Turner v. General Motors Corp., Fisher Body Plant

Decision Date05 August 1976
Docket Number25597,Docket Nos. 25571,25598
Citation246 N.W.2d 631,70 Mich.App. 532
PartiesThomas TURNER, Plaintiff-Appellee, v. GENERAL MOTORS CORPORATION, FISHER BODY PLANT, Defendant-Appellant. Ralph McAVOY, Plaintiff-Appellee, v. H. B. SHERMAN COMPANY and American Mutual Liability Insurance Company, Defendants-Appellants. Wiley STRICKLIN, Plaintiff-Appellee, v. AMERICAN CHAIN AND CABLE COMPANY, INC., and American Mutual Liability Insurance Company, Defendants-Appellants.
CourtCourt of Appeal of Michigan — District of US

Plunkett, Cooney, Rutt, Watters, Stanczyk & Pedersen, by Edward K. Pedersen, Jr., and John P. Jacobs, Detroit, for GMC-Fisher.

Conklin, Benham, McLeod, Ducey & Ottaway, P.C., by Thomas P. Chuhran, Detroit, for Sherman and American and for American Chain and American Mutual.

Jack H. Bindes, Detroit, for Thomas Turner.

Kasoff, Young, Gottesman, Kovinsky, Friedman & Walkon, P.C., by Irwin J. Kasoff, Southfield, for Ralph McAvoy.

Robert G. Hodges, Detroit, for Wiley Stricklin.

Robert A. Fineman, Detroit, for Mich. Self-Insurers, amicus curiae.

Before T. M. BURNS, P.J., and R. B. BURNS and V. J. BRENNAN, JJ.

T. M. BURNS, Presiding Judge.

This case consists of several consolidated appeals from orders of the Workmen's Compensation Appeal Board (hereinafter Appeal Board) dismissing the defendants' appeals from decisions of hearing referees for failure to comply with 1975 P.A. 34; M.C.L.A. § 418.862; M.S.A. § 17,237(862). The appeals are by leave granted and challenge the constitutionality of that statute and the Appeal Board's authority to enforce the statute by dismissing appeals.

The factual setting for this appeal is illustrated by the history of Turner v. General Motors. Turner was awarded weekly benefits by a workmen's compensation hearing referee. Defendant filed an application for review with the Appeal Board. Plaintiff subsequently filed a motion to dismiss for defendant's failure to comply with 1975 P.A. 34. Defendant objected to the motion, asserting that the act was unconstitutional. The Appeal Board notified defendant that failure to comply with the act might result in dismissal of its appeal. Defendant failed to comply with the act, and the Appeal Board dismissed defendant's appeal. The instant appeal followed.

Public Act 34 provides as follows:

'Sec. 862. A claim for review filed pursuant to sections 859 or 861 shall not operate as a stay of payment to the claimant of 70% Of the weekly benefit required by the terms of the hearing referee's award. Payment shall commence as of the date of the hearing referee's award and shall continue until final determination of the appeal or for a shorter period if specified in the award. Benefits accruing prior to the referee's award shall be withheld until final determination of the appeal. If the weekly benefit is reduced or rescinded by a final determination, the carrier shall be entitled to reimbursement in a sum equal to the compensation paid pending the appeal in excess of the amount finally determined. Reimbursement shall be paid upon audit and proper voucher from the second injury fund established in chapter 5. If the award is affirmed by a final determination, the carrier shall pay all compensation which has become due under the provisions of the award, less any compensation already paid. Interest shall not be paid on amounts paid pending final determination. Payments made to the claimant during the appeal period shall be considered as accrued compensation for purposes of determining attorneys' fees under the rules of the bureau.' (Footnotes omitted.)

The Appeal Board policy has been that the act applied to cases pending appeal on the effective date of the act (May 6, 1975), and that compliance with the act is a prerequisite to perfection of appeals. 1


The defendants' primary attack on the act raises questions of both substantive and procedural due process. While having considered each argument, we address ourselves to those most warranting discussion.

We view 1975 P.A. 34 as a rational means of furthering the valid purposes of the Workmen's Compensation Act. Public Act 34 remedies a long existing injustice in the scheme of compensation: the position of an injured worker who has been awarded benefits on account of a disability but who must often wait years to begin receiving the compensation while the employer or carrier exhausts its appellate remedies. 2

Defendants argue that the act requires payment pending appeal and without stay and reimbursement after reversal only from a fund which they must keep solvent. They claim that their rights to appeal, to stays of execution and to reimbursement are deprived in violation of due process guarantees.

The claim that the act denies the employer due process of law because it must pay money to claimants prior to obtaining judicial review is without merit. Payment is required only after an adversary hearing before an impartial trier of fact. Defendants do not challenge the compliance of the hearing referees with due process requirements.


The purpose of the act, to provide some means of sustenance for individuals who have been found to be partially or totally incapable of earning a living, is clearly reasonable and rationally related to a legitimate state interest. The humanitarian purposes of the Workmen's Compensation Act are frustrated when the disabled worker is denied benefits while the employer or carrier appeals. 3 Public Act 34 thus provides that an appeal of the award does not operate as an automatic stay of payments under the award. This provision does not violate any constitutional or statutory rights of the employer or carrier.

Defendants appear to assume that they are somehow entitled to an automatic stay of payment of an award when review of the award is sought. To the contrary, the appellant in such cases is not entitled to a stay unless an appropriate showing of irreparable harm is made. 4 Public Act 34 does nothing to interfere with the powers of the Appeal Board, this Court or the Supreme Court from granting a stay of payment pending the outcome of an appeal. Yet it must be recognized that the granting of such a stay is discretionary, not automatic. 5


Defendants argue that the carrier or self-insured employer who appeals an adverse ruling of a hearing referee is required by the act to pay benefits to the worker even if the award is reversed on appeal, that reimbursement may be had only from a fund which the appellant is required to keep solvent, 6 and that this is a confiscatory taking of property without due process 7 and a denial of the right to appeal.

Defendants' argument assumes that the act precludes employers (or the Second Injury Fund) from seeking reimbursement from claimants who have been paid pursuant to referees' awards later reversed on appeal. Construing 1975 P.A. 34 as limiting reimbursement only from the Second Injury Fund might well mandate a finding of unconstitutionality. Chrysler Corp. v. Unemployment Compensation Commission, supra, footnote 7. But the act does not so limit reimbursement. We read the act as providing an equitable system of spreading any loss suffered where attempted recovery from the claimant proves unavailing. 8 Providing as such, the act, rather than denying judicial review, shifts the risk of appeal from the claimant to the employer or carrier. This is completely consonant with the legitimate interest of the state in providing at least minimal support for injured workers while disabled and unable to work. Again, this purpose obviously is frustrated when the injured worker is denied payments until years after his injury is suffered.


The defendants also raise issues concerning the validity of P.A. 34 under the equal protection clauses of the United States and Michigan Constitutions. In addressing these issues, we must decide whether the legislative classifications are reasonable and whether they are reasonable related to the object of the legislation. Manistee Bank & Trust Co. v. McGowan, 394 Mich. 655, 671, 232 N.W.2d 636 (1975).

It is suggested that P.A. 34 invidiously discriminates among a common class of litigants (workmen's compensation appellants). The employer or carrier is inordinately burdened in the appeal process, the argument goes, as the claimant receives part of the award pending appeal, lessening the claimant's inclination to contest. On the other hand, the act encourages the claimant to press frivolous appeals as he would continue to receive benefits.

This equal protection argument prompts confusion because it has nothing to do with unequal treatment among similarly situated persons. Comment, nevertheless, is necessary.

The object of the Workmen's Compensation Act is to provide compensation to persons suffering a disability arising from their employment. Such compensation, to be effective, obviously must be provided promptly. So the act provides. M.C.L.A. § 418.801; M.S.A. § 17.237(801). Public Act 34 effectuates this purpose by providing for payment to the claimant of part of the award granted by a hearing referee. Why the claimant should not be entitled to such payment pending the employer's appeal is not answered by the defendants.

Pending appeal, money representing part of the amount awarded by the hearing referee is going to be in the hands of either the employer or the employee. It certainly doesn't fly in the face of reason to conclude that the disabled worker should receive part of that award during that period of time. The hearing referee has previously determined that the employee is entitled to the award. Because of his disability, the employee needs the money immediately, not months or years hence. Any discrimination against the employer by the imposition of a heavier risk of appeal under this procedure is clearly not irrational or unrelated to the object of the act.

The claim that employee-claima...

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8 cases
  • McAvoy v. H. B. Sherman Co.
    • United States
    • Michigan Supreme Court
    • October 11, 1977
    ...failed to comply with the act, and the Appeal Board dismissed defendant's appeal. The instant appeal followed." 70 Mich.App. 532, 535, 246 N.W.2d 631, 632 (1976). As the Court of Appeals implies, the factual sequences in McAvoy v. H. B. Sherman Company and Stricklin v. American Chain and Ca......
  • Traverse Oil Co. v. Chairman, Natural Resources Com'n
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    ...come from the Legislature. Pharris v. Secretary of State, 117 Mich.App. 202, 204, 323 N.W.2d 652 (1982). In Turner v. General Motors Corp., 70 Mich.App. 532, 246 N.W.2d 631 (1976), modified in McAvoy v. H.B. Sherman Co., 401 Mich. 419, 258 N.W.2d 414 (1977), we "Administrative bodies are in......
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    • June 30, 1978
    ...164 N.W.2d 19 (1969). This is particularly true when the legislation is remedial in nature. See, e. g., Turner v. General Motors Corp., 70 Mich.App. 532, 542, 246 N.W.2d 631 (1976); modified sub nom., McAvoy v. H. B. Sherman Co., supra. The Michigan Civil Rights Act and its predecessor, the......
  • Bentley v. Associated Spring Co., Docket No. 67567
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    • May 4, 1984
    ...arguments. [133 MICHAPP 20] We must liberally construe administrative rules in light of their purpose. Turner v. General Motors Corp., 70 Mich.App. 532, 543-544, 246 N.W.2d 631 (1976), aff'd 401 Mich. 419, 258 N.W.2d 414 (1977). The clear intent behind Rule 10(c) was to provide hearing refe......
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