Morley v. General Motors Corp.

• Decision Date: 19 July 2002
• Docket Number: Docket No. 233923,Docket No. 234298.,Docket No. 233929
• Citation: 252 Mich. App. 287,651 N.W.2d 808
• Parties: Laurie MORLEY, Plaintiff-Appellant, and Bureau of Worker's Disability Compensation, Intervening Plaintiff, v. GENERAL MOTORS CORPORATION BOC Orion Assembly, Defendant-Appellee. Laurie Morley, Plaintiff, and Bureau of Worker's Disability Compensation, Intervening Plaintiff-Appellant, v. General Motors Corporation BOC Orion Assembly, Defendant-Appellee. Wanda Benford, as Personal Representative of the Estate of Gregory Benford, Deceased, Plaintiff-Appellant, v. Delphi Automotive Systems Corporation, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

651 N.W.2d 808

252 Mich. App. 287

Laurie MORLEY, Plaintiff-Appellant, and Bureau of Worker's Disability Compensation, Intervening Plaintiff, v. GENERAL MOTORS CORPORATION BOC Orion Assembly, Defendant-Appellee.

Laurie Morley, Plaintiff, and Bureau of Worker's Disability Compensation, Intervening Plaintiff-Appellant, v. General Motors Corporation BOC Orion Assembly, Defendant-Appellee.

Wanda Benford, as Personal Representative of the Estate of Gregory Benford, Deceased, Plaintiff-Appellant, v. Delphi Automotive Systems Corporation, Defendant-Appellee.

Docket Nos. 233923, 233929, 234298.

Court of Appeals of Michigan.

Submitted June 11, 2002, at Lansing.

Decided July 19, 2002, at 9:10 a.m.

Released for Publication October 6, 2002.

Clayton & Mulder (by Kenneth D. Clayton), Waterford, for Laurie Morley.

Jennifer M. Granholm, Attorney General, Thomas L. Casey, Solicitor General, and Victoria A. Keating, Assistant Attorney General, for Bureau of Worker's Disability Compensation.

Clayton & Mulder (by Mark W. Mulder), Waterford, for Wanda Benford.

Conklin, Benham, Ducey, Listman & Chuhran, P.C. (by Martin L. Critchell), Detroit, for General Motors Corporation and Delphi Automotive Systems Corporation.

Before: OWENS, P.J., and SAWYER and COOPER, JJ.

PER CURIAM.

In these consolidated appeals, plaintiffs Laurie Morley and Wanda Benford, as personal representative of the estate of Gregory Benford, deceased, appeal by leave granted from orders of the Worker's Compensation Appellate Commission (WCAC) reversing the imposition of penalties on defendants for failing to make timely payments under voluntary payment agreements. We reverse.

Morley and Gregory Benford sustained work-related injuries and petitioned the bureau for benefits. Both plaintiffs resolved their claims by entering into voluntary payment agreements with their respective employers. These agreements were signed by magistrates and personally served on the parties. Neither plaintiff received the payment provided for under their respective voluntary agreements within the thirty days following the time their agreements were signed by the magistrate and served on the parties. After failing to timely receive the benefits due under their voluntary payment agreements, plaintiffs requested penalties pursuant to M.C.L. § 418.801.¹ The magistrate in each case concluded that the voluntary payment agreements were enforceable and that the penalties for the late payments began to accrue thirty days after the agreements were signed and served on the parties.

The WCAC reversed these decisions and concluded that no authority existed for awarding penalties because the voluntary payment agreements failed to constitute enforceable orders. According to the WCAC, M.C.L. § 418.801 only recognized orders on the merits and redemption agreements as enforceable payment obligations. The WCAC reasoned that granting voluntary payments enforceable weight would circumvent the dispute resolution process established by the Legislature. Furthermore, the WCAC noted that M.C.L. § 418.831 provides that the payment or acceptance of benefits does not constitute a determination of the parties' rights under the Worker's Disability Compensation Act (WDCA), M.C.L. § 418.101 et seq. The WCAC asserted that imposing a punishment for breaking a voluntary promise to pay benefits would interfere with the protection established under that statute. On the basis of this rationale, the WCAC declared subrule 3(2)(b), 1980 AACS, R. 408.33(2)(b), to be unenforceable.

On appeal, plaintiffs contend that the WCAC erroneously concluded that subrule 3(2)(b) conflicts with the worker's compensation statute, thereby rendering voluntary payment agreements unenforceable and not subject to late payment penalties. We agree. We review de novo questions of law involved in a final order of the WCAC. Mudel v. Great Atlantic & Pacific Tea Co., 462 Mich. 691, 697, n. 3, 614 N.W.2d 607 (2000).

The bureau director is authorized to establish rules to carry out the provisions of the WDCA. M.C.L. § 418.205. A rule adopted by an agency in accordance with the Administrative Procedures Act, M.C.L. § 24.201 et seq., is a legislative rule that has the force and effect of law. Clonlara, Inc. v. State Bd. of Ed., 442 Mich. 230, 239-240, 501 N.W.2d 88 (1993). The bureau instituted subrule 3(2)(b), which states:

(2) The following subdivisions shall govern the administration and enforcement of the penalty provisions provided under section 801 of the act:

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(b) When a case is in litigation and the defendant agrees to pay benefits on a voluntary basis, then the administrative law judge shall specify the weekly compensation rate, the period of time for which accrued benefits have become due, and which medical bills shall be paid by the carrier as a result of the injury or disability. If the benefits agreed to are not paid within 30 days of the date the agreement is formalized by the administrative law judge, then the carrier shall pay to the employee $50.00 per day for each day after 30 days that the benefits remain unpaid, not to exceed $1,500.00.

The fact that the WDCA explicitly recognizes decisions on the merits and redemptions as methods by which worker's compensation cases can be resolved does not preclude resolution by voluntary payment agreements. Indeed, M.C.L. § 418.801(2)...