Opinion
Docket No. 88126.
Decided August 14, 1986. Leave to appeal denied, 426 Mich. 880.
Davidson, Breen Doud, P.C. (by Ferris L. Arnold), for plaintiff.
Braun, Kendrick, Finkbeiner, Schafer Murphy (by Scott S. Strattard), for defendant.
Before: SHEPHERD, P.J., and J.H. GILLIS and MacKENZIE, JJ.
Defendant appeals by leave granted from a decision of the Workers' Compensation Appeal Board which affirmed an award of interest and the assessment of a $1,500 penalty which was ordered by the hearing referee.
Plaintiff filed a petition for hearing with the Bureau of Workers' Disability Compensation on May 4, 1978, seeking benefits for a work-related injury. Benefits were originally denied by the hearing referee, but that decision was reversed by the WCAB on November 5, 1981. The WCAB decision awarded benefits in the amount of $132 per week, but the board did not reach the question of interest which might be due and owing. Nonetheless, the defendant voluntarily paid interest on the award, as provided by statute, except as to those periods of time during which plaintiff received alternative benefits in the form of General Motors Disability Advance (GMDA) payments from the defendant and extended disability benefits (EDB) from defendant's insurer, Metropolitan Life Insurance Company. These payments were made subject to reimbursement agreements requiring plaintiff to repay the amounts advanced should a workers' compensation award be entered in his favor.
Plaintiff subsequently filed a petition with the WCAB alleging that defendant should have paid interest on the entire award without regard to the alternative benefits received. The hearing referee agreed that interest was due and owing on the entire award pursuant to MCL 418.801(5); MSA 17.237(801)(5). Defendant was also ordered to pay a $1,500 penalty pursuant to MCL 418.801(2); MSA 17.237(801)(2).
On appeal to the WCAB, a majority of the appeal board modified the decision as to the applicable rate of interest, but otherwise affirmed. However, WCAB member Jane S. Colombo dissented, finding this Court's opinion in McCaslin v. General Motors Corp, 133 Mich. App. 782; 349 N.W.2d 544 (1984), to be controlling. The plaintiff in McCaslin also received GMDA benefits while her workers' compensation claim was being litigated, and thus the issue was whether defendant was liable to pay interest on the amount it had paid plaintiff through the GMDA program. In deciding the issue, this Court noted that "[i]nterest is not imposed upon past due benefits as a penalty," but, rather, "because the employer benefits from the use of the money determined to be due to the employee and because the employee had to do without its use." 133 Mich. App. 788. As a result of its payment of benefits under the GMDA program, the employer did not have the use of the money and plaintiff was not deprived of its use, and thus the Court concluded that the purpose behind the imposition of interest would not be served. Id.
The present case can be distinguished from McCaslin because plaintiff here received not only alternative funds advanced by his employer, but also funds provided by a separate group insurer. However, as decided in a very recent opinion from this Court, Burns v. General Motors Corp, 151 Mich. App. 520; 391 N.W.2d 396 (1986), this distinction does not justify a different result than that reached in McCaslin. Rather, since the benefits in question in that case were paid to plaintiff by the employer's insurer, only the insurer would have standing to assert an entitlement to interest. The same is true in the instant case. Since plaintiff was not denied the use of the funds in question, "any claim that interest is due on EDB payments from Metropolitan to the plaintiff is a matter which in this case is strictly between the insurer and the defendant." Burns, supra, p 531. We therefore conclude that dissenting WCAB member Colombo was correct in finding McCaslin to be controlling. We also agree with her conclusion that since defendant was not obligated to pay interest, no penalty can be assessed for its failure to pay that interest.
We note that, other than the plaintiffs, the parties involved in Burns v. General Motors Corp, 151 Mich. App. 520; 391 N.W.2d 396 (1986), and the instant case are the same.
Reversed.