JOSEPH M REISS V PEPSICO METROPOLITAN BOTTLING WORKS
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STATE OF MICHIGAN
COURT OF APPEALS
CAROL REISS,
FOR PUBLICATION
February 5, 2002
9:20 a.m.
Plaintiff-Appellant,
v
PEPSI COLA METROPOLITAN BOTTLING
COMPANY, INC and PACIFIC EMPLOYERS
INSURANCE COMPANY,
Defendants-Appellees.
No. 228384
Worker's Compensation
Appellate Commission
LC No. 98-000171
Updated Copy
April 26, 2002
Before: Fitzgerald, P.J., and Hoekstra and Markey, JJ.
PER CURIAM.
Plaintiff Carol Reiss1 appeals by leave granted from the order and opinion of the
Worker's Compensation Appellate Commission affirming the magistrate's decision to grant
defendants' petitions to stop compensation and to recoup benefits. We affirm.
Plaintiff 's decedent, Joseph Reiss (hereinafter Joseph), suffered a work-related injury to
his lower back in 1988. At the time of the injury, Joseph already had a long history of back
problems that included two laminectomies. On December 12, 1991, the magistrate concluded
that the injury aggravated Joseph's preexisting spinal stenosis and granted Joseph an open award
of benefits. That decision was not appealed.
In December 1997, defendants filed a petition to stop benefits, arguing that Joseph's
medical condition, even if disabling, was no longer related to the 1988 injury. Attached to this
petition were the medical findings of Dr. Emmanuel Obianwu, who found only degenerative disc
disease unrelated to Joseph's work injury. Dr. Obianwu opined that although Joseph was unable
to return to work at his former job, the 1988 injury had resolved itself. Approximately two
1
While this appeal was pending, plaintiff Joseph M. Reiss died on June 25, 2001. His widow,
Carol Reiss, has been substituted in the place of the deceased party plaintiff–appellant, Joseph
M. Reiss.
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months later, defendants filed an affidavit stating that benefits had been paid and were current, as
required by 1999 AC, R 408.40, commonly referred to as Rule 10.
Joseph moved for dismissal of the petition to stop compensation on the grounds that the
proof of current payment of compensation was not filed at the same time as the petition and
because the petition did not comply with Rule 10's additional mandate that the filing include a
statement from a physician that Joseph had returned or could return to work. The magistrate
denied Joseph's motion, reasoning that defendants were permitted to proceed on any ground
allowed by current case law. He determined that the late filing of the proof of current payment
merely meant that defendants' petition was not "perfected" until the date of that filing.
After reviewing the testimony of the medical witnesses, the magistrate concluded that
defendants met the burden of showing that Joseph's condition had changed and that his current
disability "is no longer due to the symptomatic aggravation of his spinal stenosis in 1988." For
this reason, the magistrate granted defendants' petition to stop compensation in a decision mailed
March 12, 1998. In a separate December 9, 1998, opinion, the magistrate also granted
defendants' petition for recoupment, but limited recovery to benefits paid on and after February
1, 1997, pursuant to the one-year-back rule of MCL 418.833(2).
Joseph appealed both decisions to the WCAC, and the appeals were consolidated for
review. Joseph first argued that the magistrate erred in failing to dismiss the petition to stop
compensation because it did not comply with Rule 10. The WCAC conducted an extensive and
detailed analysis and concluded that the rule was not binding to the extent that it purported to
limit the legal and factual grounds for stopping compensation. The WCAC rejected Joseph's
claim that the magistrate erred in not according res judicata effect to the original magistrate's
findings and affirmed the grant of defendants' petition for recoupment.
On appeal to this Court, plaintiff argues that the WCAC erred in refusing to give effect to
Rule 10 and in failing to give res judicata effect to the first magistrate's decision. Plaintiff also
contends that the WCAC and the magistrate misapplied the burden of proof in connection with
the petition to stop compensation. Judicial review in worker's compensation cases is limited to
whether the WCAC applied the correct legal standard and whether there is any evidence to
support its factual findings. MCL 418.861a(14); Mudel v Great Atlantic & Pacific Tea Co, 462
Mich 691, 709-710; 614 NW2d 607 (2000); Holden v Ford Motor Co, 439 Mich 257, 269; 484
NW2d 227 (1992). However, questions of law involved in any final order of the WCAC are
reviewed de novo. DiBenedetto v West Shore Hosp, 461 Mich 394, 401; 605 NW2d 300 (2000).
Rule 10 provides, in pertinent part:
(1) . . . A petition to stop compensation shall include both of the
following:
(a) Proof of payment of compensation to within 15 days of the date of the
filing of a petition to stop compensation.
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(b) An affidavit which sets forth the fact that the employee has returned to
gainful employment and which substantially describes the nature of the
employment, or a signed statement from a physician stating that the employee is
able to return to his former employment.
MCL 418.205 authorizes the director of the bureau to "make rules not inconsistent with this act
for carrying out the provisions of the act . . . ." Thus, a director who promulgates a rule that is
inconsistent with the act or judicial decisions interpreting the act exceeds his authority. We
agree with the WCAC that subsection 1(b) of Rule 10 is invalid for this reason.
In Haske v Transport Leasing, Inc, Indiana, 455 Mich 628, 662; 566 NW2d 896 (1997),
the Supreme Court interpreted the definition of "disability" in MCL 418.301 et seq. and
concluded that an employee must prove three things in order to be entitled to worker's
compensation benefits: "(1) a work-related injury, (2) subsequent loss in actual wages, and (3)
that the injury caused the subsequent wage loss." An employer is entitled to file a petition to
stop compensation whenever it obtains evidence indicating a change in the employee's physical
condition that negates any of these factors. See Kosiel v Arrow Liquors Corp, 446 Mich 374,
381-382; 521 NW2d 531 (1994). However, Rule 10 precludes an employer from filing a petition
to stop compensation as long as an employee is unable to return to work, regardless of whether
the work-related injury continues to be the cause of the employee's wage loss. Thus, in cases in
which an employee's work-related injury resolves itself but the employee continues to be
disabled by a condition that is not work related, enforcement of the rule would implicitly compel
payment of benefits for a disability that is not work related, in contravention of the language and
purpose of the Worker's Disability Compensation Act and the holdings of Haske, supra, and
Kosiel, supra. Accordingly, the WCAC correctly concluded that Rule 10 is invalid to the extent
it is contrary to the provisions of the act and case law interpreting that act. Although plaintiff
cites authority holding that the WCAC is bound by the rules of the bureau, see, e.g., Paselli v
Utley, 282 Mich 267; 276 NW 444 (1937), the WCAC cannot be bound by rules that are
inconsistent with the act.
Rule 10 also requires that a petition to stop compensation include proof of payment of
compensation to within fifteen days of the petition. However, the rule is silent with regard to
any sanction for failure to do so. In this case, defendants filed such proof two months late. As a
result, the filing of the petition to stop compensation was held not to have been "perfected" until
the date that the proof of payment was filed. An administrative agency's interpretation of its own
rules is entitled to deference. Thomas Twp v John Sexton Corp of Michigan, 173 Mich App 507,
514; 434 NW2d 644 (1988); Sibel v Dep't of State Police, 154 Mich App 462, 465; 397 NW2d
828 (1986).
The penalty imposed in this case effectively sanctioned defendants for the late filing by
limiting their recovery under MCL 418.833(2) to one year back from the date the proof of
payment was filed, rather than one year back from the date the petition was filed. Plaintiff has
not shown how she was prejudiced in any way by the late filing, particularly in view of the fact
that, had the petition to stop compensation been dismissed, it could have simply been refiled
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immediately with the proof of payment. Consequently, we find no error in this portion of the
decision of the WCAC.
Plaintiff contends that there are alternatives to petitions to stop compensation that apply
when an employee refuses to cooperate with rehabilitation, medical treatment, or evaluation or
when there is a controversy with regard to benefits. However, even if plaintiff 's arguments are
accepted, it would still not remedy a situation where an employee continues to be disabled, but
the reason for the continuing disability is not related to the employee's work-related injury.
Although plaintiff contends that defendants could have avoided the requirements of Rule 10 by
filing a petition for determination of rights rather than a petition to stop compensation, such a
petition would not have accurately described the nature of the relief sought where the employer
specifically seeks to terminate benefits. Further, avoidability cannot render an invalid rule valid.
Plaintiff also contends that Haske, supra, is inapplicable because Rule 10 merely shifts the
burden of proof to the employer to show that the employee is no longer disabled. However, as
previously noted, this is of no help to the employer where the employee continues to be disabled
from an injury that is not work related. Consequently, we find plaintiff 's arguments in this
regard unpersuasive.
Plaintiff next contends that the WCAC erred in affirming the decision granting
defendants' petition to stop compensation because defendants failed to prove that Joseph's spinal
stenosis had resolved, improved, or changed in any way. Although plaintiff phrases this issue as
one involving the burden of proof, it is really a request to have this Court reexamine the facts of
the case, which we cannot do. The opinion of the WCAC must be affirmed if there is evidence
in the record supporting its factual finding that Joseph's disability was no longer work related.
MCL 418.861a(14); Mudel, supra at 709-710.
It is important to note that in the first decision issued in this case, the magistrate did not
make any specific findings with regard to Joseph's medical condition, but simply adopted the
opinion of Joseph's treating physician, Dr. Herkowitz. Herkowitz testified specifically that
Joseph's work injury did not cause the MRI findings showing spinal stenosis, but did
symptomatically aggravate Joseph's condition through a "stretching or pulling of the nerves and
muscles in the narrowed area." The doctor's testimony was unequivocal that the injury was to
soft tissues only. Therefore, the injury at issue did not directly involve Joseph's preexisting
spinal stenosis; rather, it involved only the soft tissue in his lower back.
According to defendants' expert, Dr. Obianwu, the physical examination revealed that
Joseph had no muscle spasm in the lower back or evidence of nerve impingement in that area.
Obianwu accordingly concluded that the 1988 soft tissue injury could not be the cause of
Joseph's current problems. We are therefore compelled to affirm the finding of the WCAC that
defendants carried their burden of proof in establishing a change in Joseph's condition because
there is evidence in the record supporting the finding.
Finally, plaintiff asserts that the doctrine of res judicata barred relitigation of the first
magistrate's finding that Joseph's spinal stenosis was pathologically worsened by his fall at work.
This argument is without merit in view of the fact that neither the magistrate nor Dr. Herkowitz
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ever made such a finding. At any rate, it is well established that res judicata does not preclude a
reevaluation of Joseph's entitlement to benefits when there has been a change in his condition.
See Kosiel, supra at 380; Pike v City of Wyoming, 431 Mich 589, 600-601; 433 NW2d 768
(1988) (opinion of Griffin, J.); Houg v Ford Motor Co, 288 Mich 478, 481; 285 NW 27 (1939)
("[t]he doctrine of res judicata is limited in its operation when sought to be applied to man's
physical condition which constantly changes and under a statute which provides that weekly
payments may be reviewed and ended, diminished, or increased as the facts warrant").
We affirm.
/s/ E. Thomas Fitzgerald
/s/ Joel P. Hoekstra
/s/ Jane E. Markey
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