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Michigan Supreme Court Lansing, Michigan

Opinion
RICK PETERSEN, Plaintiff-Appellee, v MAGNA CORPORATION and MIDWEST EMPLOYERS CASUALTY COMPANY, Defendants-Appellants. and KOLEASECO and THE ACCIDENT FUND COMPANY; MAGNA CORPORATION and TIG INSURANCE COMPANY; BCN TRANSPORTATION SERVICES and TIG INSURANCE COMPANY; KOLEASECO, INCORPORATED and CITIZENS INSURANCE COMPANY; BCN TRANSPORTATION SERVICES; SERTA RESTOKRAFT MATTRESS COMPANY, INCORPORATED and HARLEYSVILLE LAKE STATES INSURANCE COMPANY, Defendants-Appellees.

Chief Justice:

Justices:

Marilyn Kelly

Michael F. Cavanagh Elizabeth A. Weaver Maura D. Corrigan Robert P. Young, Jr. Stephen J. Markman Diane M. Hathaway

FILED JULY 31, 2009

Nos. 136542, 136543

BEFORE THE ENTIRE BENCH KELLY, C.J. We granted leave to appeal in this case to determine the parties against whom attorney fees may be prorated under MCL 418.315(1). We conclude that

the term "prorate" in MCL 418.315(1) applies only to employers and their insurance carriers. Accordingly, we affirm the judgment of the Court of Appeals. I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY This case involves a dispute over workers' compensation benefits. Plaintiff Rick Petersen began working for codefendant Koleasco, a trucking company, in February 1997. In March 1997, Koleasco hired codefendant BCN Transportation Services (BCN), a human resources "employee leasing" company, to administer its employee benefits. In November 1997, plaintiff was injured when he fell from a flatbed truck while securing a load of Christmas trees. After the accident, he underwent surgery on his right foot and applied for workers' compensation benefits. The following year, he required treatment for back pain, which his treating physician believed was caused by the November 1977 fall. Several questions were taken to a workers' compensation magistrate: (1) who was plaintiff's employer at the time of his injury, BCN or Koleaseco? (2) was Midwest the relevant insurer for workers' compensation purposes? (3) was plaintiff disabled? and (4) if so, which injury caused his disability? The magistrate bifurcated these issues into two trials. In the first trial, the magistrate ruled that plaintiff was a Koleaseco employee on the date of his injury despite the fact that BCN paid his wages. Thus, because BCN had stipulated that it was plaintiff's employer, the magistrate ruled that both BCN and Koleaseco were plaintiff's employers and both were liable for 2

plaintiff's workers' compensation benefits.

On appeal, the Workers'

Compensation Appellate Commission (WCAC) affirmed that ruling. In the second trial, the magistrate considered (1) was plaintiff's counsel entitled to an attorney fee of 30 percent of plaintiff's medical bills unpaid by defendant? and (2) who was responsible for paying plaintiff's future medical and weekly benefits? With respect to plaintiff's attorney fees, the magistrate ruled: [A]lthough Midwest . . . was paying the plaintiff weekly benefits, it refused to pay medical bills related to [plaintiff's] injury. . . . The total amount of the medical bills incurred . . . which defendant refused to pay is $153,448.54. I find that plaintiff's counsel is entitled to a 30 percent attorney fee for these unpaid medical bills under Section 315(1). . . . With respect to whether BCN or Koleaseco was responsible for paying plaintiff's ongoing medical and weekly benefits, the magistrate ruled that BCN and its insurance carrier, Midwest, were primarily responsible. Again, both parties appealed to the WCAC, which affirmed the award of attorney fees, observing: While the magistrate failed to explicitly so find, in this case . . . defendant knew of the medical bills in question well in advance of trial, and simply refused to pay them claiming they were not work related. Once the magistrate so found, given that prior knowledge and refusal to pay, the action in awarding attorney fees was within his discretion and hence proper.

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Magna Corporation, another "employee leasing" company insured by Midwest, and Midwest sought leave to appeal both WCAC orders. The Court of Appeals initially denied the applications.1 We remanded the case as on leave granted.2 On remand, the Court of Appeals affirmed the WCAC.3 The Court found that competent evidence supported the factual findings of both the magistrate and WCAC with respect to plaintiff's employment. Regarding the assessment of attorney fees, the Court held that

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