Lincoln v. General Motors Corp.

• Decision Date: 21 August 1998
• Docket Number: Docket No. 204560
• Parties: Arthur L. LINCOLN, Plaintiff-Appellee, v. GENERAL MOTORS CORPORATION, Defendant-Appellee, and Second Injury Fund (Total & Permanent Disability Provisions), Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 241

586 N.W.2d 241

231 Mich.App. 262

Arthur L. LINCOLN, Plaintiff-Appellee, v. GENERAL MOTORS CORPORATION, Defendant-Appellee and Second Injury Fund (Total & Permanent Disability Provisions), Defendant-Appellant.

Docket No. 204560.

Court of Appeals of Michigan.

Submitted April 9, 1998, at Detroit.

Decided Aug. 21, 1998, at 9:00 a.m.

Released for Publication Nov. 18, 1998.

Randall K. Caryl, Flint (Kelman, Loria, Simpson, Will, Harvey & Thompson, by Ann Curry Thompson, Detroit, of Counsel), for plaintiff.

Frank J. Kelley, Attorney General, Thomas L. Casey, Solicitor General, and Morrison Zack, Assistant Attorney General, for the Second Injury Fund.

Before WHITBECK, P.J., and MacKENZIE and MURPHY, JJ.

MURPHY, Judge.

On remand from the Supreme Court for consideration as on leave granted, 567 N.W.2d 242, 455 Mich. 852 (1997), defendant Second Injury Fund appeals a decision of the Worker's Compensation Appellate Commission affirming a magistrate's modification of plaintiff's benefit award. We affirm.

Plaintiff sustained a work-related injury in 1966 while employed by defendant General Motors Corporation and was awarded total and permanent disability benefits on the basis of the loss of the industrial use of both legs. Plaintiff remained disabled after the expiration of the eight hundred-week statutory period of presumed disability and continued to receive benefits from both defendants. Plaintiff reached the age of sixty-five in 1981, and in 1985 the Second Injury Fund reduced plaintiff's differential weekly benefits to twenty-five percent of the state's average weekly wage pursuant to Lopez v. Flower Basket Nursery, 122 Mich.App. 680, 332 N.W.2d 630 (1982). The fund further reduced plaintiff's benefits to recoup the overpayment of benefits in the previous twelve months. Plaintiff did not timely challenge these reductions.

Plaintiff filed an application seeking reinstatement of the reduced benefits pursuant to Wozniak v. General Motors Corp., 198 Mich.App. 172, 497 N.W.2d 562 (1993) (Wozniak I ). The magistrate concluded that defendants were entitled to continue to take the age sixty-five reduction pursuant to Rotondi v. Chrysler Corp., 200 Mich.App. 368, 504 N.W.2d 901 (1993), but did not reach the other issues. On appeal, the Worker's Compensation Appellate Commission affirmed the magistrate's reliance on Rotondi and noted that plaintiff's benefits could not be reduced below the minimum level established by M.C.L. § 418.351(2); MSA 17.237(351)(2). Pursuant to Wozniak v. General Motors Corp. (After Remand), 212 Mich.App. 40, 536 N.W.2d 841 (1995) (Wozniak II ), the commission observed that the one-year-back rule, M.C.L. § 418.833(1); MSA 17.237(833)(1), does not apply to limit recovery of any underpayments in violation of subsection 351(2).

This Court denied the fund's application for leave to appeal in an unpublished order entered September 11, 1996 (Docket No. 194191). The Supreme Court, in lieu of granting leave to appeal, remanded the matter to the Court of Appeals for consideration as on leave granted, directing this Court to address whether Wozniak I should be applied retroactively to plaintiffs who failed to timely object when their benefits were reduced pursuant to Lopez.

In Lopez, a panel of this Court sanctioned the application of the age sixty-five reduction in benefits set forth in M.C.L. § 418.357(1); MSA 17.237(357)(1) to employees who reached the age of sixty-five after July 1, 1968. In Wozniak I this Court conducted a detailed analysis of the revisions in the statutes governing the age sixty-five reduction and the case law interpreting those statutes and concluded that Lopez was wrongly decided. The Wozniak I Court concluded that the minimum-benefit provision of M.C.L. § 418.351(2); MSA 17.237(351)(2) was not affected by the age sixty-five reduction. For totally and permanently disabled workers whose date of injury precedes July 1, 1968, the age sixty-five reduction in subsection 357(1) cannot reduce the worker's benefit below the minimum established by subsection 351(2). Wozniak I, supra at 182, 497 N.W.2d 562.

As a general rule, judicial decisions are given complete retroactive effect, while legislative changes are usually prospective. Riley v. Northland Geriatric Center (After Remand), 431 Mich. 632, 647, 433 N.W.2d 787 (1988). In the context of worker's compensation law, the Supreme Court has made exceptions to the general rule when it has issued decisions that have had an effect similar to the announcement of a new rule of law. In Gusler v. Fairview Tubular Products, 412 Mich. 270, 315 N.W.2d 388 (1981), the Court corrected a misinterpretation of the act with regard to the adjustment of minimum benefits under M.C.L. § 418.351; MSA 17.237(351). The Court gave its holding prospective application, stating:

Although our holding is based on what we perceive to have been the intent of the Legislature at the time of enactment of the provisions discussed, in practical effect, given the contrary interpretations of the law by the Director of the Bureau of Workers' Compensation and the bureau's subdivisions, the Workers' Compensation Appeal Board and its hearing referees, and the Court of Appeals, today's holding is not unlike the announcement of a new rule of law. Its application therefore should be treated accordingly. See Whetro v. Awkerman, 383 Mich. 235, 174 N.W.2d 783 (1970); Parker v. Port Huron Hospital, 361 Mich. 1, 105 N.W.2d 1 (1960); Bricker v. Green, 313 Mich. 218, 21 N.W.2d 105 (1946). [Gusler, supra at 298, 315 N.W.2d 388.]

The Court revisited the prospective application of Gusler in Riley, supra. The Court noted that certain rules or principles have evolved that provide guidance in resolving the retroactive-prospective dilemma. A court must weigh (1) the purpose to be served by the new rule, (2) the extent of reliance on the old rule, and (3) the effect of retroactivity on the administration of justice. Riley, supra at 645-646, 433 N.W.2d 787.

As applied to this case, these principles mandate the retroactive application of Wozniak I. The purpose of the Wozniak I holding was to correct a misapplication of the age sixty-five reduction to a class of workers who were injured before 1968. The Legislative intent was never to reduce benefits for this class of injured workers below the minimum level of subsection 351(2). While the Second Injury Fund may have relied on this Court's ruling in Lopez, its reliance was misplaced. The application of the age sixty-five reduction has been extensively litigated in the bureau since Lopez, and the fund should have been well aware that Lopez did not definitively decide the question. Wozniak I, supra. Applying Wozniak I retroactively would further the administration of justice. While the Second Injury Fund may incur additional liabilities, the injured workers should be paid the full amount of the benefits to which they are entitled. The burden of compensating for an erroneous legal decision should not be placed on an elderly group of disabled workers. The fact that plaintiff failed to timely object to the application of the Lopez reduction does not disqualify plaintiff from receiving the retroactive application of Wozniak I. Where a decision is given full retroactivity, its application is not limited to those who raised the issue in a timely manner. Riley, supra at 649, n. 11, 433 N.W.2d 787.

Defendant fund argues that any retroactivity should be limited by the one-year-back rule, M.C.L. § 418.833(1); MSA 17.237(833)(1). However, this question has been conclusively decided in the successor case of Wozniak II, supra. A plaintiff's attempt to recover payments improperly withheld does not constitute an application for further compensation as defined by the statute. The two-year-back rule, M.C.L. § 418.381(2); MSA 17.237(381)(2), is inapplicable where the plaintiff has been receiving total and permanent disability benefits for an injury received before July 1, 1968. Brecht v. Save-Way Food Center, 407 Mich. 743, 288 N.W.2d 576 (1980). The one-year-back and two-year-back rules provide the limiting structure for back benefits in the Worker's Disability Compensation Act contemplated by the Legislature. Where these rules are inapplicable, Wozniak I should be given full retroactive effect in favor of those who did not initially object to the reduction of benefits pursuant to Lopez.

Affirmed.

MacKENZIE, J., concurred.

WHITBECK, Presiding Judge, (concurring ).

I concur with the result of the majority opinion, but through a different analysis. First, I believe we must place this matter within the context of the overall legislative scheme of the Worker's Disability Compensation Act (WDCA), M.C.L. § 418.101 et seq.; MSA 17.237(101) et seq., for worker's compensation in this state. Although this scheme is agonizingly complex--indeed, one might claim that it is incomprehensible to the ordinary claimant, the ordinary attorney, or the ordinary appellate judge--I believe we should attempt to provide some clarity regarding the context of the important, and endlessly controversial, principles involved. Further, it is only through such an analysis that one can fully appreciate the lack of merit of the position taken by defendant-appellant Second Injury Fund in this matter. Consequently, and although setting the context is a lengthy and tedious process and although I may be entering ground onto which even the purest of seraphim fear to tread, I have attempted below to provide such a context.

Second, the majority's opinion responds to only one aspect of the Supreme Court's remand to us in this matter. The Supreme Court directed us to consider "whether Wozniak v. General Motors Corp., 198 Mich.App. 172 [497 N.W.2d 562 (1993) (Wozniak I ) ], is retroactive in favor of those who did not object to the reduction in benefits made pursuant to Lopez v. Flower Basket Nursery, 122 Mich.App. 680 (1982)." 567 N.W.2d 242, 455 Mich. 852 (1997) (emphasis...