Opinion
Docket No. 81252.
Decided April 30, 1986.
Edwin H. Comber, Assistant Friend of the Court, for the Wayne County Friend of the Court.
George E. Ganos, for Pennwalt Corporation.
Pennwalt Corporation appeals from a judgment finding it in contempt of court for violation of a court order, ordering payment to the Friend of the Court (FOC) of $1,047.50, and assessing $750 in attorney fees, costs, and receiver fees payable to the FOC. We affirm.
Following a default divorce judgment in 1982, George Burnett failed to make child support payments to Gloria Burnett. On July 15, 1983, the FOC was appointed receiver of all funds due George Burnett on a workers' compensation claim against Pennwalt. This action was taken to ensure collection of a substantial arrearage. Pennwalt admitted receiving this order, which specifically named Pennwalt and stated that funds due Burnett from Pennwalt's insurer were covered by the order.
On February 27, 1984, the Bureau of Workers' Disability Compensation ordered Pennwalt and its insurer, Employer's Mutual Liability Insurance Company to pay George Burnett $1,047.50. Employer's Mutual, unaware of the court order appointing the FOC as receiver, paid Burnett directly.
Following a show cause hearing, the trial court concluded that Pennwalt had a duty to inform Employer's Mutual of the court order, while the FOC did not. Accordingly, the trial court found Pennwalt in contempt of court. The trial court ordered Pennwalt to pay $1,047.50 to Gerhard F. Ritsema, the FOC receiver, at twelve percent interest from the date of the hearing. The trial court also ordered Pennwalt to pay the receiver $750 in attorney fees, costs, and receiver fees.
We believe the propriety of finding Pennwalt liable follows from this Court's holdings in Davis v Davis, 137 Mich. App. 291; 358 N.W.2d 6 (1984), and Allen v Allen, 141 Mich. App. 105; 366 N.W.2d 88 (1985). In those cases, the FOC was appointed as receiver of any workers' compensation benefits to be awarded to the claimants, who also had child support arrearages. In each case, the employer was notified of the appointment, and in each case the employer paid the workers' compensation award directly to the claimant, contrary to the court order, rather than to the FOC. This Court found the employers liable to the FOC for the full amounts of the compensation awards.
The same holds true despite the fact that the award here was actually paid by Pennwalt's insurer. In Ptak v Pennwalt Corp, 112 Mich. App. 490; 316 N.W.2d 251 (1982), an earlier case involving Pennwalt, Pennwalt was aware of a lien against any subsequent workers' compensation benefits in favor of the insurance company that paid medical benefits to the employee. Pennwalt reached a redemption agreement with that employee. This Court held that, while an employer may settle with an employee, if such settlement is reached after proper notice of a lien from a third-party insurance company with regard to reimbursement, the employer must take the additional claim into account and make arrangements for payment in the event that liability is later ascertained. Where it failed to do so, the employer could be required to pay the full amount of the reimbursement awarded to the insurance company. 112 Mich. App. 495.
Applying the reasoning of Ptak to this case, we find that Pennwalt failed to make arrangements for payment to the FOC and, accordingly, find that Pennwalt is liable to the FOC for the full amount owed. It is only reasonable to conclude that Pennwalt, in receipt of the court order appointing a receiver and aware that it would not directly pay the award, should have notified its insurer of the proper disbursement. The order specifically covered funds to be paid by Pennwalt's insurer. Pennwalt ultimately had responsibility for the award.
Pennwalt argues that it could not be held in contempt of court. Contempt is a wilful act, omission, or statement tending to impair the authority or impede the functioning of a court. Williams International Corp v Smith, 144 Mich. App. 257, 261; 375 N.W.2d 408 (1985). Criminal contempt has as its purpose the punishment of past disobedient conduct, while civil contempt seeks compliance through the imposition of a sanction of indefinite duration terminable upon compliance or inability to comply. 144 Mich. App. 262-263. Where the noncompliance is such that the status quo can be restored and it is still possible to grant the relief originally sought, there is civil contempt. In re Contempt of Rapanos, 143 Mich. App. 483, 497; 372 N.W.2d 598 (1985).
Despite some apparent confusion below, we believe that the trial court properly found Pennwalt in civil contempt for failure to pay the award to the FOC. See Davis, supra, p 293. We note that the trial court provided no sanction to encourage compliance. Nonetheless, Pennwalt may purge itself of contempt by paying the judgment.
An award of attorney fees related to costs incurred as a result of contemptuous conduct is proper. Plumbers Pipefitters Local Union No 190 v Wolff, 141 Mich. App. 815, 818; 369 N.W.2d 237 (1985); MCL 600.1721; MSA 27A.1721. The award of $750 was recommended by a referee and approved by the trial court.
Affirmed.