Riley v. NORTHLAND GERIATRIC CENTER

160 Mich. App. 507 (1987) 408 N.W.2d 489

RILEY
v.
NORTHLAND GERIATRIC CENTER

Docket No. 94913.

Michigan Court of Appeals.

Decided June 1, 1987.

Bockoff & Zamler, P.C. (by Daryl Royal), for plaintiff.

Lacey & Jones (by Gerald M. Marcinkoski), for defendants.

Before: DANHOF, C.J., and MacKENZIE and SHEPHERD, JJ.

ON REMAND

PER CURIAM.

This case is before us on remand from the Supreme Court in Riley v Northland Geriatric Center, 425 Mich. 668; 391 NW2d 331 (1986), reversing 140 Mich. App. 72; 362 NW2d 894 (1985).

The history of the case was summarized in our earlier opinion:

On July 15, 1980, plaintiff filed a petition for workers' compensation benefits as a result of back injuries sustained while employed by defendant Northland Geriatric Center. In an opinion dated October 6, 1981, a hearing officer for the Bureau of Workers' Disability Compensation determined that plaintiff was entitled to receive compensation benefits as her injury arose out of and in the course of her employment.

Pursuant to this Court's decision in Jolliff v American Advertising Distributors, Inc, 49 Mich App 1; 211 NW2d 260 (1973), which held that the minimum benefit rates established by MCL 418.351(1); MSA 17.237(351)(1) were to be adjusted annually with reference to the state average weekly wage in accordance with MCL 418.355; MSA 17.237(355), the hearing officer ordered that plaintiff be paid $119 per week based on her average weekly wage of $130.80 with no dependents. As neither party appealed this decision, it became final on October 21, 1981.

Approximately six weeks later, on December 30, 1981, the Michigan Supreme Court decided Gusler v Fairview Tubular Products, 412 Mich. 270; 315 NW2d 388 (1981). The Gusler opinion specifically overruled Jolliff, supra, by holding that the annual adjustment provision in MCL 418.355; MSA 17.237(355) applied only to maximum benefit levels, not minimum levels. Plaintiff in that case timely filed a motion for rehearing on January 19, 1982, which was granted by the Supreme Court August 16, 1982. Before any action was taken on the rehearing, however, the Court dismissed the appeal on March 15, 1983, pursuant to a stipulation of the parties. Gusler v Fairview Tubular Products, 414 Mich. 1102 (1982).

On January 12, 1983, defendants here filed a petition for determination of rights urging that, in conformity with the holding in Gusler, supra, plaintiff's weekly benefits should be reduced to $87.20 (2/3 times $130.80). See MCL 418.351; MSA 17.237(351) prior to its amendment by 1980 PA 357, effective January 1, 1982. A hearing officer agreed and on May 26, 1983, ordered that further payments to plaintiff be reduced accordingly. Plaintiff was not obligated, however, to repay any sums already received.

Plaintiff appealed this reduction to the Workers' Compensation Appeal Board, which, in an opinion dated December 8, 1983, reversed the hearing officer and reinstated plaintiff's original award. The board further ordered that the interest payable on plaintiff's award be raised from 5 percent to 12 percent per annum. This Court granted defendants' application for leave to appeal. [140 Mich. App. 74-75.]

In our previous opinion, we held that Gusler was without precedential effect because no order or judgment pursuant to that decision issued, and accordingly affirmed the opinion of the WCAB. 140 Mich. App. 77. The Supreme Court reversed (LEVIN, J., writing separately), but declined to rule on the question of "whether the defendant is [sic] barred by principles of res judicata from asserting a change in the law, and whether Gusler should be given retroactive effect." 425 Mich. 671. We again affirm the opinion of the WCAB.

A broad rule of res judicata applies in workers' compensation cases. Res judicata bars relitigation of questions litigated in a first proceeding as well as those claims arising out of the same transaction which the claimant could have brought in the first proceeding, but did not. Gose v Monroe Auto Equipment Co, 409 Mich. 147; 294 NW2d 165 (1980); Hlady v Wolverine Bolt Co, 393 Mich. 368; 224 NW2d 856 (1975). A disability determination in compensation proceedings is not an adjudication as to a claimant's future condition and does not preclude a new claim, provided the new claim is based on a showing that the claimant's physical condition has changed. Gose v Monroe Auto Equipment, supra. However, a change in law is not such a change in condition or status that avoids the res judicata bar. Hlady v Wolverine Bolt Co, supra.

In Hlady, the claimant suffered the amputation loss of four fingers on her right hand. She received specific loss benefits for those four fingers. In 1948, she was denied benefits for loss of the industrial use of that hand under case law that then denied further compensation after specific losses that were no different or greater than normally result from the loss of the specific member or members. Hlady v Wolverine Bolt Co, 325 Mich. 23; 37 NW2d 576 (1949). In 1957, the Supreme Court decided a case which removed the bar on further compensation after specific loss benefits. Van Dorpel v Haven-Busch Co, 350 Mich. 135; 85 NW2d 97 (1957). In 1967, Hlady filed another claim for benefits, neither alleging nor showing an actual change in her physical condition, but relying solely on the Van Dorpel decision. The Hlady Court held that the mere change in law, without an actual change in Hlady's physical condition, did not justify her new claim.

In Hlady, it was the claimant who sought relief predicated upon a change of law. In Selk v Detroit Plastic Products, 120 Mich. App. 135; 328 NW2d 15 (1982), aff'd 419 Mich. 1; 345 NW2d 184 (1984), this Court ruled that an employer is also barred from seeking relief based upon a change of law absent a change in condition. There, the plaintiff was originally awarded total and permanent disability benefits for incurable insanity when such claims were governed by the definition stated in Sprute v Herlihy Mid-Continent Co, 32 Mich. App. 574; 189 NW2d 89 (1971). The Supreme Court subsequently changed the legal definition of incurable insanity in Redfern v Sparks-Withington Co, 403 Mich. 63; 268 NW2d 28 (1978). The employer contended that it was entitled to relief from the original award due to the change in law. Relying on Hlady v Wolverine Bolt Co, supra, this Court applied principles of res judicata and refused to reconsider the plaintiff's incurable insanity under the new judicial definition. Writing for this Court, Chief Judge DANHOF said:

In Hlady v Wolverine Bolt Co, 393 Mich. 368; 224 NW2d 856 (1975), the Supreme Court ruled that the principles of res judicata preclude the subsequent relitigation of an issue in the context of a workers' compensation action even if there is a change in the law in the intervening period unless there is also an accompanying change in plaintiff's physical or mental condition. That decision was reaffirmed by the Court's decision in Gose v Monroe Auto Equipment Co, supra, p 161. Also, as noted earlier, the Court in Ferns [v Russ Graham Shell Service, 413 Mich. 550; 321 NW2d 380 (1982)], held that defendant's failure to establish a change in plaintiff's "condition" following the expiration of the 800-week period precludes the board from ordering that plaintiff's benefits be terminated.

Therefore, we find it unnecessary to determine whether the Redfern test or the Sprute test would have applied if defendants had shown that plaintiff's condition changed between 1973 and the date the board entered its decision. Since no change of condition was shown, the intervening change in the law could not be advanced as a ground to defeat plaintiff's claim. The principles of res judicata bar defendants from relitigating this issue. The board's decision is affirmed. [120 Mich. App. 152.]

Defendants' attempts to distinguish Hlady notwithstanding, we are satisfied that Hlady and Selk control the instant case. Defendants, like the employer in Gusler, were free during the 1980-81 proceedings in this case to argue that Jolliff was incorrectly decided. They did not do so, instead allowing plaintiff's award, with increased payments, to become final without taking an appeal. The only reason for defendants' return to the Bureau of Workers' Disability Compensation was the new rule of Gusler. At that point, however, defendants were in the same position as Mrs. Hlady and the employer in Selk — they had come back after plaintiff's award to try to take advantage of an intervening change in law. Just as in Hlady and Selk, where the attempts were precluded, we believe that these defendants may not seek a relitigation of the amount of plaintiff's compensation benefits under the change of law represented by Gusler.

The Gusler opinion was explicit that that decision was to apply from the date of the opinion, December 30, 1981, to payments to be made and awards to be entered after that date. The Court stated:

In the interest of fairness we do not believe our holding should affect any disability compensation payments already made. Consequently, no recipient will be obligated to repay sums already received by reason of the erroneous computation formula we have nullified today. However, any benefits due and not yet paid or to be awarded after the date of this opinion shall be in accord with this ruling. [412 Mich. 298.]

We believe that when our opinion today is read with the above-quoted language of Gusler, the net effect is that Gusler will apply to all cases commenced after December 30, 1981, the date that opinion was issued, and to those cases pending in the Bureau of Workers' Disability Compensation, the WCAB, or an appellate court on December 30, 1981, in which the issue of § 355 reductions was raised. This result is consistent with the Supreme Court's most recent decisions discussing limited retroactivity. See Hyde v University of Michigan Bd of Regents, 426 Mich. 223, 238-239; 393 NW2d 847 (1986); DiFranco v Pickard, 427 Mich. 32, 75; 398 NW2d 896 (1986). Defendants' petition for redetermination of rights falls into none of these categories.

Affirmed.