Summary
reversing a penalty award above the statutory limit, finding that the Legislature intended to limit liability for failures to pay benefits, even those failures to pay that are motivated by bad faith
Summary of this case from Brown v. Cassens Transport CompanyOpinion
Docket No. 61550.
Decided March 16, 1983. Leave to appeal applied for.
Davidson, Breen Doud, P.C. (by Richard J. Doud), for plaintiff.
Braun, Kendrick, Finkbeiner, Schafer Murphy (by E. Louis Agnisanti and Daniel J. Cline), for defendant.
Defendant, General Motors Corporation, appeals by leave granted from the Workers' Compensation Appeal Board's (WCAB) award of $24.40 in compensation and $1,500 in penalties in favor of plaintiff, Donald J. Couture. We affirm in part and reverse in part.
The issue for the Court is whether MCL 418.801(2); MSA 17.237(801)(2) allows the WCAB to impose a penalty for an employer's bad faith refusal to pay a claim.
When the WCAB has applied the proper legal standards, and its factual findings are supported by some competent evidence, this Court is bound by law to accept its decision. Const 1963, art 6, § 28; Christiansen v Eaton, Yale Towne, Inc, 89 Mich. App. 440, 444; 280 N.W.2d 463 (1978). In the present case, the WCAB found that plaintiff injured his ankle at work on July 1, 1980. Plaintiff filed his petition for a hearing on July 3, 1980, seeking to compel defendant to pay his medical bills. Plaintiff also sought a $50-per-day penalty against General Motors.
On July 14, 1980, the employer filed a Form 107, reporting and disputing the injury as "not disabling". On August 15, 1980, plaintiff presented defendant with a medical bill for $18.00. Also on August 15, 1980, defendant filed an amended Form 107, disputing the claim because plaintiff was treated by his personal physician within 10 days after the injury in violation of MCL 418.315; MSA 17.237(315). On August 21, 1980, plaintiff amended his petition to include $6.40 for mileage.
The WCAB found that plaintiff had suffered a work-related injury and was entitled to an award of $24.40 as compensation. The board found the defense presented by defendant to be inconsistent and nonsensical and found that defendant had waived MCL 418.315; MSA 17.237(315). The board then stated:
"5. Given the foregoing, the penalty provision, MCL 418.801(2) definitely applies beginning September 15, 1980, 30 days after plaintiff first presented the bill to defendant. Given all of our previous discussion, we find as fact that there was no ongoing dispute based upon this record after September 15, 1980."
MCL 418.801(2); MSA 17.237(801)(2) provides:
"(2) If weekly compensation benefits, accrued weekly benefits, medical bills, or travel allowance are not paid within 30 days after becoming due and payable in cases where there is no ongoing dispute, $50.00 per day shall be added and paid to the worker for each day over 30 days in which the compensation, medical bills, or travel allowance are not paid. Not more than $1,500.00 in total may be added pursuant to this subsection."
In construing this provision, the board, in effect, found that defendant had disputed plaintiff's claim in bad faith, with no viable defense. We are bound by that factual conclusion. However, whether the board has the power to make such a finding is a matter of statutory construction and a question of law.
This Court's guiding principle of statutory interpretation is to determine and effectuate the intent of the Legislature. Charpentier v Canteen Corp, 105 Mich. App. 700, 704; 307 N.W.2d 704 (1981). To ascertain this intent, the Court must first review the specific language of the disputed provision, giving all terms their plain and ordinary meaning absent a contrary legislative intent. Lamphere Schools v Lamphere Federation of Teachers, 400 Mich. 104, 110; 252 N.W.2d 818 (1977). When an ambiguity is found, resulting in alternative interpretations being possible, this Court may refer to any factors which may advance the most probable and reasonable legislative intention. Charpentier, supra, pp 704-705.
In Charpentier, supra, this Court found that benefits are "due and payable" and there is "no ongoing dispute" only after the decision by either the referee or the board has been mailed and the time for appeal has run. In Clark v General Motors Corp, 117 Mich. App. 387; 323 N.W.2d 714 (1982), this Court found that a voluntary agreement was not due and payable and in dispute until formalized by the hearing referee. We agree with the results reached in those cases.
MCL 418.801(2); MSA 17.237(801)(2) does not, by its own terms, grant the WCAB the power to make a qualitative determination of the merits of a defense for the purpose of assessing a penalty. The statute simply provides that there must be no ongoing "dispute". Benefits, when not disputed, are due and payable on the 14th day after the employer has notice of the injury. MCL 418.801(1); MSA 17.237(801)(1). However, MCL 418.847; MSA 17.237(847) requires a claim to go to a hearing upon the application of any interested party when any "dispute" has arisen. We cannot read the term "dispute" in either statute to mean only a meritorious or nonfrivolous dispute.
We note the possible salutary effect of a penalty provision in deterring the bad faith failure to pay meritorious claims. The Legislature had expressly put such a provision into no-fault insurance law. See MCL 500.2006(4); MSA 24.12006(4). However, in the absence of such an express provision in the workers' compensation law, we must hold that the penalty provision, MCL 418.801(2); MSA 17.237(801)(2), is limited in its application to 30 days following the 14 days after the injury if no dispute is made to the compensation bureau. Once the case is set for a hearing the penalty provision is inapplicable until 30 days following a decision where no appeal is taken. Accordingly, the award of $1,500.00 in favor of plaintiff is reversed. The award of $24.40 is affirmed.
Affirmed in part and reversed in part.