Karaczewski v. Farbman Stein & Co.

Decision Date23 May 2007
Docket NumberDocket No. 129825. Calendar No. 11.
Citation732 N.W.2d 56,478 Mich. 28
PartiesKenneth KARACZEWSKI, Plaintiff-Appellee, v. FARBMAN STEIN & COMPANY and NATIONWIDE MUTUAL INSURANCE COMPANY, Defendants-Appellants.
CourtMichigan Supreme Court

Kelman Loria, P.L.L.C. (by James P. Harvey), Detroit, for the plaintiff.

Martin L. Critchell, Bingham Farms, for the defendants.

Kym L. Worthy, Prosecuting Attorney, and Timothy A. Baughman, Chief of Research, Training, and Appeals, Detroit, for amicus curiae the Wayne County Prosecutor's Office.


In this case, we consider whether a Florida resident who was injured in a Florida workplace accident may recover workers' compensation benefits in Michigan merely because he was hired in Michigan. We conclude that he cannot. The relevant portion of the Michigan Worker's Disability Compensation Act (WDCA), MCL 418.845, confers jurisdiction on the Bureau of Worker's Compensation, now the Workers' Compensation Agency, for out-of-state workplace injuries only if (1) the employee is a resident of Michigan when the injury occurs and (2) the contract of hire was made in Michigan. Accordingly, we reverse the contrary Court of Appeals judgment awarding benefits and overrule Boyd v. W.G. Wade Shows, 443 Mich. 515, 505 N.W.2d 544 (1993), upon which the Court of Appeals relied.


The parties stipulated the relevant facts:

Plaintiff was hired by defendant on October 4, 1984 to work in Michigan as a maintenance engineer. As of the date of hire, plaintiff was a resident of Detroit, Michigan and defendant employer was a resident employer in Michigan. The Contract of hire was made in Michigan. The Farbman Group continues to be a resident employer and is currently located at 28400 Northwestern Hwy, Southfield, Michigan.

Plaintiff worked for defendant in Michigan from the date of hire until September 1, 1986, when defendant transferred him to Fort Lauderdale, Florida to assume the position of building superintendent. On January 12, 1995, Plaintiff fell from a ladder in the course of his employment for defendant in Florida, breaking his left wrist and injuring his left knee. At the time of the injury, he was a resident of Florida. On September 27, 1996, plaintiff reinjured his knee while still working for defendant in Florida. He underwent surgery on November 6, 1996 for ACL [anterior cruciate ligament] reconstruction and microfracture arthroplasty. Plaintiff returned to work for defendant with restrictions on December 2, 1996.

He received certain benefits pursuant to Florida's worker's compensation law.

Plaintiff continued to work for defendant until September 15, 1997. Since that time, he has worked as a project manager for Rotella, Toroyan, Clinton Group, a Florida Corporation.

Plaintiff continues to have problems with his left knee. There is no wage loss at this time. He has, however, incurred further expenses for treatment and anticipates the need for additional surgery(ies) and future closed period(s) of disability. These claims are not covered under Florida law.

Plaintiff has filed an application for mediation or hearing, claiming medical and wage loss benefits under Michigan law. Defendant disputes jurisdiction. It does not dispute the existence of a work related knee injury.

The Court of Appeals summarized the proceedings before the magistrate and the Workers' Compensation Appellate Commission (WCAC):

In the proceedings below, defendants contended that pursuant to the plain language of the statute which determines the bureau's jurisdiction, MCL 418.845, to be entitled to benefits, an injured worker must be a resident of Michigan at the time of the injury. In response, plaintiff contended that pursuant to the interpretation of MCL 418.845, as set forth in Boyd v. W.G. Wade Shows, 443 Mich. 515, 505 N.W.2d 544 (1993), there is no residency requirement for an injured worker, and the bureau has jurisdiction over a petition filed by an injured worker when, as in the instant case, the contract of hire was executed in Michigan and the employer is a resident employer in Michigan. The magistrate agreed with plaintiff and concluded that the bureau had jurisdiction in this matter.

Defendant appealed the decision to the WCAC. The WCAC noted that the Supreme Court's decision in Boyd reaffirmed an interpretation of the jurisdictional statute originally set forth in Roberts v. I.X.L. Glass Corp., 259 Mich. 644, 244 N.W. 188 (1932). The WCAC opined that Roberts contravened the express language of MCL 418.845, but agreed with the magistrate that Boyd and Roberts are binding. Defendants were granted leave to appeal the WCAC's decision.1

The Court of Appeals affirmed the WCAC decision because "pursuant to Roberts and Boyd, the WCAC properly concluded that the bureau has jurisdiction over plaintiff's petition for benefits." Id. at 5. We granted defendant's application for leave to appeal, directing the parties to address whether the "proposed overruling of [Boyd] is justified under the standard for applying stare decisis discussed in Robinson v. Detroit, 462 Mich. 439, 463-468 (2000)."2


This case requires us to interpret the language set forth in MCL 418.845. We review de novo questions of statutory construction. People v. Perkins, 473 Mich. 626, 630, 703 N.W.2d 448 (2005).


MCL 418.845 is clear and unambiguous. It grants the bureau "jurisdiction over all controversies arising out of injuries suffered outside this state where the injured employee is a resident of this state at the time of injury and the contract of hire was made in this state." (Emphasis added.) The meaning of this provision is straightforward: where the injury occurs outside Michigan, the bureau has jurisdiction only where (1) the injured employee was a resident of Michigan at the time of the injury and (2) the contract of hire was made in Michigan. Plainly, the use of the conjunctive term "and" reflects that both requirements must be met before the bureau has jurisdiction over an out-of-state injury.

This statute in its initial enactment in 1921 PA 173, was an amendment3 of the Michigan Workmen's Compensation Act, 1912 (1st Ex. Sess.) PA 10.4 This amendment was enacted after the decision in Crane v. Leonard Crossette & Riley, 214 Mich. 218, 183 N.W. 204 (1921). In Crane, this Court held that because participation in the workers' compensation system was elective, the requirements of the law were considered to be incorporated into the employment contract when an employer chose to participate in the system. Thus, it was irrelevant that the injury did not occur in Michigan.5

In 1932, this Court considered the 1921 amendment in Roberts, supra. The Roberts Court stated that the new statutory requirements focusing on residence at the time of the injury "would come with much, if not controlling, force if it were not in conflict with other portions of the statute." Roberts, supra at 647, 244 N.W. 188. That "other portion of the statute" was 1929 CL 8412, which this Court described as fixing "the rights and liabilities of employers and employees." Id. This Court said that the WDCA covered "`all employees' regardless of residence or the locus of the accident." Id. Because of this conflict and the "radical change in the scope and effect," id. at 648, 244 N.W. 188, that the nullification of § 8412 by § 8458 would have, the Court declined to assume that the Legislature had intended such nullification when it enacted § 8458. The Court also opined that its construction was consistent with the "humane purposes" of the WDCA. This meant that § 8412 trumped § 8458, and workers' compensation coverage would be required without regard to residence or where the injury occurred, despite the language of § 8458.

In 1943 PA 245, the Legislature expressly repealed § 8412. With that action, the Legislature effectively eliminated the central rationale of the Roberts decision, i.e., the Court's declination to repeal by inference § 8412. The 1943 amendment thus left § 8458 as the unquestioned law. At that juncture, then, the Legislature had addressed the problem that had precluded the Roberts Court from enforcing § 8458, and the Roberts rationale for declining to enforce § 8458 no longer applied.

Indeed, the appellate courts of this state implicitly recognized this point in eight of nine cases where issues concerning § 8458 and its successor statutes arose from 1943 until the Boyd decision in 1992.

In Daniels v. Trailer Transport Co., 327 Mich. 525, 527, 530, 42 N.W.2d 828 (1950), this Court implicitly required that the statutory prerequisites of § 8458 be met. In that case, the Court concluded that where a Michigan employer had made an employment contract in Texas, and where the employee was an Illinois resident who suffered an injury in Tennessee, jurisdiction did not exist to bring a workers' compensation action in Michigan.6

Without reconciling Daniels, however, the Court of Appeals in Austin v. W. Biddle Walker Co., 11 Mich.App. 311, 313, 318, 161 N.W.2d 150 (1968), followed what it understood to be the Roberts holding when it concluded that a nonresident of Michigan, hired in Michigan but injured outside Michigan, could collect workers' compensation benefits in Michigan.7

Returning to the Daniels understanding, the Court of Appeals held in Rodwell v. Pro Football, Inc., 45 Mich.App. 408, 416-418, 206 N.W.2d 773 (1973), that where an employment contract was made in Michigan with a worker who lived in Michigan but the injury occurred out of state, the employee was eligible for Michigan workers' compensation.

Later, in Crenshaw v. Chrysler Corp., 394 Mich. 513, 515-516, 232 N.W.2d 166 (1975), this Court determined that the WDCA did not apply when the contract of hire with a Michigan company was executed in Ohio and the injuries occurred in Ohio.8

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