corporation and Ashland

Oil, Inc., a Kentucky corporation, Defendants.

Docket Nos. 90273, 90274.

Supreme Court of Michigan.

Argued Dec. 4, 1991 (Calendar No. 9).

Decided Sept. 29, 1992.

[441 Mich. 203] Clark, Klein & Beaumont, Michael V. Kell, [441 Mich. 204] Thomas S. Nowinski, Edward J. Hood, Detroit, for intervening plaintiff-appellee The Budd Co.

[441 Mich. 203] Chambers, Steiner, Mazur, Ornstein & Amlin, P.C. by Angela J. Nicita, Detroit, for plaintiff-appellant.

OPINION

BRICKLEY, Justice.

In this case we are called upon to determine the extent to which an employer, or workers' compensation carrier, is entitled to seek reimbursement from a third-party tort recovery obtained as a result of the death of an employee. See M.C.L. Sec. 418.827(5); M.S.A. Sec. 17.237(827)(5). We would hold that an employer or workers' compensation carrier is entitled to seek reimbursement from the entire amount of the third-party tort recovery obtained as a result of the death of an employee regardless of the classification of the damages, i.e., economic or noneconomic, or whether the recipient of the proceeds was entitled to receive compensation benefits.

I

Bobby Eddington was employed by Milford Fabricating Company, a subsidiary of intervening plaintiff-appellee The Budd Company, as a machine repairman. On February 16, 1982, he was cleaning a press pit with a chemical solvent manufactured by defendant Eppert Oil Company that contained methylene chloride. ¹ He died of asphyxiation as a result of the fumes emitted from the chemical solvent.

After Mr. Eddington's death, The Budd Company paid workers' compensation benefits to plaintiff, the decedent's surviving spouse. Plaintiff remarried one year later, and The Budd Company made payments to her on behalf of the decedent's three minor children. ²

Plaintiff, as personal representative of her deceased husband's estate, brought a wrongful death action against the manufacturers and sellers of the chemical solvent that caused the death of Bobby Eddington. ³ The case was settled by consent judgments entered on October 21, 1986, one against Ashland Oil and Ashland Chemical, and the other against Eppert Oil. The consent judgment against Ashland Oil and Ashland Chemical provided that plaintiff was to receive a total of $2,500 immediately; the consent judgment against Eppert Oil provided that $461,494 was payable upon entry of the judgment and that, in addition, Eppert was to pay a structured settlement to the decedent's minor children.

The trial court entered an order for the distribution of the wrongful death proceeds on this same date. See M.C.L. Sec. 600.2922(6); M.S.A. Sec. 27A.2922(6). Pursuant to that order, $132,869.25 was allocated to plaintiff individually for her loss of society and companionship, and $49,482.18 was allocated to decedent's parents for their loss of society and companionship. Approximately $206,643 was allocated for attorney fees, costs, and reimbursement, and $75,000 was placed in escrow with plaintiff's counsel pending a determination of the amount of the workers' compensation lien that would attach to the wrongful death proceeds. The decedent's minor children each received an award of $333 per month until their nineteenth birthdays. Thereafter, monthly payments of between $944 and $1,019, depending on the age of each child at the time of the consent judgment, were to be made to the children for five years. These payments were intended to compensate the children for the loss of financial support and loss of society and companionship of their deceased father.

On December 19, 1986, The Budd Company was permitted by stipulation to intervene to assert its workers' compensation lien. The Budd Company filed a motion to determine the amount of the workers' compensation lien on May 19, 1987, in which it was asserted that its lien should attach to the entire settlement proceeds regardless of the damages that the proceeds were intended to compensate. The trial court held that The Budd Company was not entitled to enforce its lien on the settlement proceeds designated for loss of society and companionship damages, relying upon several Court of Appeals cases. ⁴ However, the court permitted the lien to attach to the entirety of those proceeds allocated to the decedent's children for loss of financial support including those to be received after they attain the age of eighteen.

Plaintiff appealed the trial court's holding, contending that The Budd Company was not entitled to assert a lien on the portion of the proceeds awarded to the children after they attained the age of eighteen because no compensation benefits were recoverable by the children after age eighteen. The Budd Company appealed the trial court's decision that loss of society and companionship damages are not subject to the employer's statutory lien. The Court of Appeals held that The Budd Company's lien attaches to the entire third-party recovery of the children without regard to apportionment of damages and also to plaintiff's individual damages for loss of consortium ⁵ because she received compensation benefits directly from the employer. ⁶ 184 Mich.App. 771, 459 N.W.2d 103 (1990).

This Court granted leave to appeal on July 19, 1991. 437 Mich. 1046.

II

We must determine the extent to which the reimbursement provision of the Workers' Disability Compensation Act, M.C.L. Sec. 418.827(5); M.S.A. Sec. 17.237(827)(5), applies to the wrongful death recovery obtained by the plaintiff, as personal representative of Mr. Eddington's estate, and subsequently distributed to the several individuals involved in this case. To properly evaluate this issue, it is necessary to understand the manner in which the tort recovery was obtained and the interplay between the wrongful death act and the WDCA.

First, plaintiff, as personal representative of the decedent's estate, is designated within the wrongful death act as the appropriate person to bring an action to enforce the liability of any tortfeasor contributing to the decedent's death. See M.C.L. Sec. 600.2922(2); M.S.A. Sec. 27A.2922(2). Any recovery obtained by the personal representative is to be received on behalf of all who are entitled to relief pursuant to the wrongful death act as provided by M.C.L. Sec. 600.2922(3); M.S.A. Sec. 27A.2922(3).

Secondly, an employer or compensation carrier is entitled to seek reimbursement from "[a]ny recovery against the third party for damages resulting from personal injuries or death" of an employee. M.C.L. Sec. 418.827(5); M.S.A. Sec. 17.237(827)(5). A reimbursement provision of this nature has been a part of the WDCA from the early stages of its enactment, even when the receipt of benefits had operated as an election of remedies by the injured employee. See 1915 C.L. 5468. The basic reimbursement provision has carried over into the current statutory framework and is the focus of the matter to be resolved in this case. The question then is whether the language of Sec. 827(5) permits reimbursement by the employer from the entire wrongful death recovery, and, if not, what portions of the recovery are to be subject to that reimbursement provision.

III

Section 827(5) provides:

In an action to enforce the liability of a third party, the plaintiff may recover any amount which the employee or his dependents or personal representative would be entitled to recover in an action in tort. Any recovery against the third party for damages resulting from personal injuries or death only, after deducting expenses of recovery, shall first reimburse the employer or carrier for any amounts paid or payable under this act to date of recovery and the balance shall forthwith be paid to the employee or his dependents or personal representative and shall be treated as an advance payment by the employer on account of any future payments of compensation benefits. [Id. (emphasis added).]

We have previously indicated that the reimbursement section of the WDCA

"provides clearly and unambiguously that the employer or carrier is to be reimbursed from 'any recovery' against a third party for 'any amounts' paid or payable to the employee under the WDCA as of the date of the recovery. The statute speaks for itself; there is no room for judicial interpretation or construction." [Downie v. Kent Products, Inc., 420 Mich. 197, 216, 362 N.W.2d 605 (1984), quoting Land v. The George Schmidt Co., 122 Mich.App. 167, 170, 333 N.W.2d 30 (1982).]

Today we would reaffirm our finding that the language of Sec. 827(5) is clear and unambiguous, thereby removing any need to look beyond its ordinary meaning in giving it effect. See Livonia v. Dep't of Social Services, 423 Mich. 466, 378 N.W.2d 402 (1985); Kalamazoo Ed. Ass'n v. Kalamazoo Public Schools, 406 Mich. 579, 281 N.W.2d 454 (1979).

IV

Plaintiff asserts that Sec. 827(5) should be interpreted to provide reimbursement to the employer only to the extent that the third-party tort recovery duplicates damages compensable under the WDCA. On the basis of this argument, plaintiff contends that the loss of society and companionship damages and the loss of financial support recovery by decedent's dependent children for the period after their eighteenth birthdays should not be subject to reimbursement under Sec. 827(5) because such damages are not obtainable as compensation benefits under the WDCA.

A

The Court of Appeals rejected the argument that only those damages which are compensable under the WDCA are entitled to be sought as reimbursement under Sec. 827(5). Reliance was placed upon Pelkey v. Elsea Realty & Investment Co., 394 Mich. 485, 232 N.W.2d 154 (1975), for the proposition that reimbursement may be sought from a third-party...