Lambard v. Saga Food Service, Inc.

• Decision Date: 15 September 1983
• Docket Number: 63160 and 63115,Docket Nos. 63232
• Citation: 127 Mich.App. 262,338 N.W.2d 207
• Parties: Edward John LAMBARD, deceased, and Connie Lambard, widow, Plaintiffs-Appellees, v. SAGA FOOD SERVICE, INC. and Employers Mutual Liability Insurance Company, Defendants-Appellants. and St. Clair Yacht Club and Hartford Insurance Group, Defendants-Appellants, and Cregar's Pickwick House, and Liberty Mutual Insurance Company, Defendants-Appellants.
• Court: Court of Appeal of Michigan — District of US

Page 207

338 N.W.2d 207

127 Mich.App. 262

Edward John LAMBARD, deceased, and Connie Lambard, widow Plaintiffs-Appellees, v. SAGA FOOD SERVICE, INC. and Employers Mutual Liability Insurance Company, Defendants-Appellants and St. Clair Yacht Club and Hartford Insurance Group Defendants-Appellants and Cregar's Pickwick House, and Liberty Mutual Insurance Company, Defendants-Appellants.

Docket Nos. 63232, 63160 and 63115.

Court of Appeals of Michigan.

Submitted Feb. 3, 1983.

Decided May 11, 1983.

Released for Publication Sept. 15, 1983.

Levenson, Disner, Ruby & Fruitman, P.C. by Sydney L. Ruby, Southfield, for plaintiffs-appellees.

George E. Ganos, Taylor, for Saga Food Service, Inc. and Employers Mut. Liability Ins. Co.

Conklin, Benham, McLeod, Ducey & Ottaway, P.C. by Martin L. Critchell, Detroit, for Cregar's Pickwick House and Liberty Mut. Ins. Co.

Law Offices of Ronald R. Kefgen by Patrick J. MacLean, Troy, for St. Clair Yacht Club and Hartford Ins. Group.

Before WALSH, P.J., and BEASLEY and THOMAS ^*, JJ.

PER CURIAM.

Leave to appeal has been granted in this workers' compensation case involving three separate but consolidated claims of appeal. The appellants are former employers of plaintiff's deceased husband as well as those employers' workers' compensation carriers. Appellants appeal from an order of the Workers' Compensation Appeal Board (WCAB) reversing a referee's April 5, 1979, order, in which he found that the deceased did not sustain a work-related injury or disability and that his death was the result of an ordinary disease of life rather than an occupational disease. On February 12, 1982, the WCAB reversed the referee's order, finding that the decedent's death was work related, and ordered payments to plaintiff by defendant Saga Food Service, Inc., (Saga) at the rate of $107 per week plus funeral expenses of not more than $1,500. The WCAB also held that Saga should be reimbursed for 27.55% of its liability by defendant Cregar's Pickwick House (Cregar's) and for 3.6% of its liability by defendant St. Clair Yacht Club (St. Clair).

Plaintiff testified at a hearing before the referee that her husband was born in 1920 and that he began working as a cook in 1944, an occupation which he held for the rest of his life. Defendant began work in 1960 or 1961 with Harding & Williams, a corporation that managed food services for the Burroughs Corporation. Saga acquired Harding & Williams in 1970 or 1971 and decedent stayed on as an employee until November 13, 1975. From the period beginning shortly after Saga acquired Harding & Williams until November of 1975, the decedent was head cook at Burroughs' Tireman Road facility and worked 5 a.m. to 1 p.m., five days per week.

The decedent also worked as a part-time short-order cook at Cregar's from October 27, 1962, to May 2, 1968. His hours were generally from 5 p.m. to 10 p.m., three or four nights per week. From August 15, 1971, until June of 1974, the decedent worked as a cook at St. Clair three or four nights a week, generally between 4 p.m. and 9 p.m.

Decedent suffered the first of his five heart attacks (diagnosed as myocardial infarctions) on March 8, 1972, while driving home from work. Decedent returned to work in August of 1972. Decedent suffered his next heart attack while dining out on October 24, 1974. Dr. Nelson Green inserted a pacemaker in decedent's chest and decedent returned to work in January of 1975. Decedent suffered his third heart attack in April of 1975 while at a hospital seeking treatment for an unrelated problem, returned to work in August and then suffered his fourth heart attack on November 14, 1975, while on his way to work. Decedent died on January 17, 1976 while on disability leave from Saga after the fourth heart attack. Decedent died soon after suffering another heart attack while on his way to the Greek Corner Restaurant.

Under Chapter 4 of the Worker's Disability Compensation Act (the act), M.C.L. Sec. 418.401 et seq.; M.S.A. Sec. 17.237(401) et seq., the act's occupational disease chapter, the total compensation due is recoverable from the employer who last employed the employee in the position to which the nature of the disease was due and in which the disease was contracted. M.C.L. Sec. 418.435; M.S.A. Sec. 17.237(435). Saga argues that, at the time of his death, decedent was employed by the Greek Corner, a restaurant started by his son, two nephews and himself, and that, therefore, the Greek Corner is liable for the payment of benefits to plaintiff.

Plaintiff testified that at the end of 1974 her husband began to make plans for retirement. Plaintiff also testified that decedent decided to retire after the November, 1975, heart attack but that he had not settled on a retirement date at the time of his death.

Decedent first consulted with his son and two nephews about opening a restaurant in February of 1975. Decedent put up 50% of the capital investment and received the same percentage of the corporation's shares of stock. In addition, decedent advised his son and nephews in the design and purchase of equipment and the layout of the floor plan, but remained at Saga during the planning stages. Decedent stayed at home after recovering from his November, 1975, heart attack and one of his nephews periodically checked in with him for advice. The restaurant opened on January 14, 1976, and the decedent spent three days at the restaurant acting as a public relations man for a few hours each day. On January 17, 1976, decedent left his home on a cold morning to drive to the restaurant but suffered his fatal heart attack before he arrived. The restaurant was closed that day but decedent went there to check the cash register and to show the restaurant to his supervisor at Saga.

On these facts, the WCAB ruled that it could not find that decedent was an employee of the Greek Corner, although he did invest some of his money and lent his expertise. The board concluded that the Greek Corner was decedent's son's business and "that decedent was doing no more than would be expected of any devoted father helping a son to follow in his footsteps".

Findings of fact in a workers' compensation proceeding are conclusive in the absence of fraud. Const.1963, art. 6, Sec. 28; M.C.L. Sec. 418.861; M.S.A. Sec. 17.237(861). Thus, we review such findings only to determine whether there is any evidence to support them. Aquilina v. General Motors Corp., 403 Mich. 206, 213, 267 N.W.2d 923 (1978).

The facts surrounding decedent's involvement with the Greek Corner are not in dispute. What is in dispute is the board's determination that, based on the facts, decedent was not an employee of the Greek Corner. Because this determination involved a legal inference drawn from other facts, it is open to review by this Court. Stover v. Midwest Tank & Fabrication Co., Inc., 87 Mich.App. 452, 456-457, 275 N.W.2d 15 (1978), lv. den. 406 Mich. 926 (1979).

The existence of an employer/employee relationship for workers' compensation purposes is to be determined by the economic realities of the situation. Askew v. Macomber, 398 Mich. 212, 217-218, 247 N.W.2d 288 (1976); Kain v. Michigan, 109 Mich.App. 290, 299, 311 N.W.2d 351 (1981), lv. den. 413 Mich. 910 (1982). The relevant factors of the economic reality test are control of a worker's duties, payment of wages, right to hire, fire and discipline, and the performance of the duties as in integral part of the employer's business toward the accomplishment of a common goal. Askew, supra, 398 Mich. at pp. 217-218, 247 N.W.2d 288.

Although decedent's activities may have been an integral part of the business, decedent's son and nephews did not control his duties. Instead, decedent put as much effort as he pleased into the restaurant. Decedent was paid no wage but instead appears to have helped his son and nephews to start them off well and to make money on his investment. Finally, decedent's son and nephews had no right to discipline decedent. Thus, the board reached the proper legal conclusion in finding that decedent was not an employee of the Greek Corner.

Saga also argues that the board applied the wrong standard in determining that the decedent's death was work related.

M.C.L. Sec. 418.401(2)(b); M.S.A. Sec. 17.237(401)(2)(b) provides in part:

" 'Personal injury' shall include a disease or disability which is due to causes and conditions which are characteristic of and peculiar to the business of the employer and which arises out of and in the course of the employment. An ordinary disease of life to which the public is generally exposed outside of the employment in not compensable."

In 1980, the Legislature amended M.C.L. Sec. 418.401(c); M.S.A. Sec. 17.237(401)(c), effective January 1, 1982, to include after the sentence relating to ordinary diseases ¹ the following sentence: "Mental disabilities and conditions of the aging process, including but not limited to heart and cardiovascular conditions, shall be compensable if contributed to or aggravated or accelerated by the employment in a significant manner". 1980 P.A. 357, Secs. 1, 3.

Prior to 1980 P.A. 357, the statute did not specifically address heart and cardiovascular situations. Thus, the pre-1982 standard for determining whether a heart condition is compensable under the act was a matter of case law. The leading case on the subject is Kostamo v. Marquette Iron Mining Co., 405 Mich. 105, 116, 274 N.W.2d 411 (1979), where the Court held:

"The workers' compensation law does not provide compensation for a person afflicted by an illness or disease not caused or aggravated by his work or working conditions. Nor is a different result required because debility has progressed to the point where the worker cannot work without pain or injury. Accordingly, compensation cannot be awarded because the worker may suffer heart damage which would be work-related if he continued to work. Unless the work has accelerated or aggravated the illness,...