Recent Cases - Authority to Enter Voluntary Pay Agreements

Workers' Compensation Appellate Commission

Authority to Enter Voluntary Pay Agreements

In Mazza/Automobile Club of Michigan v McLaren Regional Medical Center, 2007 ACO #203, plaintiff and intervening plaintiff appealed the Magistrate’s decision that had dismissed all applications on the basis of a voluntary pay agreement.

Plaintiff proceeding in pro per appealed the dismissal challenging her attorney’s authority to compromise her claim by signing the voluntary pay agreement. The intervening plaintiff appealed as well claiming it had not received appropriate notices of hearing from the Agency.

The Appellate Commission agreed with the plaintiffs and remanded the case for a limited hearing to develop relevant facts. The Commission said that the Court of Appeals in Bigger v Cadillac Malleable Iron Co, 156 Mich App 747; 402 NW2d 87 (1986) mandates a hearing when a party challenges an attorney’s authority to compromise the claim. The Commission explained that Bigger requires two issues be addressed: 1) whether the attorney possessed the authority to compromise the claim; and 2) whether reinstatement would produce prejudice to the opposing party.

With these guidelines, the Commission asked for a determination of whether plaintiff’s counsel had authority to compromise plaintiff’s claim. And, the Magistrate was to determine the reason why intervening plaintiff failed to appear on three different dates because the Commission could not determine the reason for the failure to appear.