Nichol v. Billot

V. J. Brennan, J.

(dissenting). I disagree with the majority in this matter. The Worker’s Disability Compensation Act [hereafter WDCA] bars a common law action by an employee against a co-employee for a job-related injury which occurs during the course of employment. MCLA 418.131, 418.301, 418.827; MSA 17.237(131), 17.237(301), 17.237(827). In those situations, the injured party’s sole avenue of recovery is the exclusive remedy provided by the WDCA. Herndon v UAW Local No *2723, 56 Mich App 435, 436-437; 224 NW2d 334 (1974).

When defendant raised the WDCA as a defense to plaintiffs suit, he was raising a statutory, jurisdictional defense1 which should have been resolved *273before the case proceeded to trial. As can be seen from the briefs and the trial transcript, a primary dispute in this case is whether or not defendant and plaintiffs decedent were co-employees. If they were co-employees and the accident responsible for decedent’s death occurred during their common employment, then plaintiffs exclusive remedy lay under the WDCA and the circuit court had no subject matter jurisdiction over the matter. However, if the principals were not co-employees, plaintiff could pursue a common law negligence suit against defendant in the circuit court.2

Regardless of whether material questions of fact exist concerning the underlying negligence claim, the primary question which the trial court should have resolved before any other on a separate record was that of defendant’s status under the WDCA.3 So constituted, the question was not a question of fact for the jury to decide; the question was one of law for the judge. See Chester v World *274Football League, 75 Mich App 455, 462; 255 NW2d 643 (1977) (V. J. Brennan, J., concurring in part, dissenting in part), Askew v Macomber, 63 Mich App 359, 362; 234 NW2d 523 (1975), Renfroe v Higgins Rack Coating & Manufacturing Co, Inc, 17 Mich App 259, 261-262; 169 NW2d 326 (1969).

Since Tata v Muskovitz, 354 Mich 695; 94 NW2d 71 (1959), the economic reality test has been consistently applied by Michigan courts in determining the employer-employee relationship in connection with worker’s compensation and unemployment compensation questions. See Higgins v Monroe Evening News, 70 Mich App 407, 414-415; 245 NW2d 769 (1976), Moore v Gundelfinger, 56 Mich App 73, 80; 223 NW2d 643 (1974), White v Extra Labor Power of America, 54 Mich App 370, 374; 221 NW2d 214 (1974). On the other hand, in relation to tort claims wholely unrelated to the WDCA, the control test has been correctly used to determine employee status such as with questions of vicarious liability (respondeat superior). See Sliter v Cobb, 36 Mich App 471, 490; 194 NW2d 75 (1971), rev’d on other grounds, 388 Mich 202; 200 NW2d 67 (1972), and Kaniewski v Warner, 12 Mich App 355; 163 NW2d 34 (1968).

In the present case, the court faced its summary judgment decision in the context of a tort claim but with defendant relying on the WDCA in an effort to escape plaintiff’s suit. Consequently, the case did not then represent either a tort claim alone or a claim for statutory compensation, as against defendant’s employer. See Higgins, supra. Under these circumstances, I would hold that the logical test to use in deciding whether or not defendant can use the WDCA as a shield against the plaintiff must be the WDCA test, not the control test. Chester v World Football League, supra, at 462. See Cronk v Chevrolet Local 659, 32 *275Mich App 394, 398; 189 NW2d 16 (1971), lev den, 385 Mich 784 (1971). Hence, the judge should have used the economic reality test in deciding whether or not defendant was Boyle’s employee, and therefore the decedent’s co-employee.

In applying the economic reality test to the facts as presented,4 I conclude as a matter of law that the defendant was not an employee within the meaning of the WDCA.5 See McKissic v Bodine, 42 *276Mich App 203, 208-209; 201 NW2d 333 (1972). The reasoning and result I reach on this important question is in line with the purposes of the WDCA, which are (1) to bring about reimbursement of the employer or insurance carrier who has paid worker’s compensation benefits to the injured employee and (2) to allow the injured employee to obtain recovery beyond the statutory worker’s compensation benefits. See Hix v Besser Co, 19 Mich App 468, 472-473; 172 NW2d 821 (1969), aff'd in part, vacated in part on other grounds, 386 Mich 499; 194 NW2d 333 (1972).

Consequently, the trial judge should have found that defendant was not an employee within the meaning of the WDCA, thus providing a basis for subject matter jurisdiction of plaintiffs tort action in the circuit court.

Thereafter, were the trial court to later submit the question of defendant’s possible negligence to the jury, in the totally unlikely situation that defendant’s working status was at issue,6 the court could have at that time framed its instructions in terms of the control test. See Kendrick v Graddis, 75 Mich App 383, 386, n 1; 255 NW2d 14 (1977), Sliter v Cobb, supra, at 490. However, the court’s failure to distinguish the proper standard under the WDCA claim constitutes error and requires reversal.

*277The jury may well have exonerated defendant after concluding that he was an employee of the trailer park and not an independent contractor. Such a conclusion was reached under legally incorrect guidelines.

The plaintiff also objects to the submission of contributory negligence and negligence questions to the jury. However, our courts strongly favor jury determination of contributory negligence questions, Funk v General Motors Corp, 392 Mich 91, 113; 220 NW2d 641 (1974), Jaworski v Great Scott Supermarkets, 71 Mich App 235; 247 NW2d 363 (1976), and negligence questions, Miller v Miller, 373 Mich 519, 524; 129 NW2d 885 (1964), Witucke v Presque Isle Bank, 68 Mich App 599, 612; 243 NW2d 907 (1976). Further, in the instant case, where bona fide disputes existed over who was negligent, supervisor Campbell, the decedent or the defendant, the questions were properly left to the jury.

I would reverse and remand to the trial court for a new trial.

The circuit court can decide whether its jurisdiction extends to this case. To do so, the court must determine whether defendant was plaintiffs co-employee under the WDCA. I would distinguish one recent decision of the Michigan Supreme Court. Szydlowski v General Motors Corp, 397 Mich 356; 245 NW2d 26 (1976). In Szydlowski, where plaintiff filed a claim for workman’s compensation with the bureau which was dismissed twice for no progress and then filed a wrongful death action in circuit court trying to recover compensation under a mandatory statutory medical service provision of the WDCA, the Court denied the circuit court the jurisdiction to hear the case.

I would distinguish that case as dealing with a claim involving the grant of workman’s compensation benefits under circumstances which would have completely usurped the primary function of the Workman’s Compensation Bureau had the Court allowed the circuit court concurrent jurisdiction. Plaintiff based her entire suit on the mandatory WDCA warranty insuring "reasonable medical, surgical and hospital services”. Given the way she framed her action, the trial court could not have given judgment without directly passing upon a recovery provision of the act. Certainly, such action would serve to replace the exclusive function the act reserved to the Workman’s Compensation Bureau.

In the case before us now, plaintiff does not seek to substitute the trial court for the bureau. The action alone seeks determination of the trial court’s rightful jurisdiction — that is, whether plaintiffs action violates the statutory jurisdiction of the WDCA. This question the court must answer. The court must have jurisdiction to decide the matter of its own jurisdiction. Its resolution of jurisdictional facts is appropriate to the singular purpose of resolving the jurisdictional problem.

Further, Szydlowski involved the question whether injuries arose out of and during the course of employment and whether those injuries were compensable under a provision of the act. No determination of employee or employer status and its implications arose for the court to consider there.

In short, we find the particular question addressed by the trial court properly raised and resolved there. The court must and the act intends to allow circuit court determination of legal questions involving legitimate matters of jurisdiction touching its own court. If the suit conflicts with the ability of the Workman’s Compensation Bureau to award compensation, then the circuit court must deny the parties’ attempt to litigate there. However, the circumstances presented by this case and others involving statutory defenses under the act must be resolved by the trial court as to the jurisdictional implications under the act.

Once the court separately determined that the WDCA did not preclude a cause of action in tort, having so properly placed the suit before the court, plaintiff could then bring its motion for summary judgment on the negligence claim. GCR 1963, 117.2. He might then allege no material issue of fact under 117.2(3), at which point the court might have conceivably denied the motion on the basis of factual disputes.

Being a jurisdictional question, defendant’s claim under the WDCA can be brought at any time. See, Fox v Board of Regents of the University of Michigan, 375 Mich 238, 242; 132 NW2d 146 (1965). However, as the gist of the claim asserts lack of subject matter jurisdiction, the most appropriate vehicle would be a motion for accelerated judgment under GCR 1963, 116.1(2). See St Paul Fire & Marine Insurance Co v Littky, 60 Mich App 375, 377; 230 NW2d 440 (1975). We do not believe a motion for summary judgment is proper. See, Renfroe v Higgins Rack Coating & Mfg Co, Inc, supra, at 262. See also, St Paul Fire & Marine Insurance Co v Littky, supra, at 377. The determination of whether a cause of action should proceed to trial on the merits is distinct from the legal question concerning the court’s ability to hear and decide the case. Any dispute of jurisdictional fact should be resolved by the trial court incident to its consideration of jurisdiction under GCR 1963, 116.1(2). A separate hearing to resolve these disputed jurisdictional facts may be necessary.

Sufficient factual evidence was presented by the record to allow a legally informed decision by the trial court as to whether defendant was an employee under the WDCA.

Considered in this case, the economic realities do not indicate defendant was an employee under the WDCA. Defendant Billot testified that he and his father owned a small enterprise known as Billot Excavating Co. They owned a backhoe, an end loader, a bulldozer and three trucks. They supplied all equipment for jobs they handled. Defendant considered himself self-employed. He managed his social security and taxes himself. He was not carried on employment rolls for the jobs he took. He was paid a flat rate of $12 per hour for his work with the backhoe. This procedure was followed when defendant did the job for trailer park owner Boyle. Concurrent with work done for owner Boyle, defendant was working for several other persons. His living expenses did not depend primarily on emolument from owner Boyle. He was listed in the phone book as an excavating contractor. Defendant was not hired for purposes directly related to the operation of Boyle’s trailer park.

In short, the only factor of the eight ordinarily enumerated which applied to defendant with some accuracy was the control factor. Owner Boyle did maintain some degree of control over defendant while he was actually engaged in the operation of positioning and digging the trench. Obvious evidence of this control appears from the fact that owner Boyle contracted a specific overall supervisor for the trailer park expansion project, O. J. Campbell, the former owner of the park, and that supervisor Campbell was specifically responsible for obtaining defendant’s services. Campbell was present and directly involved with the operation of constructing the trench. Consequently, defendant may well have looked like an employee under the control test but not so under the economic reality test.

Potential prejudice appears when the fact is considered that the jury found no cause of action against defendant when instructed under the control test and then was allowed to determine the WDCA defense according to that standard. We might note incidentally, though nonessential for decision of the WDCA defense, that defendant may well be characterized as an independent contractor even were the control test used. However, the question is close enough under that test so the potential for prejudice cannot be eliminated with any degree of certainty.

Because plaintiff is suing defendant, a fellow worker, rather than owner Boyle, the question of whether either party was an employee or independent contractor has no legal significance for purposes of tort liability in this case. Consequently, the court would likely never be in a position to instruct the jury on this matter under any test. Note that if plaintiff had sued owner Boyle, the question of employee or independent contractor entails considerations of different standards of care by which defendant’s duty would be tested. See, Kendrick v Graddis, supra. See, regarding the standard of care for independent contractors as against employees, Holgate v Chrysler Corp, 279 Mich 24, 30; 271 NW 539 (1937). See also 16 Callaghan’s Michigan Civil Jurisprudence, Master and Servant, § 67, pp 457-458.