Smitter v. Thornapple Township

Michigan Supreme Court
Lansing, Michigan
Chief Justice: Justices:
Syllabus Robert P. Young, Jr. Michael F. Cavanagh
Stephen J. Markman
Mary Beth Kelly
Brian K. Zahra
Bridget M. McCormack
David F. Viviano
This syllabus constitutes no part of the opinion of the Court but has been Reporter of Decisions:
prepared by the Reporter of Decisions for the convenience of the reader. Corbin R. Davis
SMITTER v THORNAPPLE TOWNSHIP
Docket No. 144354. Argued January 9, 2013 (Calendar No. 3). Decided June 19, 2013.
Robert Smitter sought workers’ compensation benefits after he was injured while
working as a firefighter for Thornapple Township. At the time of his injury, Smitter was also
employed by General Motors Corporation, earning approximately 11 percent of his total wages
with the township and 89 percent of his wages with General Motors. The township paid Smitter
wage-loss benefits under the Worker’s Disability Compensation Act (WDCA), MCL 418.101 et
seq. Smitter also received benefits pursuant to a disability insurance policy fully funded by the
township. The township did not reduce its workers’ compensation obligation by coordinating
Smitter’s workers’ compensation benefits with his disability benefits under MCL 418.354(1)(b).
The township initially sought reimbursement from the Second Injury Fund under the dual-
employment provisions, MCL 418.372, for the entirety of Smitter’s wage-loss benefits. The
fund agreed to pay the amount it would have owed if the township had coordinated Smitter’s
benefits. The township filed an application for a hearing with the Worker’s Compensation Board
of Magistrates, seeking reimbursement from the fund for the uncoordinated amount of wage-loss
benefits. Relying on Rahman v Detroit Bd of Ed, 245 Mich App 103 (2001), the magistrate
ordered the fund to reimburse the township for 89 percent of Smitter’s uncoordinated wage-loss
benefits. The Workers’ Compensation Appellate Commission (WCAC)1 affirmed the
magistrate’s decision. The Court of Appeals denied the fund’s application for leave to appeal.
Smitter v Thornapple Twp, unpublished order of the Court of Appeals, entered April 5, 2010
(Docket No. 294768). In lieu of granting leave to appeal, the Supreme Court remanded the case
to the Court of Appeals for consideration as on leave granted. 488 Mich 917 (2010). On
remand, the Court of Appeals, TALBOT, P.J., and FITZGERALD and MARKEY, JJ., affirmed the
decision of the WCAC in an unpublished opinion per curiam, issued November 22, 2011
(Docket No. 294768). The Supreme Court granted leave to appeal. 491 Mich 917 (2012).
In an opinion by Chief Justice YOUNG, joined by Justices MARKMAN, KELLY, and
ZAHRA, the Supreme Court held:
If an injured worker was engaged in more than one employment at the time of injury, the
WDCA apportions liability between the employment that caused the injury and the Second
Injury Fund. When the injury employment provided less than 80 percent of the employee’s
1
Now the Michigan Compensation Appellate Commission. Executive Order No. 2011-6; MCL 445.2032.
wages, the fund is required to reimburse its portion of the benefits due the employee. Because
the fund’s liability is dependent on the employer’s liability and coordination of the employer’s
benefits is compulsory, the fund is required to reimburse its portion of the benefits due on the
basis of the coordinated amount of benefits. Rahman v Detroit Bd of Ed, 245 Mich App 103 is
overruled.
1. Under MCL 418.351(1), while the incapacity for work resulting from a personal
injury is total, the employer shall pay the injured employee weekly benefits of 80 percent of the
employee’s after-tax average weekly wage. MCL 418.354 provides for the coordination of
benefits, reducing an employer’s obligation to pay weekly wage benefits under the WDCA when
the injured employee simultaneously receives payments in accordance with specified benefit
programs, including a disability policy. Specifically, the statute, using the mandatory word
“shall,” requires that the employer’s worker’s compensation obligation be reduced by the after-
tax amount of the payments received under a disability policy provided by the employer.
Contrary to Rahman, coordination under MCL 418.354(1) is compulsory rather than permissive.
Rahman failed to address the significance of MCL 418.354(15), which identifies the narrow
group of employers that the Legislature has permitted to waive the coordination of benefits,
including those employing volunteer firefighters. By specifically defining the circumstances
under which an employer may waive coordination of benefits, the Legislature by implication
prohibited all other employers from waiving coordination of benefits. Because the holding in
Rahman contravened the plain language of the statute, it was overruled. Except with regard to
those employments identified in MCL 418.354(15), the coordination of benefits is mandatory
and reduces the employer’s obligation to pay weekly wage-loss benefits as a matter of law. Any
additional sum of weekly wage-loss benefits volitionally provided by the employer has no effect
on the employer’s obligation to pay weekly benefits under the law.
2. The dual-employment provisions of the WDCA, MCL 418.372, apportion liability for
an injured employee’s workers’ compensation benefits when the employee was engaged in more
than one employment at the time of injury. The statute provides that if the injury employment
provided 80 percent or less of the employee’s average weekly wage at the time of the injury, the
employer is liable for the same percentage of the injured employee’s weekly benefits as his or
her average weekly wage from the injury employment bore to his or her total weekly wages. The
Second Injury Fund is separately but dependently liable for the remainder of the weekly benefits.
The fund is liable only for its portion of the benefits due the employee. The benefits due the
employee are those that are owed to the employee. The amount due the employee by the fund is
the fund’s portion of the employer’s remaining obligation under the act, which is the balance due
after the application of the coordination provisions. The fund is not required to reimburse the
employer for any additional amount that the employer voluntarily elects to provide to an injured
employee.
3. Under the statutory scheme, the township was obligated to pay Smitter weekly wage-
loss benefits in the amount of 80 percent of his after-tax average weekly wage. Because Smitter
also received benefits pursuant to a disability policy that the township fully funded, under MCL
418.354 the township’s worker’s compensation obligation had to be reduced by the after-tax
amount of benefits that Smitter received under the disability policy. The township’s remaining
worker’s compensation obligation was reduced to the balance due after coordination. Under the
dual-employment provisions, Smitter’s weekly wage-loss benefits had to be apportioned between
the township and the Second Injury Fund because the township provided less than 80 percent of
his wages. The township was liable for 11 percent of Smitter’s coordinated weekly benefits, and
the fund was separately but dependently liable for the remaining 89 percent of Smitter’s
coordinated weekly benefits.
Judgment of the Court of Appeals reversed; case remanded to the magistrate for further
proceedings.
Justice CAVANAGH, dissenting, asserted that Smitter was a volunteer firefighter for
purposes of applying MCL 418.354(15), and, thus, that the township was permitted to provide
Smitter with uncoordinated benefits. Because the majority recognized that MCL 418.354(15)
permits the employer of a volunteer firefighter to provide its employees with uncoordinated
benefits, the majority’s conclusion that benefits coordination is mandatory except in the
employment circumstances listed in MCL 418.354(15) was dictum, as was its decision to
overrule Rahman. Although the parties had conceded that Smitter was not a volunteer firefighter
for purposes of applying MCL 418.354(15), the Court is not bound by the parties’ concessions
regarding the law. MCL 418.354(15) applies to volunteer firefighters who are considered
employees pursuant to MCL 418.161(1)(a), which, in turn, refers to those in the service of a
township under a contract of hire. Applying the statutory language, Smitter satisfied the
contract-of-hire requirement as interpreted by the majority in Hoste v Shanty Creek Mgt, Inc, 459
Mich 561 (1999). Because Smitter was a volunteer firefighter who was considered an employee
under MCL 418.161(1)(a), the township could forgo the coordination provision in MCL
418.354(1)(b). At the time of Smitter’s injury, MCL 418.372(3) stated that the allocation
provisions of MCL 418.372 did not apply to volunteer public employees entitled to benefits
under MCL 418.161(1)(a), which would have included Smitter. Thus, the apportionment
provisions were inapplicable. Because MCL 418.372 did not apply, under MCL 418.351(1), the
township was liable for all of Smitter’s workers’ compensation benefits and the fund had no
liability.
Justice MCCORMACK, dissenting, would have affirmed the decision of the Court of
Appeals. Although the word “shall” generally implies a mandatory directive, context can
undercut the application of that general principle. In this case, the majority’s conclusion that the
township was required to coordinate benefits was undercut by the text of the WDCA. Under
MCL 418.354(1), it is the employer’s obligation to pay benefits that may be reduced by
coordination, not the Second Injury Fund’s obligation. Thus, the decision to coordinate rests
with the employer, and the fund’s liability is not implicated. Further, there is no language in
MCL 418.372(1)(b), under which the Second Injury’s Fund’s liability is determined, that refers
to the possibility of benefit coordination. Nor is there any language in MCL 418.354 referring to
the Second Injury Fund. In other words, the Legislature chose not to connect the two sections.
Under the majority’s analysis, both MCL 418.354(1) and (15) are implicated only in the dual-
employment context, and then only when the injury employer provides 80 percent or less of the
injured employee’s average weekly wage; the supposedly mandatory language of MCL
418.354(1) imposes no requirements in situations in which there is only one employer, or when
the injury employer provides more than 80 percent of the injured employee’s average weekly
wage. To read MCL 418.354(1) as imposing a requirement on a subset of injury employers in
dual-employment cases renders that supposedly mandatory language meaningless in a majority
of situations. Justice MCCORMACK was reluctant to interpret the statutory terms in a manner that
would lead to that anomalous result.
Justice VIVIANO took no part in the decision of this case.
©2013 State of Michigan
Michigan Supreme Court
Lansing, Michigan
Chief Justice: Justices:
Opinion Robert P. Young, Jr. Michael F. Cavanagh
Stephen J. Markman
Mary Beth Kelly
Brian K. Zahra
Bridget M. McCormack
David F. Viviano
FILED JUNE 19, 2013
STATE OF MICHIGAN
SUPREME COURT
ROBERT SMITTER,
Plaintiff-Appellee,
v No. 144354
THORNAPPLE TOWNSHIP and
MICHIGAN MUNICIPAL LEAGUE
WORKERS’ COMPENSATION FUND,
Defendants-Appellees,
and
SECOND INJURY FUND,
Defendant-Appellant.
BEFORE THE ENTIRE BENCH (except VIVIANO, J.)
YOUNG, C.J.
Plaintiff was injured in the course of his employment as a part-time firefighter for
defendant Thornapple Township. At the time of his injury, plaintiff was also employed
by another employer. Thornapple Township paid plaintiff the maximum weekly wage
loss benefits under the Worker’s Disability Compensation Act (WDCA),1 and plaintiff
additionally received benefits pursuant to a disability insurance policy provided by the
township. Thornapple Township did not reduce its workers’ compensation liability by
coordinating plaintiff’s workers’ compensation benefits with his disability benefits under
MCL 418.354(1)(b). Subsequently, Thornapple Township sought reimbursement from
the Second Injury Fund2 under the dual employment provisions, MCL 418.372, based on
the uncoordinated amount of wage loss benefits.
The issue to be determined in this case is the amount that the fund is required to
reimburse an employer for its portion of an injured employee’s weekly benefits when the
employer fails to coordinate benefits. We hold that the coordination of benefits is
mandatory, except in very narrow employment circumstances that are inapplicable in this
case. Coordination of benefits serves to reduce the amount of weekly benefits an
employer is legally obligated to pay an employee under the WDCA. Any additional sum
of weekly benefits volitionally provided by the employer does not alter the employer’s
statutory obligation to the injured employee.
If an injured worker was engaged in more than one employment at the time of
injury, the WDCA apportions liability between the employment that caused the injury
and the Second Injury Fund. When the employment that caused the injury provided less
than 80 percent of the employee’s wages, the fund is required to reimburse its “portion of
1
MCL 418.101 et seq.
2
See MCL 418.501(1).
2
the benefits due the employee . . . .”3 Because the fund’s liability is “dependent” upon
the employer’s liability, and coordination of the employer’s benefits is compulsory, the
fund is required to reimburse its portion of the benefits due on the basis of the
coordinated amount of benefits. We reverse the judgment of the Court of Appeals and
remand this case to the magistrate for further proceedings consistent with this opinion.
I. FACTS AND PROCEDURAL HISTORY
The parties submitted this case under stipulated facts. Plaintiff, Robert Smitter,
was employed both as a part-time firefighter for Thornapple Township and as an
employee of General Motors Corporation. Smitter earned approximately 11 percent of
his total wages with Thornapple Township and 89 percent of his wages with General
Motors. On May 3, 2005, Smitter sustained a work-related injury while fighting a fire.
He was disabled from both employments for approximately 26 weeks. Given his average
weekly wage, Smitter was entitled to workers’ compensation wage loss benefits at the
maximum rate of $689 a week. Smitter also received $800 a week in “Sickness &
Accident” benefits pursuant to a disability insurance policy fully funded by Thornapple
Township. The township did not coordinate the benefits paid from the disability
insurance policy against its workers’ compensation obligation. Rather, the township
voluntarily paid the state maximum rate of wage loss benefits to plaintiff, in addition to
the benefits plaintiff received pursuant to the insurance policy.
3
MCL 418.372(1)(b).
3
Initially, Thornapple Township sought reimbursement from the Second Injury
Fund in the amount of $17,897.87 for the entirety of plaintiff’s wage loss benefits. The
fund agreed to pay $2,077.99—the amount of its liability if the township had coordinated
plaintiff’s benefits. On February 2, 2007, Thornapple Township filed an application for a
hearing, seeking reimbursement from the Second Injury Fund for “wage loss benefits
attributable to earnings from General Motors Corporation” for plaintiff’s period of
disability. Relying on Rahman v Detroit Board of Education,4 the magistrate ordered that
the fund reimburse Thornapple Township in the amount of $15,966.75, representing 89
percent of the uncoordinated wage loss benefits paid to Smitter.
The Workers’ Compensation Appellate Commission (WCAC)5 affirmed the
decision of the magistrate. The majority commiserated with the fund’s being required to
“support the Township’s public policy of treating its firefighters to benefits beyond the
statutory requirements,” agreeing with the fund that it was “unfair to allow an employer
to forfeit coordination and force another party to fund that choice.”6 However, because
Rahman controlled the facts of the case, the fund could “not take advantage of the injury
employer’s[7] entitlement to coordination unless the employer coordinates benefits.”8
4
Rahman v Detroit Bd of Ed, 245 Mich App 103; 627 NW2d 41 (2001).
5
Now the Michigan Compensation Appellate Commission. Executive Order No. 2011-6;
MCL 445.2032.
6
Smitter v Thornapple Twp, 2009 Mich ACO 175, p 3.
7
The “injury employer” is the employer the injured party was working for at the time of
the injury.
4
The Court of Appeals initially denied the fund’s application for leave to appeal,9
but this Court remanded the case to the Court of Appeals for consideration as on leave
granted.10 On remand, the Court of Appeals affirmed the decision of the WCAC.11 The
panel noted that it was bound to follow Rahman pursuant to MCR 7.215(J)(1), that the
holding in Rahman was consistent with the statutory language, and that there was no
principled reason for distinguishing Rahman from the present case. This Court granted
the Second Injury Fund’s application for leave to appeal.12
II. STANDARD OF REVIEW
While this Court’s review of a decision by the WCAC is limited, we review de
novo questions of law in a workers’ compensation case.13 Likewise, questions of
statutory interpretation are questions of law reviewed de novo.14
8
Id.9
Smitter v Thornapple Twp, unpublished order of the Court of Appeals, entered April 5,
2010 (Docket No. 294768).
10
Smitter v Thornapple Twp, 488 Mich 917 (2010).
11
Smitter v Thornapple Twp, unpublished opinion per curiam of the Court of Appeals,
issued November 22, 2011 (Docket No. 294768).
12
Smitter v Thornapple Twp, 491 Mich 917 (2012).
13
Rakestraw v Gen Dynamics Land Sys, Inc, 469 Mich 220, 224; 666 NW2d 199 (2003);
MCL 418.861; MCL 418.861a(14).
14
Dep’t of Transp v Tomkins, 481 Mich 184, 190; 749 NW2d 716 (2008).
5
In interpreting a statute, our obligation is to discern the legislative intent that may
reasonably be inferred from the words actually used in the statute.15 “A fundamental
principle of statutory construction is that ‘a clear and unambiguous statute leaves no
room for judicial construction or interpretation.’”16 When the statutory language is
unambiguous, the proper role of the judiciary is simply to apply the terms of the statute to
the facts of the particular case.17 In addition, words used by the Legislature must be
construed and understood in accordance with their common, ordinary meaning.18
III. ANALYSIS
A. RELEVANT STATUTORY PROVISIONS
In order to analyze properly the issues presented in this case, we must examine the
interplay between several provisions of the WDCA.
There is no question that plaintiff received an injury arising out of and in the
course of his employment with Thornapple Township.19 Because plaintiff was
completely disabled for approximately 26 weeks, MCL 418.351(1) describes the
township’s liability for weekly wage loss benefits. It provides in relevant part:
15
White v Ann Arbor, 406 Mich 554, 562; 281 NW2d 283 (1979).
16
In re Certified Question (Kenneth Henes Special Projects Procurement v Continental
Biomass Indus), 468 Mich 109, 113; 659 NW2d 597 (2003), quoting Coleman v Gurwin,
443 Mich 59, 65; 503 NW2d 435 (1993).
17
Rakestraw, 469 Mich at 224.
18
MCL 8.3a; Massey v Mandell, 462 Mich 375, 380; 614 NW2d 70 (2000).
19
See MCL 418.301.
6
While the incapacity for work resulting from a personal injury is
total, the employer shall pay, or cause to be paid as provided in this section,
to the injured employee, a weekly compensation of 80% of the employee’s
after-tax average weekly wage, but not more than the maximum weekly
rate of compensation, as determined under [MCL 418.355]. Compensation
shall be paid for the duration of the disability.
MCL 418.354 provides for the coordination of benefits, reducing an employer’s
obligation to pay weekly wage benefits under the WDCA when an employee
simultaneously receives payments in accordance with specified benefit programs. At the
time of plaintiff’s injury,20 MCL 418.354 provided in relevant part as follows:
(1) This section is applicable when either weekly or lump sum
payments are made to an employee as a result of liability pursuant to [MCL
418.351, MCL 418.361, or MCL 418.835] with respect to the same time
period for which old-age insurance benefit payments under the social
security act, 42 U.S.C. 301 to 1397f; payments under a self-insurance plan,
a wage continuation plan, or a disability insurance policy provided by the
employer; or pension or retirement payments pursuant to a plan or program
established or maintained by the employer, are also received or being
received by the employee. Except as otherwise provided in this section, the
employer’s obligation to pay or cause to be paid weekly benefits other than
specific loss benefits under [MCL 418.361(2)] and (3) shall be reduced by
these amounts:
* * *
(b) The after-tax amount of the payments received or being received
under a self-insurance plan, a wage continuation plan, or under a disability
insurance policy provided by the same employer from whom benefits under
[MCL 418.351, MCL 418.361, or MCL 418.835] are received if the
employee did not contribute directly to the plan or to the payment of
premiums regarding the disability insurance policy. . . .
* * *
20
Although the statute was subsequently amended by 2011 PA 266, the provisions
relevant to this case have remained substantively unaltered.
7
(2) To satisfy any remaining obligations under [MCL 418.351, MCL
418.361, or MCL 418.835], the employer shall pay or cause to be paid to
the employee the balance due in either weekly or lump sum payments after
the application of subsection (1).
* * *
(15) With respect to volunteer fire fighters, volunteer safety patrol
officers, volunteer civil defense workers, and volunteer ambulance drivers
and attendants who are considered employees for purposes of this act
pursuant to [MCL 418.161(1)(a)], the reduction of weekly benefits provided
for disability insurance payments under subsection (1)(b) and (c) and
subsection (11) may be waived by the employer. An employer that is not a
self-insurer may make the waiver provided for under this subsection only at
the time a worker’s compensation insurance policy is entered into or
renewed.[21]
MCL 418.372, known as the dual employment provision, apportions liability for
an injured employee’s workers’ compensation benefits when the employee was engaged
in more than one employment at the time of injury. At the time of plaintiff’s injury, the
statute provided in relevant part as follows:
(1) If an employee was engaged in more than 1 employment at the
time of a personal injury or a personal injury resulting in death, the
employer in whose employment the injury or injury resulting in death
occurred is liable for all the injured employee’s medical, rehabilitation, and
burial benefits. Weekly benefits shall be apportioned as follows:
(a) If the employment which caused the personal injury or death
provided more than 80% of the injured employee’s average weekly wages
at the time of the personal injury or death, the insurer or self-insurer is
liable for all of the weekly benefits.
(b) If the employment which caused the personal injury or death
provided 80% or less of the employee’s average weekly wage at the time of
21
MCL 418.354. as amended by 1987 PA 21 (emphasis added).
8
the personal injury or death, the insurer or self-insurer is liable for that
portion of the employee’s weekly benefits as bears the same ratio to his or
her total weekly benefits as the average weekly wage from the employment
which caused the personal injury or death bears to his or her total weekly
wages. The second injury fund is separately but dependently liable for the
remainder of the weekly benefits. The insurer or self-insurer has the
obligation to pay the employee or the employee’s dependents at the full rate
of compensation. The second injury fund shall reimburse the insurer or
self-insurer quarterly for the second injury fund’s portion of the benefits
due the employee or the employee’s dependents.
* * *
(3) This section does not apply to volunteer public employees
entitled to benefits under [MCL 418.161(1)(a)].[22]
Reading these statutory provisions together, it is clear that, as a starting point,
Thornapple Township is obligated by MCL 418.351 to pay Smitter weekly wage loss
benefits in the amount of 80 percent of his after-tax average weekly wage, subject to the
maximum weekly cap imposed by MCL 418.355, for the duration of his disability.
Because Smitter received benefits pursuant to a disability insurance policy
provided by Thornapple Township “with respect to the same time period”23 as the
township’s obligation to pay weekly wage loss benefits pursuant to MCL 418.351, the
coordination of benefits provisions are implicated. As Thornapple Township fully
funded the disability policy, its “obligation to pay” weekly wage loss benefits “shall be
22
MCL 418.372, as added by 1980 PA 357 (emphasis added). MCL 418.372 was
amended by 2012 PA 83, which amended subsection (3) to read “This section does not
apply to individuals entitled to benefits under [MCL 418.161(1)(d), (e), (f), (g), (h), (i),
(j), and (o)].”
23
MCL 418.354.
9
reduced” by the after-tax amount of benefits Smitter received under the policy.24 The
township’s “remaining obligations” regarding Smitter’s wage loss benefits under MCL
418.351 are thus reduced to “the balance due” after coordination.25
Lastly, because Smitter was engaged in more than one employment at the time of
his injury, the dual employment provisions of MCL 418.372 are applicable. While
Thornapple Township remains liable for all of Smitter’s medical and rehabilitation
benefits, Smitter’s weekly wage loss benefits are apportioned between the township and
the Second Injury Fund because “the employment which caused the personal injury”
provided less than 80 percent of Smitter’s wages at the time of his injury.26 The township
is liable for the same percentage of Smitter’s weekly benefits as his average weekly wage
from the township bore to his total wages. In other words, because Smitter earned 11
percent of his weekly wages with the township, it is liable for 11 percent of Smitter’s
weekly benefits. The fund is “separately but dependently liable” for the remaining 89
24
MCL 418.354(1)(b) (emphasis added).
25
MCL 418.354(2). At oral argument, the parties agreed that plaintiff is not a volunteer
firefighter, one of the very few employments to which “the reduction of weekly benefits
provided for disability insurance payments . . . may be waived by the employer.” MCL
418.354(15). Indeed, the parties submitted this case under stipulated facts, including the
stipulation that Smitter was employed as a “paid part-time firefighter . . . .” This Court
has distinguished between stipulations of fact, which are binding on the judiciary, Dana
Corp v Employment Security Comm, 371 Mich 107, 110; 123 NW2d 277 (1963), and
stipulations of law, which are not binding, In re Finlay Estate, 430 Mich 590, 595; 424
NW2d 272 (1988). Thus, Justice CAVANAGH’s reliance on Union Guardian Trust Co v
Zack, 274 Mich 108, 113; 264 NW 309 (1936), which involved an admission of law, is
inapposite.
26
MCL 418.372(1)(b).
10
percent of Smitter’s weekly benefits, representing the percentage of weekly benefits
attributable to Smitter’s employment with General Motors.27 While the township must
provide weekly benefits to Smitter “at the full rate of compensation,” the fund is required
to reimburse the township for its “portion of the benefits due the employee . . . .”28
B. COORDINATION OF BENEFITS
Relying on Rahman v Detroit Board of Education, Thornapple Township argues
that the fund is liable for reimbursement of its portion of the uncoordinated amount of
benefits and cannot reduce its liability by claiming entitlement to the coordinated amount,
particularly given that the township has “exercised its right” not to coordinate benefits.
In Rahman, the plaintiff suffered a back injury during the course of his
employment with the Detroit Board of Education. At the time of injury, Rahman was
also employed with the city of Detroit, earning 46 percent of his wages from the board of
education and the remaining 54 percent of his wages from the city of Detroit. The
magistrate ordered an open award of benefits and further held that the fund had
reimbursement liability under the dual employment provisions because the board
provided less than 80 percent of Rahman’s average weekly wage.
Rahman also received a pension from the board of education, although the facts do
not indicate whether the Board coordinated Rahman’s weekly wage loss benefits. The
27
Id.28
Id.11
fund argued that the amount it was required to reimburse the board should be based on
the coordinated amount of benefits. The Court of Appeals rejected the fund’s claim,
providing the following analysis:
[T]he coordination of benefits provision . . . applies if an employee
receives worker’s compensation benefits at the same time he receives
pension or retirement payments pursuant to a plan or program maintained
or established by an employer. [MCL 418.354(1)] provides that “the
employer’s obligation to pay or cause to be paid weekly benefits other than
specific loss benefits . . . shall be reduced by [specified] amounts . . . .” A
plain reading of the subsection indicates that the employer’s obligation to
pay the employee benefits may be reduced by the amount of pension the
employer pays to the employee.
We reject the [Second Injury Fund’s] argument that the total amount
of worker’s compensation benefits payable to plaintiff should be reduced
by the amount of the pension benefits plaintiff receives from the board.
Again, we consider the clear and unambiguous language of the statute.
[MCL 418.354] provides for a reduction in an employer’s obligation to pay
benefits if that employer provides the employee a pension. This reduction
is clearly premised on the fact that the employer is providing another wage
benefit to the employee; the statute allows the employer to coordinate that
benefit with its obligation to pay worker’s compensation wage-loss benefits
to the employee. It is apparent from the language of the statute that the
Legislature intended that the employer whose employment caused an injury
alone may take advantage of the coordination provisions. There is no
suggestion that the [Second Injury Fund], in a dual employment situation,
may take advantage of the injury-employer’s entitlement to coordination.
Therefore, the [Second Injury Fund’s] argument is rejected.[29]
While Rahman claimed to follow the unambiguous language of the statute, it
failed to do so. Contrary to Rahman’s holding that an employer’s obligation to pay
weekly benefits “may be reduced,” MCL 418.354(1) provides that the employer’s
29
Rahman, 245 Mich App at 120-121 (third alteration in original) (emphasis altered)
(citation omitted).
12
obligation “shall be reduced” by the requisite amounts listed in the statute. The
Legislature’s use of the word “shall” generally indicates a mandatory directive, not a
discretionary act.30
Furthermore, Rahman failed to recognize or address the significance of MCL
418.354(15).31 This provision explicitly delineates the narrow group of employers that
the Legislature has permitted to waive the “reduction of weekly benefits” that is
otherwise compelled by the coordination provisions: those employing “volunteer fire
fighters, volunteer safety patrol officers, volunteer civil defense workers, and volunteer
ambulance drivers and attendants who are considered employees for purposes of this act
pursuant to [MCL 418.161(1)(a)] . . . .”32 Moreover, the scope of allowable waiver
encompasses only “disability insurance payments under subsection (1)(b) and (c) and
subsection (11) . . . .”33 By specifically outlining the parameters under which an
employer may permissibly waive coordination of benefits, the Legislature by implication
prohibited all other employers who do not meet the specifications from waiving
30
Costa v Community Emergency Med Servs, 475 Mich 403, 409; 716 NW2d 236 (2006);
Burton v Reed City Hosp Corp, 471 Mich 745, 752-754; 691 NW2d 424 (2005); Tobin v
Civil Serv Comm, 416 Mich 661, 667; 331 NW2d 184 (1982); Smith v Amber Twp Sch
Dist, 241 Mich 366, 368-369; 217 NW 15 (1928).
31
Through 1983 PA 159 the Legislature enacted MCL 418.354(15) and redesignated
former subsections (15) to (17). MCL 418.354(15) has remained unaltered since that
time.
32
MCL 418.354(15).
33
Id.13
coordination of benefits.34 Such a conclusion is incompatible with Rahman’s holding
that the coordination of benefits is a discretionary “entitlement” that may be claimed or
relinquished at the pleasure of any employer.35 While Rahman decried the notion that
“the total amount of worker’s compensation benefits payable to plaintiff should be
reduced by the amount of the pension benefits plaintiff receives,” that is precisely what
MCL 418.354(1) requires. Because the holding in Rahman contravenes the plain
language of the statute, it is overruled.
Thus, with the exception of those employments falling within the limits described
in MCL 418.354(15), an employer’s obligation to pay weekly benefits under the WDCA
“shall be reduced” by the corresponding amounts listed in MCL 418.354(1). The
coordination of benefits is mandatory, not discretionary, and reduces an employer’s
obligation to pay weekly wage loss benefits as a matter of law. As a practical
consideration, an injured worker is unlikely to protest if an employer consciously chooses
to pay the employee in excess of what the law requires. However, any additional sum of
weekly wage loss benefits volitionally provided by the employer “[f]or its own policy
34
Under the doctrine of expressio unius est exclusio alterius (the expression of one thing
is the exclusion of another), the specification in a statute of one particular class excludes
all other classes. Pittsfield Charter Twp v Washtenaw Co, 468 Mich 702, 712; 664
NW2d 193 (2003); Dave’s Place, Inc v Liquor Control Comm, 277 Mich 551; 269 NW
594 (1936); Detroit v Redford Twp, 253 Mich 453, 455-456; 235 NW 217 (1931).
35
Rahman, 245 Mich App at 121.
14
reasons” has no effect on the employer’s obligation to pay weekly benefits under the
law.36
C. THE SECOND INJURY FUND’S LIABILITY
MCL 418.372(1)(b) apportions liability between the fund and the injury employer
when the employee was engaged in more than one employment at the time of his injury
and the injury employer provided 80 percent or less of the employee’s average weekly
wage.37 The statute does not require reimbursement of any additional amount that the
employer voluntarily elects to provide to an injured employee—it only provides that the
fund is liable for its “portion of the benefits due the employee . . . .” Consistent with the
common understanding of the word “due,” the benefits due the employee are those that
are owed to the employee.38
36
Despite the unambiguous meaning of the word “shall,” Justice MCCORMACK opines
that an injury employer may avoid coordinating its compensation obligation under the
WDCA because to hold otherwise would prohibit “employers and employees from freely
entering into employment contracts under terms as they see fit.” Nothing in this opinion
affects the right of an employer to agree to provide any contractual benefit to its
employees that it wishes to offer. We have announced no limiting legal principle that
would prohibit an injury employer, either by gratuitous impulse or a negotiated contract
provision, from providing benefits in excess of its obligation under the WDCA.
However, we do conclude, applying the language of the WDCA, that the injury employer
in a dual employment situation must bear the cost of its munificence and cannot require
the fund to subsidize its choices.
37
When the injury employer provided more than 80 percent of the employee’s average
weekly wage, there is no apportionment of liability. The injury employer is “liable for all
of the weekly benefits.” MCL 418.372(1)(a).
38
Random House Webster’s College Dictionary (1996), p 413 (defining “due” as “owing
or owed[.]”)
15
In determining the amount “due” the employee, we note that under the explicit
language of the statute, the fund has dependent or contingent liability39 for the remainder
of the weekly benefits for which the injury employer would ordinarily be liable40 but for
the apportionment of liability provided in MCL 418.372.41 Thus, the fund’s
reimbursement liability is expressly conditioned on the injury employer’s statutory
liability. As discussed above, the application of MCL 418.354 to reduce an employer’s
liability under the WDCA is compulsory and may not be avoided except in very narrow
circumstances.42 Therefore, the amount “due the employee”43 is the fund’s portion of the
employer’s “remaining obligation[]” under the act, which is described as “the balance
due in either weekly or lump sum payments after the application of” the coordination
provisions.44 Thus, the fund is obligated to reimburse the employer for its “portion of the
39
Random House Webster’s College Dictionary (1996), p 363 (defining “dependent” as
“conditioned or determined by something else; contingent[.]”)
40
See MCL 418.351; MCL 418.361.
41
MCL 418.372(1)(b) imposes liability on the fund for that portion of weekly benefits
attributable to the injured employee’s concurrent employment. See Lawrence v Toys R
Us, 453 Mich 112, 128; 551 NW2d 155 (1996) (“[T]he fund is only subject to liability for
benefits in respect to the wage-earning capacity lost at the concurrent employment.”).
42
We note that the very same employments permitted to waive the coordination of
benefits under MCL 418.354(15) are specifically excluded from the apportionment of
liability under the dual employment provisions pursuant to MCL 418.372(3). Thus, when
the coordination of benefits is properly waived, the fund has absolutely no reimbursement
liability in a dual employment situation.
43
MCL 418.372(1)(b).
44
MCL 418.354(2) (emphasis added).
16
benefits due the employee”45 after the application of MCL 418.354.46 The fund is not
required to reimburse the employer for any additional amounts of benefits that do not
reflect the employer’s liability under the act.
Thornapple Township argues that “strong public policy” considerations support its
position and that providing an injured firefighter with full workers’ compensation
benefits as well as disability benefits provides an “incentive” for its employees to engage
in firefighting services. However, the public policy of Michigan is not to be determined
by what a majority of this Court deems desirable or appropriate at a given time. Rather,
the public policy of Michigan must be “clearly rooted in the law” as “reflected in our
state and federal constitutions, our statutes, and the common law.”47 Moreover, this
Court may not substitute its policy preferences for those policy decisions that have been
clearly provided by statute.48 In this instant case, it is clear from the mandate contained
in MCL 418.354(1) that the public policy of Michigan, as articulated by the Legislature,
45
MCL 418.372(1)(b).
46
This conclusion is further supported by the fact that MCL 418.354(1) refers to “the
employer’s obligation.” The only time “obligation” appears in MCL 418.372(1)(b) is in
the third sentence, which addresses the “obligation” to “pay the employee . . . at the full
rate of compensation.” When MCL 418.372(1)(b) mentions the employer alone and the
fund alone, the provision refers to their “liab[ilities].” Therefore, it is reasonable to
conclude that the reference in MCL 418.354(1) to “the employer’s obligation” refers to
“the full rate of compensation,” not just the amount for which the employer alone is
“liable.” If the full rate must be coordinated, then the fund’s liability to reimburse an
employer necessarily occurs after coordination.
47
Terrien v Zwit, 467 Mich 56, 66-67; 648 NW2d 602 (2002).
48
See generally Devillers v Auto Club Ins Ass’n, 473 Mich 562, 588-593; 702 NW2d 539
(2005).
17
is to prevent duplicative wage loss payments while maintaining “suitable wage-loss
benefits.”49 Additionally, the Legislature has unequivocally indicated that the public
policy of Michigan prohibits the employees of fire departments and police departments
from receiving “like benefits” from both a municipality and the WDCA.50 MCL
418.161(c) provides:
Police officers, fire fighters, or employees of the police or fire
departments, or their dependents, in municipalities or villages of this state
providing like benefits, may waive the provisions of this act and accept like
benefits that are provided by the municipality or village but are not entitled
to like benefits from both the municipality or village and this act. However,
this waiver does not prohibit those employees or their dependents from
being reimbursed under [MCL 418.315] for the medical expenses or
portion of medical expenses that are not otherwise provided for by the
municipality or village. This act shall not be construed as limiting,
changing, or repealing any of the provisions of a charter of a municipality
or village of this state relating to benefits, compensation, pensions, or
retirement independent of this act, provided for employees.
Because the policy arguments advanced by Thornapple Township stand in stark
contradiction to the public policy pronouncements of the Legislature, they must fail.
IV. CONCLUSION
We conclude that the Second Injury Fund is required to reimburse an employer for
the fund’s portion of the benefits due the employee on the basis of the coordinated
49
See Drouillard v Stroh Brewery Co, 449 Mich 293, 299-300; 536 NW2d 530 (1995).
50
See Crowe v Detroit, 465 Mich 1, 8-10; 631 NW2d 293 (2001) (providing that “like
benefits” are those that are similar in their salient features).
18
amount of weekly benefits. We reverse the judgment of the Court of Appeals and
remand this case to the magistrate for further proceedings consistent with this opinion.
Robert P. Young, Jr.
Stephen J. Markman
Mary Beth Kelly
Brian K. Zahra
19
STATE OF MICHIGAN
SUPREME COURT
ROBERT SMITTER,
Plaintiff-Appellee,
v No. 144354
THORNAPPLE TOWNSHIP and
MICHIGAN MUNICIPAL LEAGUE
WORKERS’ COMPENSATION FUND,
Defendants-Appellees,
and
SECOND INJURY FUND,
Defendant-Appellant.
CAVANAGH, J. (dissenting).
I respectfully dissent from the majority opinion because I believe that Robert
Smitter was a “volunteer fire fighter[]” for purposes of applying MCL 418.354(15) of the
Michigan Worker’s Disability Compensation Act (WDCA),1 and, thus, Thornapple
Township was permitted to provide Smitter with uncoordinated benefits. While I do not
necessarily disagree with Justice MCCORMACK’s conclusion that the WDCA may allow
all employers to decide whether to coordinate workers’ compensation benefits and
disability insurance benefits, I do not believe that it is necessary to decide that issue in
1
MCL 418.101 et seq.
this case. Rather, because the majority recognizes that MCL 418.354(15) permits the
employer of a volunteer firefighter to provide its employees with uncoordinated benefits,
I believe that the majority’s conclusion that benefits coordination is mandatory except in
the employment circumstances listed in MCL 418.354(15) is unnecessary dictum.
Likewise, I believe that the majority’s decision to overrule Rahman v Detroit Bd of Ed,
245 Mich App 103; 627 NW2d 41 (2001), is also dictum.
Although both parties stated at oral argument that Smitter was not a volunteer
firefighter for purposes of applying MCL 418.354(15) because he was paid, this Court is
not bound by the parties’ concessions regarding the law. See, e.g., Union Guardian Trust
Co v Zack, 274 Mich 108, 113; 264 NW 309 (1936).2 Accordingly, I believe that the
majority errs by relying solely on the parties’ concessions without considering more
closely whether those concessions comport with the applicable statutory provisions.
In order to determine whether Smitter was a volunteer firefighter for purposes of
MCL 418.354(15), we must look more closely at the language of that subsection:
With respect to volunteer fire fighters, volunteer safety patrol
officers, volunteer civil defense workers, and volunteer ambulance drivers
and attendants who are considered employees for purposes of [the WDCA]
2
I recognize that the parties submitted this case under stipulated facts, including the fact
that Smitter was a “paid part-time firefighter . . . .” However, as my subsequent analysis
explains, a paid employee may nevertheless be a “volunteer” as that word is used in MCL
418.354(15). Thus, my analysis engages in statutory interpretation to determine the
meaning of “volunteer” as used in MCL 418.354(15). It is well established and
universally accepted that statutory interpretation presents a question of law. See, e.g.,
Klooster v City of Charlevoix, 488 Mich 289, 295; 795 NW2d 578 (2011). Accordingly,
contrary to the majority’s claim, this Court’s common refusal to be bound by parties’
concessions regarding the law clearly applies to this Court’s interpretation of the meaning
of “volunteer” as used in MCL 418.354(15).
2
pursuant to section 161(1)(a),[3] the reduction of weekly benefits provided
for disability insurance payments under subsection (1)(b) and (c) and
subsection (11) may be waived by the employer. An employer that is not a
self-insurer may make the waiver provided for under this subsection only at
the time a worker’s compensation insurance policy is entered into or
renewed.
Importantly, MCL 418.354(15) provides that it applies to “volunteer fire fighters . . . who
are considered employees for purposes of [the WDCA] pursuant to section
161(1)(a) . . . .” (Emphasis added.) MCL 418.161(1)(a), in turn, defines “employee” as
“[a] person in the service of the state, a county, city, township, village, or school district,
under any appointment, or contract of hire, express or implied, oral or written.”
(Emphasis added.) Thus, although MCL 418.354(15) refers to “volunteer fire fighters,”
in my view, subsection (15) applies to volunteer firefighters who are “under any . . .
contract of hire,” which may include paid firefighters.4
This Court addressed the “contract of hire” language in MCL 418.161(1) at length
in Hoste v Shanty Creek Mgt, Inc, 459 Mich 561; 592 NW2d 360 (1999).5 The Hoste
3
MCL 418.161(1)(a).
4
The idea that a “volunteer” firefighter may receive compensation is not a foreign
concept in the realm of employment benefits. For example, the Employment Security
Act, MCL 421.1 et seq., recognizes that “volunteer” firefighters may be paid and
expressly excludes a “volunteer” fire fighter’s wages, up to a defined amount, from
consideration in determining his or her unemployment benefit rate. MCL 421.27(c)(2)
(“The weekly benefit rate shall not be reduced under this subdivision for remuneration
received for on-call or training services as a volunteer firefighter, if the volunteer
firefighter receives less than $10,000.00 in a calendar year for services as a volunteer
firefighter.”) (emphasis added).
5
I remain committed to the dissent in Hoste. See Hoste, 459 Mich at 579-586 (MARILYN
KELLY, J., dissenting). However, because I conclude that the result in this case is the
same under either the majority or dissenting opinions in Hoste, I will apply the majority
opinion for purposes of this dissent.
3
majority first stated that the phrase “contract of hire” “connote[s] payment of some kind.”
Id. at 574-575. The majority supported that conclusion by noting that the Legislature
“designed worker’s compensation to be a safety net to provide ‘income maintenance for
persons who have met misfortune or whose regular income source has been cut off.’” Id.
at 575, quoting Franks v White Pine Copper Div, 422 Mich 636, 654; 375 NW2d 715
(1985). Hoste explained that the “of hire” portion of the phrase distinguishes between
gratuity or accommodation and a payment. Specifically, the majority stated that gratuity
does not satisfy the “of hire” requirement because “worker’s compensation provides
benefits to those who have lost a source of income; it does not provide benefits to those
who can no longer take advantage of a gratuity or privilege that serves merely as an
accommodation.” Hoste, 459 Mich at 575. Finally, Hoste summarized by stating that in
order to satisfy the “of hire” requirement in MCL 418.161(1), “compensation must be
payment intended as wages,” which the majority defined as “real, palpable and
substantial consideration as would be expected to induce a reasonable person to give up
the valuable right of a possible claim against the employer in a tort action and as would
be expected to be understood as such by the employer.” Id. at 576.6
Applying the statutory language as written, in my view, Smitter satisfied the
“contract of hire” requirement under the definition of “employee” as interpreted by the
6
I recognize that the version of MCL 418.161(1) in place at the time Hoste was decided
expressly included volunteer firefighters in the definition of “employee,” see Hoste, 459
Mich at 578, whereas the version of MCL 418.161(1) applicable in this case does not.
However, because MCL 418.354(15) continues to refer to MCL 418.161(1)(a), I believe
that Hoste’s analysis remains relevant. The change in statutory language and its impact
on this case will be discussed in greater detail later in this dissent.
4
Hoste majority. Both parties agree that Smitter received wages as compensation for the
time he spent working as a firefighter. Thus, I think that Smitter was a “volunteer fire
fighter[] . . . who [is] considered [an] employee[] . . . pursuant to section 161(1)(a) . . . .”
MCL 418.354(15). Accordingly, I think that the next provision of MCL 418.354(15)
applies: “the reduction of weekly benefits provided for disability insurance payments
under [MCL 418.354(1)(b)] . . . may be waived by the employer.” Therefore, I think that
Thornapple may forgo the coordination provision in MCL 418.354(1)(b) in this case and
instead provide Smitter with uncoordinated workers’ compensation and disability
insurance benefits.
Accepting that MCL 418.354(15) applies in this case and allows Thornapple to
provide Smitter with uncoordinated benefits, the next question is how that conclusion
affects the Second Injury Fund’s (SIF) liability for workers’ compensation benefits. That
question is answered by reviewing the apportionment statute, MCL 418.372.
Specifically, at the time of Smitter’s injury, MCL 418.372(3) expressly stated that the
allocation provisions in MCL 418.372 do “not apply to volunteer public employees
entitled to benefits under section 161(1)(a).”7 In my view, because Smitter was a
“volunteer fire fighter” who was “considered [an] employee[] for purposes of [the
WDCA] pursuant to section 161(1)(a)” under MCL 418.354(15), he was a “volunteer
public employee[] entitled to benefits under section 161(1)(a)” for purposes of MCL
418.372(3). Thus, I think that MCL 418.372(3) applies and the apportionment provisions
are inapplicable in this case. Indeed, the majority opinion acknowledges that this is the
7
MCL 418.372 was later amended by 2012 PA 83.
5
proper interpretation of the relevant statutory provisions. See ante at 16 n 42 (“[T]he
very same employments permitted to waive the coordination of benefits under MCL
418.354(15) are specifically excluded from the apportionment of liability under the dual
employment provisions pursuant to MCL 418.372(3).”).
Because MCL 418.372 does not apply, this case returns to a simple application of
MCL 418.351(1), which provides that “the employer shall pay, or cause to be paid as
provided in this section, to the injured employee, a weekly compensation of 80% of the
employee’s after-tax average weekly wage . . . .” In short, Thornapple is liable for all of
Smitter’s workers’ compensation benefits, and the SIF has no liability.8 Again, the
majority agrees with this result. See ante at 16 n 42 (stating that when MCL 418.354(15)
and MCL 418.372(3) apply, the SIF has “no reimbursement liability in a dual
employment situation”). Thus, because the majority, in my view, erroneously relies
exclusively on the parties’ concessions that Smitter was not a “volunteer fire fighter” for
purposes of MCL 418.354(15) while otherwise agreeing that the employer of a
“volunteer fire fighter” may elect to forgo coordination of benefits, I believe that the
majority opinion reaches issues that need not be addressed in this case. Specifically, I do
not think that it is necessary to decide whether benefits coordination is mandatory in
employment circumstances not listed in MCL 418.354(15). Moreover, because Rahman,
245 Mich App 103, did not address an employment listed in MCL 418.354(15), I think
8
Thornapple would be liable for Smitter’s “average weekly wage” based on his income
from both jobs (General Motors and Thornapple). See MCL 418.371(2) (defining
“average weekly wage” as “the weekly wage earned by the employee at the time of the
employee’s injury in all employment . . . .”) (emphasis added).
6
that opinion is distinguishable and, thus, I believe the majority’s decision to overrule
Rahman is dictum.
Finally, as mentioned previously in footnote 6 of this opinion, I recognize that the
current version of MCL 418.161(1) differs from the version of MCL 418.161(1) in place
at the time the plaintiff in Hoste was injured in 1990. Specifically, former MCL
418.161(1)(a), as amended by 1985 PA 103, explicitly addressed volunteer public
employees, including “[m]embers of a volunteer fire department:”
As used in this act, “employee” means:
(a) A person in the service of the state, a county, city, township,
village, or school district, under any appointment, or contract of hire,
express or implied, oral or written. A person employed by a contractor who
has contracted with a county, city, township, village, school district, or the
state, through its representatives, shall not be considered an employee of
the state, county, city, township, village, or school district which made the
contract, when the contractor is subject to this act. . . . Members of a
volunteer fire department of a city, village, or township shall be considered
to be employees of the city, village, or township, and entitled to all the
benefits of this act when personally injured in the performance of duties as
members of the volunteer fire department. [Emphasis added.]
The current version of MCL 418.161(1)(a) no longer includes a specific reference to
“volunteer” public employees; rather, the statute’s discussion of those employments,
including the reference to “[m]embers of a volunteer fire department,” was removed
from MCL 418.161(1)(a). However, several new subdivisions were added to the statute
that seem to address “volunteer” public employees including “[o]n-call members of a
fire department:”
As used in this act, “employee” means:
7
(a) A person in the service of the state, a county, city, township,
village, or school district, under any appointment, or contract of hire,
express or implied, oral or written. A person employed by a contractor who
has contracted with a county, city, township, village, school district, or the
state, through its representatives, shall not be considered an employee of
the state, county, city, township, village, or school district that made the
contract, if the contractor is subject to [the WDCA].
* * *
(d) On-call members of a fire department of a county, city, village,
or township shall be considered to be employees of the county, city, village,
or township, and entitled to all the benefits of this act if personally injured
in the performance of duties as on-call members of the fire department
whether the on-call member of the fire department is paid or unpaid. . . .
(e) On-call members of a fire department or an on-call member of a
volunteer underwater diving team that contracts with or receives
reimbursement from 1 or more counties, cities, villages, or townships is
entitled to all the benefits of this act if personally injured in the
performance of their duties as on-call members of a fire department or as an
on-call member of a volunteer underwater diving team whether the on-call
member of the fire department or the on-call member of the volunteer
underwater diving team is paid or unpaid. [MCL 418.161(1) (emphasis
added).][9]
Thus, the reference in MCL 418.354(15) to “volunteer fire fighters . . . who are
considered employees for purposes of [the WDCA] pursuant to section 161(1)(a),” might
be a relic reference to the former version of MCL 418.161(1)(a) that the Legislature
failed to revise when it altered the language in MCL 418.161.10
Possibly bolstering this conclusion is the fact that MCL 418.372(3) was recently
amended by 2012 PA 83. Before the 2012 amendment, MCL 418.372(3) used language
9
The switch from references to “[m]embers of a volunteer fire department” to “[o]n-call
members of a fire department” first occurred in 1994 PA 271.
10
MCL 418.354(15) has not been amended since it was enacted by 1983 PA 159.
8
similar to MCL 418.354(15). Former MCL 418.372(3) stated, “This section does not
apply to volunteer public employees entitled to benefits under section 161(1)(a).”
(Emphasis added.) However, as amended by 2012 PA 83, MCL 418.372(3) refers to the
new subdivisions of MCL 418.161(1) that expressly address the various employments of
“volunteer” public employees, including on-call members of a fire department.
Specifically, MCL 418.372(3), as amended by 2012 PA 83, states, “This section does not
apply to individuals entitled to benefits under section 161(1)(d), (e), (f), (g), (h), (i), (j),
and (o).” (Emphasis added.) Thus, it appears that MCL 418.354(15) should be similarly
revised to refer to “individuals entitled to benefits under MCL 418.161(1)(d), (e), (f), (g),
(h), (i), (j), and (o)” rather than the current reference to “volunteer fire fighters . . . who
are considered employees for purposes of this act pursuant to section 161(1)(a) . . . .”
Although evidence exists to support the conclusion that the reference in MCL
418.354(15) to MCL 418.161(1)(a) appears to be a legislative oversight in light of
subsequent amendments to MCL 418.161(1), this Court must nevertheless attempt to
apply the statutes as currently written. See Farrington v Total Petroleum, Inc, 442 Mich
201, 210; 501 NW2d 76 (1993) (“Courts cannot assume that the Legislature inadvertently
omitted from one statute the language that it placed in another statute, and then, on the
basis of that assumption, apply what is not there.”). See, also, Flint & Fentonville Plank-
Rd Co v Woodhull, 25 Mich 99, 108 (1872) (“It is not consistent with legislative
independence and dignity, that the courts should assert a right to sit in judgment upon
legislative action, or to attribute to the legislature erroneous or oppressive conduct in the
9
exercise of any of its proper and legitimate functions.”).11 Accordingly, while resorting
to Hoste’s interpretation of “contract of hire” in order to determine how best to classify
Smitter’s employment with Thornapple for purposes of applying MCL 418.354(15) is the
quintessential attempt to fit a square peg into a round hole, it is nevertheless my best
effort at determining the most reasonable analysis of the current statutory language. And,
because I believe that Hoste leads to the conclusion that Smitter was a “volunteer fire
fighter” for purposes of MCL 418.354(15), I dissent from the majority’s contrary
conclusion and from its decision to overrule Rahman, 245 Mich App 103.
Michael F. Cavanagh
11
I maintain the belief that, depending on the circumstances, it may be appropriate for
this Court to conclude that a “clerical error in legislative drafting” occurred if a literal
interpretation of the statute at issue would create an “absurd result.” See, e.g., Krajewski
v Krajewski, 420 Mich 729, 739 n 6; 362 NW2d 230 (1984). (CAVANAGH, J., dissenting).
Applying the reference in MCL 418.354(15) to MCL 418.161(1)(a) does not, however,
create an absurd result in this case.
10
STATE OF MICHIGAN
SUPREME COURT
ROBERT SMITTER,
Plaintiff-Appellee,
v No. 144354
THORNAPPLE TOWNSHIP and
MICHIGAN MUNICIPAL LEAGUE
WORKERS’ COMPENSATION FUND,
Defendants-Appellees,
and
SECOND INJURY FUND,
Defendant-Appellant.
MCCORMACK, J. (dissenting).
The majority holds that, in a dual-employment context, the Worker’s Disability
Compensation Act (WDCA)1 mandates an employer’s coordination of benefits, such that
the Second Injury Fund2 is required to reimburse an employer only for a pro rata share of
the coordinated amount of weekly benefits. As a consequence, the majority prohibits
employers and employees from freely entering into employment contracts under terms as
they see fit. While I agree with the majority that this Court’s role is to apply the terms of
1
MCL 418.101 et seq.
2
See MCL 418.501(1).
an unambiguous statute to the facts of a particular case, here the applicable sections of the
WDCA defy an unambiguous reading. In fact, the relevant statutory provisions at issue
do not even refer to one another, much less unambiguously require the majority’s
interpretation. Because I am generally reluctant to interpret ambiguous statutory terms to
impede freedom of contract, and moreover because the majority’s reading anomalously
applies only to the minority of employers who hire part-time workers, while still allowing
the great majority of employers to enter into the employment contracts they deem
appropriate, I respectfully dissent.
I. BACKGROUND
When an employee working two jobs is eligible for WDCA wage-loss benefits,
the employer in whose service the employee worked at the time of the injury (the injury
employer) is responsible for paying the full amount of those benefits.3 When the injury
employer provided 80 percent or less of the injured employee’s average weekly wage,
however, the injury employer is ultimately responsible only for that portion of the wage-
loss benefits that corresponds to the portion of the employee’s average weekly wage that
the injury employer provided.4
In this case, because Thornapple Township provided only 10.87 percent of Robert
Smitter’s average weekly wage, Thornapple was ultimately responsible for 10.87 percent
of his wage-loss benefits: after paying the full amount of the workers’ compensation
wage-loss benefits up front, Thornapple claimed entitlement to reimbursement from the
3
MCL 418.351(1).
4
MCL 418.372(1)(b).
2
Second Injury Fund for 89.13 percent of the amount paid. Had Thornapple paid no other
benefits to Smitter, there is no question, and there would have been no dispute, that
Thornapple was entitled to recover from the Second Injury Fund 89.13 percent of the
wage-loss benefits it paid Smitter. Case closed.
As it happens, however, Thornapple offered Smitter both workers’ compensation
wage-loss benefits and sickness and accident benefits, which he accepted.5 Wage-loss
benefits, of course, compensate an employee for wages lost as a result of an injury.
Sickness and accident benefits, in contrast, cover out-of-pocket expenses associated with
lifestyle changes necessitated by an injury.6 The WDCA allows an injury employer to
“coordinate” benefits when that employer also provides alternative benefits, such that an
injury employer’s initial obligation to pay workers’ compensation wage-loss benefits can
5
Smitter received $800 a week in sickness and accident benefits pursuant to the policy
purchased by Thornapple. The benefit policy covered part-time firefighters. Thornapple
Township hoped to incentivize this job to better recruit qualified candidates and therefore
offered its employees disability benefits along with workers’ compensation wage-loss
benefits.
6
Sickness and accident benefits are essentially disability benefits, and the parties do not
dispute that these benefits are provided under a disability insurance policy as described in
MCL 418.354(1)(b). MCL 500.3400(1) defines “policy of disability insurance” to
“include[] any policy or contract of insurance against loss resulting from sickness or from
bodily injury or death by accident, or both, including also the granting of specific hospital
benefits and medical, surgical and sick-care benefits to any person, family or group . . . .”
Depending on how the relevant insurance policy defines them, disability benefits may be
used for in-home assistance, special transportation needs, uncompensated medical needs,
or other consequences of an injury apart from lost income. Disability benefits are
especially relevant in dangerous occupations like firefighting, in which employment risks
are not limited to the lost wages, and the injured are likely to require compensation
greater than that provided by wage replacement. More generally, there is a robust market
for disability insurance.
3
be reduced by the amount of other benefits the injury employer provides.7 The statute
explicitly states that disability benefits, such as those provided by Thornapple to its part-
time firefighters, are among the benefits that can be coordinated.8 The crucial question is
whether they must be.
II. PLAIN LANGUAGE OF THE WDCA
The majority holds that MCL 418.354(1) mandates that employers coordinate
benefits. I am not convinced. In relevant part, § 354(1) states that “the employer’s
obligation to pay or cause to be paid weekly benefits other than specific loss benefits
under [MCL 418.361(2) and (3)] shall be reduced by these amounts[.]”9 I agree with the
majority that the sickness and accident policy Thornapple provided to Smitter is covered
by § 354(1). The question is whether Thornapple was required to coordinate that
coverage with the wage-loss benefits it also paid, or whether it could elect to do so. The
majority believes that the Legislature’s use of the word “shall” is dispositive.
I agree with the majority that “shall” generally implies a mandatory directive. But
context can occasionally undercut the general principle that the ordinary usage applies.10
7
MCL 418.354(1).
8
MCL 418.354(1)(b).
9
MCL 418.354(1).
10
“Though ‘shall’ generally means ‘must,’ legal writers sometimes use, or misuse, ‘shall’
to mean ‘should,’ ‘will,’ or even ‘may.’ See D. Mellinkoff, Mellinkoff’s Dictionary of
American Legal Usage 402-403 (1992) (‘shall’ and ‘may’ are ‘frequently treated as
synonyms’ and their meaning depends on context); B. Garner, Dictionary of Modern
Legal Usage 939 (2d ed. 1995) (‘[C]ourts in virtually every English-speaking jurisdiction
have held—by necessity—that shall means may in some contexts, and vice versa.’)”
4
In this case, the majority’s conclusion is undercut by the text of the WDCA for three
reasons.
First, MCL 418.354(1) specifically states that an employer’s obligation may be
reduced by coordination, not the Second Injury Fund’s obligation or the employee’s
bottom-line benefits. This plain language must mean that the decision to coordinate rests
with the employer and that the Second Injury Fund’s liability is not implicated. If the
Legislature intended mandatory benefit coordination it could have more clearly
accomplished that in any number of ways. Most simply, it could have omitted the phrase
“the employer’s obligation to pay or cause to be paid” from the final sentence of MCL
418.354(1). The sentence would then read: “Except as otherwise provided in this
section, . . . weekly benefits other than specific loss benefits under [MCL 418.361(2) and
(3)] shall be reduced by these amounts[.]”11 This language would better support the
majority’s reading because it would be obvious that the Legislature’s intent was to ensure
that the employee’s wage-loss benefits were reduced when the employee also received
additional benefits.
Second, MCL 418.372(1)(b) unambiguously sets forth the formula by which the
Second Injury Fund’s liability is determined. In that subsection, which provides that the
Second Injury Fund “is separately but dependently liable for the remainder of the weekly
benefits,” and “shall reimburse the insurer or self-insurer quarterly for the second injury
Gutierrez de Martinez v Lamagno, 515 US 417, 432-433 n 9; 115 S Ct 2227; 132 L Ed 2d
375 (1995).
11
See MCL 418.354(1).
5
fund’s portion of the benefits due the employee or the employee’s dependents,” no
reference is made to the possibility of benefit coordination or to MCL 418.354 more
specifically.12 There is no language whatsoever to suggest that the phrase “due the
employee” in MCL 418.372(1)(b) should be read to incorporate the ability or obligation
to coordinate in MCL 418.354. The converse is also true; while the Legislature refers
explicitly to the “second injury fund” and its liabilities in the text of MCL 418.372(1)(b),
the absence of any reference to the Second Injury Fund in MCL 418.354 is meaningful.
The Legislature could have connected the two sections, but chose not to do so.13
Third, the majority argues that MCL 418.354(15), the subsection governing
volunteer firefighters, supports its position that benefits coordination is mandatory. The
statute states that for volunteer firefighters:
[T]he reduction of weekly benefits provided for disability insurance
payments under subsection (1)(b) . . . may be waived by the employer. An
employer that is not a self-insurer may make the waiver provided for under
this subsection only at the time a worker’s compensation insurance policy
is entered into or renewed.[14]
As does MCL 418.354(1), this provision refers explicitly to the employer and decisions
made by the employer, not the liability of the Second Injury Fund or the employee’s
12
MCL 418.372(1)(b).
13
The majority argues that the Legislature’s use of the word “obligation,” as opposed to
“liability,” in MCL 418.354(1) is a meaningful reference to the third sentence of MCL
418.372(1)(b), which states that “[t]he insurer . . . has the obligation to pay the
employee . . . at the full rate of compensation.” Again, I believe that if the Legislature
had intended for the two sections to be read together, it would have indicated that
explicitly instead of using such cryptic means.
14
MCL 418.354(15).
6
bottom-line benefits. The majority believes that MCL 418.354(15) delineates the only
exception to mandatory coordination. But this reading neglects the great majority of
cases in which there is no second employer, as well as those in which the injury employer
provides more than 80 percent of the injured employee’s average weekly wage. Nothing
will prevent those employers from choosing to provide uncoordinated benefits to their
injured employees, even if the injured employees are not volunteer firefighters or other
first responders. Instead, those employers are free to contract as they see fit with respect
to benefits in accordance with their employment needs.
This point warrants emphasis: under the majority’s analysis MCL 418.354(15) is
implicated only in a dual-employment context in which the injury employer provides 80
percent or less of the injured employee’s average weekly wage and can, therefore, request
reimbursement from the Second Injury Fund. But MCL 418.354 on its face plainly
applies to all cases, not just those in which the Second Injury Fund is dependently liable.
If an employer may only waive benefit coordination under the volunteer firefighter
provision of MCL 418.354(15), what import would MCL 418.354 have if Thornapple
had been Smitter’s only employer, or if General Motors had been the injury employer?
In either case, the injury employer surely could have chosen to pay its employees
whatever benefits it deemed appropriate without regard to MCL 418.354(1) or (15).
To read MCL 418.354(1) as imposing a requirement on a subset of injury
employers in dual-employment cases renders that supposedly mandatory language
meaningless in a majority of situations.15 The majority’s analysis requires us to assume
15
“It is a maxim of statutory construction that every word of a statute should be read in
such a way as to be given meaning, and a court should avoid a construction that would
7
away the textual clues that undercut application of the common understanding of the verb
“shall” and to overlook the fact that, under the majority’s interpretation, the language of
MCL 418.354(1) is inapplicable to most cases. The plain language of the WDCA does
not make that analysis easy. If the touchstone of our analysis remains the plain language
of the statute, I would refrain from reading such particular intent into MCL 418.354(1)
and (15) because there is no clear indication that this is what the Legislature intended.16
III. THE PUBLIC POLICY ARTICULATED BY THE LEGISLATURE
The majority’s view that the statute requires coordination of benefits by injury
employers who provide less than 80 percent of an employee’s wage in dual-employment
contexts (the minority injury employer) is undermined by the many contexts in which
that rule is not enforceable. As previously noted, single employers and injury employers
who are responsible for more than 80 percent of an employee’s weekly wage will never
seek reimbursement from the Second Injury Fund and are thus free to contract with their
employees to provide insurance as they deem appropriate. In addition, the non-injury
employer in a dual-employment situation may provide the injured employee with an
insurance benefit without triggering any obligation to coordinate before seeking
reimbursement from the Second Injury Fund because the statute only addresses the
render any part of the statute surplusage or nugatory.” In re MCI Telecom Complaint,
460 Mich 396, 414; 596 NW2d 164 (1999). It seems irrational that the Legislature would
announce a mandatory directive that would apply only in a minority of situations, and I
presume that the Legislature acts thoughtfully and rationally.
16
“[A] court should refrain from speculating about the Legislature’s intent beyond the
words employed in the statute.” In re MCI, 460 Mich at 414-415.
8
coordination of benefits provided by the “same employer.”17 It is hard to imagine that the
Legislature intended to prevent benefits beyond wage-loss benefits in those cases where
there is a minority injury employer in a dual-employment situation. It makes far more
sense that the Legislature intended to give an employer providing both wage-loss and
accident benefits the possibility of reducing its wage-loss obligation, if that employer
deemed it appropriate.
To reiterate, MCL 418.354(1)(b) only directs the “same employer” to coordinate
benefits. The fact that coordination is not required when an injured employee receives an
additional benefit from a different employer is evidence that that the Legislature did not
intend this section to limit the amount of benefits an employee received.18 If Smitter had
received accident insurance from General Motors, there would have been no dispute that
Thornapple would have been responsible for paying full wage-loss benefits and also been
entitled to a full reimbursement by the Second Injury Fund. This limitation of the
coordination provision to the benefits provided by the injury employer is yet further
evidence that coordination is not mandated before reimbursement is sought. The
Legislature’s decision not to require coordination of benefits among employers implies
that the Legislature did anticipate that some employees would recover benefits apart from
the weekly wage-loss benefits and did not see any need to address that issue.
17
MCL 418.354(1)(b). The injury employer would still seek reimbursement if they
provided 80 percent or less of the employee’s wage, but the non-injury employer’s
disability benefit would never be coordinated with that amount.
18
See MCL 418.354(1)(b).
9
Furthermore, permitting a minority injury employer to coordinate instead of
mandating coordination does not result in greater costs being passed on to the Second
Injury Fund. Any minority injury employer in a dual-employment situation that might
request reimbursement from the Second Injury Fund has these choices: (1) the employer
could choose not to offer additional insurance benefits at all, (2) the employer could
choose to offer additional benefits, and then coordinate those benefits so that it would
have a lower wage-loss liability, or (3) the employer could choose to offer additional
benefits and elect not to coordinate those benefits, paying the full wage-loss benefit in
addition to the additional benefit. Notably, the minority injury employer’s and the
Second Injury Fund’s liabilities are the same in the first and last scenarios, and both are
lower in the second. The minority injury employer does not stand to gain financially
from the Second Injury Fund under any option.
According to the majority, a minority injury employer loses the right to full
reimbursement by providing an additional insurance benefit. If the majority is correct, the
Legislature must have intended to discourage employers who are hiring part-time
employees from providing incentives for those employees. Surely that narrow policy
goal could have been accomplished without requiring the tenuous reading of the statutory
language the majority proposes. But more fundamentally, there is no reason to suppose
the Legislature sought to interfere with the prerogative of this subset of employers to
enter into employment contracts and offer their employees whatever insurance benefits
the employer and employee jointly elected. Respecting employment contracts seems
especially important for employers trying to attract first responders in tough economic
times. In the absence of any reason to worry that either the injury employer or the
10
employee would be taken advantage of in their free market transaction, or that both
would collude to take advantage of the Second Injury Fund—and such worries seem hard
to imagine here—we should presume, barring legislative indication to the contrary, that
the Legislature did not seek to regulate employment contract terms.
IV. CONCLUSION
In my view, the more natural reading of the statutory provisions at issue is one that
holds that the decision to coordinate benefits rests solely with the injury employer and
does not affect the reimbursement an injury employer may request from the Second
Injury Fund in dual-employment cases. This understanding gives meaning to the
statutory language limiting coordination to benefits paid by a single employer, avoids
reading out the phrase “the employer’s obligation” in MCL 418.354(1), avoids rendering
the supposed mandate of the verb “shall” nugatory in a majority of employment
situations, and would not punish or impede an employer seeking to recruit employees
with employment terms that employers and employees deem desirable, especially for
dangerous but important jobs like fighting fires.
Accordingly, I would affirm the decision of the Court of Appeals.
Bridget M. McCormack
VIVIANO, J., took no part in the decision of this case.
11