Selk v. Detroit Plastic Products
| Decision Date | 24 May 1984 |
| Docket Number | Nos. 10-12,70417 and 70421,70412,Docket Nos. 70397,s. 10-12 |
| Citation | 348 N.W.2d 652,419 Mich. 32 |
| Parties | Marguerite A. SELK, Plaintiff-Appellee, v. DETROIT PLASTIC PRODUCTS, Defendant-Appellant. Edward T. KELLY, Plaintiff-Appellee, v. MUSKEGON COUNTY ROAD COMMISSION and Kansas City Fire & Marine, Defendants-Appellants. Ralph C. FURMAN, Plaintiff-Appellee, v. DEPARTMENT OF CORRECTIONS, and Michigan State Accident Fund, Defendants-Appellants, and Second Injury Fund, Defendant-Appellee. Calendar419 Mich. 32, 348 N.W.2d 652 |
| Court | Michigan Supreme Court |
Kelman, Loria, Downing, Schneider & Simpson by James P. Harvey, Detroit, for plaintiff-appellee.
Frank J. Kelley, Atty. Gen., Louis J. Caruso, Sol. Gen., Ray W. Cardew, Jr., Asst. Atty. Gen., Detroit, for intervenor defendant-appellant Self-Insurers' Sec. Fund in support of motion for rehearing. On Resubmission After Grant of Rehearing
On March 21, 1984, this Court issued its opinion in these consolidated workers' compensation appeals. 419 Mich. 1, 345 N.W.2d 184 (1984). Subsequently, defendants-appellants in each case filed timely motions for rehearing. We granted those motions on May 1, 1984, and the cases were resubmitted for decision. 419 Mich. 1, 345 N.W.2d 184.
We are persuaded that our original opinion in these cases requires clarification. Some of the language in the majority opinion, specifically the language found in the conclusion, lends itself to an interpretation never intended by this Court. Both the motions for rehearing and Justice Levin's dissent suggest that under the Court's interpretation, the date of the award is completely determinative of the interest rate applicable to payments made pursuant to such an award under all circumstances. 1
Such an interpretation is not consistent with our reasoning in the original opinion, and we granted the motions for rehearing in order to clarify any language which could be read to stand for such an application.
We reaffirm the rationale of the original opinion. We remain convinced that the Legislature intended 1981 PA 194 to award interest at 12% from the date each payment "was due". Thus, "[w]hen weekly compensation is paid pursuant to an award * * * interest on the compensation shall be paid at the rate of 12% per annum from the date each payment was due". 1981 PA 194 (emphasis added).
The date of the award is not determinative under this interpretation, and any suggestion to the contrary in our original opinion was inadvertent and should be disregarded. Rather, it is the date of payment which triggers the application of the 12% rate.
Where an employer pays compensation on or after January 1, 1982, pursuant to an award, interest on the award shall be paid at 12% from the date each payment was due. 2
To the extent that it is consistent with this clarification, the judgment of the Court of Appeals is affirmed. We are not persuaded that the other issues raised in the motions for rehearing merit further statement by this Court. We remand these cases to the WCAB for computation of interest in accordance with the rule expressed in this opinion.
1981 PA 194 increased from 5% to 12% per annum the interest on workers' compensation benefits payable pursuant to an award of a hearing referee, the Workers' Compensation Appeal Board, or a court. This Court has granted rehearing 1 on the question whether and to what extent workers' compensation weekly payments that were due and payable before, on, or after January 1, 1982, the effective date of Act 194, bear interest at the higher rate.
In its opinion on the original submission of this cause, the majority stated that "we conclude that where an employer pays compensation pursuant to an award of a hearing referee, the WCAB, or a court which is entered after January 1, 1982, interest shall be paid at 12% from the date each payment was due". Selk v. Detroit Plastic Products, 419 Mich. 1, 15, 345 N.W.2d 184 (1984). (Emphasis supplied.) Read literally, this would have meant that, even after January 1, 1982, interest would accrue on a pre-January 1, 1982 award at 5%. 2
The majority now modifies its earlier opinion to eliminate the limitation that the higher interest rate is payable only if the award is entered on or after January 1, 1982, and substitutes a "limitation" that the higher interest rate is payable only if the award is paid after January 1, 1982. However, because Act 194 was approved December 30, 1981, only two days before the January 1, 1982 effective date, 3 the majority's construction makes the higher interest rate fully retroactive in every pending case. The specific January 1, 1982 effective date thus becomes no limitation at all.
We adhere to the view that interest accrues at the higher rate on and after, but not before, January 1, 1982, on weekly payments of workers' compensation that became or become due before, on, or after January 1, 1982, without regard to the date of award or payment. 4 We therefore agree with the Court's modification of its earlier opinion insofar as it eliminates the limitation in its opinion on the original submission based on the date of the award, but disagree with the substitution of a date of payment limitation. We continue to disagree with the retroactive application before January 1, 1982 of the higher interest rate.
Before Act 194, interest was payable at 5% per annum pursuant to this Court's decision in Wilson v. Doehler-Jarvis Division of National Lead Co., 358 Mich. 510, 100 N.W.2d 226 (1960).
Act 194, in pertinent part, contains two sentences. The first sentence added a new subsection (5) to Sec. 801 5 of the workers' compensation act reading as follows:
"(5) When weekly compensation is paid pursuant to an award of a hearing referee, the board, or a court, interest on the compensation shall be paid at the rate of 12% per annum from the date each payment was due, until paid."
The second sentence stated a specific effective date: "This amendatory act shall take effect January 1, 1982".
The majority on the original submission and again on rehearing focuses on the use of the word "was" in the first sentence of the amendatory act to the exclusion of any meaningful consideration of the words "shall take effect January 1, 1982" in the second sentence. Because the first sentence of the amendatory act states that the increased rate applies "from the date each weekly payment was due" (emphasis supplied), the majority has concluded that the increased rate of interest is fully retroactive to weekly payments that became due before January 1, 1982.
On the original submission, the majority stated that Act 194 "was unambiguously intended to award interest from the date payment 'was due' ". Selk v. Detroit Plastic Products, supra, p. 8, 345 N.W.2d 184. We observed in dissent on the first submission that Selk v. Detroit Plastic Products, supra, p. 25, 345 N.W.2d 184 (Levin, J., dissenting ).
The majority further stated on the first submission that the amendatory act was "plain, certain, and unambiguous * * * and requires application, not interpretation". Selk v. Detroit Plastic Products, supra, p. 8, 345 N.W.2d 184. The Workers' Compensation Appeal Board and the Court of Appeals had stated a January 1, 1982 award limitation. 6 Today, the majority states that "[t]o the extent that it is consistent with this clarification, the judgment of the Court of Appeals is affirmed". 7 In today opting for a conclusion that differs from its own conclusion on the original submission and the conclusion of the WCAB and the Court of Appeals regarding the meaning of the January 1, 1982 effective date, the majority has "to that extent" demonstrated that, insofar as the rationale of the majority opinion on the original submission was based on the view that the words of Act 194 were so clear as to "require application, not interpretation", a new rationale is required to justify the "was" analysis. None is offered. The majority simply asserts its "conviction" that the Legislature intended that interest be paid at the higher rate from the date each weekly payment "was due".
The majority states that it .
Manifestly, the 12% rate--where applicable at all--is applicable from the date each payment "was due". That is what Act 194 states. That indisputable proposition does not answer the question presented, namely whether the 12% rate, applicable "from the date each payment was due", is applicable
(1) only to weekly payments that become payable pursuant to an award made after January 1, 1982--the majority's decision on the original submission; or
(2) only to weekly payments paid on or after January 1, 1982--the majority's decision on rehearing; or
(3) only to interest accruing on or after January 1, 1982--as we would hold.
Both majority opinions focus on the first ("from the date each payment was due") sentence and essentially ignore the second ("shall take effect January 1, 1982") sentence.
The focus and the analysis should, in our...
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