Hlady v. Wolverine Bolt Co.

Levin, J.

(concurring). Mary Hlady suffered a work-related injury in 1945 which resulted in amputation of four fingers. She received benefits for this specific loss and, upon expiration of those benefits, applied for additional benefits on the ground that the injury she suffered constituted the loss of the industrial use of a hand. This Court reversed an award of benefits. Hlady v Wolverine Bolt Co, 325 Mich 23; 37 NW2d 576 (1949).

Eighteen years later, in 1967, Hlady applied for general disability benefits. She appeals from a denial of her claim.

The Court rests its affirmance of the Workmen’s Compensation Appeal Board on two grounds: the 1949 decision of this Court is res judicata and the 500-week1 period of eligibility had expired before *385Hlady filed her 1967 claim.

I concur in the denial of benefits. The period of eligibility had expired before Hlady filed her claim. I write separately because the 1967 application is not barred by the doctrine of res judicata.

I

Whether a claim for continuing disability benefits is barred by an earlier adverse decision is of considerable importance in light of the 1965 amendment to the act eliminating the 500 and 750/800 week* 2 limitations. As to injuries the date "of which occurs” on or after September 1, 1965, the act now provides that compensation "shall be paid for the duration of the disability”.3

When Hlady filed her original claim, a decision of this Court precluded her recovery of general disability benefits.4 *She contends that when this Court denied her benefits in 1949, it did not consider the issue of general disability; that issue, not having been litigated, is not res judicata.

The general rule is that all issues which were or could have been raised in an action are barred under the doctrine of res judicata.5 The policy of *386the law is to require that the parties raise and join all matters which can be litigated in one action and that there be an end to litigation.6

Eight years after this Court’s 1949 decision in Hlady, the rule of law which had prevented Mary Hlady from recovering general disability benefits was changed. See Van Dorpel v Haven-Busch Co, 350 Mich 135; 85 NW2d 97 (1957).7 By then Hlady’s 500 week (partial disability) period of eligibility had expired. The 750 week (total and permanent disability) period did not expire until 1960. Her claim for general disability benefits was filed seven years later.

Were it not for the 500 and 750 week limitations, I would hold that Hlady’s claim is not barred. The doctrine of res judicata does not preclude consideration of her 1967 application for continuing disability benefits.

We all agree that if there had been a change of fact, the doctrine of res judicata would not bar consideration of Hlady’s claim. Thus, if she had been awarded general disability benefits and her physical condition improved, benefits could be terminated; and if there was a subsequent deterioration of her physical condition, benefits could be renewed. Similarly, even though she was not initially awarded disability benefits, if her physical condition had deteriorated and if the period of *387eligibility had not expired, general disability benefits could now be awarded.

My colleagues say that the "only change has been in the law applied to cases of this nature”. The basis of our disagreement is that, in my opinion, a change of law, like a change of fact, eliminates the bar of res judicata where the claimant seeks continuing benefits under a statute providing "income maintenance”.

The law can be changed by legislative enactment or court decision. When the Legislature amends a statute, its applicability to a case previously adjudicated is not analyzed in terms of res judicata. The issue then is one of statutory construction: did the Legislature intend the amendment to have retroactive as well as prospective application?8 Where the change is effected by court decision the analysis should be the same, whether as a matter of policy the new rule of law should apply retroactively as well as prospectively.9

There is no need to invoke the doctrine of res judicata to prevent reopening of decided cases; if it is thought that the new rule should not apply to claims arising before its pronouncement, that limitation can be stated. If the new rule is to apply only prospectively then, in general, the old rule *388should be applied to pre-new-rule cases where there has been no final adjudication10 as well as those where adjudication has become "final”.

II

Res judicata is not an absolute doctrine. Courts and commentators have recognized that in appropriate circumstances res judicata "may give way when in irreconcilable conflict with other, more important public policies”.11

*389Recently, this Court concluded that its decision in Young v Leadbetter, No. 52, 523 (July 2, 1969), holding that Coleman Young was ineligible to run for mayor in 1969, was not res judicata of his eligibility to seek election to the same office in 1973. "Where questions of law are involved, the courts have been reluctant to apply the rule of res judicata.” Young v Detroit City Clerk, 389 Mich 333, 338; 207 NW2d 126 (1973).

The Restatement of Judgments, 2d, § 68.1, Tentative Draft No. 1, 1973, cited in Young, states that res judicata is not a bar where,

"[although an issue is actually litigated and determined by a valid and final judgment, .and the determination is essential to judgment * * * [t]he issue is one of law and * * * [a] new determination is warranted in order to take account of an intervening change in the applicable legal context or otherwise to avoid inequitable administration of the laws * * * .”

Judicial decisions at times change the construction of the Internal Revenue Code. The United States Supreme Court has held that a judicial decision affecting a particular taxpayer does not preclude either the taxpayer or the government from relying on a later decision changing the construction of the code upon examination of a return for a subsequent period:

*390"A taxpayer may secure a judicial determination of a particular tax matter, a matter which may recur without substantial variation for some years thereafter. But a subsequent modification of the significant facts or a change or development in the controlling legal principles may make that determination obsolete and erroneous, at least for future purposes. If such a determination is then perpetuated each succeeding year as to the taxpayer involved in the original litigation, he is accorded a tax treatment different from that given to other taxpayers of the same class. As a result, there are inequalities in the administration of the revenue laws, discriminatory distinctions in tax liability, and a fertile basis for litigious confusion. Compare United States v Stone & Downer Co, 274 US 225, 235-236 [47 S Ct 616; 71 L Ed 1013 (1927)]. Such consequences, however, are neither necessitated nor justified by the principle of collateral estoppel. That principle is designed to prevent repetitious lawsuits over matters which have once been decided and which have remained substantially static, factually and legally. It is not meant to create vested rights in decisions that have become obsolete or erroneous with time, thereby causing inequities among taxpayers.” Commissioner of Internal Revenue v Sunnen, 333 US 591, 599; 68 S Ct 715; 92 L Ed 898 (1948). (Emphasis added.)

The income tax analogy is not perfect. But here as there the question of liability/entitlement is subject to reexamination in subsequent periods.

Ill

The Workmen’s Compensation Act is remedial legislation which this Court has liberally construed to effectuate its purposes.12

Workmen’s compensation benefits are of two *391kinds: those which, while paid over a period of time, are awarded for a specific loss [a "closed” transaction] and those which are awarded for continuing disability [an "open” transaction]. Workmen’s compensation disability benefits, like social security and unemployment compensation benefits, are a form of income maintenance for persons whose wage-earning capacity has been suspended or terminated. A claimant’s entitlement to such benefits depends on the circumstances at the time of application and payment.

A change in law, statutory or judge-made, like a change in fact, can effect a change in circumstances justifying, upon application of worker13 or employer, an award of benefits or termination or suspension of benefits previously awarded.

The right to workmen’s compensation disability benefits depends on whether, at a given point in time, the claimant is within the statutory intendment. The scope of that intendment is subject to change. A determination that a claimant is not today entitled to disability benefits does not preclude reexamination of his entitlement should the facts or the law, by legislative amendment or court decision, change tomorrow. Entitlement to continuing disability benefits is an open question.

T. G. Kavanagh, C. J., concurred with Levin, J.

The statute provided that "in no case” where "the incapacity for work resulting from the injury is partial * * * shall the period covered by such compensation be greater than 500 weeks from the date of the injury. ” (Emphasis supplied.) 1948 CL 412.10; MSA 17.160.

Hlady was injured in October, 1945. Her period of eligibility for partial disability benefits expired in 1955.

Hlady’s 1967 application included a claim for permanent and total *385disability benefits. The statute provided that such benefits "shall be paid for 750 weeks from the date of the injury. ” (Emphasis supplied.) 1948 CL 412.9; MSA 17.159. Hlady’s period of eligibility for permanent and total disability benefits expired in 1960, seven years before her 1967 application was filed.

1948 CL 412.9 was amended by 1954 PA 175. The period of eligibility for permanent and total disability benefits was extended from 750 to 800 weeks from the date of injury.

1948 CL 412.9, 412.10, as amended by 1965 PA 44; MSA 17.159, 17.160; now MCLA 418.351, 418.361; MSA 17.237(351), 17.237(361).

Curtis v Hayes Wheel Co, 211 Mich 260; 178 NW 675 (1920).

See Harrington v Huff & Mitchell Co, 155 Mich 139, 141-142; 118 NW 924 (1908).

Similarly, see La Vasser v Chesbrough Lumber Co, 190 Mich 403; 157 NW 74 (1916); McDannel v Black, 270 Mich 305, 311; 259 NW 40 (1935).

"Public policy, judicial orderliness, economy of judicial time, and the interest of the litigants, as well as the peace and order of society, all require that stability should be accorded judgments, that controversies once decided on their merits shall remain in repose, that inconsistent judicial decisions shall not be made on the same set of facts, and that there be an end to litigation which, without the doctrine of res judicata, would be endless.” 46 Am Jur 2d, Judgments, § 395, pp 559-561.

Van Dorpel was a 4-4 decision. We are advised, however, that Justice Voelkek’s opinion has nevertheless been regarded and followed by the Workmen’s Compensation Appeal Board and the profession as overruling Curtis and other inconsistent precedent.

Wagner v Baron, 64 So 2d 267, 268; 37 ALR2d 831, 833 (Fla, 1953).

"In the absence of an express intent to make the amendment prospective only, courts must look to the facts and circumstances surrounding the adoption of the amendment to determine whether.or not the legislature intended it to be retroactive.” Lahti v Fosterling, 357 Mich 578, 589; 99 NW2d 490 (1959). See, also, Cichecki v Hamtramck, 382 Mich 428; 170 NW2d 58 (1969).

An adjudication denying relief on grounds subsequently removed by a curative act has been held not to bar a new action on the validated claim. See Utter v Franklin, 172 US 416; 19 S Ct 183; 43 L Ed 498 (1899); McGillis v McGillis, 154 NY 532; 49 NE 145 (1898); Mackenzie v Douglas County, 91 Or 375; 178 P 350 (1919).

See Whetro v Awkerman, 383 Mich 235; 174 NW2d 783 (1970); Daley v LaCroix, 384 Mich 4; 179 NW2d 390 (1970), and the cases cited therein at p 14.

Including those perchance where benefits are being paid voluntarily-

Bates v Devers, 214 Va 667, 670; 202 SE2d 917, 920, fn 2 (1974).

Courts have not applied res judicata where its application would result in uneven application of the law or frustrate public policy: Spilker v Hankin, 88 US App DC 206; 188 F2d 35 (1951) (inviolability of the fiduciary nature of the attorney-client relationship is more important than consistent application of res judicata);

Denver Building & Construction Trades Council v National Labor Relations Board, 87 US App DC 293, 299; 186 F2d 326, 332 (1950), rev’d on other grounds, 341 US 675; 71 S Ct 943; 95 L Ed 1284 (1951) (application of res judicata would "submerge the plan of Congress for the administration and enforcement of its policy”).

United States v General Electric Co, 358 F Supp 731, 741-742 (SDNY, 1973) ("If the Government is barred from enforcing the [antitrust] law as it now is against G. E. alone, G. E. would be given an unfair and undeserved advantage over its competitors. It would enjoy what would be tantamount to perpetual immunity in an area in which the public interest should be paramount and the consuming public would suffer in consequence”).

Bishop v Fall River, 346 Mass 342, 345; 191 NE2d 769, 770 (1963) (application of res judicata "would result in the employees who were parties to the prior litigation receiving higher compensation than their fellow workers who were similarly situated”).

Christian v Jemison, 303 F2d 52, 55 (CA 5, 1962) (the Court permitted after "an intervening decision or change in the law created] an altered situation” a second attack on the constitutionality of a segregation statute).

See also Adams v Pearson, 411 Ill 431, 440; 104 NE2d 267, 272 (1952).

"Preclusion is a doctrine being applied in actual cases, and the application will reflect to some extent at least, the nature of the controversy involved.” Vestal, Res Judicata/Preclusion, Issue Preclusion, Adjudicating Bodies, p V-268.

See Annos: Bastardy — Res Judicata, 37 ALR2d 836; Applicability of Doctrine of Administrative Res Judicata to Determination by Secre*389tary of Health, Education, & Welfare that Claimant Is Not Entitled to Social Security Disability Beneñts, 14 ALRF 776.

"It would seem desirable to treat contrary intervening decisions as a change in one of the controlling circumstances in all instances, and not apply collateral estoppel in the second action.” Developments in the Law — Res Judicata, 65 Harv L Rev 818, 845 (1952).

See, generally, Polasky, Collateral Estoppel — Effects of Prior Litigation, 39 Iowa L Rev 217, 221, 250 (1954); Groner & Sternstein, Res Judicata in Federal Administrative Law, 39 Iowa L Rev 300, 303-304 (1954); Comment Note, Res Judicata as Subject to Exception when its Application would be Opposed to Public Policy, 88 L Ed 389 (1948).

See Justice Voelker’s opinion in Van Dorpel v Haven-Busch Co, 350 Mich 135; 85 NW2d 97 (1957); Lahti v Fosterling, supra. See, also, Justice Talbot Smith’s opinion in Sheppard v Michigan National Bank, 348 Mich 577; 83 NW2d 614 (1957).

"The first application was filed on April 26, 1956. Since the plaintiff did not seek judicial review, the decision of the hearing examiner is conclusive on the issue of his disability between January 26, 1954 and April 25, 1956. However, the claimant met the special earnings requirement of the Social Security Act until September 30, 1957 so that if he qualified under the disability provisions of the statute between April 25, 1956 and September 30, 1957, the problem of res judicata may be avoided.” Moore v Celebrezze, 252 F Supp 593 (ED Pa, 1966).