Order Michigan Supreme Court
Lansing, Michigan
December 2, 2009 Marilyn Kelly,
Chief Justice
137402 Michael F. Cavanagh
Elizabeth A. Weaver
Maura D. Corrigan
Robert P. Young, Jr.
Stephen J. Markman
RICHARD E. HARVLIE, Diane M. Hathaway,
Plaintiff-Appellee, Justices
and
BLUE CROSS/BLUE SHIELD,
Intervening Plaintiff-Appellee,
v SC: 137402
COA: 276044
WCAC: 04-000445
JACK POST CORPORATION and ST. PAUL
FIRE & MARINE INSURANCE COMPANY,
Defendants-Appellants.
_________________________________________/
By order of January 27, 2009, the application for leave to appeal the August 21,
2008 judgment of the Court of Appeals was held in abeyance pending the decision in
Petersen v Magna Corp (Docket Nos. 136542-3). On order of the Court, the case having
been decided on July 31, 2009, 484 Mich 300 (2009), the application is again considered,
and it is DENIED, because we are not persuaded that the questions presented should be
reviewed by this Court.
CORRIGAN, J. (dissenting).
I respectfully dissent from the order denying defendants’ application for leave to
appeal. Because the split decision in Petersen v Magna Corp, 484 Mich 300 (2009),
failed to provide a workable standard concerning the circumstances under which a
magistrate “may” prorate attorney fees, I would remand this case to the Court of Appeals
to consider defendants’ argument that the award of an attorney fee on unpaid medical
benefits was erroneous.
MCL 418.315(1) provides that “[t]he worker’s compensation magistrate may
prorate attorney fees at the contingent fee rate paid by the employee.” In Petersen, a
majority of this Court merely agreed on the result: workers’ compensation magistrates
may prorate attorney fees among employers and their insurance carriers. The five
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opinions did not offer a controlling rationale. Moreover, the five separate opinions in
Petersen do not establish a standard agreed on by a majority of justices under which
workers’ compensation magistrates may exercise their discretionary authority in the first
instance. Petersen merely tells us that a magistrate “may prorate” attorney fees but that
an award is not automatic. See Petersen, supra at 309 (opinion of Kelly, C.J.) (“Hence,
magistrates are allowed to award attorney fees, but they are not required to do so.”).
Consequently, Petersen does not explain how magistrates could abuse their discretion in
awarding attorney fees, much less specify how magistrates may exercise their discretion.
In MCL 418.315(1), the Legislature differentiated between magistrates’
discretionary authority to prorate attorney fees and their mandatory duty to order
reimbursement for reasonable medical expenses that an employer fails, neglects, or
refuses to pay. See MCL 418.315(1) (“If the employer fails, neglects, or refuses so to do,
the employee shall be reimbursed for the reasonable expense paid by the employee, or
payment may be made in behalf of the employee to persons to whom the unpaid expenses
may be owing, by order of the worker’s compensation magistrate.”). Accordingly, MCL
418.315(1) mandates reimbursement for medical bills that the employer does not pay. In
contrast, the award of attorney fees under MCL 418.315(1) is discretionary. Because the
award of attorney fees is a discretionary determination, magistrates presumably must
make some additional finding before exercising their authority. Yet neither Petersen nor
the statutory language assists a workers’ compensation magistrate in determining whether
to exercise that discretionary authority in a given case.
The dearth of guidance from this Court concerning the standard under which a
magistrate may exercise discretion under MCL 418.315(1) will continue to confound
members of the bench and bar. In this case, for example, defendants challenge the award
of attorney fees when payment was delayed for approximately three months because of
typical processing lags and plaintiff’s failure to submit evidence in a timely manner.
Defendants contend that the magistrate abused his discretion in awarding attorney fees
under the unique facts of this case. Assuming arguendo that a three-month delay is an
appropriate circumstance for the magistrate to have exercised his discretionary authority,
it remains unclear whether the magistrate would necessarily have reached the same result
if payment had been delayed for two months or two weeks. Similarly, it is unclear what
additional factors would be relevant to the magistrate’s discretionary determination.
Indeed, the lack of any workable standard complicates the appellate review of such
awards as well because a reviewing court has no meaningful basis to consider whether a
magistrate abused his discretion in awarding attorney fees.
Because Petersen failed to resolve these issues, I would remand this case to the
Court of Appeals for reconsideration of defendants’ argument that the award of an
attorney fee on unpaid medical benefits was erroneous. Specifically, I would order the
Court of Appeals to consider whether the workers’ compensation magistrate made
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sufficient findings and offered adequate analysis to show that he engaged in a proper
exercise of discretion in requiring defendants to pay attorney fees under MCL
418.315(1). See Petersen, supra at 310, 335-336. Moreover, I would ask the Court of
Appeals to address defendants’ argument that the magistrate erred by awarding attorney
fees on medical bills that plaintiff failed to prove were not diligently paid after defendants
received notice of them. Unless this Court or the Court of Appeals clarifies the standard
under which a magistrate may exercise discretion, the award of attorney fees under MCL
418.315(1) will become automatic. Plainly, the Legislature did not authorize the
automatic assessment of attorney fees.
Accordingly, I would remand this case to the Court of Appeals to consider
defendants’ argument that the award of an attorney fee on unpaid medical benefits was
erroneous.
YOUNG and MARKMAN, JJ., join the statement of CORRIGAN, J.
I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
December 2, 2009 _________________________________________
1124 Clerk