Rotondi v. Chrysler Corp.
| Decision Date | 22 June 1993 |
| Docket Number | 143037,Docket Nos. 143036 |
| Citation | 504 N.W.2d 901,200 Mich.App. 368 |
| Parties | Anthony ROTONDI, Plaintiff-Appellee, v. CHRYSLER CORPORATION, Defendant-Appellant, and Second Injury Fund and Compensation Supplement Fund, Defendants. Anthony ROTONDI, Plaintiff-Appellee, v. CHRYSLER CORPORATION and Compensation Supplement Fund, Defendants, and Second Injury Fund, Defendant-Appellant. |
| Court | Court of Appeal of Michigan — District of US |
Kelman, Loria, Downing, Schneider & Simpson by Donald W. Loria, Detroit, for Anthony Rotondi.
Lacey & Jones by Gerald M. Marcinkoski, Birmingham, for Chrysler Corp.
Frank J. Kelley, Atty. Gen., Thomas L. Casey, Sol. Gen., and Morrison Zack, Asst. Atty. Gen., for Second Injury Fund.
Before WAHLS, P.J., and WEAVER and CORRIGAN, JJ.
The Second Injury Fund (SIF) and Chrysler Corporation appeal a June 26, 1991, decision of the Workers' Compensation Appeal Board. The WCAB concluded that both the SIF and Chrysler acted improperly in unilaterally reducing plaintiff's weekly benefits.
Plaintiff was born on July 14, 1911. Plaintiff's injury date is August 26, 1966. Plaintiff belongs to a special group of totally and permanently disabled employees with injury dates before July 1, 1968. See King v. Second Injury Fund, 382 Mich. 480, 170 N.W.2d 1 (1969). See Welch, Worker's Compensation in Michigan: Law & Practice, § 13.8. Chrysler has paid plaintiff $69 a week in benefits beginning September 1, 1967. Plaintiff's disability is incurable insanity, M.C.L. § 418.361(3)(f); M.S.A. § 17.237(361)(3)(f).
Plaintiff received differential benefits pursuant to M.C.L. § 418.521(2); M.S.A. § 17.237(521)(2) from the SIF. By June 1985 those benefits reached $129.74 a week. The SIF unilaterally reduced the benefits to $62.20 on June 26, 1985, in order to account for the age sixty-five reduction required by M.C.L. § 418.357(1); M.S.A. § 17.237(357)(1).
Beginning January 1, 1982, plaintiff was also paid supplemental benefits of $61 a week. These benefits were paid by Chrysler pursuant to M.C.L. § 418.352; M.S.A. § 17.237(352). Following an audit performed by the SIF, Chrysler learned that the differential benefits plaintiff received should have served to reduce the supplemental benefits pursuant to M.C.L. § 418.352(5); M.S.A. § 17.237(352)(5). Chrysler then determined that plaintiff should not receive any supplemental benefits and that plaintiff had been overpaid $4,770.20.
Chrysler's benefits administrator sent plaintiff a letter on July 1, 1983, advising him of the overpayment and asking for immediate reimbursement in full. After several communications between Chrysler, plaintiff, and plaintiff's wife, Chrysler agreed to collect the overpayment by a reduction of $20 a week in plaintiff's base benefit payment of $69 a week. Plaintiff sent Chrysler a letter dated July 7, 1983, asking for this arrangement. No interest was involved and under the arrangement it would take more than four years of weekly payments to recover the overpayment. Chrysler began reducing plaintiff's weekly payments before the end of July 1983.
Contending that plaintiff was no longer totally and permanently disabled, the SIF petitioned to stop payments in late 1982. The petition was denied after a hearing. The hearing referee ordered that differential benefits be continued and also ordered Chrysler to continue to pay benefits of $69 a week. Chrysler was not a party, although it had an attorney present during the hearing. The SIF appealed to the WCAB.
Meanwhile plaintiff, represented by the attorney who represented him in the proceeding initiated by the SIF, petitioned for penalties, M.C.L. § 418.801; M.S.A. § 17.237(801), against Chrysler for reducing his weekly benefits by $20. After a hearing, a referee found that the benefit reductions by both the SIF and Chrysler were proper, that the recoupment of $20 a week was reasonable and must continue, and that no penalties were warranted. Plaintiff appealed to the WCAB.
The WCAB decided the appeals of the SIF and plaintiff in its June 26, 1991, decision. The WCAB affirmed the denial of the SIF's petition to stop, a decision not now contested and reversed almost everything decided by the referee in plaintiff's case for penalties, except the denial of penalties.
The WCAB found that the age sixty-five reduction of § 357 did not apply to plaintiff, who was injured in 1966, and that under M.C.L. § 418.351(2); M.S.A. § 17.237(351)(2) plaintiff was entitled to minimum benefits equal to fifty percent of the state average weekly wage. The WCAB ordered the SIF to pay plaintiff the differential benefits it had reduced since June 25, 1985, and ordered Chrysler to continue paying supplemental benefits at the rate of $48 a week (a figure not explained in the WCAB's opinion) and to repay plaintiff all sums Chrysler had recouped.
The WCAB further found that the unilateral actions of the SIF and Chrysler were inappropriate. The WCAB agreed with the SIF and Chrysler that a petition for a hearing did not have to be filed before overpayments could be stopped or recouped, but the WCAB nevertheless found that a hearing was necessary to determine the amount of overpayments. The WCAB also found that Chrysler had "implicitly threatened plaintiff through his wife, and that he was de jure mentally incompetent" and so could not agree to the $20 a week reduction in benefits.
Supplemental Benefits--Section 352(5)
The WCAB erred in preventing Chrysler from reducing, or recouping overpayments of, supplemental benefits without first having a hearing and erred in requiring Chrysler to repay plaintiff sums recouped under the $20 a week arrangement. It was also error to require Chrysler to continue paying plaintiff $48 a week in supplemental benefits. The decision of the WCAB is reversed in these respects.
An employer or carrier can recoup against future payments, and an employee is entitled to petition if he believes the employer or carrier is mistaken. This is an efficient mechanism for correcting errors and is not precluded by the act. Recovery against future payments has been recognized, Samels v. Goodyear Tire & Rubber Co., 323 Mich. 251, 35 N.W.2d 265 (1948), and is a simple way to resolve the problem of overpayments. Recovery of overpayments is consistent with the principle that a double recovery is repugnant to the purpose of workers' compensation. Hiltz v. Phil's Quality Market, 417 Mich. 335, 350, 337 N.W.2d 237 (1983).
There was no need for a hearing to determine the amount Chrysler overpaid supplemental benefits. Those benefits were due pursuant to § 352. Section 352(5) provides that supplemental benefits "shall" be reduced by the amount of differential benefits (§ 521) the employee receives. Section 352(5) states:
An employee who is eligible to receive differential benefits from the second injury fund shall be paid the supplement pursuant to this section as reduced by the amount of the differential benefits being made to the employee by the second injury fund at the time of the payment of the supplement pursuant to this section.
This subsection is self-executing. It is automatic. No more need for a hearing exists under this subsection than there would be for the application of the age sixty-five reductions in § 357(1), Heath v. Owens-Corning Fiberglas Corp., 188 Mich.App. 358, 470 N.W.2d 663 (1991), the offsets for unemployment benefits in § 358, Smith v. Michigan Bell Telephone Co., 189 Mich.App. 125, 133-137, 472 N.W.2d 32 (1991), or the coordination provisions of § 354, Franks v. White Pine Copper Div., 422 Mich. 636, 375 N.W.2d 715 (1985).
In the instant case, the differential benefits paid to plaintiff were always known (and exceeded the amount of supplemental benefits), and therefore the amount of the offset under § 352(5) was always readily determinable. A hearing would have been a waste of time and resources. Because Chrysler is entitled to offset an amount greater than $48 a week, the WCAB erred in ordering Chrysler to pay supplemental benefits at that rate.
Similarly, with regard to the method for recovering the overpayment--the arrangement to reduce plaintiff's weekly benefits by $20--no hearing was needed. Chrysler and plaintiff reached an arrangement that was fair and reasonable. There is no authority presented that Chrysler had to wait to recover the overpayment. But Chrysler agreed to collect $20 a week over more than four years, without interest, from payments being made to a plaintiff over seventy years old.
The WCAB found that plaintiff was incompetent to enter into the arrangement to repay overpayments. This factual finding might be unassailable, but it is irrelevant. Chrysler could unilaterally accept repayment at $20 a week, and it would be for plaintiff to petition for a hearing if he objected. Indeed, there was a hearing in this case, initiated by plaintiff's petition for penalties. The referee approved the repayment arrangement. The WCAB reversed on erroneous grounds, i.e., no proper hearing and plaintiff's incompetency. But the WCAB never found repayment at the rate of $20 a week to be unreasonable. In view of the WCAB's error and the circumstances of this case, we leave plaintiff and Chrysler with their arrangement and leave it for plaintiff to petition for a hearing if he believes some other arrangement is more appropriate and can be enforced.
An issue raised by plaintiff and not decided by the WCAB is whether Chrysler's recoupment of overpayments of supplemental benefits is limited by the one-year-back rule of M.C.L. § 418.833(2); M.S.A. § 17.237(833)(2). This statute applies to recoupments by employers or carriers. Supplemental benefits are an obligation of the state. Lulgjuraj v. Chrysler Corp., 185 Mich.App. 539, 542, 463 N.W.2d 152 (1990). As explained in Lulgjuraj, an employer or carrier is merely a disbursement agent for the state. It follows that...
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Lincoln v. General Motors Corp.
...concluded that defendants were entitled to continue to take the age sixty-five reduction pursuant to Rotondi v. Chrysler Corp., 200 Mich.App. 368, 504 N.W.2d 901 (1993), but did not reach the other issues. On appeal, the Worker's Compensation Appellate Commission affirmed the magistrate's r......
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Lincoln v. General Motors Corp.
...the present plaintiff (injured in 1966) belong to different parts of the larger group. As interpreted in Rotondi v. Chrysler Corp., 200 Mich.App. 368, 375-379, 504 N.W.2d 901 (1993), the age-related reductions of M.C.L. § 418.357(1); MSA 17.237(357)(1) do apply to persons injured on or afte......