Petersen v. Magna Corp., No. 136542

• Court: Supreme Court of Michigan
• Parties: RICK PETERSEN, Plaintiff-Appellee, v MAGNA CORPORATION and MIDWEST EMPLOYERS CASUALTY COMPANY, Defendants-Appellants. and KOLEASECO and THE ACCIDENT FUND COMPANY; MAGNA CORPORATION and TIG INSURANCE COMPANY; BCN TRANSPORTATION SERVICES and TIG INSURANCE COMPANY; KOLEASECO, INCORPORATED and CITIZENS INSURANCE COMPANY; BCN TRANSPORTATION SERVICES; SERTA RESTOKRAFT MATTRESS COMPANY, INCORPORATED and HARLEYSVILLE LAKE STATES INSURANCE COMPANY, Defendants-Appellees.
• Docket Number: No. 136542,No. 136543
• Decision Date: 31 July 2009

RICK PETERSEN, Plaintiff-Appellee,
v
MAGNA CORPORATION and MIDWEST EMPLOYERS CASUALTY COMPANY,
Defendants-Appellants. and KOLEASECO and THE ACCIDENT FUND COMPANY;
MAGNA CORPORATION and TIG INSURANCE COMPANY; BCN TRANSPORTATION
SERVICES and TIG INSURANCE COMPANY; KOLEASECO, INCORPORATED and CITIZENS
INSURANCE COMPANY; BCN TRANSPORTATION SERVICES; SERTA RESTOKRAFT
MATTRESS COMPANY, INCORPORATED and HARLEYSVILLE
LAKE STATES INSURANCE COMPANY, Defendants-Appellees.

No. 136542
No. 136543

Michigan Supreme Court Lansing, Michigan

FILED JULY 31, 2009

Opinion

Chief Justice:
Marilyn Kelly

Justices:
Michael F. Cavanagh
Elizabeth A. Weaver
Maura D. Corrigan
Robert P. Young, Jr.
Stephen J. Markman
Diane M. Hathaway

BEFORE THE ENTIRE BENCH

KELLY, C.J.

We granted leave to appeal in this case to determine the parties against whom attorney fees may be prorated under MCL 418.315(1). We conclude that

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the term "prorate" in MCL 418.315(1) applies only to employers and their insurance carriers. Accordingly, we affirm the judgment of the Court of Appeals. I. Factual Background and Procedural History

This case involves a dispute over workers' compensation benefits. Plaintiff Rick Petersen began working for codefendant Koleasco, a trucking company, in February 1997. In March 1997, Koleasco hired codefendant BCN Transportation Services (BCN), a human resources "employee leasing" company, to administer its employee benefits.

In November 1997, plaintiff was injured when he fell from a flatbed truck while securing a load of Christmas trees. After the accident, he underwent surgery on his right foot and applied for workers' compensation benefits. The following year, he required treatment for back pain, which his treating physician believed was caused by the November 1977 fall.

Several questions were taken to a workers' compensation magistrate: (1) who was plaintiff's employer at the time of his injury, BCN or Koleaseco? (2) was Midwest the relevant insurer for workers' compensation purposes? (3) was plaintiff disabled? and (4) if so, which injury caused his disability? The magistrate bifurcated these issues into two trials.

In the first trial, the magistrate ruled that plaintiff was a Koleaseco employee on the date of his injury despite the fact that BCN paid his wages. Thus, because BCN had stipulated that it was plaintiff's employer, the magistrate ruled that both BCN and Koleaseco were plaintiff's employers and both were liable for

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plaintiff's workers' compensation benefits. On appeal, the Workers' Compensation Appellate Commission (WCAC) affirmed that ruling.

In the second trial, the magistrate considered (1) was plaintiff's counsel entitled to an attorney fee of 30 percent of plaintiff's medical bills unpaid by defendant? and (2) who was responsible for paying plaintiff's future medical and weekly benefits? With respect to plaintiff's attorney fees, the magistrate ruled:

[A]lthough Midwest . . . was paying the plaintiff weekly benefits, it refused to pay medical bills related to [plaintiff's] injury. . . . The total amount of the medical bills incurred . . . which defendant refused to pay is $153,448.54. I find that plaintiff's counsel is entitled to a 30 percent attorney fee for these unpaid medical bills under Section 315(1). . . .

With respect to whether BCN or Koleaseco was responsible for paying plaintiff's ongoing medical and weekly benefits, the magistrate ruled that BCN and its insurance carrier, Midwest, were primarily responsible.

Again, both parties appealed to the WCAC, which affirmed the award of attorney fees, observing:

While the magistrate failed to explicitly so find, in this case . . . defendant knew of the medical bills in question well in advance of trial, and simply refused to pay them claiming they were not work related. Once the magistrate so found, given that prior knowledge and refusal to pay, the action in awarding attorney fees was within his discretion and hence proper.

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Magna Corporation, another "employee leasing" company insured by Midwest, and Midwest sought leave to appeal both WCAC orders. The Court of Appeals initially denied the applications.¹ We remanded the case as on leave granted.²

On remand, the Court of Appeals affirmed the WCAC.³ The Court found that competent evidence supported the factual findings of both the magistrate and WCAC with respect to plaintiff's employment. Regarding the assessment of attorney fees, the Court held that § 315(1) is ambiguous because it does not identify the entity against which the magistrate may assess such fees.⁴

The Court concluded, "[W]here the remainder of [§ 315(1)] discusses the employer and/or the [insurance] carrier, it follows that the attorney fees are to be calculated or divided between those entities. The plain language of the statute does not mandate that the health care provider assume responsibility for any

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portion of those fees."⁵ We granted leave to appeal to consider the proper interpretation of § 315(1).⁶

II. MCL 418.315(1)

The proper interpretation and application of a statute presents a question of law that we review de novo.⁷ MCL 418.315(1), part of the Worker's Disability Compensation Act (WDCA),⁸ provides in pertinent part:

The employer shall furnish, or cause to be furnished, to an employee who receives a personal injury arising out of and in the course of employment, reasonable medical, surgical, and hospital services and medicines, or other attendance or treatment recognized by the laws of this state as legal, when they are needed. . . . After 10 days from the inception of medical care as provided in this section, the employee may treat with a physician of his or her own choice by giving to the employer the name of the physician and his or her intention to treat with the physician. The employer or the employer's carrier may file a petition objecting to the named physician selected by the employee and setting forth reasons for the objection. If the employer or carrier can show cause why the employee should not continue treatment with the named physician of the employee's choice, . . . the . . . magistrate may order that the employee discontinue treatment with the named physician or pay for the treatment received from the physician . . . . If the employer fails, neglects, or refuses so to do, the employee shall be reimbursed for the reasonable expense paid by the employee, or payment may be made in behalf of the employee to persons to whom the unpaid expenses may be owing, by order of the workers' compensation magistrate. The workers' compensation magistrate may prorate

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attorney fees at the contingent fee rate paid by the employee. [Emphasis added.]

A. Statutory Interpretation

This is a case of statutory interpretation. The primary goal of such interpretation is to give effect to the intent of the Legislature.⁹ The first step in ascertaining such intent is to focus on the language of the statute itself. If statutory language is unambiguous, the Legislature is presumed to have intended the meaning expressed in the statute.¹⁰ The words of a statute provide the most reliable evidence of the Legislature's intent, and as far as possible, effect should be given to every phrase, clause, and word in a statute.¹¹ If the statutory language is certain and unambiguous, judicial construction is neither required nor permitted, and courts must apply the statute as written.¹²

However, when statutory language is ambiguous, this Court has consistently held that a court construing it may go beyond the plain language of the statute.¹³ In fact, where the language leaves the statute's meaning ambiguous, it is the duty of the courts to construe it, giving it an interpretation that is

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reasonable and sensible.¹⁴ Therefore, a finding of ambiguity has important interpretive ramifications.

In this case, the Court of Appeals held that the last sentence of § 315(1) is ambiguous in that it is unclear who is responsible for an injured employee's attorney fees. Thus, the threshold question is whether, in light of the plain language of the entire provision, the last sentence of § 315(1) is ambiguous.

Section 315(1) gives magistrates the discretionary authority to prorate attorney fees at the contingent fee rate paid by the employee. "Prorate" means "to divide, distribute, or calculate proportionately."¹⁵ In § 315(1), the term "prorate" could reasonably apply to employers, their insurance carriers, health care providers, employees seeking workers' compensation benefits, or to any combination of them. Moreover, neither § 315 as a whole nor any other provisions of the WDCA indicates the parties to whom a division or distribution of attorney fees applies.

I agree with the Court of Appeals conclusion that the final sentence of § 315(1) applies only to employers and their insurance carriers. This is because that interpretation harmonizes the final sentence with the remainder of § 315(1). The

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final sentence does not stand alone.¹⁶ It must be construed in the context of § 315(1) in its entirety and harmonized with the statute's other provisions to satisfy the purpose intended by the Legislature.¹⁷

Here is how that construction operates. Section 315(1) concerns employer liability to pay medical benefits to...