McDougall v. General Motors Corp.

Shepherd, J.

Defendant appeals by leave granted from the order of the Workers’ Compensation Appeal Board dismissing defendant’s appeal on the basis that it had no jurisdiction to review the appeal. The wcab found that defendant was required to first appeal the magistrate’s decision as to attorney fees to the director of the Bureau of Workers’ Disability Compensation. We reverse.

While generally our review of a decision of the wcab is limited, this Court will reverse a decision of the wcab where the decision is based upon erroneous legal reasoning. Juneac v ITT Hancock Industries, 181 Mich App 636, 639; 450 NW2d 22 (1989). The wcab found that it had no jurisdiction to decide the dispute over attorney fees on the basis of the following statute:

(1) The cost of a hearing, including the cost of taking stenographic notes of the testimony presented at the hearing, not exceeding the taxable costs allowed in actions at law in the circuit courts of this state, shall be fixed by the director and paid by the state as other expenses of the state are paid. The fees and payment thereof of all attorneys and physicians for services under this act shall be subject to the approval of a hearing referee or worker’s compensation magistrate, as applicable. In the event of disagreement as to such fees, an interested party may apply to the bureau for a hearing. After an order by the hearing referee or worker’s compensation magistrate, as applicable, review may be had by the director if a request is filed within 15 days. Thereafter the director’s order may be reviewed by the appeal board or the appellate commission, as applicable, on request of an interested party, if a request is filed within 15 days. [MCL 418.858(1); MSA 17.237(858X1).]

In Gross v Great Atlantic & Pacific Tea Co, 87 Mich App 448, 451; 274 NW2d 817 (1978), lv den 406 Mich 944 (1979), this Court held that § 858 of the act applies only to disputes between attorneys and their clients and does not apply to disputes over attorney fees between the parties. We believe that the plain language of § 858 supports the holding in Gross. The statute by its very terms speaks only to disputes over the amount of attorney fees to be awarded and does not speak to the substantive issue of the propriety of awarding attorney fees. Furthermore, the procedure for settling disagreements over attorney fees outlined in § 858 does not appear to have been intended to be applied within the framework of a proceeding to recover workers’ compensation benefits, but contemplates a separate proceeding altogether for resolution of the kind of dispute involved in this case. We may infer from this that a § 858 action is to take place after resolution of the claim between the opposing parties. We decline to adopt an interpretation of the statute which would require a defendant to fully litigate and appeal the issues involved in the disability claim and then file a petition for another hearing and ultimate review by the director as to the attorney fee issue.

We reverse the decision of the wcab and remand this case for review on the merits. We reserve jurisdiction and direct the wcab to resolve this matter and submit its findings and opinion to this Court within ninety-one days of the date of this opinion.