Shaw v. Lakeway Chemicals, Inc.

• Decision Date: 11 May 1966
• Docket Number: No. 498,No. 3,498,3
• Citation: 142 N.W.2d 15,3 Mich.App. 257
• Parties: Garth SHAW, Plaintiff-Appellant, v. LAKEWAY CHEMICALS, INC., and Michigan Employment Security Commission, Defendants-Appellees. Cal
• Court: Court of Appeal of Michigan — District of US

Page 15

142 N.W.2d 15

3 Mich.App. 257

Garth SHAW, Plaintiff-Appellant, v.LAKEWAY CHEMICALS, INC., and Michigan Employment Security Commission, Defendants-Appellees.

Cal. No. 498.

Court of Appeals of Michigan, Division No. 3.

May 11, 1966.

Vernon D. Kortering, Jerry S. McCroskey, Marcus, McCroskey, Libner, Reamon, Williams & Dilley, Muskegon, for appellant.

Frank J. Kelley, Atty. Gen., Robert A. Derengoski, Sol.Gen., Lansing, Arthur W. Brown, Asst. Atty. Gen., Detroit, for appellees.

Before HOLBROOK, P.J., and BURNS and McGREGOR, JJ.

HOLBROOK, Presiding Judge.

This is an appeal from a judgment of the circuit court for Muskegon county, dated February 2, 1965, affirming the decision of the appeal board of the Michigan Employment Security Commission of July 8, 1964, requiring petitioner Shaw to repay unemployment compensation paid him at a time when he was awarded and received workmen's compensation benefits.The facts are not in dispute and appear to be as follows:

Garth Shaw was employed by Lakeway Chemicals, Inc., and received a workmen's compensation award of $45 a week for total disability from August 21, 1962 to November 1, 1963, and $45 each week thereafter until further notice.

During the 14 calendar weeks beginning September 8, 1963, and terminating December 15, 1963, Shaw had also certified for and been paid unemployment compensation benefits by the Michigan Employment Security Commission at $45 a week for a total of $630.

The Michigan Employment Security Act was amended by P.A.1963, No. 188, effective September 6, 1963 and added section 27n¹ which reads as follows:

'Sec. 27n.(a) If an individual claims and is otherwise eligible for weekly benefits under this act for a week with respect to which he has received weekly benefits, other than death benefits or scheduled benefits for a specific loss, under the workmen's compensation act of this state or under any similar law of another state or of the United States, The individual's weekly benefits otherwise payable under this act for such week shall be reduced to the amount, if any, by which the individual's workmen's compensation weekly benefit for such week was less than his benefits otherwise payable under this act for such week.If the individual's workmen's compensation weekly benefit for such week equaled or exceeded his weekly benefits otherwise payable under this act for such week, no weekly benefits shall be payable under this act for such week.

(b) If an individual has received weekly benefits under this act for a week and subsequently (within 1 year after such week) files a claim as a result of which he is awarded or receives weekly benefits (other than death benefits or scheduled benefits for a specific loss) for the same week under the workmen's compensation act of this state or under any similar law of another state or of the United States, The amount of the weekly benefits paid under this act for such week shall be redetermined and reduced (or denied) in the manner provided in paragraph (1) of this subsection; and, notwithstanding any other provision of this act, the individual shall be required to make restitution for the amount of such reduction under section 62(a) of this act: Provided, however, That such reduction or denial and restitution shall not be required if the amount of the workmen's compensation weekly benefits awarded or paid has been reduced by the amount of weekly benefits received under this act for the same period.

(c) Weekly benefits which are paid in a reduced amount for any week under the provisions of this subsection shall be charged against the individual's maximum benefits under subsection (d) of section 27 of this act as if an amount equal to 1/2 of the individual weekly benefit rate had been paid for such week.'(Emphasis supplied).

On being notified by claimant's employer Lakeway Chemicals, Inc., that Shaw had been paid workmen's compensation, the Michigan Employment Security Commission on February 17, 1964 pursuant to said Sec. 27n issued a notice of redetermination stating that Shaw was not entitled to the unemployment benefits received by him for the said 14-week perid and required him to repay this amount to the commission.The redetermination was protested by Shaw and a hearing was had before a commission referee which resulted in substantially affirming the redetermination.This decision was in turn duly affirmed by the appeal board and by the Muskegon county circuit court.

There is only one question advanced by appellant on this appeal to-wit:

'If a claimant is required by statute to reimburse the MESC for weekly unemployment benefits received, if he makes a subsequent workmen's compensation recovery for the same period, and assuming an equal benefit level under each act, should the reimbursement be an amount equal to the gross weekly benefits received for the period in the workmen's compensation action, or should it amount to the net weekly workmen's compensation benefits to the claimant for the period after deduction of ratable costs incurred in the recovery of the workmen's compensation claim?'

Plaintiff and appellant contends that he is entitled to deduct from the sum to be reimbursed the ratable cost (about 40%) including attorney fees, witness fees, etc., incurred in the recovery of the workmen's compensation claim and cites rule XIV of the workmen's compensation department allowing attorney fees in the collection of any compensation claim.

It is unquestioned that plaintiff did incur expenses in processing his workmen's compensation claim and plaintiff asserts that the phrase 'workmen's compensation weekly benefit' as found in C.L.1963, § 421.27n (a), should be interpreted to mean his net weekly recovery after attorney fees and court costs have been deducted on a pro rata basis.

This is a case of first impression in Michigan and is governed by the Michigan Employment Security Act,...