Leonard v. Lans Corp.

• Citation: 150 N.W.2d 746,379 Mich. 147
• Decision Date: 06 June 1967
• Docket Number: No. 24,24
• Parties: Richard K. LEONARD, Plaintiff and Appellee, v. LANS CORPORATION and Michigan State Accident Fund, Defendants and Appellants, and Travelers Insurance Company, Lansing Pattern and Manufacturing Company,Michigan Mutual Liability Company, Die Aids Corporation, Auto-Owners InsuranceCompany, Hardware Mutual Insurance Company and Citizens Insurance Company,Defendants andAppellees.
• Court: Supreme Court of Michigan

Page 746

150 N.W.2d 746

379 Mich. 147

Richard K. LEONARD, Plaintiff and Appellee, v. LANS CORPORATION and Michigan State Accident Fund Defendants and Appellants and Travelers Insurance Company, Lansing Pattern and Manufacturing Company,Michigan Mutual Liability Company, Die Aids Corporation, Auto-Owners InsuranceCompany, Hardware Mutual Insurance Company and Citizens Insurance Company,Defendants andAppellees.

No. 24.

Supreme Court of Michigan.

June 6, 1967.

Lee C. Dramis, Lansing, for plaintiff.

Peter Munroe and Larry J. Nobach, Lansing, for defendants and appellants.

Anderson & Green, by Stewart M. Green, Lansing, for defendants and appellees. Cholette, Perkins & Buchanan, Grand Rapids (Edward D. Wells, Grand Rapids, of counsel), for defendants and appellees Die Aids Corporation, Hardware Mut. Ins. Co. and Citizens Mut. Ins. Co.

Before the Entire Bench.

SOURIS, Justice.

In Trellsite Foundry & Stamping Company v. Enterprise Foundry (1961), 365 Mich. 209, 112 N.W.2d 476, this Court held constitutionally invalid the procedure then specified in section 9, Part. VII of our workmen's compensation law ¹ for apportioning liability for an employee's disabling occupational disease among his last and prior employers in whose employment the employee was subject to conditions to the nature of which such disease was due. The Court's decision was based upon its finding that the apportionment procedure of the section denied prior employers procedural due process since it did not provide expressly for their participation in the hearing at which the claimant's right to compensation benefits was determined.

In 1962, the Legislature rectified the procedural defect of the section by enactment of P.A.1962, No. 189, which became effective on March 28, 1963. ² That act amended section 9, Part VII to provide that upon motion of a last employer against whom a claim has been filed prior employers shall be made parties and shall be given notice of, and an opportunity to participate in, the hearing before a referee at which the claimant's right to compensation is determined.

In this case, Leonard filed his application for hearing and adjustment of claim against Lans Corporation in 1964. He claimed he became disabled by occupational disease which in Lans' employment prior to March of 1963. Lans thereupon moved, in accordance with Act 189, for the addition as parties defendant of Die Aids Corporation and Lansing Pattern and Manufacturing Company, in whose employment Leonard served prior to his employment by Lans. The hearing referee awarded compensation to Leonard from Lans, but the referee failed to order apportionment of that liability between Lans and the prior employers. Lans appealed to the appeal board, solely on the issue of apportionment, and the board affirmed on the ground that the apportionment provisions of Act 189 could not be applied to a claim whise arose prior to its effective date. The Court of Appeals, without opinion, denied review by order merely citing its decision in Briggs v. Campbell, Wyant & Cannon Foundry Company (1966), 2 Mich.App. 204, ³ 139 N.W.2d 336. This Court granted leave to appeal.

It is appellees' contention, apparently shared by the appeal board and by the Court of Appeals in Briggs, supra, that our decision in Trellsite abrogated all of former section 9, Part VII except its first sentence and that thereafter, until Act 189 became effective, there was no liability imposed upon prior employers of a claimant who became disabled from an occupational disease. From this premise it is argued that Act 189 did more than provide a valid procedure for enforcing a preexisting liability; it is claimed that it created a liability upon prior employers to replace that theretofore abrogated by our decision in Trellsite and provided a constitutionally valid procedure for its enforcement. The conclusion urged upon us is that Act 189, since it is claimed to have created a new substantive liability as well as an enforcement procedure, therefore cannot be applied retroactively to claims arising before its effective date without running afoul of constitutional obstacles. We do not accept such conclusion.

Section 9, Part VII, as considered in Trellsite, read as follows:

'The total compensation due shall be recoverable from the employer who last employed the employee in the employment to the nature of which the disease was due and in which it was contracted. If, however, such disease was contracted while such employe was in the employment of a prior employer, the employer who is made liable for the total compensation as provided by this section my appeal to said board for an apportionment of such compensation among the several employers who since the contraction of such disease shall have employed such employe in the employment to the nature of which the disease was due. Such apportionment shall be proportioned to the time such employe was employed in the service of such employers, and shall be determined only after a hearing, notice of the time and place of which shall have been given to every employer alleged to be liable for any portion of such compensation. If the board finds that any portion of such compensation is payable by an employer prior to the employer who is made liable for the total compensation as provided by this section, it shall make an award accordingly in favor of the last employer, and such award may be enforced in the same manner as an award for compensation.'

While it is true that in Smith v. Lawrence Baking Company (1963), 370 Mich. 169, 121 N.W.2d 684, we treated the first sentence of the quoted section as unaffected by our decision in Trellsite, we did not attempt in Smith, nor have we attempted subsequently, to delineate specifically how much of the language of former section 9, Part VII was invalidated by our decision in Trellsite. It is important to do so now because of appellees' contentions.

It may be conceded that Trellsite may be read as broadly as it is read by appellees and, so read, that the result urged upon us by appellees would have to follow. However, the Court's opinion in Trellsite need not be read so broadly, and, in our judgment, it should not be.

Trellsite presented for the Court's decision only the constitutional validity of the procedure for apportioning liability among a claimant's last and prior employers. For failure to provide prior employers notice of, and an opportunity to participate in, the hearing at which the claimant's right to compensation was adjudicated, this Court in Trellsite declared unconstitutional the provisions of the statute for apportionment of the liability among such employers. In other words, the procedure for invoking the last employer's right of apportionment was declared invalid. However, it was not necessary for decisional purposes in Trellsite to declare the statutory imposition of several liability upon prior employers invalid, nor did we do so in express language. We perceive no reason now to read into Trellsite more than it was necessary to decide in that case.

Since our decision in Trellsite invalidated only the procedural provisions of former section 9, Part VII, which were found to be constitutionally deficient, the following portion was left intact until amended by Act 189:

'The total compensation due shall be recoverable from the employer who last employed the employe in the employment to the nature of which the disease was due and in which it was contracted. If, however, such disease was contracted while such employe was in the employment of a prior employer, the employer who is made liable for the total compensation as provided by this section may appeal to said board for an apportionment of such compensation among the several employers who since the contraction of such disease shall have employed such employe in the employment to the nature of which the disease was due. Such apportionment shall be proportioned to the time such employe was employed in the service of such employers * * *.'

The language of the former section invalidated by our decision in Trellsite read as follows:

'* * * and shall be determined only after a hearing, notice of the time and place of which shall have been given to every employer alleged to be liable for any portion of such compensation. If the board finds that any portion of such compensation is payable by an employer prior to the employer who is made liable for the total compensation as provided by this section, it shall make an award accordingly in favor of the last employer, and such award may be enforced in the same manner as an award for compensation.'

Thus, after Trellsite, while prior employers continued liable to the last employer for their proportionate share of the compensation payable to a claimant disabled by an occupational disease, there was no valid statutory procedure by which the last employer could enforce that liability in proceedings before the workmen's compensation department. When Act 189 became effective, however, the statutory procedural deficiency resulting from our decision in Trellsite was corrected and thereafter the prior employers' liability was enforceable in proceedings before the department at least in those cases in which the employees' claims had not yet been adjudicated finally by a referee, as in this case of Leonard.

We perceive no reason in logic nor in law why the remedial provisions of Act 189 should not be applicable retroactively in those cases in which they may be applied literally. Ample precedent exists for retroactive application of remedial statutes designed to correct defects in existing law or to provide procedures for enforcing existing liabilities, as distinguished from those creating new substantive rights or destroying vested rights.

In Rookledge v. Garwood (1954), 340 Mich. 444, 65 N.W.2d 785, this Court, by unanimous decision, held that an amendment to the workmen's compensation law removing the previous statutory bar...