Sexton v. Jit, Inc.

200 Mich. App. 52 (1993) 504 N.W.2d 16

SEXTON
v.
JIT, INC.

Docket No. 161269.

Michigan Court of Appeals.

Submitted February 12, 1993, at Lansing. Decided June 7, 1993, at 9:40 A.M.

Schefman & Miller, P.C. (by Leslie C. Schefman and Neil A. Miller), for the plaintiffs.

Eccelstone, Moffett & Humphrey, P.C. (by Donald R. Dillon, Jr.), for the defendant.

Before: SAWYER, P.J., and NEFF and FITZGERALD, JJ.

ON REMAND

NEFF, J.

This case is before us on remand from the Supreme Court. 441 Mich. 929 (1993). In Sexton v JIT, Inc, unpublished opinion per curiam of the Court of Appeals, decided May 22, 1992 (Docket No. 129480), this panel reversed and remanded to the trial court for entry of summary disposition in defendant's favor. The Supreme Court, in lieu of granting leave to appeal, vacated our original opinion and remanded this case to us for consideration of plaintiffs' argument that B.T. Transportation complied with MCL 418.611; MSA 17.237(611) through an agreement that JIT, Inc., would provide workers' compensation and, therefore, the condition of JIT, Inc., becoming a statutory employer under MCL 418.171; MSA 17.237(171) was not met. On remand, we affirm the order of the circuit court denying defendant's motion for summary disposition based on the exclusive remedy provision of the workers' compensation act and remand for further proceedings consistent with this opinion.

I

As noted in our now vacated opinion, plaintiff Edward Sexton was hired by B.T. Transportation to drive a truck and deliver loads on behalf of defendant. B.T. Transportation had no workers' compensation coverage. By oral agreement between B.T. Transportation and defendant, defendant provided the workers' compensation coverage for B.T. Transportation's drivers.^[1] Plaintiff was severely injured during the course of his employment for B.T. Transportation. He obtained workers' disability compensation benefits paid by defendant's workers' compensation carrier.

Plaintiffs thereafter brought this personal injury action against defendant. As noted, the trial court denied defendant's motion for summary disposition based on the exclusive remedy provision of the workers' compensation act, MCL 418.131; MSA 17.237(131). We held that defendant was a statutory employer pursuant to MCL 418.171; MSA 17.237(171), a conclusion we acknowledge was in error.

II

Under § 171 of the act, a principal may be deemed a statutory employer and therefore liable to pay workers' compensation under the act if it contracts with another employer who is not subject to the act or who has not complied with the provisions of § 611.

Under § 611, an employer can secure the payment of workers' compensation benefits under the act by being self-insured, by obtaining insurance, or by insuring liability with the Accident Fund. By employing the so-called "shoot through" agreement in this case, B.T. Transportation complied with the requirements of securing payment of compensation required under MCL 418.611(1)(b); MSA 17.237(611)(1)(b), by insuring against liability with an insurer via the coverage provided by JIT, Inc. Accordingly, JIT, Inc., cannot be deemed the statutory employer under § 171 because it did not contract with someone who was not subject to the act or who had not complied with the provisions of § 611 because B.T. Transportation was subject to the act and had complied with § 611. In essence, B.T. Transportation is the insured party by virtue of the "shoot through" agreement between B.T. Transportation and JIT, Inc. B.T. Transportation, as plaintiff's employer, complied with § 611 of the act, rendering § 171 inapplicable to defendant's claim that it is plaintiff's statutory employer.

Because plaintiff's employer is B.T. Transportation and JIT, Inc., cannot be deemed a statutory employer pursuant to § 171 of the act, JIT, Inc., is not entitled to summary disposition under the exclusive remedy provision of the act, MCL 418.131; MSA 17.237(131).

Affirmed.

NOTES

[1] This type of arrangement is sometimes referred to as a "shoot through" agreement.