Johnson v. Nationwide Life Ins. Co., Docket No. 2735

• Decision Date: 20 July 1967
• Docket Number: No. 1,Docket No. 2735,1
• Citation: 7 Mich.App. 441,151 N.W.2d 840
• Parties: Theodore JOHNSON, Plaintiff-Appellee, v. NATIONAL LIFE INSURANCE COMPANY, a foreign insurance corporation, Defendant-Appellant
• Court: Court of Appeal of Michigan — District of US

Page 840

151 N.W.2d 840

7 Mich.App. 441

Theodore JOHNSON, Plaintiff-Appellee, v. NATIONAL LIFE INSURANCE COMPANY, a foreign insurance corporation, Defendant-Appellant.

Docket No. 2735.

Court of Appeals of Michigan, Division No. 1.

July 20, 1967.

Michael J. Kelly, Kelly, Oster, Tatham & Solner, Detroit, for appellant.

Harry R. Bockoff, Detroit, for appellee.

Before LESINSKI, C.J., and FITZGERALD and GILLIS, JJ.

FITZGERALD, Judge.

On September 5, 1963, plaintiff was an employee of the People's Baking Company in Detroit. While on the job, he had gone to change fuses and upon returning, his foreman came up and crused him. Brief fisticuffs resulted, the plaintiff returned to his work, and the foreman departed. Fifteen or 20 minutes later, the foreman returned and, without warning, stabbed plaintiff first in the back and then twice in the chest with a screwdriver, requiring hospitalization, medical attention and surgery, which were billed directly to the plaintiff.

At the time, defendant insurance company had a non-contributory group policy with People's Baking, covering plaintiff's major medical expenses but excluding him if the accidental injury 'arises out of or in the course of employment'. Defendant was not employer's compensation carrier.

On September 30, 1963, plaintiff filed application for compensation in the workmen's compensation department, alleging that he was stabbed by his foreman while on the job and in the course of employment. Following a hearing at which plaintiff was the only witness, the referee approved a redemption in the total amount of $1,767. No appeal was taken.

The instant suit against defendant insurance company was begun in October of 1965 in the common pleas court for the city of Detroit claiming benefits under the group insurance policy. Defendant denied liability under the exclusionary clause in the policy providing that no benefits were payable for loss or expense caused by accidental bodily injury arising 'out of or in the course of employment.' Recovery gained under the previous redemption required a determination that the injury arose out of the course of employment.

Upon trial, plaintiff claimed that the injury did not in fact arise out of or in the course of employment because there was an interval of time between the original altercation with his foreman and the time when he was stabbed, namely 15 or 20 minutes.

A motion for directed verdict on plaintiff's opening statement was made by defendant and again at the close of plaintiff's proofs, both motions being denied. Defendant offered no testimony but did offer exhibits from the proceedings in the workmen's compensation action and the exclusionary provisions of the group insurance policy.

The court held that the plaintiff was not barred from attacking findings necessary to the redemption, i.e., that the accident arose out of or in the course of plaintiff's employment because the action in the trial court was not between the same parties as the workmen's compensation action. The court further found as a matter of fact that the injury did not arise out of or in the course of employment because of the lapse of time, calling it a cooling off period, which removed it from the course of plaintiff's employment and created a private dispute. Judgment in favor of plaintiff against defendant insurance company was entered for the sum of $1,082.05 plus costs and attorney fees.

The insurance company now appeals, asking whether acceptance and payment under the workmen's compensation redemption order estopped plaintiff from collaterally attacking in the civil court proceeding the redemption order's holding that his injury arose out of or in the course of employment, and also questioning whether plaintiff's injury, in fact, did arise out of and in the course of his employment.

The matter before us stands in the following posture: Before the workmen's compensation department, plaintiff's injury was determined to arise out of and in the course of his employment; before the common pleas court, it was found not to arise out of or in the course of his employment.

The doctrine of Res judicata and collateral estoppel fly through the pages of the record and the briefs of both parties with seemingly complete interchangeability. This is not to be wondered at since it has been acknowledged by many courts that the distinction has become muted with time and application. Jones v. Chambers (1958), 353 Mich. 674 at 680, 91 N.W.2d 889. See also 88 A.L.R. 574.

At the outset, we are met with the question of whether a workmen's compensation redemption partakes of the nature of that kind of judgment to which the doctrines of Res judicata or collateral estoppel are applicable. As between identical parties, this matter has been settled as to Res judicata by our Supreme Court in Ayers v. Genter (1962), 367 Mich. 675, 117 N.W.2d 38, wherein it is stated, 'It is clear that in this jurisdiction the doctrine of Res judicata is applicable to a decision rendered in workmen's compensation proceedings'. Unlike Ayers, however, the parties in the instant appeal are Not identical with those involved in the workmen's compensation. proceedings.

That the doctrine of Res judicata and collateral estoppel do not apply in a case such as the instant one was definitively settled by our Supreme Court in Jordan v. C. A. Roberts Company (1967), 379 Mich. 235, 150 N.W.2d 792. Therein, the Court said, 'There being no identity of the parties, the doctrine of Res judicata is inapplicable.' (citing cases) In the instant case, Nationwide Insurance was a complete stranger to the prior proceedings.

This result is further borne out by the nature of a redemption proceeding. Perhaps the best summarization of this character is found in Wehmeier v. W. E. Wood Company (1966), 377 Mich. 176, 139 N.W.2d 733.

'As is well recognized, redemptions serve their most important function in allowing compromises of borderline or difficult cases. Every business man every citizen, on occasion has a dispute or quarrel with someone else. Compromise is the lubricant that permits people to overcome inter-human frictions. No one knows better than lawyers about the cost of doing battle and the uncertainties incidental thereto. Almost all...