Ohio Farmer's Ins. Co. v. Neff, Docket No. 51696
| Decision Date | 28 January 1982 |
| Docket Number | Docket No. 51696 |
| Citation | 315 N.W.2d 553,112 Mich.App. 53 |
| Parties | OHIO FARMER'S INSURANCE COMPANY, Plaintiff-Appellant, v. Christopher Joseph NEFF, Defendant, and Michigan Bell Telephone Company, Defendant-Appellee. 112 Mich.App. 53, 315 N.W.2d 553 |
| Court | Court of Appeal of Michigan — District of US |
[112 MICHAPP 54] Johnson, Campbell & Moesta, P. C., Detroit, for plaintiff-appellant.
Garan, Lucow, Miller, Seward, Cooper & Becker, P. C., Detroit, for Michigan Bell.
[112 MICHAPP 55] Before DANHOF, C. J., and WALSH and RILEY, JJ.
Plaintiff appeals from a grant of summary judgment entered in Detroit Common Pleas Court in favor of defendant Michigan Bell Telephone Company. This grant of summary judgment was affirmed by the circuit court. We granted plaintiff's application for leave to appeal.
On November 11, 1971, Christopher Neff, an employee of Kenneth Langdon, doing business as Kencraft Cabinets, while operating a motor vehicle in the course of his employment, was involved in an accident with a motor vehicle owned by Michigan Bell Telephone Company (Michigan Bell). Neff was injured and was paid workers' compensation benefits by plaintiff, the workers' compensation carrier for Neff's employer.
Neff sued Michigan Bell seeking damages for his personal injuries. Plaintiff did not intervene in that lawsuit. However, Neff and Michigan Bell had actual notice of the fact that plaintiff had paid workers' compensation benefits to Neff, and that, pursuant to M.C.L. § 418.827; M.S.A. § 17.237(827), plaintiff had a lien on any recovery by Neff from Michigan Bell.
A consent judgment was entered into between Neff and Michigan Bell. Under the terms of this agreement Neff received $48,601.83. The agreement stated that it was in satisfaction of all claims against Michigan Bell including the claims of any workers' compensation carrier. Further, the agreement stated that Neff was to indemnify Michigan Bell for any sums due and owing to Neff's workers' compensation carrier.
Subsequently, plaintiff commenced suit in Detroit Common Pleas Court against Neff and Michigan[112 MICHAPP 56] Bell. Plaintiff sought enforcement of its lien of $7,497.90.
A default judgment was entered against Neff, who is not a party to this appeal.
On April 2, 1979, the Common Pleas Court denied plaintiff's motion for summary judgment for the amount it claimed as a lien against Michigan Bell. At the same time, the court granted Michigan Bell's motion for summary judgment of no cause of action against plaintiff. This action was affirmed by the circuit court.
On appeal, plaintiff contends that since Michigan Bell had knowledge, when it settled with Neff, that plaintiff had paid workers' compensation benefits, M.C.L. § 418.827; M.S.A. § 17.237(827), required that Michigan Bell reimburse plaintiff for benefits paid to Neff before giving the balance of the recovery to Neff. Plaintiff contends that since Michigan Bell had knowledge of the fact that workers' compensation benefits had been paid failure to intervene in the lawsuit between Neff and Michigan Bell is immaterial and does not adversely affect plaintiff's right to proceed against Michigan Bell.
Michigan Bell, in turn, argues that plaintiff does not retain a cause of action against it because plaintiff did not intervene in Neff's action against Michigan Bell. Also, Michigan Bell points out that the settlement with Neff, by its terms, included all amounts for which Neff received workers' compensation payments from plaintiff. In essence, Michigan Bell maintains that under the settlement with Neff, it became solely Neff's responsibility to reimburse plaintiff.
We agree with plaintiff and hold that Michigan Bell, which had knowledge of plaintiff's lien prior to its settlement with Neff, had a statutory obligation to reimburse plaintiff, even though plaintiff [112...
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