Ottenwess v. Hawkeye Security Insurance , 84 Mich. App. 292 ( 1978 )

R. B. Burns, J.

Plaintiff, decedent’s spouse, instituted suit to collect no-fault automobile insurance benefits from decedent’s insurer, Hawkeye Security Insurance Company (Hawkeye), and decedent’s employer’s insurer, Travelers Insurance Company (Travelers). The trial court granted both defendants summary judgment on the authority of Mathis v Interstate Motor Freight System, 73 Mich App 602; 252 NW2d 842 (1977), and plaintiff appeals.

The decedent, Michael Ottenwess, was an employee of Wickes Lumber Company. While examining or attempting to repair a malfunction in the mechanism of a company dump truck, Ottenwess was crushed to death when the dump box suddenly came down upon him, trapping him between the box and the frame of the truck. The malfunction came to Ottenwess’s attention while he was making deliveries with the truck in the regular course of his employment. He had just exited the cab and was standing on or next to the dump box when the incident occurred. Following the accident, plaintiff and her two minor children received worker’s compensation benefits from Wickes Lumber Company’s compensation carrier.

I. Liability of Employer’s No-Fault Insurer

Defendant Travelers asserts that the exclusive remedy provision of the Worker’s Disability Compensation Act, MCL 418.131; MSA 17.237(131), prevents recovery by plaintiff, relying upon Mathis v Interstate Motor Freight System, supra. Except for the fact that in that case the employer was self-insured, Mathis is identical to the situation before us as far as Travelers is concerned. There, plaintiff was injured while unloading freight from his employer’s semi-trailer. He drew worker’s compensation benefits and applied for benefits under the no-fault act. The trial judge held that worker’s compensation benefits were plaintiff’s exclusive remedy. In a single sentence this Court affirmed:

"The Supreme Court in Solakis v Roberts, 395 Mich 13, 20; 233 NW2d 1, 4 (1975), said: 'When an employee’s injury is within the scope of the act, workmen’s compensation benefits are the exclusive remedy against the employer.’ Affirmed.” Mathis v Interstate Motor Freight System, supra at 603; 252 NW2d at 842.

Plaintiff seeks to distinguish Mathis on the grounds that, there, the employer was a no-fault self-insurer and as such would pay no-fault benefits for an injury in tort, whereas in the instant case the employer is a contractual insurer for whom no-fault benefits are paid ex contractu. Plaintiffs distinction is supported by the recent case of Hawkins v Auto Owners Ins Co, 83 Mich App 225; 268 NW2d 534 (1978). That case was factually indistinguishable from the instant case, and the Court said:

"The defendant in the instant case, unlike the defendant in Mathis v Interstate Motor Freight System, 73 Mich App 602; 252 NW2d 842 (1977), is not plaintiff’s employer as defined in § 131. Consequently, that exclusive remedy provision does not operate to bar the instant circuit court action. Therefore, accelerated judgment, based on § 131, was improper and must be reversed.

"The statutory schemes of worker’s disability compensation and no-fault motor vehicle insurance provide an employee, such as the plaintiff, who is injured in the course of employment while occupying an employer-owned motor vehicle covered by a no-fault policy issued by an insurance company, at least two potential avenues of recovering compensation. The employee may obtain worker’s disability compensation benefits and also may obtain no-fault benefits.”

We do not agree with the distinction made in Hawkins, because it conflicts with the no-fault act’s provision that a self-insurer "has all the obligations and rights of an insurer under this chapter”. MCL 500.3101(4); MSA 24.13101(4). The liabilities of self-insurers and insurers must be coextensive. Under Hawkins, the liability of insurers is greater than that of self-insurers. For the purpose of the application of the exclusive remedy provision of the Worker’s Disability Compensation Act, an employer’s no-fault insurer must be considered the alter ego of the employer.

Nor do we agree with plaintiffs tort-contract distinction. Applicability of the exclusive remedy provision of the Worker’s Disability Compensation Act turns not upon the characterization of the asserted cause of action as tort or contract, but upon whether the employee has a right to recover benefits under the act. MCL 418.131; MSA 17.237(131). An employee has a right to compensation where he "receives a personal injury arising out of and in the course of his employment”. MCL 418.301; MSA 17.237(301).

Suit is not barred against employers for all tort, Crawley v General Motors Truck Corp, 259 Mich 503; 244 NW 143 (1932), Panagos v North Detroit General Hospital, 35 Mich App 554; 192 NW2d 542 (1971), Moore v Federal Department Stores, Inc, 33 Mich App 556; 190 NW2d 262 (1971), or all contract, Milton v Oakland County, 50 Mich App 279; 213 NW2d 250 (1973), damages, but where the above criteria for recovery of worker’s compensation are applicable, suit is barred even on a contract theory, Neal v Roura Iron Works, Inc, 66 Mich App 273; 238 NW2d 837 (1975), Milton v Oakland County, supra. Since plaintiff was entitled to, and did in fact receive, worker’s compensation, further recovery cannot be had by labeling the asserted right thereto "contract”.

Mathis is therefore not distinguishable as to Travelers’ alleged liability, and controls the resolution of this issue. However, plaintiff has advanced arguments that the exclusivity provision of the Worker’s Disability Compensation Act does not bar recovery under the no-fault act. These arguments are not met by the brief opinion in Mathis. We have therefore reexamined the issue, and determine that Mathis was correctly decided.

The worker’s compensation exclusivity provision does not itself contain an exception to permit recovery of no-fault benefits, MCL 418.131; MSA 17.237(131), nor does the no-fault act contain an express partial repeal of the worker’s compensation exclusivity provision.

"Repeals by implication are not favored. The intent to repeal must very clearly appear, and courts will not hold to a repeal if they can find reasonable ground to hold to the contrary.” Couvelis v Michigan Bell Telephone Co, 281 Mich 223, 225; 274 NW 771, 772 (1937).

" 'The principle that the law does not favor repeals by implication is of especial application in the case of an important public statute of long standing, which should be shown to be repealed either expressly, or by a strong and necessary implication.’ 25 R.C.L. p. 920.” Attorney General, ex rel. Owen v Joyce, 233 Mich 619, 623; 207 NW 863, 864 (1926).

It is plaintiffs theory that subsection 3114(3) of the no-fault act clearly contemplates recovery by an employee of both worker’s compensation and no-fault benefits. This subsection provides:

"An employee, his spouse, or a relative of either domiciled in the same household, who suffers accidental bodily injury while an occupant of a motor vehicle owned or registered by the employer shall receive personal protection insurance benefits to which the employee is entitled from the insurer of the furnished vehicle.” MCL 500.3114(3); MSA 24.13114(3).

Section 3114 is a priority provision, dictating which of several insurers will be liable in various circumstances. That subsection 3114(3) is only a priority provision, and was not intended to create additional substantive rights to recover, is apparent from the qualifying words "to which he is entitled”. Plaintiff is not entitled to recover because such recovery is barred by the exclusivity provision of the Worker’s Disability Compensation Act.

It is asserted that the use of the words "to which he is entitled” is an obscure way for the Legislature to indicate that it did not intend recovery by an employee against his employer’s no-fault insurer where he is entitled to worker’s compensation. However, the exclusivity provision is a clear expression of such intent. The exclusivity provision was amended October 30, 1972, and the no-fault act was passed October 31, 1972. The Legislature was surely aware of the potential overlap of the two acts, and had it intended to effectuate a partial repeal of the exclusivity provision, it would have done so explicitly.

It is also asserted that if subsection 3114(3) is interpreted so as to apply only where an employee is using a company vehicle for personal business, not in the course of his employment, the subsection will apply to a situation which occurs so infrequently that it is illogical to assume the Legislature would have included the provision within the act. We are sure that thousands of employees have access to company vehicles for personal use. That the Legislature anticipated injuries arising in such situation is apparent from its inclusion of the employee’s spouse, and relatives domiciled within the household, within the subsection, for how many employees have their spouses and relatives riding with them in company vehicles in the course of their employment?

Finally, it is argued that the words "to which he is entitled” were inserted by the Legislature into the subsection to indicate the applicability of the deductions required by subsection 3109(1). That subsection provides that:

"Benefits provided or required to be provided under the laws of any state or the federal government shall be subtracted from the personal protection insurance benefits otherwise payable for the injury.”

This explicit provision requiring the deductions from any policy benefits makes it unnecessary to add the words "to which he is entitled” to priority subsections to indicate the deductions shall be made. The only other priority subsection containing the words "to which he is entitled” is subsection 3114(2), which provides in part:

"A person suffering accidental bodily injury while an operator or a passenger of a motor vehicle operated in the business of transporting passengers shall receive the personal protection insurance benefits to which the person is entitled from the insurer of the motor vehicle”. MCL 500.3114(2); MSA 24.13114(2). (Emphasis added.)

An operator of such a vehicle may be expected to be entitled to worker’s compensation from either his employer, as self-insurer, or from his employer’s insurer. If the words "to which he is entitled” refer to benefits minus subsection 3109(1) deductions, then why did the Legislature only use those words in subsections where an employee may not be entitled to any no-fault benefits due to the Worker’s Disability Compensation Act’s exclusivity clause?

Certainly legislative history indicates that among the deductions from benefits required by subsection 3109(1) is worker’s compensation benefits. But that deduction will not be applicable where an employee is not entitled to any benefits because of the exclusivity clause. Rather, such deductions for worker’s compensation only apply when the insurer owing benefits is not the employee’s employer or employer’s insurer.

We conclude that plaintiff has not only failed to show a clear legislative intention to effectuate partial repeal of the exclusivity provision, but that there is an indication of a contrary legislative intention to not permit recovery of no-fault benefits from an employer or his insurer where an employee is entitled to worker’s compensation benefits. The trial court did not err by granting summary judgment in favor of Travelers.

II. Liability of Employee’s No-Fault Insurer

Defendant Hawkeye also argues that Mathis bars recovery under the policy it issued plaintiff’s decedent. However, Hawkeye was neither the decedent’s employer nor employer’s insurer. The Worker’s Disability Compensation Act’s exclusivity provision is inapplicable. MCL 418.131; MSA 17.237(131). Mathis does not bar recovery against Hawkeye.

Subsection 3114(4) of the no-fault act provides:

"Except as provided in subsections (1) to (3), a person suffering accidental bodily injury while an occupant of a motor vehicle shall claim personal protection insurance benefits from insurers in the following order of priority:

"(a) The insurer of the owner or registrant of the vehicle occupied.

"(b) The insurer of the operator of the vehicle occupied.” MCL 500.3114(4); MSA 24.13114(4).

As we have seen, plaintiff cannot recover under subsection 3114(3) against Travelers because of the worker’s compensation exclusivity provision. Subsections 3114(1) and 3114(2) are patently inapplicable. Plaintiff’s decedent was killed while an occupant of the vehicle. See Nickerson v Citizens Mutual Insurance Co, 393 Mich 324, 328-331; 224 NW2d 896, 898-899 (1975). Subsection 3114(4) therefore governs which insurer is liable. Recovery cannot be had under provision (a) because, again, Travelers is protected from liability by the exclusivity provision. Therefore, provision (b) establishes liability. Since Hawkeye is the insurer of the operator of the vehicle occupied, it is liable for no-fault benefits. Summary judgment was erroneously granted Hawkeye.

Judgment affirmed as to defendant Travelers; costs to defendant. Judgment reversed as to defendant Hawkeye and the case is remanded for trial on the merits; costs to plaintiff.

J. H. Gillis, P. J., concurred.