Modeen v. Consumers Power Co.

• Decision Date: 01 March 1971
• Docket Number: No. 2,2
• Citation: 384 Mich. 354,184 N.W.2d 197
• Parties: Evelyn MODEEN, Widow of Harold Modeen, Deceased, Plaintiff-Appellant, v. CONSUMERS POWER COMPANY, Defendant-Appellee.
• Court: Michigan Supreme Court

Page 197

184 N.W.2d 197

384 Mich. 354

Evelyn MODEEN, Widow of Harold Modeen, Deceased, Plaintiff-Appellant, v. CONSUMERS POWER COMPANY, Defendant-Appellee.

No. 2.

Supreme Court of Michigan.

March 1, 1971.

Marcus, McCroskey, Libner, Reamon, Williams & Dilley by Jerry S. McCroskey, Muskegon, for plaintiff-appellant.

O. K. Petersen, K. K. Cassell, Jackson, Muskegon, for plaintiff-appellant. Rapids (Edward D. Wells, Grand Rapids, of counsel) for defendant-appellee.

Marcus, McCroskey, Libner, Reamon, Williams & Dilley by Paul A. Williams, Grand Rapids, for amicus curiae Gilbert Mead.

Hayes & Davis, Grand Rapids (Kenneth T. Hayes, Grand Rapids, of counsel), for amicus curiae Peterson-King Co. and U.S. Fidelity & Guaranty Co.

Before the entire bench.

PER CURIAM.

This proceeding was instituted before the workmen's compensation department. It presents exclusively the same jurisdictional question which, in Mead v. Peterson-King Co., 24 Mich.App. 530, 533--534, 180 N.W.2d 304 (1970), was dealt with by Division 3 as the 'first issue on appeal.' By our order of August 26, 1970, entered upon application for leave to review Mead, the latter was held in abeyance pending decision of the appeal now at bar.

February 13, 1959 Harold Modeen, a regular employee of self-insuring Consumers Power Co., sustained a compensable injury arising out of and in the course of his employment. He engaged counsel (Sessions and Barlow of Muskegon) to sue certain allegedly negligent third parties, pursuant to the 1952 amendment of section 15 of part III of the workmen's compensation law (M.C.L.A. 413.15; M.S.A. 17.189). By agreement of employee Modeen and employer Consumers, the latter did not join in the suit but did cooperate fully with Mr. Modeen in the prosecution thereof. It is stipulated that, as the suit neared trial, '* * * a settlement was reached between Mr. Modeen and Consumers Power Co. on one side and certain of the defendants (Wilde and Reeths) for a total of $75,000.' May 15, 1961 the suit as against defendants Wilde and Reeths was dismissed with prejudice upon stipulation and order of the court. Separately and on the same date the remaining defendant was correspondingly dismissed, apparently without monetary contribution. Excepting as noted in this opinion, all details of the agreed settlement and final disposition of the suit appear in the appeal board's opinion, quoted Post.

The general release of third party defendants Wilde and Reeths was signed by Mr. Modeen and also by his wife. She is the present plaintiff. The release is in the usual unconditional form and needs no expatiation. The release by Consumers Power Co. of the same defendants was executed and delivered separately. Consumers' May 22, 1961 letter to Sessions and Barlow, by which Consumers paid its agreed share of 'attorneys fees and expenses' incurred in connection with the third party suit, reads as follows:

'Gentlemen:

'Enclosed, pursuant to our agreement, is Consumers Power Company's check No. 767, dated May 18, 1961, made payable to Sessions & Barlow, in the amount of $3,450.08.

'This check is in full payment of Consumers Power Company's share of attorneys' fees and expenses in the above matter.'

Mr. Modeen died in 1966 from causes not related to his compensable injury. Shortly thereafter his widow engaged present counsel to file the instant application for claimed benefits under the workmen's compensation law, 'requesting apportionment of the costs of the third party recovery week by week against the employer.' The opinion of the appeal board, on review of denial by the referee of the plaintiff's application, proceeded to affirmance this way:

'Plaintiff suffered a personal injury that arose out of and in the course of his employment on 2--13--59, and received compensation voluntarily paid at the rate of $40.00 per week until 4--22--61, when a third-party settlement in the total amount of $75,000.00 was concluded. Workmen's compensation and medical expenses paid by defendant amounted to $11,450.08 leaving a gross sum of $63,549.92 against which was charged attorney fee of $16,678.09, and other expenses of recovery of.$121.34. Thus, attorney fees and other expenses of recovery amounted to 26.4% Of the third-party settlement proceeds. Defendant had already paid $3,321.91 on his (its) share of the total expenses of recovery, including attorney fees, amounting to $20,121.34.

'After the third-party settlement, plaintiff remained totally disabled until the date of his death on 8--21--66, of causes unrelated to his personal injury of 2--13--59.

'Upon plaintiff's death, his widow filed a petition for hearing which the referee denied and credited defendant for compensation voluntarily paid.'

Then, having quoted portions of section 15 with emphasis of the sentence:

'The expenses of recovery above mentioned shall be apportioned by the court between the parties as their interests appear at the time of said recovery.'; the board went on to rule, in praiseworthy compendium:

'This Board not being the 'Court' mentioned in the Statute does not have the power to 'apportion' the 'expenses of recovery."

May 14, 1969 the Court of Appeals denied leave to appeal, ruling 'lack of merit in the grounds presented.' This Court, being informed of the upcoming pendency of the Mead Case, supra granted leave to review July 15, 1969 (382 Mich. 769).

No question of Mrs. Modeen's right if any to dependency benefits, under the workmen's compensation law, is involved. Today's issue is sharp; whether in the light of the arms-length settlement agreed to under the statute, both by the employee and his widow with the assistance of able counsel, the department is vested with jurisdiction to provide for the plaintiff widow more 'apportionment' than she and her husband obtained when they signed off in May of 1961. To provide due understanding of the contention we quote plaintiff's counsel directly:

'In a nutshell what plaintiff wants is to be reimbursed for the cost of recovery of each week's credit the employer takes As it is taken, surely not an exorbitant and preposterous request. Our problem is that although our request seems reasonable we can't find a forum to make it in.' (Emphasis supplied by counsel.)

Then, having referred to the appeal board's presently quoted opinion and to said section 16, counsel proceed:

'The workmen's compensation appeal board members are reluctant to assert its authority in this situation; they feel they are not a 'court' (which is true) and they apparently feel that this ongoing apportionment of the recovery is reserved by the statute to a 'court' (which we feel is not true). Thus, the tribunal charged by law with responsibility for determination of all other compensation problems is diffident...