Stanley v. Hinchliffe and Kenner

• Decision Date: 27 January 1976
• Docket Number: No. 12,12
• Citation: 395 Mich. 645,238 N.W.2d 13
• Parties: John STANLEY, Plaintiff-Appellee, v. HINCHLIFFE AND KENNER and Maryland Casualty Insurance Co., Defendants-Appellants. 395 Mich. 645, 238 N.W.2d 13
• Court: Michigan Supreme Court

Page 13

238 N.W.2d 13

John STANLEY, Plaintiff-Appellee, v.HINCHLIFFE AND KENNER and Maryland Casualty Insurance Co.Defendants-Appellants.

No. 12.

395 Mich. 645, 238 N.W.2d 13

Supreme Court of Michigan Jan. 27, 1976.

Rodger G. Will, Kelman, Loria, Downing, Schneider & Simpson, Detroit, for plaintiff-appellee.

Grahame E. Capp, LeVasseur, Werner, Mitseff & Brown, Detroit, for defendants-appellants.

WILLIAMS, Justice.

This appeal, taken from a split decision of the Michigan Workmen's Compensation Appeal Board, concerns the effect of a workmen's compensation disability award made under the workmen's compensation laws of the state of California upon plaintiff's claim for compensation for the same injury filed under Michigan's Workmen's Compensation Act.¹

Specifically we must decide 1) whether under the full faith and credit clause of the United States Constitution, ² a California compensation award acts as a bar to recovery in a Michigan proceeding involving the same injury, and if it is not, 2) whether the California award msut be credited against any recovery received in Michigan.

Independent of any considerations concerning the impact of the California award, defendants ask this Court to reverse the finding of liability by the Hearing Examiner and the Appeal Board on the basis that the record is devoid of competent evidence to establish that, plaintiff is disabled as a result of his employment with defendant Hinchliffe & Kenner.

I--FACTS

John Stanley, plaintiff-appellee, was born in Manchester, England on December 17, 1906 and came to this country in 1923.He married and worked at various jobs in Michigan before moving his family to California in 1943 where he found employment as an asbestos worker.After a two-year apprenticeship, he received his journeyman's card and remained in the asbestos field for the next 25 years.Plaintiff's line of work exposed him to excessive quantities of dust.A member of a local union, he was sent out of state to work wherever men were needed.He worked in New Mexico, Arizona, Texas, New Jersey and also in Michigan where he spent approximately five of those 25 years.

In January, 1967he was laid off from work in California and he came to Michigan seeking employment.In August of that year plaintiff began working at the Trenton powerhouse for Combustion Engineering.Plaintiff had the task of installing insulation blankets on the walls of a boiler and this resulted in his exposure to fiberglass dust.Around January 1, 1968plaintiff was employed by Hinchliffe & Kenner, defendant-appellant, ³ to do the same work on the project.He remained in defendant's employ until May 14, 1968 when he left his job because of a shortness of breach and chest pains.Plaintiff first experienced these symptoms in 1966 and his condition apparently had continued to worsen.

Upon returning to California, plaintiff in June, 1968 filed a claim for workmen's compensation benefits under California law.He indicated that he had been employed as an asbestos worker by various employers during the period March, 1943 to May 14, 1968 and claimed to have developed a pulmonary disorder as a result of exposure to asbestos dust.On June 19, 1969 the California Workmen's Compensation Appeal Board issued an order approving a compromise and release of the claim.An award of $10,045.48 was made by multiple California employers.After deducting attorneys' fees, costs, charges by two doctors and satisfaction of a lien of the Department of Employment, plaintiff netted $8,125.23.

On July 22, 1969plaintiff filed for workmen's compensation benefits in Michigan for the same injury for which he had previously received an award in California.Hinchliffe & Kenner, being plaintiff's only Michigan employer during the last 10 years who had employed him for a period of six months, was the sole employer named as a defendant.The hearing referee found plaintiff disabled as a result of an injury arising out of and in the course of his employment with defendant.He also ruled that no credit could be given for the California award.

While all members of the Appeal Board concurred on the issue of defendant's liability they split on the question of crediting the California award.Three members felt no authority existed for ordering credits while two members would have required credit for the California award.The Court of Appeals denied defendant's application for leave to appeal.We granted leave on August 23, 1974.392 Mich. 789.

II--PRIOR AWARD DOES NOT BAR RECOVERY IN SECOND STATE

Defendants argue that under the full faith and credit clause of the United States Constitutionplaintiff's prior receipt of a compensation award is a bar to recovery in a Michigan proceeding concerning the same injury ⁴ and cite the case of Magnolia Petroleum Co. v. Hunt, 320 U.S. 430, 64 S.Ct. 208, 88 L.Ed. 149(1943) as authority.The impact of a compensation award received in one state upon a proceeding for compensation in a second state was in the past the subject of extensive debate among both jurists and legal analysts.However, the issue, at least in terms of the applicability of the full faith and credit clause, appears to be settled and today a workmen's compensation recovery in one state in most instances will not act an absolute bar to a recovery in a second state.

A.Background⁵

The law prior to Magnolia Petroleum Co., v. Hunt, supra, was that a recovery in one state was not a bar to recovery in a second state.Goodrich, Conflict of Laws, 3d ed., p. 287.However, in 1943 the United States Supreme Court in a five-to-four decision ruled that a worker who had received a compensation award in Texas was precluded by the full faith and credit clause from seeking a remedy in Louisiana.Magnolia, supra, 320 U.S. 443, 64 . s.Ct. 208.

The decision received widespread criticism in legal periodicals ⁶ and efforts were made by other courts to distinguish the Magnolia decision.⁷

Just five years after its decision in Magnolia, the United States Supreme Court dramatically altered its position and in Industrial Commission of Wisconsin v. McCartin, 330 U.S. 622, 67 S.Ct. 886, 91 L.Ed. 1140.(1947) unanimously ruled that an Illinois resident injured in Wisconsin who had previously recovered compensation in Illinois was not precluded from maintaining an action in Wisconsin for workmen's compensation.The Court suggested that the Illinois award had a different effect from the Texas award in the Magnolia case.The Court indicated that while Illinois Workmen's Compensation Act had been interpreted as precluding rights of action against the employer under Illinois common law or under the Illinois Personal Injury Act(Ill.Rev.Stat.1943, ch. 70, §§ 1, 2), it was not intended to preclude compensation actions in other states arising out of the same injury.

The Supreme Court in McCartin stated:

'* * * there is nothing in the statute or in the decisions thereunder to indicate that it is completely exclusive, that it is designed to preclude any recovery by proceedings brought in another state for injuries received there in the course of an Illinois employment.Cf.Bradford Electric Light Co. v. Clapper, supra(286 U.S. 145, 52 S.Ct. 571, 76 L.Ed. 1026);Cole v. Industrial Commission, 353 Ill. 415, 187 N.E. 520, 90 A.L.R. 116.And in light of the rule that workmen's compensation laws are to be liberally construed in furtherance of the purpose for which they were enacted, Baltimore & Philadelphia Steamboat Co. v. Norton, 284 U.S. 408, 414, 52 S.Ct. 187, 189, 76 L.Ed. 366, we should not readily interpret such a statute so as to cut off an employee's right to sue under other legislation passed for his benefit.Only some unmistakable language by a state legislature or judiciary would warrant our accepting such a construction.Especially is this true where the rights affected are those arising under legislation of another state and where the full faith and credit provision of the United States Constitution is brought into play.SeeOhio v. Chattanooga Boiler Co., 289 U.S. 439, 53 S.Ct. 663, 77 L.Ed. 1307.'Supra, 330 U.S. 627--628, S.Ct., 889.

It is now widely accepted that McCartin severely limited, if not overruled Magnolia, by holding that an employee's right to proceed in a second state will not be precluded unless the first state's workmen's compensation act in 'unmistakable language' bars the employee from bringing an action in another state.⁸

B.Effect of California Award

Plaintiff's compromise and release in California was approved by that state's Workmen's Compensation Appeal Board.In California this type of settlement when approved by the Appeal Board has the force and effect of an award made after a full hearing.SeeJohnson v. Workmen's Compensation Appeals Board, 2 Cal.3d 964, 88 Cal.Rptr. 202, 471 P.2d 1002, 1007(1970).Thus in this casewe are dealing with an 'award' and not the type of voluntary payment found in Cline v. Byrne Doors, Inc., 324 Mich. 540, 37 N.W.2d 630(1949) where this Court found the full faith and credit clause was inapplicable.

The question then becomes whether there is 'unmistakable language' in the California Workmen's Compensation Act which 'cut(s) off an employee's right to sue under other legislation passed for his benefit.'McCartin, supra, 330 U.S., 628, 67 S.Ct., 889.The parties do not direct this Court to any such language nor has our independent inquiry revealed such a specific restriction.⁹Thus in accordance with the rule laid down in Industrial Commission of Wisconsin v. McCartin, supra, we find that plaintiff's award in California does not act as a bar under the full faith and credit clause to proceedings in this state for workmen's compensation benefits arising out of the same injury.

This result is consistent with the result reached by this Court in Schenkel v. Tower Builders Co., Inc., 380 Mich. 492, 157 N.W.2d 204(1968).

III--AWARD IN FIRST STATE SHOULD BE CREDITED

Having determined...