Wozniak v. General Motors Corp.

• Decision Date: 02 February 1993
• Docket Number: Docket No. 154514
• Parties: Florence WOZNIAK, Plaintiff-Appellant, v. GENERAL MOTORS CORPORATION and Second Injury Fund, Defendants-Appellees.
• Court: Court of Appeal of Michigan — District of US

Page 562

497 N.W.2d 562

198 Mich.App. 172

Florence WOZNIAK, Plaintiff-Appellant, v. GENERAL MOTORS CORPORATION and Second Injury Fund Defendants-Appellees.

Docket No. 154514.

Court of Appeals of Michigan.

Submitted Dec. 15, 1992, at Lansing.

Decided Feb. 2, 1993, at 9:00 a.m.

Released for Publication April 12, 1993.

Kelman, Loria, Downing, Schneider & Simpson by Rodger G. Will, Detroit, for Florence Wozniak.

Conklin, Benham, Ducey, Listman & Chuhran, P.C. by Martin L. Critchell, Detroit, for General Motors Corp.

Frank J. Kelley, Atty. Gen., Thomas L. Casey, Sol. Gen., and Morrison Zack, Asst. Atty. Gen., for Second Injury Fund.

Before DOCTOROFF, C.J., and MARK J. CAVANAGH and MARILYN J. KELLY, JJ.

PER CURIAM:

Plaintiff, Florence Wozniak, seeks leave to appeal from a June 26, 1992, opinion and order of the Workers' Compensation Appellate Commission affirming a decision of a magistrate who allowed the reduction of her benefits pursuant to the age sixty-five provision of Sec. 357 of the Workers' Disability Compensation Act, M.C.L. Sec. 418.357; M.S.A. Sec. 17.237(357) and also held that her minimum benefit rate is twenty-five percent of the state average weekly wage pursuant to Sec. 356(3), M.C.L. Sec. 418.356(3); M.S.A. Sec. 17.237(356)(3).

Since 1964, plaintiff has been totally and permanently disabled by incurable insanity. 1965 P.A. 44 added what became M.C.L. Sec. 412.9(g); M.S.A. Sec. 17.159(g) now Sec. 357. That portion of 1965 P.A. 44 provided for five percent annual reductions, to a maximum of fifty percent at age seventy-five, of weekly benefit payments for employees entitled to weekly payments who reach the age of sixty-five. Thus, although the benefit reduction provision did not exist when plaintiff was injured, the commission has upheld the right of defendants, General Motors Corporation and the Second Injury Fund, to invoke it to reduce her benefits.

Plaintiff additionally claims that her minimum benefits should be calculated under Sec. 351(2), M.C.L. Sec. 418.351(2); M.S.A. Sec. 17.237(351)(2), which specifically applies to totally and permanently disabled employees whose date of injury precedes July 1, 1968, approximately the date when 1965 P.A. 44 was amended by 1968 P.A. 227. Under that section of the WDCA, plaintiff is entitled to the greater of (a) the compensation payable immediately before the effective date of Sec. 351(2), December 31, 1969, or (b) fifty percent of the state average weekly wage as last determined under Sec. 355, the state average weekly wage for 1992 being $490, half of which is $245. This is well in excess of plaintiff's original weekly benefit rate of $33, or the Eva King ¹ rate, which includes differential benefits payable by the Second Injury Fund up to two-thirds of plaintiff's average weekly wage of $110.04.

Again, the commission agreed with defendants that plaintiff is not entitled to payments in excess of twenty-five percent of the state average weekly wage, $122.50, because that amount exceeds two-thirds of her average weekly wage at the time of injury, relying on Sec. 356(3), which was added to the WDCA by 1980 P.A. 357, effective January 1, 1982.

In the unpublished portion of the order of the Supreme Court in Banks v. Workers' Compensation Hearing Referee, 429 Mich. 900 (1988), the Supreme Court directed that "expedited consideration be given at all proceedings under 1969 P.A. 317, as amended, involving the issues raised in this application." In lieu of granting leave to appeal, we resolve the issues presented by means of this peremptory opinion. MCR 7.205(D)(2); Kerby v. Judges' Retirement Bd., 166 Mich.App. 302, 420 N.W.2d 195 (1988), and cases there cited.

In its original form, Sec. 1 of 1965 P.A. 44 was held unconstitutional in Brown v. Saginaw Metal Casting Plants, 68 Mich.App. 85, 241 N.W.2d 769 (1976), because of an equal protection problem. It permitted reduction of benefits beginning at age sixty five only for workers injured before their sixty-fifth birthdays, a disparity the Brown Court found untenable as utterly lacking a rational basis.

The Supreme Court vacated the decision and remanded for reconsideration in light of its decision in Cruz v. Chevrolet Grey Iron Division, 398 Mich. 117, 247 N.W.2d 764 (1976). Brown v. Saginaw Metal Casting Plants, 399 Mich. 828, 249 N.W.2d 867 (1977). On remand, this Court adhered to its original decision, and the Supreme Court thereafter denied leave to appeal, 400 Mich. 852, 282 N.W.2d 922 (1977). Brown thus remains valid precedent.

In Cruz, the Supreme Court upheld, against the same kind of equal protection challenge, the amended version of the age sixty-five benefit reduction provision established by 1968 P.A. 227, M.C.L. Sec. 412.9; M.S.A. Sec. 17.159 which rewrote the first part of the statute to read as follows:

"(g) When an employee who is receiving weekly payments or is entitled to weekly payments reaches or has reached or passed the age of 65, the weekly payments for each year following his sixty-fifth birthday shall be reduced by 5% of the weekly payment paid or payable at age 65...."

This language has been carried forward in Sec. 357(1), with a proviso in Sec. 357(2) that the benefit reduction provision applies only to claimants who are otherwise eligible to receive social security benefits, a category that includes plaintiff.

In Welch v. Westran Corp., 45 Mich.App. 1, 205 N.W.2d 828 (1973), aff'd on other grounds by an equally divided Court, 395 Mich. 169, 235 N.W.2d 545 (1975), this Court held that 1968 P.A. 227, Sec. 9(g) "may not be applied retrospectively and that the referee and appeal board erred in so doing."

Unfortunately, our opinion in Lopez v. Flower Basket Nursery, 122 Mich.App. 680, 688-689, 332 N.W.2d 630 (1982), misconstrued the holding in Welch by quoting a portion of the Welch opinion out of context. In Welch, the Court discussed, not the retroactivity of 1968 P.A. 227 to injuries that occurred before its effective date, but the effect of the change in phraseology between the 1968 and 1965 benefit reduction provisions. Otherwise, the Welch discussion quoted in Lopez would have ended the analysis and led to affirmance of the appeal board decision in Welch, where the plaintiff, who was born on January 22, 1901, and had a January 31, 1966, date of injury, had been held subject to the age sixty-five benefit reduction provision on the effective date of the 1968 amendments.

Instead, the Welch Court noted that this simply presented the question of the retroactivity of the 1968 amendment:

Thus we are confronted with the question of whether the 1968 amendment operates retroactively to reduce the weekly benefits of a plaintiff who suffered a compensable injury after his sixty-fifth birthday but prior to July 1, 1968, the effective date of the amendment. [45 Mich.App. at 5, 205 N.W.2d 828.]

The Court in Welch then concluded that 1968 P.A. 227, Sec. 9(g) could not be applied retrospectively in that situation. This Court's decision in Lopez turned the Welch holding on its head.

That, of course, is merely a conflict between two panels of this Court. But an overriding factor that compels adherence to the Welch decision, and concomitant rejection of Lopez, is a portion of 1965 P.A. 44 that has not been addressed in any decision. Section 1 of 1965 P.A. 44 became numerous sections of the Michigan Compiled Laws, a variety of amendments of the Workmen's Compensation Act of 1912. Section 2 of 1965 P.A. 44 repealed certain portions of the 1912 act. Neither Sec. 2 nor Secs. 3 or 4, Sec. 4 being the effective date provision of 1965 P.A. 44, were assigned a Michigan Compiled Laws section number.

Regarding Sec. 3, this appears to have been an error of omission by the compiler, M.C.L. Sec. 8.41 et seq.; M.S.A. Sec. 2.243(1) et seq., because Sec. 3 provided:

All of the provisions of this 1965 amendatory act shall apply only to personal injuries the date of injury of which occurs on or after the effective date of this act, except as otherwise specifically provided in this act and except for the amendment to part 2, Sec. 4, concerning selection of physicians as provided in this act.

The act was given immediate effect on June 3, 1965.

Although the age sixty-five benefit reduction provision was held unconstitutional in Brown as violative of equal protection, that did not affect the retroactivity limiting language of Sec. 3 of 1965 P.A. 44. 1968 P.A. 227 was, in part, an amendment of 1965 P.A. 44, as reflected in its title. The age sixty-five benefit reduction provision was thereby amended to resolve the equal protection difficulty, by making it applicable to all workers entitled to benefits after their sixty-fifth birthday, irrespective of their age on the date of injury. But nothing in 1968 P.A. 227 purported to alter the retroactivity limiting language of Sec. 3 of 1965 P.A. 44, of which the age sixty-five benefit reduction provision remained a part. See Curry v. Detroit, 49 Mich.App. 240, 242, 211 N.W.2d 559 (1973), aff'd on other grounds, 394 Mich. 327, 231 N.W.2d 57 (1975), and Jones v. Williams, 172 Mich.App. 167, 171-172, 431 N.W.2d 419 (1988). Thus, the age sixty-five benefit reduction provision, by the terms of Sec. 3 of 1965 P.A. 44, would not apply to this plaintiff, whose date of injury was before the effective date of both statutes.

The present plaintiff turned sixty-five in 1981. By that time, Sec. 357(1), the age sixty-five benefit reduction provision, was part of 1969 P.A. 317, the current WDCA. However, Sec. 891(1) of 1969 P.A. 317, also part of the current WDCA, provides:

To the extent that they are reenacted herein, all the provisions of former Act No. 44 of the Public Acts of 1965 shall apply only to personal injuries the date of which occurs on or after September 1, 1965, except as otherwise provided in such act and except for the amendment to part 2, section 4 of that act, concerning selection of physicians as provided in that act. [M.C.L. Sec. 418.891(1...