Summary
recognizing that an employee can bring an action to set aside a redemption if she discovers that the employer procured the redemption by fraud
Summary of this case from Jackson v. Sedgwick Claims Mgmt. Servs., Inc.Opinion
Docket No. 61003.
Decided May 1, 1979.
On application for leave to appeal the Supreme Court, in lieu of granting leave to appeal, reversed the decision of the Court of Appeals. Rehearing granted post, p 977.
James D. Jackson for plaintiff.
Dickinson, Wright, McKean, Cudlip Moon (by Thomas G. Kienbaum) for defendant.
The plaintiff applies for leave to appeal from the Court of Appeals decision affirming the trial judge's entry of summary judgment for the defendant. This case presents the question whether an allegation that the redemption of a workers' compensation claim was based on mutual mistake of a fact states a claim for which relief may be granted. The courts below held that it did not. We disagree and reverse.
I
Josephine Solo was injured in a work-related accident on February 18, 1969. Chrysler Corporation voluntarily paid benefits until she returned to work on April 21, 1969. Mrs. Solo stopped working in September 1969 and filed a claim for workers' compensation benefits. The parties reached an agreement to redeem the claim for $10,500, and the hearing referee approved the redemption following a hearing on June 15, 1970.
On November 1, 1971, Mrs. Solo filed a new petition for benefits, claiming that the settlement was not for the complete injury. However, the hearing referee and the Workmen's Compensation Appeal Board denied the petition on the ground that the agency was without authority to set aside a redemption.
Mrs. Solo then commenced this action in the Wayne Circuit Court, seeking to set aside the redemption. The trial judge granted Chrysler's motion for summary judgment on the ground that there was no genuine issue as to the existence of fraud and that the allegations of mutual mistake failed to state a claim for which relief could be granted.
The Court of Appeals initially reversed. Solo v Chrysler Corp, 76 Mich. App. 63; 255 N.W.2d 770 (1977). However, it granted rehearing and affirmed, with Presiding Judge T.M. BURNS dissenting. 77 Mich. App. 354; 258 N.W.2d 224 (1977).
II
Both the trial judge and the Court of Appeals relied heavily on the following language from Johnston's Administrator v United Airlines, 23 Mich. App. 279, 285; 178 N.W.2d 536 (1970):
"A redemption order is a final determination and an award made and accepted cannot be disturbed except upon a showing that it was procured by fraud. Panozzo v Ford Motor Co, 255 Mich. 149 [ 237 N.W. 369] (1931); Catina v Hudson Motor Car Co, 272 Mich. 377 [ 262 N.W. 266] (1935)."
Panozzo and Catina should not be read as limiting to fraud the grounds for setting aside a redemption. Those decisions said that fraud could be a basis for setting aside a redemption; they did not say that redemptions may be disturbed only on that basis.
For example, in Panozzo v Ford Motor Co, 255 Mich. 149, 150; 237 N.W. 369 (1931), we said: "A court of equity may relieve against a settlement, [a] petition to the board for its approval, [an] award based thereon, and a final settlement receipt procured by fraud."
We have held in a series of more recent cases that a mutual mistake of fact may be the basis for setting aside a release of a tort claim. See Van Avery v Seiter, 383 Mich. 486; 175 N.W.2d 744 (1970); Ryan v Alexy, 373 Mich. 50; 127 N.W.2d 845 (1964); Hall v Strom Construction Co, 368 Mich. 253; 118 N.W.2d 281 (1962). We hold that the same principle applies to workers' compensation redemptions. Thus, the plaintiff's allegation of a mutual mistake states a claim for which relief may be granted, and the summary judgment was improperly entered.
Accordingly, pursuant to GCR 1963, 853.2(4), in lieu of granting leave to appeal, we reverse the judgments of the Court of Appeals and the circuit court and remand to the Wayne Circuit Court for further proceedings.
COLEMAN, C.J., and KAVANAGH, LEVIN, FITZGERALD, RYAN, and BLAIR MOODY, JR., JJ., concurred.
WILLIAMS, J., concurred in the result.