Layman v. Newkirk Electric Associates Inc.

Kelly, J.

We granted leave in this case to decide (1) whether the Worker’s Compensation Appellate Commission improperly made fact findings in the absence of findings by the magistrate, and (2) whether, on remand from an appellate court, additional fact findings should be undertaken by the magistrate or the commission. We conclude that the commission exceeded its authority in this case and that the magistrate is the proper person to make additional fact findings.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff-appellant William D. Layman is a journeyman lineman who worked without physical restrictions for approximately thirty-five years, despite having a preexisting condition of spinal arthritis. In July 1991, his union hall assigned him to a job with defendant-appellee Newkirk Electric Associates, Inc.

On October 17, 1991, plaintiff was participating in a Newkirk project that involved tearing down large electrical cables. The assignment required him to *497work on utility poles from the elevated bucket of a bucket truck. He spent six to eight hours in that position. Because the distance between the utility poles was short, he remained in the bucket while the truck was moved from pole to pole.

The brakes on the bucket truck were malfunctioning, causing him to be thrown about inside the bucket whenever the truck stopped. Plaintiff was unable to anticipate which way the truck would lunge. As a result, his waist was repeatedly banged against the rim of the bucket. He was also unable to protect himself because his hands were occupied with preventing an overhead cable from falling on light fixtures and pedestrians.

Plaintiff finished the work day, but he had difficulty getting out of bed the following Monday morning because of soreness in his back. He never returned to work at Newkirk. Newkirk voluntarily paid worker’s compensation benefits to plaintiff from October 1991, through March 1992, but not afterward, because its insurer disputed Newkirk’s liability for benefits.

Plaintiff worked for defendant-appellee Henkels & McCoy, Inc., from June 29, 1992, to August 12, 1992. This job required him to climb utility poles with a hook and belt. Plaintiff was unable to perform all his duties. Other workers did some of the work for him, and it was necessary for him to take several aspirin each day in order to tolerate his pain. He turned down the jobs he was offered following his employment with Henkels & McCoy.

Plaintiff filed a claim for worker’s compensation benefits on March 24, 1992. The case proceeded to a hearing before Magistrate B. Lloyd Blair in Detroit on July 21, 1993. At the hearing, plaintiff testified that he *498no longer was able to perform the jobs he had done in the past. He said he had difficulty even walking, and it was necessary for him to stop and rest whenever he walked as much as half a mile.

The medical testimony generally supported the conclusion that plaintiff has a bad back, but there was disagreement concerning the cause and the severity of his condition.

In a decision mailed August 16, 1993, the magistrate awarded open-ended benefits to plaintiff. He found that plaintiff was a believable witness, that his account of the October 17, 1991, incident was unrebutted, and that he suffered a work-related aggravation of a preexisting back condition on that date.

Defendant Newkirk appealed to the Worker’s Compensation Appellate Commission. On June 14, 1995, the commission reversed the magistrate’s decision, and denied plaintiff’s claim for benefits. 1995 Mich ACO 1389.

The Court of Appeals denied leave to appeal.1 This Court granted plaintiff’s application for leave to appeal.2

H. ANALYSIS

This Court is asked to review a decision of the Worker’s Compensation Appellate Commission. According to the Michigan Constitution, “Findings of fact in workmen’s compensation proceedings shall be conclusive in the absence of fraud unless otherwise provided by law.” Const 1963, art 6, § 28. Additionally, MCL 418.861a(3); MSA 17.237(861a)(3) provides:

*499Beginning October 1, 1986 findings of fact made by a worker’s compensation magistrate shall be considered conclusive by the commission if supported by competent, material, and substantial evidence on the whole record. As used in this subsection, “substantial evidence” means such evidence, considering the whole record, as a reasonable mind will accept as adequate to justify the conclusion.

This Court recently stated in Goff v Bil-Mar Foods, Inc (After Remand):3

[W]here a party claims that the wcac has exceeded its power by reversing the magistrate, meaningful review must begin with the magistrate’s decision, because if competent, material, and substantial evidence based on the whole record supports the magistrate’s decision, the wcac need go no further. If it does, the wcac is exceeding its authority.

A. THE MAGISTRATE’S FINDINGS

The magistrate recognized that Newkirk had voluntarily paid worker’s compensation benefits to plaintiff between October 1991, and March 1992, and was contesting plaintiff’s disability only after March 1992. After reviewing plaintiff’s testimony and that of the medical experts, the magistrate found an October 17, 1991, injury date and a continuing disability from the injury.

John S. Warner, D.C., a chiropractor who began treating plaintiff before the incident with Newkirk,4 testified that plaintiff suffered from either a com*500pressed nerve root or a herniated disc at the L5-S1 interval. He said plaintiff should avoid bending and twisting and should lift no more than ten pounds.

Chiropractor Wallace Ross examined plaintiff on February 25, 1992, pursuant to a request by CNA Insurance Company. Dr. Ross detected arthritis throughout the spine. He estimated that the condition had been present for approximately ten years. He opined that the October 17, 1991, incident could have caused muscle strain, but that the condition would have been resolved after several weeks. He said plaintiff should not lift more than thirty-five pounds, and that his condition would improve if he obeyed restrictions and performed strengthening exercises.

Christopher Schaiberger, M.D., a neurologist, examined plaintiff on June 3, 1992, pursuant to a referral for a neurological examination of plaintiffs lower back and extremities. He found degenerative arthritis in the lumbar region, with spurring at L5-SI, and he expressed the opinion that these problems existed before the incident on October 17, 1991. He felt the injury could have originated with trauma or could have developed spontaneously. He recommended no bending, no twisting, and no lifting over fifty pounds without help.

Harvey Andre, M.D., who examined plaintiff on March 25, 1993, found degenerative arthritis at L3 and L4-5. He said plaintiff could perform only light work and that he should avoid stooping, bending, twisting, pushing and pulling, and should lift no more than five pounds.

The magistrate found plaintiff believable, his account of the accident unrebutted, and ruled that plaintiff suffered a work-related aggravation of a pre*501existing back condition on October 17, 1991. The magistrate explained:

There is agreement between Drs. Ross and Schaiberger that plaintiff has arthritic changes in his entire spine which predated October 17, 1991. I so find. And, although Dr. Schaiberger acknowledged that plaintiff’s problems stemming from his arthritis could have originated spontaneously, I find that they did not. The theory of spontaneous initiation in this case flies in the face of plaintiff’s activities of October 17, 1991. To find spontaneous origin here, one would have to completely ignore plaintiff’s undisputed testimony that he was banged around waist height in the bucket of a bucket truck which turned out to have had an improperly functioning master brake cylinder. Accordingly, I find the experience of October 17, 1991, combined with plaintiff’s arthritic condition and resulted in his current low-back disability.
All the experts agree plaintiff is disabled by arthritis and should be restricted from various activities which his job as a lineman would demand. I therefore find an injury date of October 17, 1991, and continuing disability from said injury.
I do not find that work plaintiff did for Henkels & McCoy, Inc. subsequent to leaving defendant, Newkirk Electric Associates, Inc., changed plaintiff’s basic underlying condition. No specific injury or occurrence was alleged. Plaintiff was “carried” by co-workers and could only tolerate what little work he did by taking 12 to 16 aspirins per day. He definitely was disabled when he went to work for Henkels & McCoy, Inc., but this job did not contribute to or aggravate his underlying condition. I find no July, 1992 injury date.

On the basis of his findings, the magistrate awarded open-ended benefits to plaintiff.

B. THE COMMISSION’S REVIEW

Defendant Newkirk appealed to the Worker’s Compensation Appellate Commission. Among other mat*502ters, Newkirk argued that the magistrate committed legal error requiring reversal by not applying the significant-manner standard of MCL 418.301(2); MSA 17.237(301)(2). The standard provides:

Mental disabilities and conditions of the aging process, including but not limited to heart and cardiovascular conditions, shall be compensable if contributed to or aggravated or accelerated by the employment in a significant manner. [Emphasis added.]

Plaintiff argued that the magistrate based his finding of injury on MCL 418.301(1); MSA 17.237(301)(1). It states:

An employee, who receives a personal injury arising out of and in the course of employment by an employer who is subject to this act at the time of the injury, shall be paid compensation as provided in this act.

The commission noted that there was “no dispute that plaintiff suffers from a type of arthritis which is a condition of the aging process. As such, the significant contribution test of MCL 418.301(2) [MSA 17.237(301)(2)] applies.” 1995 Mich ACO 1391. It concluded that the magistrate had clearly erred in failing to apply the significant-manner test. The commission then disregarded some of the magistrate’s factual findings and made its own findings. The panel said that an omission by the magistrate made it appropriate for it to exercise its limited fact-finding powers under Holden v Ford Motor Co, 439 Mich 257; 484 NW2d 227 (1992), and Woody v Cello-Foil Products *503(On Remand), 204 Mich App 259; 514 NW2d 228 (1994).5

The panel then undertook to determine whether plaintiff’s work-related injury was a significant factor in causing his disability. It found that plaintiff’s work was not a significant factor in causing his disability for the following reasons: Dr. Warner’s testimony was equivocal at best in regard to the significance of the work incident in relation to plaintiff’s overall condition. Dr. Schaiberger’s testimony “fell far short of opining that work was a significant factor.” 1995 Mich ACO 1394. Dr. Ross “testified that plaintiff’s work incidents at most caused a temporary symptomatic aggravation, as opposed to a permanent pathological aggravation . . . .” Id. at 1395. The commission concluded:

We are not persuaded that the workplace incidents plaintiff complained of were of such a nature that they would have significantly contributed to plaintiff’s already existing complaints caused by his degenerative arthritic condition. Certainly, when the record below is reviewed as a whole, it does not support a finding of a significant or pathological aggravation of plaintiff’s longstanding arthritic condition. Accordingly, we reverse the Magistrate’s open award of benefits. [J&]

m. impermissible fact finding by the commission

The commission engaged in improper fact finding, initially, when it concluded that plaintiff’s arthritis was a condition of the aging process. A review of the magistrate’s opinion shows that he found “arthritic *504changes in [Mr. Layman’s] entire spine which predated October 17, 1991.” This does not equate with a finding that the arthritis was a condition of the aging process. While arthritis may be related to the aging process, it is certainly not always aging-related. Taber’s Cyclopedic Medical Dictionary. Arthritis is often caused by repetitive stress on a certain part of a person’s body, and can occur at any time in a person’s lifetime.

The magistrate did not make a specific finding regarding whether plaintiff’s arthritis was part of the aging process. Whether a plaintiff’s arthritis is part of the aging process is the type of medical factual inquiry that is reserved for the magistrate’s fact-finding powers. Without a finding by the magistrate, the commission is not entitled to invoke the significant-manner test.

The commission cites this Court’s decisions in Holden and the Court of Appeals decision in Woody as justification to exercise its limited fact-finding powers and to then apply the significant-manner test. However, we have since reversed the Woody decision.

In Woody v Cello-Foil Products, we examined (1) whether the magistrate made sufficient findings of fact regarding work-related causation, and (2) whether those findings were supported by substantial, material, and competent evidence on the whole record. The Court of Appeals had ruled that, because the magistrate made no findings regarding the origin of the plaintiff’s sensitivity, the commission was free to make a factual finding of its own. Woody, 204 Mich App 262. In reversing the decision of the Court of Appeals, we held:

*505The magistrate did not make findings of fact that were sufficiently detailed for us to separate the facts found from the law applied. Further, the conclusory findings are inadequate because we need to know the path taken through the conflicting evidence, the testimony adopted, the standards followed, and the reasoning used to reach his conclusion. [Woody v Cello-Foil Products (After Remand), 450 Mich 588, 597; 546 NW2d 226 (1996).]

We remanded the case to the magistrate “for further proceedings and detailed findings of fact regarding whether the plaintiff’s injury was caused by her exposure to mek at defendant company.” Id., citing Kostamo v Marquette Iron Mining Co, 405 Mich 105, 138; 274 NW2d 411 (1979).

In the case at bar, it is not clear whether the magistrate based his decision on subsection 1 or subsection 2 of MCL 418.301; MSA 17.237(301). The commission stated: “A review of the Magistrate’s opinion reveals that he failed to apply the ‘significant manner’ test, apparently applying a less stringent ‘causal relationship’ standard . . . .” 1995 Mich ACO 1392. Plaintiff argues that evidence that the magistrate applied the significant-manner test is shown by the magistrate’s use of terms like “originated,” “initiation,” and “resulted.”

For the commission to find that those terms clearly convey the magistrate’s application of the significant-manner test requires the commission “to speculate regarding the facts and the legal reasoning that the magistrate relied on to reach his conclusion,” which it cannot do. Woody, 450 Mich 597.

The commission also cited this Court’s ruling in Holden, supra, to support its decision to enter into the fact-finding arena. It remarked that, in both the *506case at bar and in Holden, the magistrate had failed to make certain findings of fact essential to a legal determination regarding causation. In Holden, the wcac ruled that the magistrate’s findings and conclusions were not supported by substantial evidence on the whole record, and then proceeded to make its own findings. This Court found that the commission did not exceed its legislatively prescribed reviewing function.

Any interpretation of Holden as permitting the commission to make original fact finding on issues overlooked by the magistrate is refuted by our subsequent decision in Woody. We hold in the instant case, as we did in Woody, that the proper person to make findings of fact is the magistrate. On remand, the magistrate must be given the task of providing comprehensive findings of fact while applying the proper legal standard.

The Legislature intended that the magistrate have the final word regarding most fact finding and that the commission play a much more limited role:

A primary purpose of [1985 PA 103] is to make the decisions of the magistrates final in most cases. While an appeal can be filed, it is intended that relatively few appeals will be successful. The number of members of the workers’ compensation appellate tribunal has been reduced because the appellate role has been reduced from factfinder to a limited review for error. The decision of the magistrates will in most cases constitute the final decision. [Civil Service Comm v Dep’t of Labor, 424 Mich 571, 621; 384 NW2d 728 (1986), amended by 425 Mich 1201 (1986).]

We agree with plaintiff that the commission went beyond its legislatively prescribed function of reviewing the magistrate’s decision and substituted its inter*507pretation of the evidence for the findings of the magistrate.

In Goff, supra at 538, this Court explained:

If the magistrate’s decision is reasonably supported in the record by any competent, material, and substantial evidence, then it is conclusive and the WCAC must affirm. If it does not, it is exceeding the scope of its reviewing power and impermissibly substituting its judgment for the magistrate’s. In reviewing the magistrate’s decision, the WCAC must do so with sensitivity and deference toward the findings and conclusions of the magistrate in its assessment of the record. If in its review the wcac finds that the magistrate did not rely on competent evidence, it must carefully detail its findings of fact and the reasons for its findings grounded in the record. If after such careful review of the record the wcac finds that the magistrate’s determination was not made on the basis of substantial evidence and is therefore not conclusive, then it is free to make its own findings. In such circumstances, the findings of fact of the wcac are conclusive if the commission was acting within its powers. Ultimately, the role of the Court of Appeals and this Court is only to evaluate whether the wcac exceeded its authority. [Emphasis added.]

We hold that the commission exceeded its authority when it made impermissible findings of fact in the absence of findings by the magistrate.

A reviewing court should not identify alternative findings that could be supported by substantial evidence and supplant the agency’s findings with them. Arkansas v Oklahoma, 503 US 91, 113; 112 S Ct 1046; 117 L Ed 2d 239 (1992), and see In re Payne, 444 Mich 679, 692; 514 NW2d 121 (1994). In the instant case, the commission “gave only passing lip service” to the requirement that the commission be aware of the deference due the magistrate. Goff supra at 536, citing Holden, supra. The commission justified impos*508ing its own factual conclusions because the magistrate did not use the magic words “significant manner.”

It essentially turned the substantial-evidence standard on its head when it embarked on its own fact-finding journey. Arkansas, supra.

MCL 418.861a(12); MSA 17.237(861a)(12) provides:

The commission or a panel of the commission may remand a matter to a worker’s compensation magistrate for purposes of supplying a complete record if it is determined that the record is insufficient for purposes of review.

Where a magistrate’s findings are insufficient for appellate review, nothing in the Worker’s Disability Compensation Act prevents this Court or the Court of Appeals from remanding the case to the magistrate for additional fact finding. Woody, 450 Mich 588. The office of the magistrate is the appropriate place for additional fact finding because only the magistrate has the opportunity to observe live testimony and argument.6

The commission engaged in impermissible fact finding in the absence of findings by the magistrate. The findings that the magistrate did make were made on the basis of competent, material, and substantial evidence. The magistrate did find an injury date of October 17, 1991, and continuing disability from that date. Unfortunately, the magistrate did not clearly delineate which standard he applied to find the injury. Additionally, it is not clear that the magistrate found *509that plaintiffs arthritis is a condition of the aging process, thus requiring the application of the significant-manner test. The commission was in error when it stated that the magistrate found that plaintiff suffers from a preexisting aging condition. The magistrate did not make that finding. A determination on the issue must be made on remand.

We conclude that the commission erred in disregarding certain of the magistrate’s findings and reversing the award of benefits. Where a factual finding needs to be made, but has not been rendered by the magistrate, the case should be remanded to the magistrate. When the commission finds that the magistrate has failed to make necessary fact findings, it should remand the case to the magistrate for that purpose. See Woody, 450 Mich 588.

We hold that the commission must remand this case, and other cases where fact findings are incomplete, to the magistrate for the requisite fact finding. To hold otherwise would deprive parties of any meaningful review of factual findings by the commission. The commission must review the magistrate’s findings of fact to determine whether they are supported by competent, material, and substantial evidence.

IV. CONCLUSION

We vacate the June 14, 1995, decision of the Worker’s Compensation Appellate Commission. We remand this case to the magistrate to determine whether plaintiff’s arthritis is a condition of the aging process, and, if so, to determine whether the significant-manner test of MCL 418.301(2); MSA 17.237(301)(2) applies to this case. The magistrate shall then reconsider whether plaintiff’s work-related *510injury contributed to or aggravated or accelerated his disability in a significant manner. In order to facilitate subsequent appellate review, the magistrate is directed to analyze the evidence and make detailed findings under the significant-manner test, even if he determines that the test is not applicable in this case.

Mallett, C.J., and Brickley and Cavanagh, JJ., concurred with Kelly, J.

Unpublished order, entered December 14, 1995 (Docket No. 187340).

456 Mich 891 (1997).

454 Mich 507, 513; 563 NW2d 214 (1997).

Plaintiff consulted with Dr. Warner about his back pain on May 22, 1990. He received five office treatments between that date and January 13, 1991. Dr. Warner said plaintiff improved significantly during this treatment. He did not see plaintiff again until October 21, 1991, four days after the incident with Newkirk.

After the commission issued its decision in the instant case, we reversed the Court of Appeals decision in Woody (After Remand), 450 Mich 588; 546 NW2d 226 (1996).

We acknowledge that, in this case, the medical expert testimony was provided by deposition. However, the magistrate did have the opportunity to observe plaintiff and did specifically find plaintiff to be credible.