McCaslin v. General Motors Corp., Saginaw Steering Gear Div., Docket No. 68723

• Decision Date: 07 June 1984
• Docket Number: Docket No. 68723
• Citation: 349 N.W.2d 544,133 Mich.App. 782
• Parties: Jilann McCASLIN, Plaintiff-Appellee, v. GENERAL MOTORS CORPORATION, SAGINAW STEERING GEAR DIVISION, Defendant-Appellant. 133 Mich.App. 782, 349 N.W.2d 544
• Court: Court of Appeal of Michigan — District of US

Page 544

349 N.W.2d 544

Jilann McCASLIN, Plaintiff-Appellee, v. GENERAL MOTORS CORPORATION, SAGINAW STEERING GEAR DIVISION Defendant-Appellant.

Docket No. 68723.

133 Mich.App. 782, 349 N.W.2d 544

Court of Appeals of Michigan.

Submitted Feb. 8, 1984.

Decided April 17, 1984.

Released for Publication June 7, 1984.

[133 MICHAPP 784] Davidson, Breen & Doud, P.C. (by Richard J. Doud), Saginaw, for plaintiff-appellee.

Otis M. Smith, Gen. Counsel, and Willard W. Wallace, Jr., Detroit, and Braun, Kendrick, Finkbeiner, Schafer & Murphy by E. Louis Ognisanti and Michael J. Jordan, Saginaw, for defendant-appellant.

Before CYNAR, P.J., J.H. GILLIS and ANDERSON, ^* JJ.

PER CURIAM.

Defendant appeals, by leave granted, from an opinion and order of the Worker's Compensation Appeal Board (WCAB). The WCAB, one member dissenting, affirmed the decision of the hearing officer ordering defendant to pay the maximum penalty of $1,500 for failure to pay interest on a final award, M.C.L. Sec. 418.801(2); [133 MICHAPP 785] M.S.A. Sec. 17.237(801)(2), and ordering that the interest be paid.

The facts are not disputed. In July, 1979, plaintiff, Jilann McCaslin, injured her back while employed by defendant, General Motors Corporation. Following plaintiff's petition for benefits, a hearing was held before a hearing officer. On September 30, 1980, the hearing officer entered a decision ordering defendant to pay the following benefits: (a) for the period of July 7, 1979, through October 7, 1979, defendant was ordered to pay weekly benefits at the rate of $173 per week; (b) for the period of February 7, 1980, through March 30, 1980, defendant was ordered to pay weekly benefits at the rate of $188 per week; (c) for the period of April 5, 1980, through September 12, 1980, and until further order of the Bureau, defendant was ordered to pay $188 per week, subject to section 361 of the Act; (d) payment of unpaid medical expenses and mileage expenses; and (e) payment of Blue Cross--Blue Shield lien. The award provided that defendant pay interest "at the rate of 5% per annum from the date each payment was due until paid". The award further provided that defendant would be given credit for all amounts it had voluntarily paid.

Defendant is self-insured under the Worker's Disability Compensation Act. Prior to the hearing officer's September 30, 1980, award, defendant had been paying plaintiff a weekly disability allowance equal to the amount she was ultimately entitled to receive under the act, as reflected in the hearing officer's award. Following the award, the only past due amount which had not been paid pursuant to the General Motors Disability Advance (GMDA) program was for the period of April 5, 1980, through September 12, 1980. Following issuance of [133 MICHAPP 786] the award, defendant paid this amount, plus five percent interest. The fees paid to plaintiff's attorney were computed on the basis of the entire award, including the amounts paid under the GMDA program. Defendant also made a bookkeeping transfer so that the money previously paid pursuant to the disability advance program was debited against its worker's disability compensation account. Defendant did not appeal the hearing officer's order and began paying benefits pursuant to the open award.

Thirty days after the time for appealing the award had expired, plaintiff petitioned for payment of the $50-per-day penalty provided by Sec. 801(2), based on defendant's failure to pay interest on the award. On August 28, 1981, a hearing was held on plaintiff's petition before the hearing officer. At the hearing, the parties agreed that all amounts due under the award had been paid. The only issue was whether defendant should be required to pay the five percent interest on the amounts it had paid plaintiff through the GMDA program prior to the award. Defendant argued that the basis for awarding interest is to compensate the employee for the denial of the use of funds which are later determined to be due to the employee. Therefore, since the plaintiff had not been denied the use of funds, there was no interest due under the award. Further, even if plaintiff's contentions were correct, the ongoing dispute over the matter prevented assessment of a penalty. The plaintiff argued that the way the payments were categorized was controlling and that defendant owed five percent interest from the date of each payment until the bookkeeping transfer made pursuant to the hearing officer's award.

On October 20, 1981, the hearing officer rendered[133 MICHAPP 787] his decision, ordering that the interest be paid and assessing the maximum penalty of $1,500 pursuant to M.C.L. Sec. 418.801(2); M.S.A. Sec. 17.237(801)(2). From this decision defendant appealed to the WCAB and plaintiff filed a cross-appeal.

On November 29, 1982, the WCAB issued an opinion affirming the hearing officer's order. The WCAB held that res judicata precluded the defendant's challenge to the award of interest in the hearing officer's original September 20, 1979, order. Since the award was not complied with, the WCAB held that the penalty was proper. The dissenting member stated that the imposition of the penalty was not proper in the instant case. This member did not believe that Sec. 821(2), M.C.L. Sec. 418.821(2); M.S.A. Sec. 17.237(821)(2), which authorized the procedure by which defendant received credit for its advance payments, or the ...