Shoup v. Johns-Manville Sales Corp.

• Decision Date: 19 June 1985
• Docket Number: Docket No. 75315,JOHNS-MANVILLE
• Citation: 142 Mich.App. 189,369 N.W.2d 470
• Parties: Laura E. SHOUP, Plaintiff-Appellee, and Silicosis and Dust Disease Fund, Plaintiff-Intervenor-Appellant, v.SALES CORPORATION, Home Indemnity Company, Owens-Corning and Mechanical Insulation, Defendants-Appellees. 142 Mich.App. 189, 369 N.W.2d 470
• Court: Court of Appeal of Michigan — District of US

Page 470

369 N.W.2d 470

Laura E. SHOUP, Plaintiff-Appellee and Silicosis and Dust Disease FundPlaintiff-Intervenor-Appellant, v.JOHNS-MANVILLE SALES CORPORATION, Home Indemnity Company Owens-Corning and Mechanical InsulationDefendants-Appellees.

Docket No. 75315.

142 Mich.App. 189, 369 N.W.2d 470

Court of Appeals of Michigan.

Submitted Aug. 22, 1984.

Decided Jan. 30, 1985.

Released for Publication June 19, 1985.

[142 MICHAPP 190]Frank J. Kelley, Atty. Gen., Louis J. Caruso, Sol.Gen., and Caleb B. Martin, J., Asst. Atty. Gen., for Silicosis and Dust Disease Fund.

[142 MICHAPP 191]Arthur L. Petersen, P.C., Saginaw by Arthur L. Petersen, Saginaw, for plaintiff-appelleeLaura Shoup.

Davidson, Breen & Doud, P.C., Saginaw by John Davidson, Saginaw, for defendant-appelleeMechanical Insulation Services, Inc.

Before SHEPHERD, P.J., and MacKENZIE, and NICOLICH^*, JJ.

PER CURIAM.

The Silicosis Dust Disease Fund (Dust Fund), intervening plaintiff, appeals as of right from an order granting disbursement of funds to plaintiff.

Plaintiff's decedent suffered from asbestosis allegedly caused by his work as an insulation applicator and received workers' compensation benefits.Plaintiff brought a third-party tort action against defendants, seeking damages for causing the decedent's asbestosis.Plaintiff settled against all defendants.The certificate of distribution of the settlement was expressly made "subject to resolution by final unappealed order determining extent of lien claim, if any, of the dust fund, and appropriate sums shall be escrowed until such resolution of pending litigation".

The Dust Fund sought to intervene as partyplaintiff in this and similar actions to seek reimbursement for monies paid by the fund from any damages the plaintiffs might recover.Denial of its motions to intervene was appealed to this Court.In Revard v. Johns-Manville Sales Corp., 111 Mich.App. 91, 314 N.W.2d 533(1981), this Court ruled that the Dust Fund could not intervene because it had no right to reimbursement from the proceeds of a third-party lawsuit.The instant case was one of the cases consolidated on appeal in Revard.[142 MICHAPP 192] Leave to appeal this Court's decision was denied by the Supreme Court.417 Mich. 854(1983).

Since the Supreme Court's denial of leave to appeal Revard represented the final unappealed order determining the extent of the Dust Fund's lien claim on plaintiff's recovery, plaintiff brought a motion for disbursement of funds held in escrow pending final unappealed order.The order was entered on November 18, 1983, over the Dust Fund's objection, as the court believed the Dust Fund had no standing to object to entry of the order.From entry of that order the Dust Fund appeals.

The Dust Fund objects specifically to the following language in the order granting disbursement of funds held in escrow:

"It is further ordered that in determining sums of monies to be released to Plaintiff, any claim of the Silicosis and Dust Disease Fund to reimbursement and/or set-off shall not be reflected in the Franges [Franges v. General Motors Corp, 404 Mich. 590, 274 N.W.2d 392(1979) ] calculations, this matter having been resolved by Revard[supra ] * * *."

The Dust Fund contends that this language is overbroad and misconstrues Revard.The Dust Fund would like to insert the words "from the plaintiff" between the words "set-off" and "shall", arguing that Revard only prohibits the Dust Fund from obtaining reimbursement directly from any third-party tort recovery plaintiffs may realize, but that Revard left open the question of the extent of the employer's recovery.

The Dust Fund was created under a part of the Worker's Disability Compensation Act, M.C.L. Sec. 418.101 et seq.;M.S.A. Sec. 17.237(101) et seq.It was created to cushion employers and insurance carriers[142 MICHAPP 193] from the potentially devastating impact of paying long-term benefits for dust disease disabilities and also to ensure that victims of such disease are fully compensated.Stottlemeyer v. General Motors Corp., 399 Mich. 605, 250 N.W.2d 486(1977);Revard, supra, p. 94, 314 N.W.2d 533.The fund does not pay any benefits directly to the employee, but reimburses the employer or carrier for benefits they pay the employee in excess of $12,500.M.C.L. Sec. 418.531(1);M.S.A. Sec. 17.237(531)(1).The Dust Fund states that it is its policy to reimburse employers only to the extent that they correctly apply the statute, so that overpayments by employers will not be reimbursed by the Dust Fund.

Under the provisions of the Worker's Disability Compensation Act, recipients of workers' compensation may bring actions in tort against a third party.If the action is successful, the employer or carrier is entitled to reimbursement for any amounts it has already paid out to the employee, and the balance of the recovery is treated as an advance payment by the employer of future benefits the employer would otherwise be obligated to pay the employee.M.C.L. Sec. 418.827(5);M.S.A. Sec. 17.237(827)(5).The formula for apportioning the recovery and the costs of recovery between the employer or insurer and the employee, both as to past and future benefits, was spelled out in Franges v. General Motors Corp., 404 Mich. 590, 274 N.W.2d 392(1979).

The Dust Fund acknowledges that Revard prohibits it from obtaining reimbursement directly from a third-party tort recovery.But the Dust Fund suggests Revard left open the question of whether the Dust Fund could obtain reimbursement from the employer.The employer has a statutory right to reimbursement from the third-party tort recovery, yet the employer has already [142 MICHAPP 194] been reimbursed by the Dust Fund for payments it made in excess of $12,500.

We find no merit in the Dust Fund's appeal.

We first question whether the Dust Fund has a right to intervene in this action.Revard held that the Dust Fund could not intervene because it had no right to reimbursement from the proceeds of the third-party recoveries.The instant case was one of those consolidated in Revard, which means the Dust Fund was properly denied intervention in this case as well.However, Revard did not discuss M.C.L. Sec. 14.101;...