Morris v. Baker Auto Parts, Docket No. 20220

• Decision Date: 27 November 1974
• Docket Number: Docket No. 20220,No. 3,3
• Citation: 57 Mich.App. 65,225 N.W.2d 179
• Parties: Ray E. MORRIS, Plaintiff-Appellee, v. BAKER AUTO PARTS and Employers Mutual Casualty Company, Defendants-Appellants, and Gerald DeYoung et al., Defendants-Appellees
• Court: Court of Appeal of Michigan — District of US

Page 179

225 N.W.2d 179

57 Mich.App. 65

Ray E. MORRIS, Plaintiff-Appellee, v. BAKER AUTO PARTS and Employers Mutual Casualty Company Defendants-Appellants and Gerald DeYoung et al., Defendants-Appellees.

Docket No. 20220.

Court of Appeals of Michigan, Division No. 3.

Nov. 27, 1974.

Rehearing Denied Jan. 7, 1975.

Released for Publication Jan. 31, 1975.

Kenneth L. Block, Cholette, Perkins & Buchanan, Grand Rapids, for Baker and Empl. Mut.

Ray E. Morris, in pro. per.

James A. Sullivan, Detroit, for Lustre and Am. Auto.

Albert J. Russell, Grand Rapids, for DeYoung and Citizens.

Before HOLBROOK, P.J., and T. M. BURNS and VanVALKENBURG,* JJ.

HOLBROOK, Presiding Judge.

While in the employ of defendant Baker Auto Parts in 1966, plaintiff suffered an injury to his left elbow which necessitated an operation to transplant his ulnar nerve. Plaintiff petitioned on August 28, 1967, for a hearing on his claim for compensation. By decision dated May 17, 1968, the referee found in plaintiff's favor. In November 1969 plaintiff petitioned for another hearing. The hearing was held in May 1972 and plaintiff was awarded continuing partial disability compensation. The award was affirmed by the Workmen's Compensation Appeal Board (hereinafter referred to as WCAB), on April 5, 1974, with the exception that the WCAB ordered that interest be paid at the rate of 6% Per annum from the date each weekly payment was due until paid rather than 5% As ordered by the referee. Leave to appeal was granted by this Court on August 21, 1974, restricted to the propriety of the award of 6% Interest, and we further ordered that past due payments be made forthwith together with interest at 5%, holding in abeyance the additional 1% Interest. We are now advised that $12,658.82 for 182 weeks compensation plus 5% Interest and some other compensation has since been paid.

In Maxwell v. General Motors Corp., Fleetwood Division, WCO 1973, No. 1075 the WCAB began to order 6% Interest be paid in its awards. In this state, interest had not been allowed on workmen's compensation awards until Wilson v. Doehler-Jarvis Division of Nat'l Lead Co., 358 Mich. 510, 100 N.W.2d 226 (1960). Wilson expressly overruled Fowler v. Muskegon County, 340 Mich. 522, 65 N.W.2d 801 (1954). Fowler had held that as interest in Michigan was purely statutory and there was no provision in the workmen's compensation law therefor, interest could not be awarded. In Wilson, at 358 Mich. 514--517, 100 N.W.2d 228--229, Mr. Justice Voelker, speaking for the Supreme Court, wrote:

'The workmen's compensation act neither provides for, nor borbids, the allowance of interest by the circuit court; the subject is simply not mentioned. The question is, does the circuit court have authority to allow the legal rate of interest when it enters a judgment on a compensation award? In the Fowler Case we said that interest is purely statutory, yet the fact is that we have consistently allowed interest in many cases in which no express statute could be invoked. See Hammond v. Hannin, 21 Mich. 374 (1870) (damages for breach of contract to convey land); McCreery v. Green, 38 Mich. 172 (1878) (fraudulent conveyance, breach of contract); Snow v. Nowlin, 43 Mich. 383, 5 N.W. 433 (1880) (fraudulent conveyance); Taylor v. Bay City St. Railway Co., 101 Mich. 140, 59 N.W. 447 (1894) (damages for negligence); Kaminski v. Wayne County Board of Auditors, 287 Mich. 62, 282 N.W. 902 (1938) (suit for back salary of a circuit court commissioner).

'On this same subject the United States supreme court in Rodgers v. United States, 332 U.S. 371, 373, 68 S.Ct. 5, 7, 92 L.Ed. 3 (1947), speaking through Mr. Justice Black said:

". . . There is no language in the Agricultural Adjustment Act or in any other act of Congress which specifically allows or forbids interest on penalties such as these prior to judgment. But the failure to mention interest in statutes which create obligations has not been interpreted by this Court as manifesting an unequivocal congressional purpose that the obligation shall not bear interest. Billings v. United States, 232 U.S. 261, 284--288, 34 S.Ct. 421, 425--427, 58 L.Ed. 596, 606--608 (1914). For in the absence of an unequivocal prohibition of interest on such obligations, this Court has fashioned rules which granted or denied interest on particular statutory obligations by an appraisal of the congressional purpose in imposing them and in the light of general principles deemed relevant by the Court. See, E.g., Royal Indemnity Co. v. United States, supra (313 U.S. 289, 61 S.Ct. 995, 85 L.Ed. 1361 (1941)); Board of Com'rs of Jackson County v. United States, 308 U.S. 343, 60 S.Ct. 285, 84 L.Ed. 313 (1939).

"As our prior cases show, a persuasive consideration in determining whether such obligations shall bear interest is the Relative equities between the beneficiaries of the obligation and those upon whom it has been imposed. And this Court has generally weighed these Relative equities in accordance with the historic judicial principle that one for whose financial advantage an obligation was assumed or imposed, and who has suffered actual money damages by another's breach of that obligation, should be fairly compensated for the loss thereby sustained (citing authority).'

'We also feel that the failure of the legislature to mention interest does not necessarily mean that it intended that the obligation created by it should not bear interest. Rather we must look to the purpose of the legislation:

"The primary purpose of the Workmen's Compensation Act is to provide compensation for disability or death resulting from occupational injuries or diseases or accidental injury to or death of employees. The statute is a remedial one enacted primarily for the benefit of the man who works in the pursuits subject to its provisions; it is for the benefit of injured employees and not injured employers.' 24 MLP, Workmen's Compensation, § 2, p. 229.

'Who benefited from the delay in payment here? Who, if anyone, suffered any loss? In the instant case the disputed claim for compensation has been in the throes of litigation for over 5 years. In the meantime the defendant-appellant has had the possession and use of funds that it now appears rightfully belonged all along to the plaintiff, while the plaintiff (theoretically if not actually) had to raise money elsewhere (and presumably pay interest on it) to meet the daily necessities of life. In a real sense, then, the employee and his dependents have been obliged to help subsidize the employer in the long expensive fight for possession of the money thus wrongfully withheld.

'Considering the broad purposes of the workmen's compensation act and the Various equities involved we think and hold that the circuit court properly had jurisdiction to allow interest on the award. In so holding we expressly overrule the contrary principles expressed in the Fowler Case.' (Emphasis supplied.)

In the case of Drake v. Norge Division, Borg-Warner Corp., 367 Mich. 464, 468, 116 N.W.2d 842, 844 (1962), our Supreme Court stated:

'Unless interest is charged for past due benefits awarded, the employee inevitably will receive less than he is entitled to receive. By the same token, unless interest is charged for past due benefits awarded, the employer will have had the free use of money determined to have been due the employee. Our belated recognition of the Elementary nature of the equities involved in this controversy finally establishes a parity between the employee who ultimately collects accruced benefits and the employer who redeems a claim by paying benefits in advance,--at a commuted value, of course (C.L.1948 § 412.22 (M.S.A. 17.172)).' (Emphasis supplied.)

In 3 Larson's Workmen's Compensation Law, § 83.40, pp. 354.83--354.84, Professor Larson wrote as follows:

'As to the Right to interest on compensation payments, there is considerable difference among the states as to the date from which interest should run. Minnesota has held in a death case that interest should run only from the date of the claim, not from the date of the death; but Michigan, by judicial decision, has decreed that interest is payable from the date of death, that is, from the date each compensation payment 'would have been due if it had been paid voluntarily,' rather than from the date of death or the date of the highest appellate decision. Accordingly, in a subsequent case, interest was allowed from the date of injury, 1853, although no claim had been made until 1958. Oklahoma has selected a still different date, that of the award following the original hearing. In the case of an award that had been appealed, vacated, and reinstated, the court held that interest should run from the date the award first became due, that is, immediately after the original hearing and decision, which was favorable to claimant. Florida has held that, when attorneys' fees have been awarded to claimant and the case has been appealed, interest is payable on the attorneys' fees for the time the case is on appeal, if the decision is affirmed.' (Emphasis supplied.)

In Ralston Purina Co. v. Parsons Feed & Farm Supply, Inc., 416 F.2d 207, 213 (CA 8, 1969), Judge Blackmun, citing the Rodgers case, stated that the United States Supreme Court, when faced with the problem of interest not provided for by statute, 'has approached and resolved these problems in a sense of equity or fairness'.

Rodgers was also cited in Strachan Shipping...