Piper v. Pettibone Corp., Docket No. 99515
| Court | Supreme Court of Michigan |
| Writing for the Court | PER CURIAM; BRICKLEY; LEVIN |
| Citation | 450 Mich. 565,542 N.W.2d 269 |
| Docket Number | Docket No. 99515 |
| Decision Date | 05 December 1995 |
| Parties | Robert D. PIPER and Joyce Piper, Plaintiffs-Appellees, and Chrysler Corporation, Intervening Plaintiff-Appellant, v. PETTIBONE CORPORATION, Defendant-Appellee. |
Page 269
and
Chrysler Corporation, Intervening Plaintiff-Appellant,
v.
PETTIBONE CORPORATION, Defendant-Appellee.
[450 Mich. 566] Lacey & Jones by Gerald M. Marcinkoski, Birmingham, for Chrysler Corporation.
Frank J. Kelley, Attorney General, Thomas L. Casey, Solicitor General, and Morrison Zack, Detroit, Assistant Attorney General, for the Trustees of the Second Injury Fund, Self-Insurers' Security Fund, and Silicosis, Dust Disease, and Logging Industry Compensation Fund, amici curiae.
PER CURIAM.
This is a products liability action arising from a workplace accident. The injured plaintiff received worker's compensation benefits, giving his employer a statutory lien against the amount recovered in this suit. After the plaintiff settled with the alleged tortfeasor for an amount far less than the lien, the circuit court directed that the employer be given only a small portion of the settlement amount. The Court of Appeals affirmed.
Because the Legislature has enacted clear statutory language compelling a different result,
Page 270
we vacate the judgments of the circuit court and the Court of Appeals, and remand this case to the circuit court for further proceedings consistent with this opinion.Plaintiff Robert D. Piper was an employee of Chrysler Corporation. In October 1986, he was seriously injured when a tow vehicle tipped as he was driving it. As a result, Chrysler paid $278,461.81 in weekly disability benefits and medical[450 Mich. 567] benefits 1 under the Worker's Disability Compensation Act. 2
Mr. Piper and his spouse 3 also sued Pettibone Corporation, the manufacturer of the tow vehicle. 4 This suit is permitted by M.C.L. § 418.827(1); M.S.A. § 17.237(827)(1), which authorizes so-called third-party actions in such a circumstance.
During the pendency of the plaintiffs' suit against Pettibone, Chrysler filed a notice that it held a worker's compensation lien arising from its payment of benefits. The lien was asserted under M.C.L. § 418.827(5); M.S.A. § 17.237(827)(5), which provided: 5
In an action to enforce the liability of a third party, the plaintiff may recover any amount which the employee or his dependents or personal representative would be entitled to recover in an action in tort. Any recovery against the third party for damages resulting from personal injuries or death only, after deducting expenses of recovery, shall first reimburse the employer or carrier for any amounts paid or payable under this act to date of recovery and the balance shall forthwith be paid to the employee or his dependents or personal representative and shall be treated as an advance payment by the employer on account of any future payments of compensation benefits. [Emphasis supplied.]
On the basis of its lien, Chrysler was added to [450 Mich. 568] the case as an intervening plaintiff. 6 The order permitting Chrysler's intervention included this paragraph:
In the event the named plaintiffs and Chrysler Corporation are unable to agree upon the division or application of the proceeds of any settlement or the responsibility for right of reimbursement for costs of suit, expenses of litigation or the fees of the attorneys engaged in the prosecution of plaintiffs' claims, then either the named plaintiffs or Chrysler Corporation may petition this Court for hearing for the purpose of determining the apportionment of such proceeds or the responsibility for or right to reimbursement of such costs of suit, expenses of litigation or the fees of attorneys.
The following year, the plaintiffs agreed to settle their claims against Pettibone for $75,000. However, the plaintiffs and Chrysler were unable to agree on the division of the settlement. The plaintiffs thus moved for an apportionment order, proposing that the circuit court give Chrysler five percent of the settlement amount ($3,750). Chrysler strongly objected to so small an allocation.
When this matter was argued in circuit court, one of the points of contention was the worth of the plaintiffs' case against Pettibone. The plaintiffs obtained Chrysler's concession that the case against Pettibone might have been worth as much as $1 million if liability could have been proven. 7 However, Chrysler insisted that the chances of proving liability were slim, and that $75,000 was all the case was worth (hence the agreement to settle for that figure).
Page 271
On the ground that they had settled a $1 million [450 Mich. 569] case for far less than it was worth, the plaintiffs asked that the circuit court award Chrysler an equally small percentage of the recovery. Having noted its statutory right to full reimbursement, Chrysler responded that it would accept one-third of the settlement figure, in accordance with what Chrysler's counsel characterized as the normal custom and usage of the worker's compensation bar in situations where a third-party tort recovery is smaller than the employer's lien. 8
The parties also argued about reducing the gross settlement figure of $75,000 to reflect the expenses of the litigation. The circuit court agreed with the plaintiffs that the net recovery, after expenses of litigation, should be the amount used in calculating the proper allocation. 9
The circuit court then determined that the net recovery of the plaintiffs reflected approximately four percent of their potential million-dollar claim against Pettibone. The court concluded that it would be equitable to award Chrysler four percent of the net recovery. In this fashion, the circuit court awarded Chrysler $1,680.04. 10
[450 Mich. 570] The Court of Appeals affirmed. 11 It acknowledged that M.C.L. §...
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