McAvoy v. H. B. Sherman Co.
Decision Date | 11 October 1977 |
Docket Number | Nos. 58845,SELF-INSURERS,s. 58845 |
Parties | Ralph McAVOY, Plaintiff-Appellee, v. H. B. SHERMAN COMPANY and American Mutual Liability Insurance Company, Defendants-Appellants. Wiley STRICKLIN, Plaintiff-Appellee, v. AMERICAN CHAIN & CABLE COMPANY, INC., and American Mutual Liability Insurance Company, Defendants-Appellants. Thomas TURNER, Plaintiff-Appellee, v. GENERAL MOTORS CORPORATION, Defendant-Appellant. MICHIGAN' ASSOCIATION, a Michigan Non-Profit Corporation, on behalf of itself and its members, Plaintiff-Appellant, v. STATE of Michigan, Bureau of Workmen's Compensation and Ernest C. Fackler, its Director, Workmen's Compensation Appeal Board and Michael J. Gillman, its Chairman, and Second Injury Fund and Gary L. Calkins, its Administrator, Defendants-Appellees. to 58846, 58983 and 58855. |
Court | Michigan Supreme Court |
Kasoff, Young, Gottesman, Kovinsky, Friedman & Walkon, P. C. by Irwin J. Kasoff, Southfield, for plaintiff-appellee (Ralph McAvoy).
Marston, Sachs, Nunn, Kates, Kadushin & O'Hare, P. C. by Robert G. Hodges, Detroit, for plaintiff-appellee (Wiley Stricklin).
Conklin, Benham, McLeod, Ducey & Ottaway, P. C. by Thomas P. Chuhran, Detroit, for defendants-appellants.
Lopatin, Miller, Bindes, Freedman & Bluestone by Michael A. Gantz, Detroit, Assisted by Joel Alpert, Law Clerk, for plaintiff-appellee.
Plunkett, Cooney, Rutt, Watters, Stanczyk & Pedersen by Edward K. Pedersen Honigman, Miller, Schwartz & Cohn by Robert A. Fineman, Detroit, for plaintiff-appellant.
Jr., Jeannette A. Paskin, Detroit, for defendant-appellant; Frazer F. Hilder, Gen. Counsel, Thomas W. Watkins, James A. Durkin, Gen. Motors Corp., Detroit, of counsel.
Frank J. Kelley, Atty. Gen., Robert A. Derengoski, Sol. Gen., E. J. Setlock, Asst. Atty. Gen., Detroit, for defendants-appellees.
Beaumont, Smith & Harris by Dwight H. Vincent and J. Walker Henry, Detroit, for Michigan Manufacturers Assn., et al.
Theodore Sachs, Detroit, for Michigan AFL-CIO; Robert W. Howes (P 23191), Kelman, Loria, Downing, Schneider & Simpson, Detroit, of counsel.
We granted leave in these consolidated worker's compensation cases in order to consider whether 1975 P.A. 34, M.C.L.A. § 418.862; M.S.A. § 17.237(862), comports, on its face and as applied, with certain fundamental constitutional mandates. 1975 P.A. 34 is commonly referred to as the "70% statute". It provides that a claim for review filed by a self-insured employer or a carrier from a worker's compensation award entered by a hearing referee shall not operate as a stay of payment to the claimant of 70% of the weekly benefit.
The statute also provides, in its disputed part, that if the weekly benefit is reduced or rescinded by a final determination upon appeal, the self-insured employer or carrier shall be entitled to reimbursement from the second injury fund for compensation paid during the appellate process in excess of the amount finally determined.
The appellant employers, insurance carriers and self-insurers contend that the foregoing legislative enactment is unconstitutional. They maintain, inter alia, that the instant statute violates (a) various due process guarantees, both procedural and substantive, as articulated in both the United States Constitution and the Michigan Constitution of 1963; (b) traditional equal protection guarantees as set forth in both Constitutions, and, (c), certain proscriptions against the impairment of contracts as found in both Constitutions. Lastly, (d), the appellants maintain the Worker's Compensation Appeal Board exceeds the scope of its authority when it dismisses appeals for noncompliance with the 70% statute.
We have examined all of appellants' contentions in the light of the broad philosophical tenets underpinning Michigan's Worker's Disability Compensation Act; we have scrutinized both the specific language of the 70% statute and the legislative intent underlying the act; and, we have looked to established legal precedent in both our jurisdiction and others in examining the appellants' legal and constitutional positions. We conclude that 1975 P.A. 34, the "70% statute", is constitutional on its face and as applied.
Accordingly, we affirm the Court of Appeals decision which held the instant statute constitutional and found that the Worker's Compensation Appeal Board does not exceed its authority by dismissing the appeals of appellants who do not comply with the statute's mandates.
There is no dispute as to the "facts" in the instant case. Therefore, we adopt the Court of Appeals statement of facts:
"This case consists of several consolidated appeals from orders of the Workmen's Compensation Appeal Board (hereinafter Appeal Board) dismissing the defendant's appeals from decisions of hearing referees for failure to comply with 1975 P.A. 34; M.C.L.A. 418.862; M.S.A. 17.237(862). The appeals are by leave granted and challenge the constitutionality of that statute and the Appeal Board's authority to enforce the statute by dismissing appeals.
70 Mich.App. 532, 535, 246 N.W.2d 631, 632 (1976).
As the Court of Appeals implies, the factual sequences in McAvoy v. H. B. Sherman Company and Stricklin v. American Chain and Cable Company, the consolidated cases, are identical to the Turner v. General Motors sequence. Furthermore, the legal arguments presented by the defendant-appellant employers and insurance carriers as to the constitutionality of 1975 P.A. 34 are virtually identical in all these cases.
This Court granted leave in the Turner et al. cases on October 13, 1976, and consolidated them with Michigan Self-Insurers' Association v. Bureau of Workmen's Compensation, 70 Mich.App. 565-567, 246 N.W.2d 316 (1976). The legal issues in Self-Insurers are identical with those in Turner et al. The Court of Appeals pointed out this fact in its brief opinion in Self-Insurers :
Therefore, the Michigan Self-Insurers' Association joins the various employers and carriers as the appellants herein. Turner, McAvoy, Stricklin and the Worker's Compensation Bureau et al are the appellees.
This Court perceives the principal issue in this case to be whether 1975 P.A. 34, M.C.L.A. § 418.862; M.S.A. § 17.237(862) provides for a taking of property from self-insured employers or carriers without procedural or substantive due process of law.
1975 P.A. 34 provides for the following legislative schema:
Appellants maintain that this statute denies them procedural due process 1 in that it requires payment of 70% of the hearing referee's award pending appeal without the traditional stay of payment during the appellate process. Appellants further contend that this "70%" provision effectively denies them their right to appeal as guaranteed by Const. of 1963, art. 6, § 28.
Appellants also maintain that the 70% statute denies them substantive due process in that any reimbursement which they receive after a hearing referee's award is reversed must come from the second injury fund, a fund which the appellants themselves are required to keep solvent. Appellants contend that this reimbursement procedure constitutes a confiscatory taking of property and thus renders the statute unconstitutional. We will examine these two due process issues separately.
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