DERRICK D CURRIE V NATIONAL METAL PROCESSING INC
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STATE OF MICHIGAN
COURT OF APPEALS
DERRICK D. CURRIE,
UNPUBLISHED
December 9, 2003
Plaintiff-Appellant,
and
LIBERTY MUTUAL INSURANCE,
Intervening Plaintiff,
v
NATIONAL METAL PROCESSING, INC., and
MERIDIAN NATIONAL CORPORATION,
No. 240450
Wayne Circuit Court
LC No. 95-523061-NP
Defendants-Appellees.
Before: Whitbeck, C.J. and Talbot and Zahra, JJ.
PER CURIAM.
Plaintiff1 appeals as of right the trial court’s order granting defendant Meridian’s motion
for summary disposition under MCR 2.116(C)(10). We affirm.
I. Facts and Procedural History
This is the second time this case has been before this Court. The relevant facts and
procedural history are set forth in Derrick D Currie v National Metal Processing Inc,
unpublished opinion of the Court of Appeals, issued February 11, 2000 (Docket No. 211106), as
follows:
Plaintiff’s cause of action stems from a workplace accident that occurred at
National Metal’s steel pickling plant. National Metal, a Michigan corporation, is
1
Intervening plaintiff Liberty Mutual played a very limited role in the proceedings
below and does not join this appeal. Therefore, “plaintiff” refers only to Currie.
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a wholly owned subsidiary of Meridian, a Delaware corporation. Plaintiff
sustained severe and permanent injuries to his legs when he was struck by a crane
carrying a load of steel shafts. At the time of the accident, plaintiff was an
employee of Amstaff, a labor broker who provided personnel to work at National
Metal’s plant. The Client Service Agreement between Amstaff and National
Metal provided that the personnel supplied by Amstaff to work in the plant were
employees of Amstaff. Prior to trial, National Metal and Meridian moved for
summary disposition, arguing that because plaintiff was their employee,
plaintiff’s only remedy was under the [Worker’s Disability Compensation Act].
The trial court disagreed, reasoning that “[u]nder the economic reality and the
supervision and control tests,” plaintiff was not, as a matter of law, an employee
of defendants. Subsequently, the parties stipulated that defendants were negligent,
that their negligence was the proximate cause of plaintiff’s injuries, and that
plaintiff was entitled to damages in the amount of $625,000. A judgment for
plaintiff in that amount was thereafter entered by the court. On appeal,
defendants challenge the trial court’s ruling regarding plaintiff’s employment
status. [Currie, supra at slip op pp 1-2.]
In addressing plaintiff’s claim against National Metal, this Court applied the economic
reality test to determine whether an employment relationship existed for the purposes of the
WDCA. This Court stated that:
After reviewing the totality of the circumstances, we conclude that under the
economic reality test plaintiff was an employee of National Metal. Accordingly,
National Metal is entitled to invoke the exclusive remedy provision of the
WDCA. [Currie, supra at 3.]
However, in regard to plaintiff’s claims against Meridian, this Court found that,
[b]ecause the focus below was on whether National Metal was plaintiff’s
employer for purposes of the exclusive remedy provision of the WDCA, there is
insufficient information in the record to determine whether under the economic
reality test Meridian was also plaintiff’s employer for purposes of the WDCA.
Accordingly, we remand this matter to the trial court for a determination of
whether Meridian was plaintiff’s employer for purposes of the exclusive remedy
provision of the WDCA. [Currie, supra at 5.]
On remand, the trial court applied the economic reality test and determined that Meridian
was plaintiff’s employer for purposes of the exclusive remedy provision of the WDCA. On
appeal, plaintiff challenges the trial court’s ruling in regard to plaintiff’s employment status with
Meridian.
A. “Employer” under MCL 418.131(1)
Plaintiff first argues that the Legislature intended to preclude a finding of more than one
employer under the act when it used “the” to modify “employer” in the WDCA’s exclusiveremedy provision, MCL 418.131(1).
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Plaintiff’s contention is inapposite. Here, the inquiry concerns whether Meridian and
National Metal will be treated as essentially one entity for purposes of the exclusive remedy
provision, infra. Unlike a claim that plaintiff has two employers, Currie, supra, the instant
inquiry considers whether two entities will be treated as one. Consequently, plaintiff’s reliance
on the language in MCL 418.131(1) is misplaced because Meridian and National Metal are
claimed to be one employer for purposes of the WDCA.
B. Plaintiff’s Employment Relationship with Meridian
Plaintiff next argues that the trial court erred when it determined that Meridian employed
plaintiff because Meridian and National Metal do not engage in a single integrated enterprise and
because Meridian has no responsibility for plaintiff’s compensation benefits. We disagree. We
review de novo a trial court’s decision to grant summary disposition under MCR 2.116(C)(10).
Maiden v Rozwood, 461 Mich 109, 120; 597 NW2d 817 (1999). A motion for summary
disposition under MCR 2.116(C)(10) tests whether there is factual support for a claim. Spiek v
Dep’t of Transportation, 456 Mich 331, 337; 572 NW2d 201 (1998). When deciding a motion
for summary disposition, a court must consider the pleadings, affidavits, depositions, admissions
and other documentary evidence submitted in the light most favorable to the nonmoving party.
Ritchie-Gamester v City of Berkley, 461 Mich 73, 76; 597 NW2d 517 (1999). Summary
disposition of all or part of a claim or defense may be granted when “[e]xcept as to the amount of
damages, there is no genuine issue as to any material fact, and the moving party is entitled to
judgment or partial judgment as a matter of law.” MCR 2.116(C)(10). Further,
. . . whether a business entity is a particular worker’s “employer,” as that term is
used in the WDCA, is a question of law for the courts to decide if the evidence on
the matter is reasonably susceptible of but a single inference. Only where
evidence of a putative employer’s status is disputed, or where conflicting
inferences may reasonably be drawn from the known facts, is the issue one for the
trier of fact to decide. [Clark v United Technologies Automotive, Inc, 459 Mich
681, 693-694; 594 NW2d 447 (1999) (internal citations omitted).]
Broad distinctions have been created by case law that has applied the economic realities
test for purposes of the WDCA exclusive remedy provision.
One line of authority involves what can be called the dual employer or
coemployer cases. In these cases, the employee typically has a “legal” or “actual”
employer against whom there is no question that a tort suit is barred by the
exclusive remedy provision, and the dispositive question is whether, under the
economic realities test, a second entity can also be classified as an employer for
purposes of the provision. Clark, supra at 689.
Plaintiff’s claims against National Metal involved this type of scenario. However,
[a]nother line of authority involves cases concerning parent and subsidiary
corporations. Wells [v Firestone Tire & Rubber Co, 421 Mich 641; 364 NW2d
670 (1984)] is, of course, the leading case in this area. In Wells, the employee
was injured during the course of his employment at a wholly owned subsidiary
corporation; he then brought suit against the subsidiary’s parent corporation. This
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Court applied the economic realities test and found that the parent corporation
was the employee’s employer. This Court recognized that this result constituted
“in effect, ... a ‘reverse-piercing’ “of the parent corporation’s corporate veil and
acknowledged that the general rule in Michigan is that separate entities, including
that of corporation and shareholder, will be respected. However, this Court
premised its willingness to depart from the general rule and disregard the separate
corporate entities in that case on the Court’s “recognition of the important public
policies underlying the [WDCA] and our belief that a contrary determination
would be inequitable under the facts of this case.” [Clark, supra at 689-690
(internal citations omitted).]
Plaintiff’s claim against Meridian involves the classic Wells scenario, concerning parent
and subsidiary corporations. This Court previously determined that National Metal was
plaintiff’s employer under the economic reality test. Currie, supra at 3-5. We must now
determine whether Meridian and National Metal will be treated as one entity for purposes of the
exclusive remedy provision. “A salient factor in determining an employee-employer relationship
in the parent-subsidiary context is the use of a combined worker’s compensation insurance
policy by both parent and subsidiary.” James v Commercial Carriers, Inc, 230 Mich App 533,
539; 583 NW2d 913 (1998) citing Verhaar v Consumers Power Co, 179 Mich App 506, 509;
446 NW2d 299 (1989). “Combined bookkeeping and accounting, together with income tax
treatment that regards the corporations as a single entity, has also been a persuasive factor in
supporting the conclusion that two corporations should be treated as one for the purposes of the
exclusive remedy provision.” Id., citing Verhaar, supra. “In some cases, the parent company
has been directly responsible for hiring and firing, but in Verhaar[, James] and Wells, there was
nothing more than unity of personnel policy.” Id., citing Verhaar, supra.
Here, Meridian did not obtain worker’s compensation insurance for National Metal’s
Amstaff employees, such as plaintiff. Rather, plaintiff received worker’s compensation benefits
through Amstaff because, under a labor contract with Meridian and National Metal, Amstaff was
obligated to obtain worker’s compensation insurance for its employees. Though Amstaff issued
plaintiff his employment check, the economic reality is that Meridian paid plaintiff’s wages and
benefits. See Kidder v Miller-Davis Co, 455 Mich 25, 41; 564 NW2d 872 (1997). Undisputed
testimony was presented that, in practice, National Metal would request a disbursement from
Meridian’s central account to pay the Amstaff employees. After withdrawing the funds,
National Metal would then transfer the money to Amstaff, who, acting as a “payment conduit,”
would pay its employees. In reality, Meridian paid plaintiff’s wages, fringe benefits, health
insurance premiums and worker’s compensation insurance premiums through National Metal
and Amstaff. This payment arrangement, along with Meridian obtaining worker’s compensation
insurance policy for some of National Metal’s direct employees, supports the conclusion that
Meridian and National Metal should be treated as one for purposes of the exclusive remedy
provision.
In addition, Meridian lists National Metal as its subsidiary on its Securities Exchange
Commission form, and Meridian consolidates income tax returns for itself and its subsidiaries.
Further, while National Metal keeps its own day-to-day bookkeeping record, Meridian controls
National Metal’s cash and maintains a central account to wire funds to its subsidiaries, including
National Metal, upon request. Money received by National Metal was deposited into Meridian’s
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central account. Thus, the financial structure of the entities suggests they should be treated as
one for purposes of the exclusive remedy provision. Finally, Meridian managed personnel
records for National Metal’s direct employees, which indicates a unity of personnel policy.
Our Supreme Court has recognized that courts should normally uphold the separate
identities of a parent and its wholly owned subsidiary corporation. Wells, supra at 641.
However, in the context of the exclusive remedy provision of the WDCA, our Supreme Court
has deemed that public policy justifies disregarding the business distinctions between the parent
and subsidiary when upholding them would inequitably allow a plaintiff to enjoy the benefits of
the worker’s compensation structure without suffering the single-remedy drawback. Id., at 651.
Because plaintiff received the benefits of the worker’s compensation from its employment
relations with Amstaff, Meridian and National Metal, equity does not favor plaintiff’s attempt to
override the act’s exclusive-remedy provision. Id. Therefore, the trial court correctly
determined that Meridian and National Metal were one employer for purposes of the WDCA.
Affirmed.
/s/ William C. Whitbeck
/s/ Michael J. Talbot
/s/ Brian K. Zahra
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