Sewell v. Clearing Mach. Corp.

• Decision Date: 03 May 1984
• Docket Number: Docket No. 64974
• Citation: 347 N.W.2d 447,419 Mich. 56
• Parties: Jon SEWELL, Plaintiff-Appellant, v. CLEARING MACHINE CORPORATION, a foreign corporation, Greyhound Leasing and Financial Corporation, a Delaware corporation, Defendants, and Armco Steel Corporation, a foreign corporation, Defendant-Appellee.
• Court: Michigan Supreme Court

Page 447

347 N.W.2d 447

419 Mich. 56

Jon SEWELL, Plaintiff-Appellant, v. CLEARING MACHINE CORPORATION, a foreign corporation Greyhound Leasing and Financial Corporation, a Delaware corporation, Defendants and Armco Steel Corporation, a foreign corporation, Defendant-Appellee.

Docket No. 64974.

Supreme Court of Michigan.

May 3, 1984.

Draugelis, Ashton & Scully by John A. Ashton, Plymouth, for plaintiff-appellant.

Plunkett, Cooney, Rutt, Watters, Stanczyk & Pedersen, P.C. by Jeannette A. Paskin and Dennis M. Day, Detroit, for defendant-appellee Armco Steel Corp.

PER CURIAM.

The issue before us today is whether, in an action in a circuit court seeking damages for personal injury, the circuit court has jurisdiction to decide whether the defendant is the plaintiff's employer and thus able to invoke the exclusive remedy provision of the Worker's Disability Compensation Act. M.C.L. Sec. 418.131; M.S.A. Sec. 17.237(131). We hold that the circuit court has jurisdiction to make this determination.

I

On May 10, 1976, while an employee of Bathey Manufacturing Company, the plaintiff was seriously injured in an industrial accident. In 1978, he filed a complaint in the Wayne Circuit Court, alleging that the accident had occurred as a result of the wrongful conduct of two defendants whose relationship to this case we need not consider here. ¹ An amended complaint added Armco Steel Corporation as a defendant. The plaintiff alleged that Armco had "assumed control of the safety program and other operations" at Bathey, and that Armco "operated some functions [of Bathey] and its manufacturing plant for profit at the direction and control of agents and employees of Armco".

Armco responded with a motion for accelerated judgment in which it stated that it was the plaintiff's employer and that the plaintiff's exclusive remedy against it was to seek workers' disability compensation benefits. M.C.L. Sec. 418.131; M.S.A. Sec. 17.237(131). Armco later filed an amended motion for accelerated judgment in which it stated that Bathey was its wholly owned subsidiary. In the amended motion, Armco recited that the plaintiff thought Bathey to be the employer while Armco thought itself to be the employer. Asserting that there was therefore an issue of fact concerning the identity of the plaintiff's employer, Armco stated that the Bureau of Workers' Disability Compensation had exclusive jurisdiction to decide the question. Armco relied on M.C.L. Sec. 418.841; M.S.A. Sec. 17.237(841), which reads:

"Any controversy concerning compensation shall be submitted to the bureau and all questions arising under this act shall be determined by the bureau. The director shall be deemed to be an interested party in all workmen's compensation cases in questions of law."

The Wayne Circuit Court denied the motion for accelerated judgment, as well as a motion for rehearing. Armco then applied to the Court of Appeals, seeking leave to appeal. In lieu of granting leave to appeal, the Court of Appeals issued a peremptory order that had the effect of granting the relief sought by Armco:

"In this cause an application for leave to appeal is filed by defendant-appellant Armco, Inc., and an answer in opposition thereto having been filed, and due consideration thereof having been had by the Court,

"It is ordered that plaintiff shall, within 20 days from the certification of this order, file with the Workmen's Compensation Bureau an application for a hearing on the question in controversy. If such application is timely filed, the circuit court shall hold the instant action in abeyance pending the decision of the bureau. If the bureau determines the issue of Armco, Inc.'s liability adversely to the plaintiff, or if plaintiff fails to apply for a bureau determination within 20 days, the circuit court shall grant accelerated judgment for defendant Armco. If the bureau finds for the plaintiff on the issue raised, this action may proceed. We retain no jurisdiction."

The plaintiff now asks this Court to grant leave to appeal the order of the Court of Appeals. ² In lieu of granting leave to appeal, we today reverse the judgment of the Court of Appeals and remand this case to the Wayne Circuit Court for further proceedings.

II

The Court of Appeals has ordered the plaintiff to file in the Bureau of Workers' Disability Compensation an application for hearing on the issue of who is his employer. The Court of Appeals directed that if this application is timely filed the circuit court shall hold the plaintiff's civil suit in abeyance pending the bureau's decision. This is a procedure that the Court of Appeals has ordered in a number of other cases, ³ each time relying on this Court's opinion in Szydlowski v. General Motors Corp., 397 Mich. 356, 245 N.W.2d 26 (1976), or the Court of Appeals opinion in this plaintiff's suit against Bathey, Sewell v. Bathey Mfg. Co., 103 Mich.App. 732, 303 N.W.2d 876 (1981). In Szydlowski, supra, 397 Mich. pp. 357-358, 245 N.W.2d 26, this Court agreed with the trial court that the bureau should decide a claim that GM had breached a statutory duty to provide medical services:

"Plaintiff filed a wrongful death action in circuit court on February 4, 1972. She claimed that her husband was a GM employee and had received certain injuries during the course of his employment. GM treated the injuries and the death was attributed to the improper administration of medicine and drugs 'by non-physician personnel of General Motors Corporation'. This was said to violate General Motors' statutorily imposed warranty that employees 'would receive "reasonable medical, surgical and hospital services" '.

"The circuit court granted a motion for summary judgment saying that 'Plaintiff's exclusive right is the Workmen's Compensation Act'. In reversing, the Court of Appeals held

" 'that the circuit court does have subject matter jurisdiction, concurrent with the workmen's compensation bureau, to determine whether the exclusive remedy provision, MCL 418.131; MSA 17.237(131), forces Szydlowski to return to that forum to seek relief. We hold further that Szydlowski's complaint has stated a cause of action sufficient to avoid summary judgment under GCR 1963, 117.2(1).' 59 Mich App 180, 186; 229 NW2d 365 (1975).

"This is a clearly erroneous conclusion. In Solakis v Roberts, 395 Mich 13, 20; 233 NW2d 1 (1975), we said that when 'an employee's injury is within the scope of the act, workmen's compensation benefits are the exclusive remedy against the employer. MCL 418.131; MSA 17.237(131).' MCL 418.841; MSA 17.237(841) provides that 'all questions arising under this act shall be determined by the bureau'.

"The circuit court complaint said plaintiff's husband was a GM employee who received injuries in the course of his employment. Defendant was said to have a statutory duty to provide medical service. This claim is based upon a section of the compensation act. MCL 418.315; MSA 17.237(315). The complaint concerned matters for the Workmen's Compensation Bureau, not for the circuit court."

In discussing the present plaintiff's suit against Bathey, the Court of Appeals cited Szydlowski in its discussion of this general principle:

"It is also beyond peradventure that the question whether the act applies to a particular injury, i.e., whether an injury arose out of and in the course of a worker's employment (and thus is compensable under the act), is a question to be resolved in the first instance exclusively by the Bureau of Workmen's Compensation. Szydlowski v. General Motors Corp., 397 Mich 356, 358-359; 245 NW2d 26 (1976), St Paul Fire & Marine Ins Co v. Littky, 60 Mich App 375, 377-378; 230 NW2d 440 (1975), MCL 418.841; MSA 17.237(841)." Sewell, supra, 103 Mich.App. p. 737, 303 N.W.2d 876.

Taken alone, those general statements suggest that the bureau's jurisdiction takes precedence over that of the circuit court whenever there is an issue concerning the applicability of the Worker's Disability Compensation Act. ⁴ The rule is not so broad, however. Properly stated, the Szydlowski principle is that the bureau has exclusive jurisdiction to decide whether injuries suffered by an employee were in the course of employment. ⁵ The courts, however, retain the power to decide the more fundamental issue whether the plaintiff is an employee (or fellow employee) of the defendant. This distinction was noted in Northern v. Fedrigo, 115 Mich.App. 239, 241, 320 N.W.2d 230 (1982), and is clearly illustrated by Nichol v. Billot, 406 Mich. 284, 279 N.W.2d 761 (1979), in which this Court discussed at some length how the court (judge and jury) is to go about determining whether a plaintiff is a fellow employee of the defendant. When Nichol was in the Court of Appeals, Judge Brennan, dissenting, explained this principle. Nichol v. Billot, 0 Mich.App. 263, 272, fn. 1, 263 N.W.2d 345 (1977):

"The circuit court can decide whether its jurisdiction extends to this case. To do so, the court must determine whether defendant was plaintiff's co-employee under the WDCA. I would distinguish one recent decision of the Michigan Supreme Court. Szydlowski v. General Motors Corp., 397 Mich 356; 245 NW2d 26 (1976). In Szydlowski, where plaintiff filed a claim for workmen's compensation with the bureau which was dismissed twice for no progress and then filed a wrongful death action in circuit court trying to recover compensation under a mandatory statutory medical service provision of the WDCA, the Court denied the circuit court the jurisdiction to hear the case.

"I would distinguish that case as dealing with a claim involving the grant of workmen's compensation benefits under circumstances which would have completely usurped the primary function of the Workmen's Compensation Bureau had the Court allowed the circuit court concurrent jurisdiction. Plaintiff based her entire suit on the mandatory WDCA warranty insuring 'reasonable medical, surgical and hospital services'. Given the way she framed...