Carson v. Bandit Indus.

NORMAN E. CARSON, Plaintiff-Appellant, v. BANDIT INDUSTRIES INC and ACUITY MUTUAL INSURANCE CO, Defendants-Appellees.

No. 350257

Court of Appeals of Michigan

September 30, 2021

UNPUBLISHED

MCAC LC No. 18-000012

Before: O'Brien, P.J., and M. J. Kelly and Redford, JJ.

ON REMAND

PER CURIAM.

In 2019, plaintiff, Norman Carson, applied to this Court for leave to appeal a decision by the Michigan Compensation Appellate Commission (MCAC), ^[1] raising three questions related to his claim for workers' compensation benefits under the Worker's Disability Compensation Act (WDCA), MCL 418.101 et seq. We denied leave as to the first two questions, but granted it as to the third.^[2] Because it appeared to us that the recently decided case of Fisher v Kalamazoo Regional Psych Hosp, 329 Mich.App. 555; 942 N.W.2d 706 (2019) was dispositive of the issue we granted leave to appeal on, we sua sponte directed the parties to file supplemental briefs addressing whether Fisher applied retroactively.^[3] Thereafter, in an unpublished opinion, we affirmed the MCAC in part, reversed in part, and remanded for further proceedings.^[4] Carson then filed an application for leave to appeal in our Supreme Court. In lieu of granting leave the Supreme Court vacated our opinion and remanded to us to consider as on leave granted the first two issues raised in the application for leave to appeal that Carson filed in this Court in 2019.^[5] Specifically, the Supreme Court directed us to consider the following two questions as on leave granted:

I. Did the appellate commission violate MCL 418.861a(3) when it reversed the magistrate's finding of a work-related injury?

II. Did the appellate commission misapply the legal standard articulated by the Supreme Court in Rakestraw v General Dynamics Land Systems, 469 Mich. 220; 666 N.W.2d 199 (2003) in finding that the plaintiff failed to demonstrate a work-related injury? [Carson v Bandit Indus Inc, 961 N.W.2d 148 (2021), clarified by Carson v Bandit Indus Inc, 961 N.W.2d 491 (2021).]

And because our decision on the above issues may impact our prior determination regarding the third issue-which relates to recoupment of overpaid workers' compensation benefits-the Supreme Court also directed us to "reconsider the recoupment issue and address the arguments presented by the parties in this Court with respect to that issue." Id. We sua sponte ordered supplemental briefing to address the issues now before this Court.^[6] We now affirm, but remand for further proceedings relating to the calculation of the amount of recoupment.

I. BASIC FACTS

In our prior opinion, we set forth the underlying facts:

In 2013, Bandit Industries hired Carson as a welder. Carson's job duties required him to kneel, bend, twist, and lift up to 100 pounds. On April 22, 2014, Carson was lifting a heavy part when he felt a pop in his back. Carson testified that he then felt pain and burning in his back and legs. The next day, when he reported the incident to his supervisor, he was referred to a physician[, Dr. Schrauben]. [Dr. Schrauben] evaluated Carson two days later, recommended physical therapy and placed a 30-pound lifting restriction on Carson. Because Carson continued to experience pain, his primary care physician referred him to a spine specialist[, Dr. Bleiberg]. [Dr. Bleiberg] eventually diagnosed Carson with radiculopathy and recommended that Carson be off of work as of August 2014. Thereafter, Bandit Industries voluntarily began paying wage-loss benefits to Carson.

In October 2014, plaintiff was evaluated by another physician [Dr. Sczecienski], who did a medical examination at the behest of Bandit Industries. [Dr. Sczecienski] opined that there were degenerative changes in Carson's lumbar spine, and concluded that the April 2014 work incident may have aggravated Carson's degenerative disk injuries. In July 2015, Bandit Industries arranged for Carson to submit to a second medical examination, this time with a different physician selected by Bandit Industries. The new physician[, Dr. Mayer, ] concluded that there was no neurological evidence of radiculopathy, that Carson had low back pain with no neurological involvement, and that Carson could return to work without restriction. Unsurprisingly, Bandit Industries opted to rely on the recommendation arising from the second medical examination. On September 2, 2015, Carson filed an application for mediation or hearing-Form A against Bandit Industries, alleging that he had sustained a work-related injury to his lower back on April 22, 2014. A response to the application was filed on October 2, 2015. Thereafter, on April 19, 2016, Bandit Industries' insurance carrier filed a petition to recoup benefits overpaid to Carson between August 5, 2014 and August 14, 2015.

A trial was held in December 2017. Carson was confronted by surveillance footage depicting him performing work for his brother's business, Carson Lawn Services. The surveillance footage depicted Carson performing the following activities: weed whacking, branch trimming, and mowing grass on a tractor. Carson admitted that almost immediately after he stopped working for Bandit Industries, he started helping his brother's business on a "limited" basis. He estimated that he did so for approximately 10 hours per week. He claimed that, primarily, his work for his brother consisted of training new employees. Carson also testified that he received no monetary compensation from his brother for his assistance with the business. Carson admitted that he did not tell any of his treating physicians of the lawn-care work he was performing for his brother's business. [Carson, unpub op at 1-2.]

The magistrate found that Carson's testimony was "perfectly credible," accepted the opinions of Dr. Bleiberg and Dr. Sczencienski, and accepted the findings of Dr. Schrauben. The magistrate did not credit the opinions of Dr. Mayer. The magistrate found that Carson had sustained a work-related injury on April 22, 2014, that he had a continued low back condition related to the personal injury that occurred at work, that he had a retained wage earning capacity, and that recoupment was not warranted because Carson did not receive payment for assisting his brother's lawn-care business. Defendants appealed the magistrate's opinion to the MCAC.

On review, the MCAC deferred to the magistrate's credibility determinations, but concluded that the finding that there was a work-related injury was not supported by competent, substantial, and material evidence under MCL 418.861a(3) because, contrary to the requirements in Rakestraw and Fahr v Gen Motors Corp, 478 Mich. 922; 733 N.W.2d 22 (2007), the evidence did not show that Carson's injury was medically distinguishable from his preexisting condition. Alternatively, the MCAC concluded that Carson was not entitled to workers' compensation benefits because of his failure to disclose the lawn-care work that he performed for his brother after April 22, 2014. As a result, the MCAC reasoned Carson was precluded by MCL 418.222(6) from "proceeding under" the WDCA. The MCAC also concluded that Carson's failure to report the volunteer work he performed for his brother's lawn-care business constituted fraud, so recoupment of workers' compensation benefits was not barred by Whirley v JC Penney Co, Inc, 1997 Mich. ACO 247, overruled by Fisher, 329 Mich.App. 555 (2019) (proclaiming that, in the absence of employee fraud, an employer or carrier could not recoup overpaid workers' compensation benefits paid to that employee).

II. STANDARDS OF REVIEW

This Court recently set forth the multilayered standards of review applicable to the administrative review of the magistrate's decision by the MCAC and the judicial review of the MCAC's opinion. See Omer v Steel Technologies, Inc, 332 Mich.App. 120, 133-134; 955 N.W.2d 575 (2020), vacated in part on other grounds ____ Mich____ (2021). The Omer Court explained:

The MCAC reviews "the magistrate's findings of fact under the' substantial evidence' standard ." Mudel v Great Atlantic & Pacific Tea Co, 462 Mich. 691, 698; 614 N.W.2d 607 (2000). Substantial evidence is "such evidence, considering the whole record, as a reasonable mind will accept as adequate to justify the conclusion." MCL 418.861a(3). The MCAC must consider as "conclusive" the findings of fact made by a workers' compensation magistrate, as long as those facts are "supported by competent, material, and substantial evidence on the whole record." Id.; see also Findley v Daimlerchrysler Corp, 490 Mich. 928, 928; 805 N.W.2d 833 (2011).

The MCAC has limited fact-finding power. It may substitute its own factual findings for those of the magistrate when a "qualitative and quantitative analysis" of the record yields a different result. MCL 418.861a(13); see also Mudel, 462 Mich. at 699-700. However, the MC AC s factual review of the magistrate's opinion is not de novo. Rather, it "involves reviewing the whole record, analyzing all the evidence presented, and determining whether the magistrate's decision is supported by competent, material, and substantial evidence." Mudel, 462 Mich. at 699. In other words, the MCAC must begin by considering the "whole record" to determine whether the evidence considered by the magistrate meets the legislative standard of "competent, material, and substantial evidence." If it does, further review exceeds the MCAC's authority. The MCAC is not empowered to" 'set aside findings merely because alternative findings also could have been supported by substantial evidence on the record.'" Agueros v Bridgewater Interiors LLC, 2020 Mich. ACO 4, p. 2, quoting In re Payne, 444 Mich. 679, 692, 514 N.W.2d 121 (1994).

This Court must treat the MCAC's factual findings as conclusive if there is any competent record evidence

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