Hakkinen v. Lake Superior District Power Co.

J. H. Gillis, J.

(dissenting). I would affirm the trial court’s judgment for plaintiffs (not its alternative findings). After exploring numerous cases, many substantively aligned with the majority, I nevertheless conclude that the trial judge’s application of equitable principles to bar reimbursement in this case was appropriate and proper. Further, Hix v Besser Co, 386 Mich 499; 194 NW2d 333 (1972), decided just after Hakkinen #1,¹ which applied the waiver doctrine to this area, modified preexisting law. Application of "res judicata” or its offshoots is improper in this context, especially absent a final judgment.

The issue was well framed by the trial judge: May an employee and his spouse settle their claims against a third-party tortfeasor for damages independent of workmen’s compensation or do subsequently interpreted provisions of MCLA 413.15; MSA 17.189 ² prohibit that settlement? The issue is further, and to my mind, conclusively modified because the insurance carrier, a protected intervening plaintiff, knew of that settlement but failed to exercise any rights respecting it despite its intervening status. I believe the employee has the right to settle for his independent damages. The statute does not prohibit that result. I agree with the trial judge; both Transamerican Freight Lines v Quimby, 381 Mich 149; 160 NW2d 865 (1968), and Gamble v American Asbestos Products Co, 381 Mich 105; 159 NW2d 839 (1968), are distinguishable because of the employer’s intervenor status. Settlement between the injured employee and third-party tortfeasor was effected on December 29, 1967. The insurance carrier first filed objections and requested apportionment in 1972, after Hakkinen #1 was decided, despite the right granted the insurer to appeal the dismissal of the employee’s action by the order of intervention. In fact, after the settlement the insurer filed its own complaint against the third-party tortfeasor!

MCLA 413.15; MSA 17.189, inartfully attempts to achieve several goals: to preclude the employee from double recovery, to prevent ouster of the insurer’s right to recover, but to preserve nonetheless the employee’s common-law rights aside from his rights under the Workmen’s Compensation Act. The prior statute required an election of remedies but was amended to protect common-law rights and avoid that effect. Legislative redefinition is indicated when the assertedly "remedial” legislation casts the employee as a collection agent for the insurer. But if that is the Legislature’s intent, the unwitting employee at least deserves to be apprised of the fact! To cast him in that role some four years after good-faith settlement of his claim violates fundamental principles of our jurisprudence. To this injustice, laches and constructive fraud should apply. I dissent from my Brothers’ treatment of this case.

1 Hakkinen v Northern Advertising Co, 38 Mich App 506; 196 NW2d 863 (1972).

2 Now MCLA 418.827; MSA 17.237(827).