Manninen v. Warner & Swasey Co., Docket No. 77-818

• Decision Date: 06 December 1977
• Docket Number: Docket No. 77-818
• Citation: 80 Mich.App. 253,263 N.W.2d 341
• Parties: Earl MANNINEN and June Manninen, Plaintiffs-Appellants-Cross Appellees, v. The WARNER & SWASEY COMPANY, a Foreign Corp., and Bark River Culvert Co., a Michigan Corporation, Defendants-Appellees, and Employers Mutual Insurance Co. of Wausau, Wisconsin, a Foreign Corp., Defendant-Appellee-Cross Appellant. 80 Mich.App. 253, 263 N.W.2d 341
• Court: Court of Appeal of Michigan — District of US

Page 341

263 N.W.2d 341

Earl MANNINEN and June Manninen, Plaintiffs-Appellants-Cross Appellees, v. The WARNER & SWASEY COMPANY, a Foreign Corp., and Bark River Culvert Co., a Michigan Corporation Defendants-Appellees and Employers Mutual Insurance Co. of Wausau, Wisconsin, a Foreign Corp., Defendant-Appellee-Cross Appellant.

Docket No. 77-818.

80 Mich.App. 253, 263 N.W.2d 341

Court of Appeals of Michigan.

Dec. 6, 1977.

Released for Publication March 14, 1978.

[80 MICHAPP 254] Wisti & Jaaskelainen by Kermit C. Bryant, Hancock, for Earl and June manninen.

Calvin R. Danhof, Grand Rapids, for Warner & Swasey.

Weis, Cossi & Slade by Russell G. Slade, Ironwood, for Bark River and Employers Mut. Ins.

Before QUINN, P. J., and BASHARA and D. E. HOLBROOK, Jr., JJ.

PER CURIAM.

Plaintiffs appeal from a final order of the Houghton County Circuit Court which affirmed an order granting reallocation of a $25,000 consent judgment. Defendant Employers Mutual also appeals alleging error in the court's reallocation.

Plaintiff, Earl Manninen, was injured while in the course of his employment. He commenced collecting Workmen's Compensation benefits for total and permanent disability. The lawsuit alleged injuries from the negligent design by defendant, Warner & Swasey Company, of a vehicle in which defendant was riding. Plaintiff also complained that defendants, Bark River Culvert Company and Employers Mutual Insurance Company, failed to make a proper inspection of the vehicle.

Plaintiffs subsequently settled with defendant, Warner & Swasey Company, for the sum of $25,000. Initially, the court ordered that $12,500 be [80 MICHAPP 255] paid to each plaintiff with plaintiff, Earl Manninen, to reimburse defendant, Employer's Mutual, for Workmen's Compensation benefits from his share of the judgment only. After Employers Mutual filed objections, the court reallocated the amount of the judgment ordering 1/3 to be paid to plaintiff's attorneys, 1/2 of the balance to Employers Mutual as reimbursement for Workmen's Compensation payments, and the balance to plaintiffs. The court reaffirmed its order on a subsequent motion for rehearing.

The sole issue is whether the trial court correctly apportioned the proceeds of the consent judgment under the statute providing for reimbursement to a Workmen's Compensation carrier. M.C.L.A. § 418.827; M.S.A. § 17.237(827) is the appropriate statute. Its pertinent language is as follows:

"(5) In an action to enforce the liability of a third party, the plaintiff may recover any amount which the employee or his dependents or personal representative would be entitled to recover in an action in tort. Any recovery against the third party for damages resulting from personal injuries or death only, after deducting expenses of recovery, shall first reimburse the employer or carrier for any amounts paid or payable under this act to date of recovery and the balance shall forthwith be paid to the employee or his dependents or personal representative and shall be treated as an advance payment by the employer on account of any future payments of compensation benefits.

"(6) Expenses of recovery shall be the reasonable expenditures, including attorney fees, incurred in effecting recovery. Attorney fees, unless otherwise agreed upon, shall be divided among the attorneys for the plaintiff as directed by the court. Expenses of recovery shall be apportioned by the court between the parties as their interests appear at the time of the recovery."

We believe that the correct application of the [80 MICHAPP 256] statute was set forth in Schalk v. Michigan Sewer Construction Co., 62 Mich.App. 658, 233 N.W.2d 825 (1975), lv. granted, 398 Mich. 810 (1976).

In reference to the statute, the Court said at 660-661, 233 N.W.2d at 827:

"Under M.C.L.A. § 418.827; M.S.A. § 17.237(827), an injured party is permitted to sue a third-party tortfeasor...