Susan Azar Appointed to Funds Administration Board of Trustees

Susan Azar of Northville was recently appointed by Governor Jennifer Granholm to the Funds Administration's Board of Trustees. The board oversees the Self-Insurers' Security Fund, Second Injury Fund, and the Silicosis, Dust Disease and Logging Industry Compensation Fund. Ms. Azar is the manager of workers' compensation for General Motors Corporation, and is appointed to represent employers authorized to act as self-insurers for a term expiring April 30, 2012. She succeeds Libby Child whose term has expired.

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STOKES DECIDED - BREAKING NEWS.

SUPREME COURT DECIDES STOKES v CHRYSLER LLC
BY: Gerald M. Marcinkoski, Lacey & Jones, LLP

The Michigan Supreme Court on June 12, 2008 released the long-awaited opinion in Stokes v Chrysler LLC. The Supreme Court explained how the Sington definition of disability in the Worker’s Disability Compensation Act is to be applied. Recall that Sington v Chrysler Corp, 467 Mich 144; 648 NW2d 624 (2002) is the case where the Supreme Court six years ago explained the meaning of the definition of general disability in workers’ compensation.

The Supreme Court in Stokes sets forth a specific step-by-step process that should be followed in litigating workers’ compensation claims. This process should also be borne in mind in evaluating workers’ compensation claims that are not in litigation. Before setting forth the Supreme Court’s step-by-step guidelines, the following points in the opinion are worth highlighting:

• The Supreme Court displayed some displeasure with the Magistrates and Workers’ Compensation Appellate Commission’s “tendency to properly set forth the Sington standard, but then to apply the standard in a manner that effectively constitutes a reversion” to pre-Sington law. The Supreme Court in Stokes said: “It is insufficient to merely articulate the Sington standard and then overlook necessary steps in its application.”
• The Supreme Court said that the workers’ compensation claimant’s burden of proving disability includes the following: “The claimant must make a good-faith attempt to procure post-injury employment if there are jobs at the same salary or higher that he is qualified and trained to perform.” And, the claimant is to disclose “the results of any efforts to secure employment.”
• In defending the case, “the employer [is] entitled to discovery before the hearing to enable it to meet its burden of coming forward with evidence to rebut claimant’s claim of disability.” “Discovery” is an out-of-court effort to gather information by various means, such as via interrogatories and depositions. The Supreme Court said: “For example, the employer may choose to hire a vocational expert to challenge the claimant’s proofs. That expert must be permitted to interview the claimant and present the employer’s own analysis or assessment.” The “discovery” can occur “throughout the entire process of examining the case,” as for example where the need arises for an interview in the midst of the workers’ compensation hearing. The Stokes dissent objected to this saying: “Now, every time an employer requests to have its expert interview a claimant, the magistrate must comply.”
• It is the claimant’s burden to prove that all jobs in the same “salary range” suitable to his/her qualifications and training cannot be performed as a result of the work injury or are not reasonable available. The Supreme Court said suitable jobs are “‘those jobs that afford a plaintiff an opportunity for consideration to be hired because he possesses the minimum experience, education, and skill.’”

The Supreme Court then sets forth the procedures to be followed in detail. The Supreme Court said: “We attempt only to afford guidance in the application of Sington so that future claimants and employers will have the benefit of a consistent and workable standard in assessing their rights and obligations under the law.” The step-by-step process is as follows:

“After reviewing the inconsistencies in the WCAC opinions since Sington, we set forth the following practical application of the Sington standard in this case.

First, the injured claimant must disclose his qualifications and training. This includes education, skills, experience, and training, whether or not they are relevant to the job the claimant was performing at the time of the injury. It is the obligation of the finder of fact to ascertain whether such qualifications and training have been fully disclosed.

Second, the claimant must then prove what jobs, if any, he is qualified and trained to perform within the same salary range as his maximum earning capacity at the time of the injury. Sington, supra at 157. The statute does not demand a transferable-skills analysis and we do not require one here, but the claimant must provide some reasonable means to assess employment opportunities to which his qualifications and training might translate. This examination is limited to jobs within the maximum salary range. There may be jobs at an appropriate wage that the claimant is qualified and trained to perform, even if he has never been employed at those particular jobs in the past. Id. at 160. The claimant is not required to hire an expert or present a formal report. For example, the claimant’s analysis may simply consist of a statement of his educational attainments, and skills acquired throughout his life, work experience, and training; the job listings for which the claimant could realistically apply given his qualifications and training; and the results of any efforts to secure employment. The claimant could also consult with a job-placement agency or career counselor to consider the full range of available employment options. Again, there are not absolute requirements, and a claimant may choose whatever method he sees fit to prove an entitlement to workers’ compensation benefits. A claimant sustains his burden of proof by showing that there are no reasonable employment options available for avoiding a decline in wages.

We are cognizant of the difficulty of placing on the claimant the burden of defining the universe of jobs for which he is qualified and trained, because the claimant has an obvious interest in defining that universe narrowly. Nonetheless, this is required by the statute. Moreover, because the employer always has the opportunity to rebut the claimant’s proofs, the claimant would undertake significant risk by failing to reasonably consider the proper array of alternative available jobs because the burden of proving disability always remains with the claimant. The finder of fact, after hearing from both parties, must evaluate whether the claimant has sustained his burden.

Third, the claimant must show that is work-related injury prevents him from performing some or all of the jobs identified as within his qualifications and training that pay his maximum wages. Id. at 158.

Fourth, if the claimant is capable of performing any of the jobs identified, the claimant must show that he cannot obtain any of these jobs. The claimant must make a good-faith attempt to procure post-injury employment if there are jobs at the same salary or higher that he is qualified and trained to perform and the claimant’s work-related injury does not preclude performance.

Upon the completion of these four steps, the claimant establishes a prima facie case of disability. The following steps represent how each of the parties may then challenge the evidence presented by the other.

Fifth, once the claimant has made a prima facie case of disability, the burden of production shifts to the employer to come forward with evidence to refute the claimant’s showing. At the outset, the employer obviously is in the best position to know what jobs are available within that company and has a financial incentive to rehabilitate and re-employ the claimant.

Sixth, in satisfying its burden of production, the employer has a right to discovery under the reasoning of Boggetta if discovery is necessary for the employer to sustain its burden and present a meaningful defense. Pursuant to MCL 418.851 and MCL 418.853 [footnote omitted], the magistrate has the authority to require discovery when necessary to make a proper determination of the case. The magistrate cannot ordinarily make a proper determination of a case without becoming fully informed of all the relevant facts. If discovery is necessary for the employer to sustain its burden of production and to present a meaningful defense, then the magistrate abuses his discretion in denying the employer’s request for discovery. For example, the employer may choose to hire a vocational expert to challenge the claimant’s proofs. That expert must be permitted to interview the claimant and present the employer’s own analysis or assessment. The employer may be able to demonstrate that there are actual jobs that fit within the claimant’s qualifications, training, and physical restrictions for which the claimant did not apply or refused employment.

Finally, the claimant, on whom the burden of persuasion always rests, may then come forward with additional evidence to challenge the employer’s evidence.

This precise sequence is not rigid, but rather identifies the nature of the proofs that must precede the fact-finder’s decision. Should it become evident in a particular case that a different sequence is more practical, the parties may present their evidence accordingly. However, the magistrate must ensure that all steps are completed in some fashion or another, that all the facts necessary to the determination of the case are presented, that each side has been accorded an adequate opportunity to respond to the other’s proofs, and that the statutory burden of proof is respected. After that point, the magistrate can properly determine whether the claimant has satisfied his obligations under MCL 418.301(4).

We reiterate that MCL 418.851 places the burden of proof on the claimant to demonstrate his entitlement to compensation and benefits by a preponderance of the evidence. This burden of persuasion never shifts to the employer, although the burden of production of evidence may shift between the parties as the case progresses. Because a claimant does not prove a “disability” under MCL 418.301(4) by merely demonstrating the inability to perform any previous jobs, the burden remains on the claimant to demonstrate that there are no available jobs within his qualifications and training that he can perform. Only after the claimant has first sustained that statutory burden of proofs does the burden of production shift to the employer to show that there are jobs that the claimant can perform.”

The dissent in Stokes says Mr. Stokes worked 28 years as a forklift driver for Chrysler and has a high school diploma and, therefore, “If compelled discovery is ‘necessary’ in this case, it will be ‘necessary” in all cases.” The dissent also says:

“However, as a practical matter, the claimant will face even greater risk if he doesnot hire an expert. The majority clearly assumes that employers will have vocational experts at workers’ compensation proceedings to best support their positions. With the employer’s expert locked and loaded, the prudent claimant will have like reinforcement. The vocational proofs required virtually ensure that claimants will need experts.”

Recent Cases - Michigan Supreme Court

. As of this writing, the Supreme Court still has pending before it Stokes v Chrysler LLC, f/k/a DaimlerChrysler Corp (SC Docket No. 132648). The case was orally argued on October 4, 2007. The point orally argued in Stokes was the parties’ burdens of proof in Sington disability cases. Recall that the Court of Appeals had largely dismantled the Workers’ Compensation Appellate Commission’s en banc decision in Stokes, but the Court of Appeals affirmed the result in the case – an open award of benefits at the maximum rate. Stokes v DaimlerChrysler Corp, 272 Mich App 571; 727 NW2d 637 (2006). For the time being, the Court of Appeals’ Stokes decision is the controlling rule of law.

Another case that had been orally argued before the Supreme Court and remains pending as of this writing is Gee v Arthur B. Myr Industries, Inc (SC Docket No. 133762). Gee was argued in January 2008. It is a factually complex case involving res judicata in an attendant care context.

More specifically, Mr. Gee had litigated a total and permanent disability claim in 2001. At the conclusion of the hearing, he requested attendant care benefits for his family providers. The Magistrate failed to address the nursing or attendant care portion of the claim. On appeal, the Workers’ Compensation Appellate Commission denied the attendant care claim on the basis that plaintiff had failed to introduce any evidence on the reasonable value of services performed. That appeal became final.

Plaintiff then filed a new application again requesting attendant care services. The defendant moved for dismissal on the basis of res judicata. The Magistrate denied the motion to dismiss. And, the Magistrate went on to determine plaintiff was entitled to 56 hours of attendant care services each week. Defendant appealed to the Appellate Commission and Court of Appeals without success. The Supreme Court’s oral argument related to whether the defendant is entitled to relief on the basis of res judicata.

Most recently, the Supreme Court has granted an oral argument on an application for leave to appeal in Brackett v Focus Hope (SC Docket No. 135375). The oral argument is scheduled for May 7, 2008.

The issue in the case is whether plaintiff’s claim is barred by the intentional and wilful misconduct provision, MCL 418.305. The facts are that plaintiff at the time of hire was advised that she had to attend Focus Hope’s annual Martin Luther King Day celebrations. After hire, plaintiff decided not to attend the celebration. Her supervisors confronted her about her decision and she claimed a psychiatric injury as a result. The question for oral argument is whether her psychiatric injury is by reason of her own intentional and wilful misconduct.

Finally, two other cases pending before the Supreme Court bear noting if for no other reason than the length of time they have been pending before the Supreme Court. One is Bessinger v Our Lady of Good Counsel (SC Docket No. 128870). The other is Diot v Department of Corrections (SC Docket No. 130702).

Bessinger presents the question of whether the claimant is entitled to only partial disability benefits after he ceased working at a post-injury lesser paying job. The Supreme Court had remanded the case while retaining jurisdiction on January 31, 2006. The Workers’ Compensation Appellate Commission issued its opinion on remand on October 25, 2006. The case then automatically returned to the Supreme Court where it still pends.

In Diot, the employer applied for leave to appeal on March 14, 2006, over two years ago. That application still pends, which is highly unusual. Mr. Diot was granted an open award of benefits upon being found disabled as a result of an inability to return to work at one place of employment for his employer, although he acknowledged the ability to do that type of work elsewhere.

It is conceivable that Bessinger and Diot are either being held in abeyance while the Supreme Court continues to consider Stokes. Or, perhaps they are being considered in conjunction with Stokes. We will of course keep everyone apprised of the developments.

Recent Cases - Applying Sington

Michigan Court of Appeals

Applying Sington

In Miller v Grand Haven Stamped Products Co (CA Docket No. 278235, rel’d April 1, 2008), the Court of Appeals reversed the Workers’ Compensation Appellate Commission’s and Magistrate’s open award of benefits on the basis that they had misapplied Sington.

The plaintiff in this case works for an automobile components manufacturer. She suffered a work-related right knee injury. At the time of her injury, she was working up to 60 hours a week. Following arthroscopic surgery, she returned to work with restrictions requiring a sit/stand option. Post-injury, she performed different jobs within these restrictions, some of where ended when they were outsourced to other countries and some of which paid less than she earned at the time of injury. After her benefits were terminated, plaintiff filed her application seeking a reinstatement of partial disability benefits.

The Magistrate and Appellate Commission found that plaintiff was disabled under Sington and granted her an open award of benefits.

The Court of Appeals reversed saying “[p]laintiff is not disabled under Sington.” After reviewing Sington’s discussion of both the first and second sentences of MCL 418.301(4), the Court of Appeals in discussing the definition of disability in the first sentence says plaintiff did not prove “disability” because:

One of the factual matters to consider when making a disability determination is whether there continues to be a substantial job market for the work for which the employee is both trained at qualified. [Sington, supra] at 157. Here, the record establishes that the piecework job that plaintiff held in the 1980s, at which she earned $15 to $17 an hour, has not existed since the 1980s. There is no evidence in the record that there is any market, let alone a substantial job market, for such work at present. Accordingly, the piecework job has no relevance for purposes of establishing plaintiff’s maximum wage earning capacity. Furthermore, although the evidence demonstrated a link between plaintiff’s injury and her loss of the opportunity to work in other cells within defendant’s plant, there was no showing that plaintiff would earn a greater hourly wage if she worked in any other cell.

With respect to the second sentence of § 301(4) and its obligation to link wage loss to a disability, the Court of Appeals added:

Moreover, although plaintiff demonstrated that she had lost significant earning capacity, as reflected by her loss of overtime work, the evidence demonstrates that this loss of earning capacity is not attributable to her injury, but to the changing fortunes and efficiencies of the automotive industry and the terms of her union contract.

The Court of Appeals then added that, given pay raises, plaintiff now “realizes her maximum wage earning capacity” and her work injury “has had no adverse impact on her maximum wage earning capacity.”