Tucker v. Clare Bros. Ltd.
Citation | 196 Mich.App. 513,493 N.W.2d 918 |
Decision Date | 02 November 1992 |
Docket Number | Docket No. 135054 |
Parties | Maurice TUCKER and Donna Tucker, Plaintiffs-Appellees, v. CLARE BROTHERS LIMITED, Defendant-Appellee, and R.A. Townsend Company and Citizens Insurance Company, Appellants. |
Court | Court of Appeal of Michigan (US) |
Fordney, Cady, Mastromarco & Jahn, P.C. by Jo Ellen O'Connor, Gaylord, for Clare Bros. Ltd.
Hanba, Lazar & Della Santina by Geoffrey D. Lawrence, Flint, for R.A. Townsend Co. and Citizens Ins. Co.
Before HOOD, P.J., and CONNOR and KAUFMAN, * JJ.
Appellants R.A. Townsend Company and Citizens Insurance Company appeal as of right from a final judgment entered on October 29, 1990, in favor of plaintiffs Maurice and Donna Tucker in their action for personal injury. We remand to the trial court for additional proceedings.
Maurice Tucker suffered personal injuries while in the course of delivering a furnace for his employer, R.A. Townsend Company. Plaintiffs sued the manufacturer of the furnace being delivered, defendant Clare Brothers Limited. It was alleged that plaintiff was injured when a plastic band holding the furnace in the packaging broke while the furnace was being unloaded from the truck, causing plaintiff to fall. Plaintiff Maurice Tucker claimed he suffered severe physical injuries to his shoulders, back, head, skeletal frame, and internal organs. Plaintiff Donna Tucker alleged that as a result of her husband's injuries, she suffered a loss of consortium.
On September 6, 1990, an attorney for Citizens Insurance Company, Townsend's workers' compensation carrier, wrote to plaintiffs' attorney regarding the trial date of September 17, 1990. The letter also provided notice to plaintiffs that Citizens was asserting its workers' compensation lien for over $100,000 in weekly and medical benefits paid to plaintiff Maurice Tucker. Copies of the letter were provided to defense counsel and the trial court.
Instead of proceeding to trial as scheduled, plaintiffs and defendant agreed to settle, and on October 4, 1990, plaintiffs filed a motion for entry of judgment. The proposed judgment provided that plaintiff Donna Tucker would receive $30,000, while plaintiff Maurice Tucker would receive $10,000. Costs would not be awarded to either side.
On October 26, 1990, Townsend and Citizens filed a joint appearance and answer to the motion for entry of a judgment. In the answer, Townsend and Citizens requested that the proposed judgment not be entered and that an evidentiary hearing be held to determine plaintiff Donna Tucker's actual damages. Townsend and Citizens alleged that the allocation of the damages between the two plaintiffs was disproportionate and an attempt to circumvent the workers' compensation lien because any award made to plaintiff Donna Tucker could not be reached to satisfy the lien.
The trial court heard the motion for entry of a judgment on October 29, 1990, and ruled as follows:
The Court: Well, as I perceive the matter, we have a case here involving a closed-head injury to an individual who would receive, as I understand it, $10,000 under the $40,000 settlement as allocated in the proposed judgment. The spouse would receive $30,000. And the rationale for this is that the liability of Clare Brothers, Limited, was tenuous at best and, further, that the mediation panel awarded $30,000 as its considered opinion as to how much the case was worth. And also, there was the prospect of a significant amount of dollars involved in possible sanctions if the plaintiff proceeded with his claim, notwithstanding the fact that the mediators had assessed the case at less than what the settlement was.
So it seems to me that, first of all, as to the value of the case, the $40,000 settlement is appropriate and reasonable. It's certainly not excessive or it's not a sham. It looks to me like, under the facts and circumstances of this case, it's a bona fide, arm's length settlement. Now the question then becomes whether the allocation is appropriate.
It seems to me again that even though there's no doubt in my mind that the dollar amount of the medical and the pain and suffering that Mr. Tucker sustained would ordinarily be considered greater than what his wife's loss of consortium would be, under the facts and circumstances of this case, the value of his interest was substantially diminished by the fact of the mediator's award of such a comparatively low amount and also the fact that the case was one of tenuous liability. Certainly her claim would be one of some independence and magnitude that contrasted with his claims status.
I think, under the facts and circumstances of this case as I understand them, that the judgment is appropriate, and I've signed it. We're never going to reach perfection. I don't find it to be the kind of derogation of the work comp carrier's rights that would warrant its not being approved, so I've signed it.
Townsend and Citizens filed this appeal, arguing that the trial court erred in approving the settlement without first granting their request for an evidentiary hearing regarding the actual damages sustained by plaintiff Donna Tucker for loss of consortium. Townsend and Citizens argue that the allocation of the settlement evidences an intent to circumvent the lien for workers' compensation proceeds and that the parties must justify the division provided in the settlement.
Initially, we must address defendant's argument that Townsend and Citizens never formally intervened in this matter by complying with MCR 2.209(C) and should have been barred from objecting to the settlement both below and on appeal. This issue was first raised on appeal. Defendant did not file a cross appeal challenging Townsend's and Citizens' appearance in this case in the lower court. For these reasons, we could decline to address the issue. Joyce v. Vemulapalli, 193 Mich.App. 225, 228, 483 N.W.2d 445 (1992); Kim v. Ford Motor Co., 170 Mich.App. 544, 550, 429 N.W.2d 203 (1988). However, we note that Townsend and Citizens are real parties in interest and consequently they could have intervened in this case. The parties ' treatment of Townsend and Citizens' appearance and answer acknowledges this. Had plaintiffs or defendant objected below on the ground that Townsend and Citizens did not comply with the court rules for intervention, any error could have been easily corrected, and it is clear that Townsend and Citizens would have been allowed to intervene. See Harrison v. Ford Motor Co., 370 Mich. 683, 686, 122 N.W.2d 680 (1963); Mason v. Scarpuzza, 147 Mich.App. 180, 184-185, 383 N.W.2d 158 (1985); M.C.L. Sec. 418.827(1); M.S.A. Sec. 17.237(827)(1). Compare American States Ins. Co. v. Albin, 118 Mich.App. 201, 209-210, 324 N.W.2d 574 (1982); Kolar v. Hudson, 55 Mich.App. 114, 118-120, 222 N.W.2d 53 (1974). 1 Moreover, although the better practice is to formally intervene, whether one has the right to intervene does not affect the statutory right to a lien against any proceeds of the third-party action. A workers' compensation carrier is not under an obligation to intervene in a third-party tort action in order to protect its statutory lien. Fritsch v. Magnaflux Corp., 150 Mich.App. 573, 578, 389 N.W.2d 94 (1986); Ohio Farmer's Ins. Co. v. Neff, 112 Mich.App. 53, 315 N.W.2d 553 (1981). 2 However, because it is clear that Townsend and Citizens in fact sought to timely intervene in this matter, but merely failed to file a motion to intervene, we now correct the lower court record to reflect that Townsend and Citizens are permitted to intervene, nunc pro tunc, to cure this procedural defect. MCR 7.216(A)(2). Krajewski v. Klawon, 84 Mich.App. 532, 536-537, 270 N.W.2d 9 (1978).
This Court has held that neither the employer's nor the workers' compensation carrier's right to reimbursement extends to a spouse's recovery of damages for loss of consortium for nonfatal injuries to the employee. Treadeau v. Wausau Area Contractors, Inc., 112 Mich.App. 130, 136-137, 316 N.W.2d 231 (1982); Lone v. Esco Elevators, Inc., 78 Mich.App. 97, 106-108, n. 7, 259 N.W.2d 869 (1977). Compare Eddington Estate v. Eppert Oil Co., 441 Mich. 200, 207, n. 5, 490 N.W.2d 872 (1992); Hearns v. Ujkaj, 180 Mich.App. 363, 370-371, 446 N.W.2d 657 (1989). Townsend and Citizens point out that by allocating a greater share of the settlement to plaintiff Donna Tucker, plaintiffs have avoided subjecting the bulk of the settlement to the workers' compensation lien. The parties conceded that this was the result below, but argue that the allocation is justified because defendant would have had to pay a greater portion to Donna Tucker rather than Maurice Tucker because of the amount of setoffs that could affect Maurice Tucker's allocation. The only setoff defendant refers to is the workers' compensation insurance benefits paid by Townsend and Citizens. Under M.C.L. Sec. 600.6303(4); M.S.A. Sec. 27A.6303(4), these benefits do not fall within the definition of a collateral source 3 for purposes of a setoff for economic damages because Townsend and Citizens are entitled by law to a lien for these insurance benefits. Accordingly, the justification for a significant reduction of plaintiff Maurice Tucker's award, but not for plaintiff Donna Tucker's award, has not been established by the parties.
We believe the parties' settlement division does not properly represent the actual amount of damages each plaintiff would have been entitled to receive, given their justification for the allocation. From our review of the record, it appears that the parties have attempted to circumvent the lien by arbitrarily determining an allocation of the settlement. As a result of this settlement, the bulk of the $10,000 payment would go to Townsend and Citizens, after expenses, while the $30,000 payment would go to Donna Tucker. On the record made, we find that the parties have...
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