Order Michigan Supreme Court
Lansing, Michigan
December 2, 2009 Marilyn Kelly,
Chief Justice
135615 Michael F. Cavanagh
Elizabeth A. Weaver
Maura D. Corrigan
Robert P. Young, Jr.
Stephen J. Markman
FAROOK MANSOUR, Diane M. Hathaway,
Plaintiff-Appellee, Justices
v SC: 135615
COA: 277570
WCAC: 05-000284
AZ AUTOMOTIVE CORPORATION, f/k/a
AETNA INDUSTRIES, INC.,
Defendant-Appellant.
_________________________________________/
By order of October 10, 2008, the application for leave to appeal the December 4,
2007 order of the Court of Appeals was held in abeyance pending the decision in
Petersen v Magna Corp (Docket Nos. 136542-43). 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 defendant’s 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 defendant’s 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
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
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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, defendant argues that it did not
immediately pay medical bills for disc surgery to plaintiff’s back because defendant
reasonably questioned whether the surgery was related to plaintiff’s compensable, work-
related back injury, which was merely a back strain. Peterson does not establish whether,
and under what circumstances, attorney fees are appropriate when a defendant contests
his duty to pay a bill that appears unrelated to the compensable injury. Perhaps most
significantly, defendant observes that the magistrate made no findings with regard to the
attorney fee issue, but simply awarded a fee on the basis of plaintiff’s request and the fact
that the bills went unpaid for an undetermined amount of time. It would seem that some
amount of explicit fact-finding was necessary for the magistrate to properly exercise her
discretion in awarding a fee.
Because Petersen failed to resolve these issues, I would remand this case to the
Court of Appeals for reconsideration of defendant’s 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
sufficient findings and offered adequate analysis to show that she engaged in a proper
exercise of discretion in requiring defendant 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 defendant’s argument that the magistrate erred by awarding attorney fees on
medical bills where defendant contested whether the services addressed plaintiff’s work-
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related injury, and thus whether payment was actually owed by defendant. 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
defendant’s 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