Siira v. Employers Mut. Liability Ins. Co. of Wisconsin, Docket No. 77-2294

Decision Date27 November 1978
Docket NumberDocket No. 77-2294
PartiesMelvin S. SIIRA, Shirley Siira, Andrew H. Wisti and Gordon J. Jaaskelainen, d/b/a Wisti & Jaaskelainen, a partnership, Plaintiffs-Appellants, v. EMPLOYERS MUTUAL LIABILITY INSURANCE COMPANY OF WISCONSIN, Defendant-Appellee. 87 Mich.App. 227, 274 N.W.2d 26
CourtCourt of Appeal of Michigan — District of US

[87 MICHAPP 228] Wisti & Jaaskelainen by A. H. Wisti, Hancock, for plaintiffs-appellants.

Jeryl A. Manchester, Houghton, for defendant-appellee.

Before GILLIS, P. J., and D. E. HOLBROOK and MAHER, JJ.

GILLIS, Presiding Judge.

Plaintiffs appeal from the trial court's order granting accelerated judgment to defendant.

Plaintiff Melvin Siira incurred a work-related injury in Montana in August, 1969. Workmen's compensation benefits were paid under the Montana Workmen's Compensation Act. A lump-sum payment of $14,308.90 was ultimately made which was approved by the Montana Workmen's Compensation Division.

Plaintiffs Melvin and Shirley Siira subsequently filed suit against the manufacturer of a power saw which had been involved in the accident. This suit was settled for $75,000, $25,000 of which went to plaintiffs Wisti and Jaaskelainen for attorney fees.

On May 19, 1975, defendant filed a complaint [87 MICHAPP 229] against Mr. Siira for reimbursement of the workmen's compensation benefits pursuant to the Montana Act. Judgment in favor of defendant was rendered in July, 1976, and a writ of execution was subsequently secured to enforce this judgment.

Plaintiffs commenced the instant suit in April, 1977, requesting (1) apportionment of attorney's fees as is provided for in the Michigan Worker's Disability Compensation Act, M.C.L. § 418.827; M.S.A. § 17.237(827), and (2) actual and punitive damages for abuse of process and interference with plaintiffs' contractual rights.

Defendant brought motions for accelerated judgment and summary judgment. The former was granted on June 20, 1977. Plaintiffs appeal as of right.

I APPORTIONMENT OF ATTORNEY FEES

In granting accelerated judgment the trial court held that the "claims of Plaintiffs are barred by the prior District Court Judgment on July 19, 1976" and plaintiffs Wisti and Jaaskelainen "have no standing and are otherwise without legal capacity to seek the relief requested in the Complaint; and the claims of Plaintiffs for an accounting and/or equitable lien are barred by laches due to their failure to bring this action in a timely manner".

In asking for apportionment of attorney fees plaintiffs rely upon § 827 of the Michigan Worker's Disability Compensation Act, M.C.L. § 418.827; M.S.A. § 17.237(827). This section allows an employee who has received worker's compensation benefits from his employer to recover from a third-party tortfeasor. Provision is made to reimburse the employer [87 MICHAPP 230] or carrier for compensation payments, with the attorney fees in a successful third-party action to be apportioned between the employee and carrier. However, § 827 has no applicability to the instant case. The first sentence of that section begins as follows: "Where the injury for which compensation is payable Under this act * * *." 1 It is evident [87 MICHAPP 231] from this language that § 827 is applicable only when the compensation was paid or payable under the Michigan Act. In the instant case Mr. Siira lived and worked in Montana at the time of the injury, the claim was made under the Montana Act, and the lump sum settlement of that claim was approved by the appropriate Montana worker's compensation agency.

The Montana Act differs significantly from the Michigan Act. While both acts allow reimbursement to the carrier, Montana does not provide for apportionment of attorney fees. On the other hand, while in [87 MICHAPP 232] In the instant case the original compensation was paid pursuant to the Montana Act. In addition, Employers Mutual sought reimbursement in accordance with the Montana Act. We therefore hold that § 827 of the Michigan Act is not applicable to this case. Rather, the Montana provision on reimbursement governs the issue.

Michigan the carrier is entitled to be reimbursed for all compensation payments made, in Montana the carrier is only entitled to recover 50 percent of the compensation payments. 2

Under the Montana Act, the attorney has a first lien on the proceeds from a third-party settlement in the hands of whomsoever such proceeds may come. Hardware Mutual Casualty Co. v. Butler, 116 Mont. 73, 148 P.2d 563 (1944). If there are sufficient funds after payment of this fee, the compensation carrier may recover its full statutory share of reimbursement. See Anno.: Workmen's compensation: attorney's fee or other expenses of litigation [87 MICHAPP 233] incurred by employee in action against third party tortfeasor as charge against employer's distributive share, 74 A.L.R.3d 854, 929. It was conceded by plaintiffs Wisti and Jaaskelainen that they received their full fee out of the third-party settlement. They contend, however, that they have agreed to refund a portion of that fee to the Siiras due to the reimbursement to the insurance carrier. They now seek to assert a claim against Employers Mutual for the attorney fees they have refunded to Mr. Siira. Whatever may be the private agreement among the plaintiffs it is clear that under Montana law defendant has no obligation to pay any portion of the attorney fees.

There is some question as to whether an order granting accelerated judgment is an appropriate method for disposing of this claim. Summary judgment for failure to state a cause of action would seem to be a more appropriate way to deal with the matter. However, since the applicability of the Michigan Act was argued in front of the trial court and the parties were directed to address this issue before this Court we believe it is appropriate, pursuant to our authority under GCR 1963, 820.1(7), to order entry of summary judgment, GCR 1963, 117.2(1), in favor of defendant on Count I. See American Fidelity Fire Ins. Co. v. Barry, 80 Mich.App. 670, 264 N.W.2d 92 (1978).

II ABUSE OF PROCESS

Counts II, III and IV deal essentially with plaintiffs' allegation of abuse of process. The trial court's decision to grant accelerated judgment on these three counts on the basis of res judicata was error.

[87 MICHAPP 234] The facts alleged to constitute abuse of process involve the manner in which defendant Employers Mutual executed upon its district court judgment. In order for a judgment to constitute a bar to a claim in a subsequent action, it must be upon the merits, upon the same matter in issue, and between the same parties or their privies. Curry v. Detroit, 394 Mich. 327, 231 N.W.2d 57 (1975). It is evident that a judgment cannot be dispositive of a cause of action based upon facts which occur subsequent to the entry of that judgment, as is the situation in the case at bar.

We, therefore, conclude that the trial court's order granting accelerated judgment on Counts II, III and IV should be reversed and the case remanded for a trial on the merits. No costs, neither party having prevailed in full.

1 M.C.L. § 418.827; M.S.A. § 17.237(827) reads in full as follows:

"(1) Where the injury for which compensation is payable under this act was caused under circumstances creating a legal liability in some person other than a natural person in the same employ or the employer to pay damages in respect thereof, the acceptance of...

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  • Oberson v. Federated Mut. Ins. Co.
    • United States
    • Montana Supreme Court
    • 20 décembre 2005
    ...v. State (1983), 206 Mont. 264, 289, 670 P.2d 1372, 1385 (citations omitted). Federated points us to Siira v. Employers Mut. Liability Insurance Co. (1978), 87 Mich.App. 227, 274 N.W.2d 26. In that case a Montana resident, injured in Montana, received benefits under Montana's Workers' Compe......

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