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STATE OF MICHIGAN COURT OF APPEALS

ANNMARIE NILL, Plaintiff-Appellee, v BORDERS GROUP, INC., and LIBERTY MUTUAL INSURANCE COMPANY, Defendants-Appellants.

UNPUBLISHED December 20, 2011

No. 298446 WCAC LC No. 09-000229

Before: CAVANAGH, P.J., and SAWYER and METER, JJ. PER CURIAM. Defendants appeal from an opinion and order of the Workers' Compensation Appellate Commission (WCAC) that reversed a magistrate's order dismissing plaintiff's claim for benefits on the basis of res judicata. This Court originally denied defendants' application for leave to appeal, Nill v Borders Group, Inc, unpublished order of the Court of Appeals, entered January 20, 2011 (Docket No. 298446), but the Supreme Court, in lieu of granting leave to appeal, subsequently remanded the case to this Court for consideration as on leave granted. Nill v Borders Group, Inc, 489 Mich 939; 798 NW2d 215 (2011). We affirm. Plaintiff was injured at work on January 24, 2002. Defendants voluntarily paid benefits, but stopped paying benefits after plaintiff refused her employer's offer to return to work. In proceedings before Magistrate Susan Cope in 2003, the parties stipulated that plaintiff had sustained an injury that arose out of her employment, but disagreed concerning whether plaintiff remained disabled. In August 2003, Magistrate Cope decided that plaintiff lacked credibility and awarded benefits only until the date that Dr. Terry Weingarden concluded that she could return to work without restrictions. The WCAC affirmed, but corrected the date of Dr. Weingarden's examination specified in the magistrate's opinion. In June 2007, plaintiff filed an application for mediation or hearing and claimed there had been a "change in condition." She alleged that she "continued to be disabled, leading to subsequent worsening of her condition" and necessitating surgery. In this second proceeding, defendants argued, and Magistrate Victor McCoy agreed, that the application was barred by res judicata. Plaintiff appealed to the WCAC, which concluded that the magistrate committed legal error in his analysis and reversed the dismissal of plaintiff's claim.

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Application of the doctrine of res judicata presents a question of law. Banks v LAB Lansing Body Assembly, 271 Mich App 227, 229; 720 NW2d 756 (2006). This Court reviews de novo questions of law involved in a final order of the WCAC. Romero v Burt Moeke Hardwoods, Inc, 280 Mich App 1, 4; 760 NW2d 586 (2008). The WCAC's decision may be reversed if the WCAC "operated within the wrong legal framework or based its decision on erroneous legal reasoning." Id. "The doctrine of res judicata applies where: (1) there has been a prior decision on the merits, (2) the issue was either actually resolved in the first case or could have been resolved in the first case if the parties, exercising reasonable diligence, had brought it forward, and (3) both actions were between the same parties or their privies." Paige v City of Sterling Hts, 476 Mich 495, 521 n 46; 720 NW2d 219 (2006). The Supreme Court has quoted with approval the following passage from 58 Am Jur, Workmen's Compensation,

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