Nichols v. Howmet Corp.
Nichols v. Howmet Corp.
Opinion of the Court
ON REMAND
This case, which involves a dispute between two insurance carriers of a single employer, How-met Corporation, returns to this Court on remand from the Michigan Supreme Court. The Michigan Supreme Court has directed this Court to address whether liability for Edwin A. Nichols’s wage-loss benefits should be allocated between defendant Pacific Employers Insurance Company/CIGNA (Pacific) and defendant American Manufacturers Mutual Insurance (American). The Michi
I. FACTS
A. BACKGROUND FACTS
This Court’s previous opinion fully states the facts of this case.
Nichols returned to work at a lower wage than he had earned before his 1993 cervical-spine injury. In December 1998, while engaged in light-duty work, Nichols injured his low back. At that time, Howmet was known as Cordant Technologies. American was Howmet’s workers’ compensation insurer. After Nichols’s 1998 low-back injury, a magistrate awarded Nichols an open
B. PROCEDURAL HISTORY
On appeal, Pacific contended that, if it is liable for wage-loss benefits, it is only obligated to pay the difference above the wage loss attributable to Nichols’s 1998 low-back injury. This Court concluded that we could not reach the issue because Pacific did not raise the issue before the commission and the commission did not address it.
II. ALLOCATION OF LIABILITY
A. STANDARD OF REVIEW
This Court reviews de novo questions of law related to a final order of the commission.
In its supplemental brief, American contends that this Court cannot allocate liability in this instance because specific statutory sections provide for the allocation of wage-loss benefits. We disagree.
Generally, it is true that “[t]hat which is expressed puts an end to or renders ineffective that which is implied.”
American also argues that MCL 418.301(5)(e) provides that the employer is liable for wage loss based on the original date of injury and thus establishes that Pacific cannot allocate that liability. We find this argument unpersuasive because MCL 418.301(5)(e) does not allocate liability among insurance carriers,
C. DIFFERENTIAL WAGE-LOSS BENEFITS
1. LEGAL STANDARDS
An employee is disabled when the employee experiences a disability covered under the workers’ compensation act that results in a reduction in wage-earning capacity.
work that is within the employee’s capacity to perform that poses no clear and proximate threat to that employee’s health and safety, and that is within a reasonable distance from that employee’s residence.[16 ]
MCL 418.301(5)(e) provides that a disabled employee who works less than 100 weeks and loses his or her job “for whatever reason. . . shall receive compensation based upon his or her wage at the original date of injury.”
2. APPLYING THE STANDARDS
Pacific contends that it should only be liable for the wage-loss benefits above those that American should pay for Nichols’s 1998 low-back injury. We agree.
Here, Pacific paid wage-loss benefits for Nichols’s 1993 cervical-spine injury. That injury partially disabled Nichols, but he remained capable of earning an average weekly wage of $567.70. In December 1998,
We conclude that the commission erred when it declined to hold American liable for wage-loss benefits related to Nichols’s 1998 low-back injury. The commission correctly determined that Pacific, the first insurance carrier, was hable to pay benefits on the basis of Nichols’s wages at the time of the original injury.
To hold the first insurer liable for the employee’s entire amount of wage-loss benefits under MCL 418.301(5)(e) when a second disabling injury causes the employee to lose his or her job defies principles of causation in workers’ compensation law for two reasons. First, an employee’s entitlement to wage-loss benefits from an employer (or insurance carrier) is based on his or her reduction in wage-earning capacity.
Second, an employee’s postinjury earnings or ability to earn operates as a credit and mitigates the employer’s liability to pay wage-loss benefits.
We conclude that, under the circumstances of this case, American, as the insurer at the time of Nichols’s 1998 low-back injury, is responsible for Nichols’s wage loss attributable to his 1998 low-back injury and second disability but that Pacific, as the insurer at the time of the commission’s partial disability determination, should remain liable for wage-loss benefits from the partial disability caused by Nichols’s 1993 cervical-spine injury. Our conclusion is consistent with general disability principles concerning causation and with reasonable employment principles.
III. CONCLUSION
We conclude that Pacific is only liable for wage loss related to Nichols’s 1993 cervical-spine injury and par
Nichols v Howmet Corp, 495 Mich 988 (2014).
Nichols v Howmet Corp, 302 Mich App 656; 840 NW2d 388 (2013), vacated in part 495 Mich 988 (2014).
Nichols, 302 Mich App at 673.
Nichols, 495 Mich at 988.
Id.
DiBenedetto v West Shore Hosp, 461 Mich 394, 401; 605 NW2d 300 (2000).
Sebewaing Indus, Inc v Village of Sebewaing, 337 Mich 530, 545; 60 NW2d 444 (1953). See Johnson v Recca, 492 Mich 169,176 n 4; 821 NW2d 520 (2012).
See, e.g., MCL 418.372(1)(b) (allocating liability when an employee has two employers); MCL 418.921 (allocating liability of an employer of an employee with a vocational disability).
MCL 418.301 was amended effective December 19, 2011, and the relevant provisions of Subsection (5) are now contained in Subsection (9) of the statute. References in this opinion to Subsection (5) are to Subsection (5) as constituted at the time applicable to this case.
Stewart v Saginaw Osteopathic Hosp, 100 Mich App 502, 510; 298 NW2d 911 (1980) (reimbursement). See Arnold v Gen Motors Corp, 456 Mich 682, 691-692; 575 NW2d 540 (1998) (allocation).
Nichols, 495 Mich at 988.
Sington v Chrysler Corp, 467 Mich 144, 155; 648 NW2d 624 (2002).
See MCL 418.361 as constituted at the time applicable to this case; Sweatt v Dep’t of Corrections, 468 Mich 172, 181; 661 NW2d 201 (2003).
Schmaltz v Troy Metal Concepts, Inc, 469 Mich 467, 473; 673 NW2d 95 (2003) (quotation marks and citation omitted).
Derr v Murphy Motor Freight Lines, 452 Mich 375, 383; 550 NW2d 759 (1996).
MCL 418.301(9) as constituted at the time applicable to this case.
MCL 418.301(5)(e).
Arnold, 456 Mich at 691.
Id. at 692 n 9.
See Arnold, 456 Mich at 691.
See Sington, 467 Mich at 155; Sweatt, 468 Mich at 186.
Schmaltz, 469 Mich at 473; Perez v Keeler Brass Co, 461 Mich 602, 611; 608 NW2d 45 (2000); MCL 418.301(5)(a).
See Schmaltz, 469 Mich at 473.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.