Michigan Court of Appeals; Docket No. 297584; Unpublished
Judges Krause, Cavanagh, and Jansen; Unanimous, Per Curiam
Official Michigan Reporter Citation: Not applicable; Link to Opinion
On December 16, 2011, the Supreme Court DISMISSED the pending application for leave to appeal following a stipulation signed by both parties; Link to Order
Workers’ Disability and Compensation Act
In this unanimous unpublished per curiam opinion, the Court of Appeals affirmed the trial court’s order granting summary disposition in favor of defendant on the issue of whether the plaintiff’s no-fault insurer was an insurer of higher priority than Great West Casualty Company.
The plaintiff in this case was injured while working as a tractor trailer operator for YES Express. At the time of the incident, Great West Casualty Company provided no-fault insurance to YES Express, while the plaintiff had his own personal no-fault insurance coverage through a different insurer. The opinion does not specify whether the plaintiff was operating his own vehicle or a vehicle owned by YES Express.
After plaintiff filed suit against defendants seeking no-fault benefits, Great West sought summary disposition under MCR 2.116(C)(10) on the basis that the plaintiff was an independent contractor, rather than an employee of YES Express, so plaintiff’s no-fault insurer was higher in priority. The trial court ultimately agreed and granted Great West’s motion.
On appeal, the plaintiff argued that the trial court erred in granting the motion for summary disposition, because the trial court lacked subject matter jurisdiction to make the determination of whether the plaintiff was an independent contractor or an employee of YES Express. Specifically, the plaintiff argued that only the Bureau of Workers’ Disability and Compensation may determine whether a worker is an employee or independent contractor. In rejecting this argument, the Court of Appeals first noted that under the Michigan State Constitution, Article 6 §13, Michigan Circuit Courts have original subject matter jurisdiction “in all matters not prohibited by law.” The Court of Appeals rejected the plaintiff’s argument that the Workers’ Disability Compensation Act, MCL 418.101, et. seq., creates an exception to this general grant of jurisdiction by vesting exclusive jurisdiction over determinations of employment status with the Workers’ Bureau. The Court of Appeals explained that the specific provision in the Workers’ Compensation Act cited by the plaintiff, MCL 418.847(1), does not relate the subject matter jurisdiction, but simply sets forth a procedure for resolving issues under the Workers’ Disability and Compensation Act generally. The court further explained that while MCL 418.841(1) divests Circuit Courts of jurisdiction over cases “concerning compensation or other benefits,” this language is limited only to compensation and benefits available under the Workers’ Disability and Compensation Act, and this provision does not specifically divest jurisdiction from Circuit Courts over issues of whether a person is an independent contractor or an employee.
The Court of Appeals further explained that in the Michigan Supreme Court’s decision in Sewell v Clearing Machine Corp, 419 Mich 56 (1984) further supports that Circuit Courts do have jurisdiction to determine a person’s employment status. In Sewell, the Supreme Court rejected the notion that the Workers’ Bureau’s jurisdiction takes precedent over that of the Circuit Court whenever there is an issue concerning the applicability of the Workers’ Disability and Compensation Act. Furthermore, the Court in Sewell clarified that under its previous holding in Szydlowski v General Motors Corp, 397 Mich 356 (1976), the Workers’ Bureau has exclusive jurisdiction to decide whether injuries suffered by an employee were in the course of employment, but the Szydlowski did not hold that the Bureau had exclusive jurisdiction over determining a person’s employment status. Accordingly, in this case, the Court of Appeals rejected the plaintiff’s argument that Sewell supports that the Workers’ Bureau has exclusive jurisdiction over a person’s employment status.
In further explaining why the plaintiff’s argument must be rejected, the Court of Appeals noted that employment status under the Michigan No-Fault Act is determined by the “economic reality” test, as established by the Michigan Court of Appeals in Parham v Preferred Risk Mut Ins Co, 124 Mich App 618 (1983), which differs from the statutory definition provided under the Workers’ Disability and Compensation Act. Therefore, the Court explained that there are two distinct standards for determining whether someone is an employee for purposes of claims under the Workers’ Disability and Compensation Act and for the purposes of claims not brought under that Act. In this regard, the court stated:
“Thus, there are two distinct standards for determining whether someone is an employee for the purposes of claims under the WDCA and for the purposes of claims not brought under the WDCA. The fact that the No-Fault Act does not explicitly provide its own statutory definition does not necessarily mean the WDCA’s definition must be used. Consequently it makes no sense to give the Bureau unlimited jurisdiction to determine employment status under any circumstance.”