Ramsey v. Kohl

• Decision Date: 18 September 1998
• Docket Number: Docket No. 199240
• Citation: 591 N.W.2d 221,231 Mich.App. 556
• Parties: In re WORKER'S COMPENSATION LIEN. Bonnie S. Ramsey and Charles H. Ramsey, Plaintiffs-Appellees, and The Accident Fund Company, Appellant, v. Lawrence D. Kohl, Patrick Nolan, Loeckner & Kohl, P.C., and Crowley Olsman, Nolan & Berman, P.C. d/b/a Woll, Crowley, Berman, Olsman & Nolan, P.C., Defendants-Appellees.
• Court: Court of Appeal of Michigan — District of US

Page 221

591 N.W.2d 221

231 Mich.App. 556

In re WORKER'S COMPENSATION LIEN.

Bonnie S. Ramsey and Charles H. Ramsey, Plaintiffs-Appellees, and The Accident Fund Company, Appellant, v. Lawrence D. Kohl, Patrick Nolan, Loeckner & Kohl, P.C., and Crowley Olsman, Nolan & Berman, P.C. d/b/a Woll,

Crowley, Berman, Olsman & Nolan, P.C.,

Defendants-Appellees.

Docket No. 199240.

Court of Appeals of Michigan.

Submitted April 8, 1998, at Lansing.

Decided Sept. 18, 1998, at 9:10 a.m.

Released for Publication Dec. 10, 1998.

Gad L. Holland, Detroit, for Accident Fund Company.

Collins, Einhorn, Farrell & Ulanoff, P.C. (by Noreen L. Slank ), Southfield, for Lawrence D. Kohl, Charles H. Ramsey, and others.

Plunkett & Cooney, P.C. (by Christine D. Oldani ), Detroit, for Loeckner & Kohl, P.C.

Before: HOOD, P.J., and MARKMAN and TALBOT, JJ.

TALBOT, J.

Plaintiff Charles Ramsey filed a worker's compensation claim against his former employer, E.H. Rowley Company, where he had been employed from 1983 until 1986. In his claim, he alleged that his exposure at work to certain industrial chemicals resulted in a disabling medical condition that began in September 1986. The worker's compensation claim was ultimately redeemed for $65,000 paid by E.H. Rowley's insurer, The Accident Fund Company. Subsequently, plaintiffs hired the defendant law firms and lawyers to pursue a products liability claim against the manufacturers and sellers of certain chemicals that allegedly caused plaintiff to suffer medical injuries. ¹ In February 1987, plaintiff filed suit in the products liability case. One year later, plaintiff's suit was dismissed because of defendants' failure to properly serve the products liability complaint. Thereafter, in October 1994, plaintiff brought this action against defendants alleging legal malpractice.

The Accident Fund sought to intervene in order to protect its interest in any recovery by plaintiff from defendants. ² The trial court denied its motion to intervene, indicating that the Accident Fund would be "protected in some way" if it was later determined that the Accident Fund had a right to some portion of the proceeds. Plaintiff eventually settled with defendants for a total amount of $335,000, and the action was dismissed. Counsel for the Accident Fund, present at the final settlement proceeding, requested that $40,000 from the settlement be put into an escrow account pending a determination of the Accident Fund's right to take pursuant to a worker's compensation lien. The trial court denied this request, noting that the Accident Fund was not a party and that it could start its own lawsuit to protect its claim.

On appeal, the Accident Fund first argues that the trial court erred in denying its motion to intervene. We disagree. A carrier's right to intervene in a third-party action is contingent on its statutory right to assert a worker's compensation lien. McKenney v. Crum & Forster, 218 Mich.App. 619, 621-622, 554 N.W.2d 600 (1996). This is a question of law to be reviewed de novo. Id.

As a general matter, an employer or worker's compensation insurance carrier that has paid benefits to an injured employee is entitled under M.C.L. § 418.827; MSA 17.237(827) to reimbursement from any recovery that the employee obtains in a third-party tort action. ³ See Beaudrie v. Anchor Packing Co., 206 Mich.App. 245, 247-248, 520 N.W.2d 716 (1994); Hearns v. Ujkaj, 180 Mich.App. 363, 367, 446 N.W.2d 657 (1989). Reimbursement is allowed only where the injury, for which compensation is payable, was caused under circumstances creating legal liability in a third party, and only to the extent that the benefits were paid for the same injury. Powell v. Keeler Brass Co., 135 Mich.App. 67, 72, 351 N.W.2d 896 (1984). Here, the third-party suit in which the Accident Fund wishes to assert its statutory lien is not a tort action against the party directly responsible for the worker's injury, but rather a legal malpractice action against the attorneys who allegedly mishandled the injured worker's original tort action. In its brief on appeal, the Accident Fund does not specifically address the issue whether an insurance carrier is entitled to assert a worker's compensation lien against the proceeds of a legal malpractice settlement. Nor did the trial court rule directly on this issue. Nevertheless, we will review the issue because it is a question of law, the necessary underlying facts have been presented, and its resolution is essential to the question presented on appeal. See Atkinson v. Detroit, 222 Mich.App. 7, 11, 564 N.W.2d 473 (1997); Carson Fischer Potts & Hyman v. Hyman, 220 Mich.App. 116, 119, 559 N.W.2d 54 (1996).

The question whether an employer or its insurance carrier may assert a worker's compensation lien against the proceeds of a legal malpractice action is one of first impression in Michigan. Courts in other jurisdictions considering similar provisions are split with regard to the question. Those foreign courts allowing employers or insurance carriers to assert worker's compensation liens on legal malpractice recoveries have relied primarily on (1) the general policy of the reimbursement statutes, which is to prevent injured workers from receiving windfall double recoveries, and (2) the fact that the measure of damages in a legal malpractice action is equivalent to the amount the plaintiff would have otherwise recovered in the underlying tort action (i.e., the "suit within a suit"). See Williams v. Katz, 23 F.3d 190 (C.A.7, 1994); Bongiorno v. Liberty Mut. Ins. Co., 417 Mass. 396, 630 N.E.2d 274 (1994); Frazier v. New Jersey Manufacturers Ins. Co., 142 N.J. 590, 667 A.2d 670 (1995); Toole v. EBI Companies, 314 Or. 102, 838 P.2d 60 (1992). On the other hand, those foreign courts prohibiting employers or insurance carriers from asserting worker's compensation liens on legal malpractice recoveries have relied primarily on the specific language of their respective reimbursement statutes and the notion that a court may not impose a lien in the absence of explicit contractual or statutory authority. See Travelers Ins. Co. v. Breese, 138 Ariz. 508, 675 P.2d 1327 (1983); Woodward v. Pratt, Bradford & Tobin, P.C., 291 Ill.App.3d 807, 226 Ill.Dec. 32, 684 N.E.2d 1028 (1997); Sladek v. K Mart Corp., 493 N.W.2d 838 (Iowa, 1992). The analysis employed by these latter courts more closely reflects our own principles of statutory construction.

The primary goal of judicial interpretation of statutes is to ascertain the intent of the Legislature. Farrington v. Total Petroleum, Inc., 442 Mich. 201, 212, 501 N.W.2d 76 (1993). The first criterion in determining intent is the specific language of the statute. House Speaker v. State Administrative Bd., 441 Mich. 547, 567, 495 N.W.2d 539 (1993). The Legislature is presumed to have intended the meaning it plainly expressed. McFarlane v. McFarlane, 223 Mich.App. 119, 123, 566 N.W.2d 297 (1997). If the plain language of the statute is clear, no further judicial interpretation is necessary. Lorencz v. Ford Motor Co., 439 Mich. 370, 376, 483 N.W.2d 844 (1992).

The clear language of M.C.L. § 418.827; MSA 17.237(827) limits the application of worker's compensation liens to those third-party actions in which recovery is sought from persons liable for causing the injury for which compensation was payable. The first subsection of the statute provides that when "the injury for which compensation is payable under this act was caused under circumstances creating a legal liability in some person other than a natural person in the same employ or the employer to pay damages in respect thereof," the injured employee may bring an action against "the third party" in addition to receiving worker's compensation benefits and, if the injured employee does not bring such an action within one year after the occurrence of the injury, then the employer or its insurance carrier "may enforce the liability of such other person. " MCL 418.827(1); MSA 17.237(827)(1) (emphasis added). The statute then provides that any recovery from the third-party "shall first reimburse the employer or carrier for any amounts paid or payable" as worker's compensation. MCL 418.827(5); MSA 17.237(827)(5). In this case, defendants (plaintiff's lawyers) did not cause the injury that led to the compensation payments. Put differently, the circumstances that allegedly caused plaintiff's injury did not "create" a legal liability in the defendant lawyers. Accordingly, the statute does not provide for the imposition of a worker's compensation lien on the proceeds of plaintiff's legal malpractice claim against defendants. Cf. Woodward, supra, 291 Ill.App.3d at ----, 684 N.E.2d at 1033.

We are aware of the general policy against double recoveries indicated by M.C.L. § 418.827; MSA 17.237(827), see Great American Ins. Co. v. Queen, 410 Mich. 73, 92, 300 N.W.2d 895 (1980); 6 Larson's Workers' Compensation Law, § 71.20. However, it is not for this Court to enforce the general policy suggested by a statute at the expense of the specific language of the statute. The wisdom of a statute is for the Legislature to decide and the law must be applied as written. Jennings v. Southwood, 446 Mich. 125, 142, 521 N.W.2d 230 (1994); Allstate Ins. Co. v. Dep't of Ins., 195 Mich.App. 538, 547, 491 N.W.2d 616 (1992).

Because M.C.L. § 418.827; MSA 17.237(827) does not provide for the imposition of a worker's compensation lien in this case, we hold that the trial court did not err in denying the Accident Fund's motion to intervene. McKenney, supra at 621-622, 554 N.W.2d 600. We need not address the Accident Fund's argument that it is entitled to reimbursement from plaintiff's recovery despite its failure to formally intervene or its argument that all of the appellees should be held liable for the lien.

Affirmed.

HOOD, P.J., concurred.

MARKMAN, J. (concurring ).

I write separately in order to express my reservations about our holding in this opinion, but...