Wallacev.Con Freight

Michigan Court of AppealsApr 5, 1993
199 Mich. App. 141 (Mich. Ct. App. 1993)
199 Mich. App. 141500 N.W.2d 752

Docket No. 142632.

Submitted November 18, 1992, at Lansing.

Decided April 5, 1993, at 9:55 A.M. Leave to appeal sought.

Kelman, Loria, Downing, Schneider Simpson (by Ann Curry Thompson), for the plaintiff.

Damm Tauscher, P.C. (by Michael J. Tauscher and Randy G. Martinuzzi), for the defendant.


This appeal involves the jurisdiction of the Michigan Bureau of Workers' Disability Compensation. The question is whether the Bureau has jurisdiction pursuant to Michigan's Workers' Disability Compensation Act over a disability claim filed by a nonresident who was injured while working in Michigan. MCL 418.101 et seq.; MSA 17.237(101) et seq. The appeal is from a Workers' Compensation Appeal Board (WCAB) order which held that the WCAB was without jurisdiction to consider plaintiff's petition for disability benefits. Plaintiff argues that the WCAB erred as a matter of law in finding no Michigan jurisdiction. We agree and reverse.


Defendant, an out-of-state company, is a common carrier of freight with terminals and customers in many Michigan cities. Plaintiff is an Indiana resident hired in Indiana by defendant as a truck driver. Plaintiff was injured while working for defendant in Lansing, Michigan on May 31, 1984 and in Flint, Michigan on May 1, 1985. His injuries arose out of and in the course of his employment.

The State of Indiana paid plaintiff weekly disability benefits from May 31, 1984 until he returned to work on June 12, 1984. After his injury in 1985, he again received weekly benefits, until he was classified as having a permanent-partial disability under Indiana's workers' compensation law. The classification terminated his right to continued weekly and medical care benefits but entitled him to a lump sum payment.

Plaintiff then filed a petition in Michigan claiming benefits under the Workers' Disability Compensation Act (WDCA) for the same injuries. A magistrate denied the claim, finding no statutory basis for jurisdiction. The WCAB affirmed.


Defendant argues that there is no basis in the WDCA to provide Michigan with jurisdiction over disability claims filed by nonresidents injured within the state. MCL 418.101 et seq.; MSA 17.237(101) et seq. It asserts that the Michigan Legislature did not intend that nonresidents be eligible for disability benefits. Plaintiff argues that Michigan has jurisdiction due to the broad jurisdictional grant over employees and employers which the WDCA provides. MCL 418.111; MSA 17.237(111).

Section 111 of the WDCA states:

Every employer, public and private, and every employee, unless herein otherwise specifically provided, shall be subject to the provisions of this act and shall be bound thereby. [MCL 418.111; MSA 17.237(111).]

The Michigan Supreme Court, after interpreting the predecessor to § 111, has upheld a disability award to a nonresident injured in Michigan. Schenkel v Tower Builders Co, Inc, 380 Mich. 492; 157 N.W.2d 204 (1968). In Schenkel, the employer was incorporated in Indiana, and the employee was an Indiana resident. The plaintiff was injured in Michigan when a tower he was helping to construct collapsed. The plaintiff obtained disability benefits under Indiana's workers' compensation law. He sought additional disability benefits from Michigan.

That section provided:

On and after the effective date of this section, every employer, public and private, and every employee, unless herein otherwise specifically provided, shall be subject to the provisions of this act and shall be bound thereby. The commission may in its discretion destroy any record, file or paper pertaining to workmen's compensation where, or whenever, 20 or more years have elapsed since the date of the injury to which the record, file or paper refers.

This act shall be known and may be cited as "The workmen's compensation act." [1948 CL 411.2.]

The issue before the Michigan Supreme Court was whether the full faith and credit clause barred the plaintiff from recovery in Michigan. However, before reaching this issue, the Court stated:

A preliminary question calls for treatment. Appellant claimed below that the Michigan workmen's compensation department has no "jurisdiction over a workmen's compensation claim by a foreign employee employed under a foreign contract of employment who is injured in the State, after he has accepted workmen's compensation benefits under an award in his home State."

The contention is opposed directly by the compulsory feature of part 1, § 2 of our statute, as amended in 1943, which amendment was in force on the date of plaintiff's injury and disablement (CL 1948, § 411.2 [Stat Ann 1960 Rev § 17.142]). It is overcome also by the fact of timely filing with our department of the appellant insurer's required certificate of Michigan coverage. The certificate, filed October 31, 1961, recites that Tower Builders Company, Inc., located in the Republican Building at Angola, Indiana, "has been issued a policy" (by appellant) "covering all the liability imposed upon that employer by the provisions of the Michigan workmen's compensation act for all his employees in any and all of his businesses." The coverage effected by that certificate remained in force, so far as concerns compensable claims arising out of disablements occurring in Michigan, until March 11, 1963. [ Id., 494-495.]

Defendant argues that the jurisdictional analysis in Schenkel is dictum. It asserts, also, that the facts are distinguishable, because the plaintiff in Schenkel was a temporary resident, and the employer accepted jurisdiction by filing a certificate of Michigan insurance coverage. However, the fact that the plaintiff in Schenkel may have been a temporary resident played no role in the Supreme Court's decision to uphold Michigan's jurisdiction. Moreover, that the employer in Schenkel filed a certificate of insurance in Michigan does not alone provide a basis for Michigan to exercise jurisdiction.

Unlike the defendant in Schenkel, the defendant in this case is self-insured. Therefore, it was required to receive approval to act as a self-insured from the director of the Michigan Bureau of Workers' Disability Compensation. MCL 418.611(1)(a); MSA 17.237(611)(1)(a). We decline to distinguish between an employer obtaining bureau approval to act as a self-insured and an employer obtaining a certificate of Michigan insurance coverage. The jurisdictional grant provided in § 111 of the WDCA does not hinge on whether the employer is insured in Michigan.

The jurisdictional analysis in Schenkel was not dictum. Had the Supreme Court found that the workers' compensation department lacked jurisdiction over a nonresident's disability claim, it would never have reached the full faith and credit clause question. Since Schenkel cannot be distinguished from this case on jurisdictional grounds, we find that Schenkel controls the result here.


Even if Schenkel were distinguishable, we would hold that Michigan has jurisdiction under the facts of this case based on the broad grant of jurisdictional power authorized in § 111. MCL 418.111; MSA 17.237(111). We are not persuaded by defendant's arguments that the Legislature had no intention of allowing nonresidents to recover Michigan disability benefits under the WDCA.

Defendant cites the preamble of the WDCA in support of its argument. The preamble expressly provides that it was the intent of the Legislature "to promote the welfare of the people of this State." Defendant has not convinced us that prohibiting Michigan from exercising jurisdiction over disability claims filed by nonresidents injured within the state would promote the welfare of this state. Further, the current preamble of the WDCA does not contain the "promote the welfare" language.


Courts may depart from a literal reading of a statutory provision when it would lead to absurd and unjust results patently inconsistent with policies promoted by the statute. See Salas v Clements, 399 Mich. 103, 109; 247 N.W.2d 889 (1976). A literal reading of § 111 would allow coverage to nonresidents injured within the state. Defendant argues that the literal reading would be inconsistent with the statutory definition of an employee as a person "under any contract of hire." MCL 418.161(1)(b); MSA 17.237(161)(1)(b).

We find no inconsistency. It does not follow from the fact that the employer-employee relationship must be contractual that the contract must be entered into in Michigan. Nothing in the act supports defendant's argument that the employee's contract must be a Michigan contract.


Defendant argues also that the Legislature's intent in amending the WDCA in 1980 and 1981 was to limit the scope of the act by reducing the cost of workers' compensation liability insurance. Consequently, it asserts that the Legislature could not have intended to provide coverage to nonresidents.

The 1980 and 1981 amendments did not limit the jurisdictional reach of the act. In fact, § 846, which was added in 1982, provides a credit to Michigan if an injured employee receives disability compensation from another state. MCL 418.846; MSA 17.237(846). It does not distinguish between Michigan employees injured outside the state and nonresident employees injured within it. The Legislature could have made the distinction had that been its intent.


Defendant asserts that, in the WDCA, benefit levels and premiums are calculated by examining an employee's Michigan wages. In addition, the Michigan Employment Security Commission is charged with calculating the state's average weekly wage. From this, defendant concludes that the Legislature must have intended to limit the act to Michigan workers. We disagree. The method of making calculations is independent from the question of whether the state has jurisdiction over filed disability claims.


Finally, defendant urges that granting jurisdiction under the facts of this case would violate the conflicts of law doctrine. Whether Michigan can exercise jurisdiction pursuant to the WDCA depends upon an analysis of the scope of the act, not upon whether Indiana or Michigan law applies.

We conclude that, pursuant to the WDCA, Michigan has jurisdiction over disability claims filed by nonresidents injured within the state.