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Michigan Supreme Court Lansing, Michigan

Opinion
MARY BAILEY, Plaintiff-Appellee, v OAKWOOD HOSPITAL AND MEDICAL CENTER, Defendant-Appellant, and SECOND INJURY FUND, Defendant-Appellee, and DIRECTOR OF THE BUREAU OF WORKERS' AND UNEMPLOYMENT COMPENSATION, Intervenor-Appellee. _______________________________ BEFORE THE ENTIRE BENCH KELLY, J. This case involves the

Chief Justice:

Justices:

Clifford W. Taylor

Michael F. Cavanagh Elizabeth A. Weaver Marilyn Kelly Maura D. Corrigan Robert P. Young, Jr. Stephen J. Markman

FILED JUNE 29, 2005

No. 125110

allocation

of

liability

for

benefits under the vocationally disabled persons chapter of the Worker's Disability Compensation Act. seq. MCL 418.901 et

The act makes an employer initially liable to pay

disability benefits to a certified vocationally disabled employee who is injured on the job. employer only fifty-two care, weeks and last of It imposes on the liability and for burial

compensation, expenses. becomes

medical

illness

MCL 418.921. In the

Thereafter, the Second Injury Fund event of an employment-related

liable.

injury to a certified vocationally disabled employee, the employer's worker's disability insurance carrier has an

obligation to give notice to the fund. The issue here is whether a carrier that fails to notify disabled weeks. the fund is solely liable for a vocationally fifty-two

person's

disability

benefits

after

MCL 418.925(1).

Related issues are whether the

fund is liable after the fifty-second week if it receives late notice, and whether the employer can be liable after fifty-two weeks under any circumstances. We benefits hold after that the the employer has week, no even liability if the for fund

fifty-second

receives late notice.

Also, the carrier must continue to Finally, the fund is

pay benefits after fifty-two weeks.

not released from liability to reimburse the carrier for its payments made after fifty-two weeks even if it receives late notice. An exception exists if the employee loses If the employee

eligibility before late notice is given.

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is found ineligible for payments made before late notice was given, the fund need not reimburse the carrier for the benefits paid. We overrule the Court of Appeals decisions

in Valencic v TPM, Inc1 and Robinson v Gen Motors Corp2 to the extent that they are inconsistent with today's opinion. We reverse in part the Court of Appeals decision in this case and remand the case to the Worker's Compensation

Appellate Commission (WCAC). THE PROVISIONS
FOR

VOCATIONALLY DISABLED EMPLOYEES

A vocationally disabled employee is an employee who suffers from one of several statutorily enumerated medical conditions and whose impairment is a substantial obstacle to employment. MCL 418.901(a). The liability to pay

benefits for such an employee, when injured on the job, is allocated among the employer, the employer's carrier, and the Second Injury Fund. The disability act restricts the MCL

employer's liability to the first fifty-two weeks. 418.921.

After that, the employer's carrier must continue to pay benefits to the employee. the carrier for the amount But the fund must reimburse the carrier pays after the

fifty-second week following the injury.

MCL 418.925(2).

1 2

248 Mich App 601; 639 NW2d 846 (2001). 242 Mich App 331; 619 NW2d 411 (2000). 3


By allocating liability in this fashion, the act reduces an employer's normal worker's compensation liability,

encouraging employment of the vocationally disabled. The act provides that a vocationally disabled employee will receive benefits in the same manner and to the same extent as other employees. MCL 418.921. To qualify under

this chapter, the employee must apply to the Division of Vocational Rehabilitation of the Department of Education for certification as vocationally disabled. MCL

418.901(b), 418.905. The employer and the disability insurance carrier must also fulfill certain obligations. When hiring a disabled

employee, the employer must submit required information to the Division of Vocational Rehabilitation. MCL 418.911.

If a certified vocationally disabled employee is injured on the job, the carrier must notify the fund within a certain time after the injury. MCL 418.925(1).

In this case, defendant Oakwood Hospital was both the employer and the carrier.3 disabled employee. defendant Oakwood Plaintiff was its vocationally

After plaintiff was injured at work, failed to timely notify the defendant

See MCL 418.601(c). Oakwood is self-insured. We distinguish between "carrier" and "employer" here, just as the act does, although in this case, they are the same party. 4


3

fund under the act's notice provision. which defendant, if either, is liable

In controversy is for benefits to

plaintiff after the fifty-second week. FACTUAL BACKGROUND The basic facts are not in dispute. Plaintiff, an

employee of Oakwood, was certified as vocationally disabled from a previous injury. She became afflicted with

debilitating bilateral cumulative trauma disorder in her hands, known as carpal tunnel syndrome, as a consequence of her work as a medical transcriptionist. Her condition Over

rendered her unable to work after September 21, 1994.

the next several months, she received noninvasive treatment then underwent carpal tunnel release surgery. Oakwood voluntarily paid disability benefits to

plaintiff until March 20, 1998. asserted Plaintiff that plaintiff for was a able

At that time, Oakwood to return a to work.

applied

hearing

before

worker's

compensation magistrate pursuant to MCL 418.931, seeking the reinstatement of her benefits. PROCEEDINGS
IN THE

WCAC

AND THE

COURT

OF

APPEALS

Oakwood failed to notify the Second Injury Fund within the period established in MCL 418.925(1) that the fund

might be liable to pay plaintiff's compensation and medical care benefits. On November 12, 1998, Oakwood filed a

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petition

with

the from

worker's the

compensation for its

bureau

seeking to

reimbursement

fund

overpayment

plaintiff pursuant to MCL 418.931(1). copy of plaintiff's vocationally

Oakwood included a certificate

handicapped

with its petition.

It argued that it should be liable for

payment of no more than fifty-two weeks of benefits under MCL 418.921 and that the fund owed the rest. The fund sought to dismiss Oakwood's petition on the basis that Oakwood had failed to give it timely notice under MCL 418.925(1). dismissed commission the A magistrate granted the motion and On appeal to the WCAC, the

petition.

granted

Oakwood's

interlocutory

appeal, Bailey

reversed, and remanded the case to the magistrate. v Oakwood Hosp & Med Ctr, 2000 Mich ACO 292.

Soon after that action, the Court of Appeals decided Robinson, supra. It held that the failure of a carrier to

timely notify the fund under MCL 418.925(1) resulted in dismissal of the fund's liability and continued the

liability of the carrier.

Robinson, supra at 334

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