This worker's compensation case comes to us following a reversal of an award by the Court of Appeals. The Court of Appeals found that plaintiff was judicially estopped from asserting
We reverse the decision of the Court of Appeals and find that plaintiff was not judicially estopped from advancing his claim. A representation made before the MESC that one is willing and able to work, in order to secure unemployment benefits, may not be used to preclude a subsequent claim that one was totally disabled during that same period.
There being no showing of fraud, we take the factual findings of the Worker's Compensation Appeal Board as conclusive. Const 1963, art 6, § 28, MCL 418.861; MSA 17.237(861).
Plaintiff Raymond R. Paschke was employed by defendant Retool Industries from 1956 until 1983. During that twenty-seven year span, Mr. Paschke worked in the capacity of office manager. As office manager, he was in charge of funding, client development, payroll, and similar matters. He testified that he spent the majority of his time in customer relations.
In 1981, the owner of Retool Industries sold his interest to Herman Wilson, previously the company foreman. Within less than a month after taking over the business, Mr. Wilson discharged assistant office manager Nelson Nettie, despite admitted discussions before the takeover that he would keep on both Mr. Nettie and plaintiff. While Mr. Wilson testified that he had discharged Mr. Nettie for stealing from the company, he also stated that he had been aware of that stealing before his promise to keep him on. Mr. Nettie denied that he was discharged for stealing. After
After the first year of Mr. Wilson's ownership, in late 1982 and early 1983, plaintiff began to experience physical problems such as inability to sleep, chest pains, and headaches. He attributed these ailments to troubling conditions at work. Specifically, he felt that Ms. Wilkerson was given preferential treatment in the form of a relaxed workday schedule and pay increases, while he and other employees received no increased benefits, but actually had their vacation pay benefits cut. Further, he had seen Mr. Nettie discharged, despite Mr. Wilson's promise to keep him on, and plaintiff feared that he might be next to go. He also testified that he felt anxiety regarding his dealings with creditors, who had loaned funds to the company largely on the basis of their past dealings with and trust of him. The company was increasingly unable to satisfy those debts because of financial difficulties, and plaintiff felt that he could not deal honestly with those creditors, because Mr. Wilson refused to discuss workplace finances with him and also refused to deal with the creditors himself.
On March 22, 1983, plaintiff stayed home from work, on the advice of his wife, and sought medical treatment from their family doctor, Robert Tam. Dr. Tam prescribed antidepressants and blood pressure and water pills. He also recommended that plaintiff not return to work.
By June, 1983, plaintiff had begun to feel better, and he contacted Mr. Wilson about resuming his former position as office manager. By registered letter, Mr. Wilson informed plaintiff that he could return to work, but not in his former position. Instead, he offered plaintiff the assistant office
Plaintiff testified that he was "[s]hocked" by this response, that it caused his physical condition to worsen, and that he rejected the offer of reemployment. For the next six months, he received company health and accident benefits. In August, 1983, plaintiff petitioned for worker's compensation benefits, alleging total disability, and soon thereafter relocated to Florida, where he and his wife purchased a home. In November, 1983, he sought and obtained unemployment compensation, over Mr. Wilson's objection.
At the worker's compensation hearing before a hearing referee, plaintiff testified, without objection, to the fact that he had previously received unemployment compensation and that, in order to receive that benefit, he had represented to the MESC that he was ready and able to return to work at some place other than Retool Industries. He also testified that he had unsuccessfully sought work since leaving Retool. His wife testified that he had sent out twenty-five to thirty resumes, primarily in Florida.
The referee found that plaintiff had failed to establish any disability arising out of the course of employment. The ruling was reversed by the WCAB. By order dated June 29, 1990, the WCAB awarded plaintiff total disability benefits on the basis of his hypertension and psychiatric claims.
Following a petition for rehearing, the Court of Appeals clarified its brief holding in the case. 198 Mich.App. 702; 499 N.W.2d 453 (1993). While maintaining that plaintiff was judicially estopped from asserting his worker's compensation claim, the Court limited its decision to the facts of plaintiff's case, i.e., a claim for total disability. The Court explained that under the doctrine of judicial estoppel only "wholly inconsistent" claims are prohibited, and that the receipt of unemployment benefits would not preclude a claim of partial disability for the same period. Id. at 709. Dual recovery might also be allowed if claimant's disability consisted of a latent condition that was not discovered
This Court granted leave to appeal. 444 Mich. 866 (1993). We reverse.
The doctrine of judicial estoppel first emerged in the mid 1800s, in a Tennessee case, Hamilton v Zimmerman, 37 Tenn (5 Sneed) 39 (1857). Comment, Judicial estoppel — Beating shields into swords and back again, 139 U Pa LR 1711, 1719 (1991). In Hamilton, the court determined that the plaintiff was estopped from maintaining a position inconsistent with one he had asserted under oath in an earlier judicial proceeding. Sometimes described as the doctrine against the assertion of inconsistent positions, Comment, supra at 1711, judicial estoppel is widely viewed as a tool to be used by the courts in impeding those litigants who would otherwise play "fast and loose" with the legal system. Bigelow, Estoppel (6th ed), p 783. Since Hamilton, the doctrine has been adopted by most state and federal courts, in slightly varying forms.
In the context of the administrative proceedings at issue, we adopt the "prior success" model of judicial estoppel:
While the Court of Appeals correctly stated that only wholly inconsistent claims were precluded, we find that the panel's application of that standard to the facts in this case was clearly error. There exists neither statutory nor judicial support for the Court of Appeals determination that plaintiff's representation that he was ready and available for work, made before the MESC, was wholly inconsistent with his subsequent claim of total disability during the same period.
This Court and the lower courts of Michigan have devoted considerable time and energy to the examination of both statutes involved in this dispute: the Worker's Disability Compensation Act, MCL 418.101 et seq.; MSA 17.237(101) et seq., and the Employment Security Act, MCL 421.1 et seq.; MSA 17.501 et seq. In the course of this exploration, a number of guiding principles has emerged that might be helpful in evaluating the interrelation of the two statutes in the present case.
We have previously explained that the WDCA is in derogation of the common law, and its terms
Where the statutory language is clear, the courts should neither add nor detract from its provisions. Nevertheless, where ambiguity exists, and judicial interpretation is needed, the act should be liberally construed to grant rather than to deny benefits. Bower v Whitehall Leather Co, 412 Mich. 172, 191; 312 N.W.2d 640 (1981).
Like the WDCA, the Employment Security Act is a legislative construct intended to "provide relief from the hardship caused by involuntary unemployment...." Storey v Meijer, Inc, 431 Mich. 368, 377; 429 N.W.2d 169 (1988). Accordingly, this Court will not "broaden or extend the disqualifications fixed, in plain language, by the legislature." Thomas v Employment Security Comm, 356 Mich. 665, 669; 97 N.W.2d 784 (1959). We will, however, keep in mind the legislative purpose of the statute, "to get `money into the pocket of the unemployed worker at the earliest point that is administratively feasible.'" Storey, 431 Mich. 377, quoting California Dep't of Human Resources Development v Java, 402 U.S. 121, 135; 91 S.Ct. 1347; 28 L Ed 2d 666 (1971).
This Court has also had occasion to examine the interplay of the worker's compensation and unemployment
The Legislature has since passed a WDCA provision that allows for a dollar-for-dollar setoff between worker's compensation and unemployment benefits.
Turning to the statutes in question, we can find no support for the Court of Appeals conclusion that plaintiff's receipt of unemployment benefits estops his total disability claim for the same period. Unlike several states,
Professor Larson explored the latter point in his treatise on worker's compensation law, in which he explained:
Further, the offset provision of the Michigan worker's compensation statute suggests that the Legislature contemplated the simultaneous recovery of worker's compensation and unemployment benefits. MCL 418.358; MSA 17.237(358). As previously discussed, this provision allows a dollar-for-dollar setoff between unemployment benefits and benefits sought under worker's compensation. Importantly, it specifically references not only the partial disability section of the statute, but the section concerning total disability as well, implicitly acknowledging that the Legislature envisaged instances in which both unemployment and total disability benefits would be recoverable.
In rejecting the estoppel theory applied by the Court of Appeals and urged by defendants, we act in concert with numerous other jurisdictions faced with the same question, within the context of similar legislation.
We further find persuasive plaintiff's assertion that even were the claims inconsistent, representations made before the MESC may not generally be used to estop claims in other forums, where the MESC is not a party to the proceeding.
In Storey v Meijer, Inc, supra, we interpreted the above provision to prohibit the use of factual determinations of the MESC to collaterally estop the litigation of issues in a subsequent civil proceeding. We determined that application of collateral estoppel to such determinations would be contrary to legislative intent as well as public policy considerations that support expeditious and nonadversarial unemployment proceedings. Were MESC determinations to have binding effect upon subsequent and more consequential civil actions, employers would be more likely to contest their comparatively minor unemployment liability, thus significantly delaying the recovery of unemployment benefits. Id. at 378. Further, the binding effect of unemployment compensation determinations might cause a potential claimant to forgo those benefits, otherwise available, in order to preserve a later claim for civil damages. It might also cause one who pursued unemployment benefits, ignorant of their effect on future civil claims, to unknowingly and permanently forfeit his right to recovery. Id. at 378-379.
The same policy considerations that governed in Storey are applicable where unemployment benefits
Defendants argue that judicial estoppel is appropriate here because, unlike in Storey, it is plaintiff's statements, not the determinations of the MESC, that are being used to estop him. Accordingly, defendants claim that the protections afforded under § 11(b)(1) are not implicated by the facts of this case.
Lastly, defendants argue that by voluntarily testifying about the substance of his representations made before the MESC, plaintiff waived any privilege attached thereto. This argument fails because the Employment Security Act provision, as interpreted by this Court, provides for an absolute privilege:
We find that the Court of Appeals clearly erred in determining, sua sponte, that plaintiff's total disability claim was judicially estopped by earlier representations before the MESC that he was ready and able to work. Neither the language nor the policy objectives of the Worker's Disability Compensation Act or the Employment Security Act support that result. Accordingly, we reverse the decision of the Court of Appeals. We remand this case to the Court of Appeals to consider those
CAVANAGH, C.J., and LEVIN and BOYLE, JJ., concurred with MALLETT, J.
BRICKLEY, J. (concurring).
While I agree with the majority's conclusion that plaintiff's total disability claim is not barred by judicial estoppel, and that the Court of Appeals erred by holding otherwise, I do not subscribe to the rationale offered for this resolution and, accordingly, am compelled to write separately. I also write separately to expressly align myself with the dissenting position for a remand to the Court of Appeals so that it may ultimately address the merits of plaintiff's total disability claim, and specifically the issue whether the WCAB applied the correct legal standard.
It is well established that "equity follows the law," and that where legislation provides an adequate legal remedy, the judiciary may not create additional relief by invoking equitable doctrines.
I believe that the majority fails to adequately
The majority ultimately remands this case to the Court of Appeals for consideration of those issues "previously raised by the parties but not addressed by that Court." Ante at 520. I agree with this remand, but write separately to reiterate an important point made by the dissent: namely, that on remand the Court of Appeals must determine "whether the WCAB applied the correct legal standard — i.e., whether being disabled from one's previous particular employment suffices to establish `disability' in the employee's `general field of employment' pursuant to § 301(4)." Post at 534, n 6 (GRIFFIN, J., dissenting).
Defendant's appeal from the WCAB decision specifically challenged the board's finding of a total disability. While at this juncture I cast no opinion regarding the appropriateness or accuracy of the WCAB's total disability conclusion, it seems clear that this important issue, like most issues properly
For these reasons, I concur in the result reached by the majority.
I respectfully dissent. I agree with the Court of Appeals that, under the particular circumstances of this case, plaintiff Raymond Paschke, by seeking and obtaining unemployment compensation benefits, is judicially estopped from claiming that, for the same period, he was totally disabled and entitled to worker's compensation benefits.
Under the doctrine of judicial estoppel, "a party who has successfully and unequivocally asserted a position in a prior proceeding is estopped from asserting an inconsistent position in a subsequent proceeding." Lichon v American Universal Ins Co, 435 Mich. 408, 416; 459 N.W.2d 288 (1990). The underpinnings of the doctrine were explained by the court in Edwards v Aetna Life Ins Co, 690 F.2d 595, 599 (CA 6, 1982):
The doctrine of judicial estoppel is to be applied with caution. As the court explained in Allen v Zurich Ins Co, 667 F.2d 1162, 1166-1167 (CA 4, 1982),
The instant case involves interpretation of statutes governing two different compensation systems, the Michigan Employment Security Act and the Worker's Disability Compensation Act. As a condition precedent to the receipt of unemployment benefits, the MESA requires:
The definition of "disability" for worker's compensation purposes at the time of the plaintiff's alleged injuries provided:
Plaintiff in the case at bar sought and was awarded unemployment benefits following a hearing contested by his employer, defendant Retool Industries. He subsequently filed for worker's compensation benefits, alleging that he suffered total disability during that same period. He ultimately received the desired benefits from the Worker's Compensation Appeal Board. While the MESA prohibits the receipt of unemployment compensation benefits during a period of continuous disability, MCL 421.28a(5); MSA 17.530(1)(5),
Plaintiff maintains that his successful assertion of his ability to work for purposes of unemployment compensation eligibility is not irreconcilably inconsistent with his claim of disability as defined in the WDCA. Because entitlement to unemployment compensation benefits compares the claimant against a different field of labor than does entitlement to worker's compensation benefits, plaintiff alleges that there is no inconsistency in the assertion that there is some work that a claimant such as himself "is qualified to perform by past experience or training," MCL 421.28(1)(c); MSA 17.530(1)(c), so as to qualify for unemployment compensation benefits, but that is not within his general field of employment in which he was employed by defendant under MCL 418.301(4); MSA 17.237(301)(4) for purposes of worker's compensation. Simply put, "[he] was entitled to unemployment compensation benefits because there was some work he could perform, and also entitled to worker's compensation
Supporting this point of view, the majority in the instant case cites Professor Larson for the proposition that
Use of the doctrine of judicial estoppel is fact specific and depends on the facts and circumstances of each case. The particular facts now before us differ significantly from the situation described by Larson, supra, and the situation involved in Henry v Ford Motor Co, 291 Mich. 535; 289 NW 244 (1939), also cited by the majority.
First, as already indicated, plaintiff, by the mere fact of his application for and acceptance of unemployment benefits,
Plaintiff was qualified by his past experience to be an office manager. Plaintiff's testimony indicates that he began receiving unemployment compensation in November 1983, and received his last payment on July 14, 1984. On August 5, 1983, plaintiff filed a petition for hearing, claiming disability of
He based his claim on an occupational disease date of March 22, 1983, linked to
A hearing referee denied plaintiff's claim. On appeal, plaintiff claimed that he sustained his burden of proof in proving psychiatric or hypertension disabilities of a continuing nature. The WCAB
At the worker's compensation hearing, plaintiff testified that as of June 1983 he was able to resume full-time unrestricted work following his medical leave:
Q. Did you want to return to work?
Q. Did you communicate that to your employer?
* * *
Plaintiff testified that he was "[s]hocked" upon learning that he could not resume his regular job but would have to accept what was in effect a demotion. The reason plaintiff gave for not returning
Q. What specifically about the environment?
Plaintiff really wanted to return to his usual office manager job for defendant, and he admitted:
After he stopped working at defendant's business, plaintiff looked for other employment. He testified, for example, that he applied for more
Plaintiff's wife corroborated this testimony, stating that she and plaintiff prepared his resume and contacted "between twenty-five and thirty" companies in Florida seeking employment for plaintiff in his field. She testified that plaintiff was applying for the same type of office manager position that he had held with defendant in Michigan and that at the time of trial plaintiff was still seeking employment in Florida.
The Court of Appeals succinctly characterized plaintiff's claim, and he does not now dispute it, that
By virtue of plaintiff's acceptance of unemployment benefits from the MESC, plaintiff averred that he met the condition precedent to the receipt of those benefits, namely, that he was "able and available to perform suitable full-time work [for which he] is qualified to perform by past experience or training...." MCL 421.28(1)(c); MSA 17.530(1)(c). Plaintiff prevailed in this regard following a contested hearing. Yet given the factual background, plaintiff subsequently convinced the WCAB that he was totally disabled in his "general
This is not a situation in which partial disability has been alleged, or even in which the possibility of some physical capacity for work is thwarted by the inability to get a job for physical reasons, as described by Larson, supra. The present facts are likewise distinguishable from Henry v Ford Motor Co, supra. In Henry, the injured plaintiff was given favored work and was then laid off. He applied for unemployment benefits. The Court recognized that "one permanently disabled to continue the work that he was engaged in when the accident occurred may nevertheless be able to do some light work of a different nature than that in which he was previously engaged." Id., p 538. The Court found no paradox:
However, the Court of Appeals in the instant case appropriately noted,
The instant case presents a plaintiff who tried to
Plaintiff lastly submits that there is no need to invoke the doctrine of judicial estoppel because the WDCA contains an express provision that reduces a claimant's worker's compensation benefits, dollar for dollar, by the amount of any unemployment compensation previously received. MCL 418.358; MSA 17.237(358).
In the case at bar, the doctrine of judicial estoppel goes to the very heart of plaintiff's eligibility for benefits. A setoff is irrelevant if the plaintiff should not have been allowed to advance inconsistent positions in the first place.
In conclusion, although the principle of judicial estoppel is one to be applied with caution, I believe that the Court of Appeals properly applied it under the particular circumstances of this case. The record demonstrates that the plaintiff earlier successfully asserted a position respecting his employability that is antagonistic to the position asserted before the WCAB. I would affirm the Court of Appeals decision reversing the WCAB's award of total disability benefits to the plaintiff for the same period that he was receiving unemployment benefits.
There is no indication that plaintiff's representations were themselves inconsistent. According to testimony, plaintiff advanced both his unemployment and worker's compensation claims on the premise that he was ready and able to work, although at some place other than Retool Industries. Therefore, the Court of Appeals decision must be read as implying that it was the nature of his claims that was inconsistent, i.e., a claim that one is able and available for work is inherently inconsistent with a claim of total disability for the same period.
Since the Court's 1981 decision in Bower, the delay in pursuing a worker's compensation claim has, if anything, increased. In plaintiff's case, his petition for hearing was received by the WCAB on August 9, 1983, and his case was not heard until July 15 and 16, 1985, nearly two years later.
In contrast, § 11(b)(1) is constructed less as a personal privilege than a systemic policy. There is no indication in the language of the section that the action of either party is necessary to give it effect, or that the action of either party can obviate its effect.
The Legislature codified this judicial definition of disability when it amended the WDCA, 1981 PA 200, in § 301(4), and defined "disability" as "a limitation of an employee's wage earning capacity in the employee's general field of employment...."
Because the Court of Appeals in the case at hand disposed of the case on the issue of judicial estoppel, raised sua sponte, it did not reach the merits of plaintiff's total disability claim. Thus, I would alternatively remand this matter to the Court of Appeals for consideration of whether the WCAB applied the correct legal standard — i.e., whether being disabled from one's previous particular employment suffices to establish "disability" in the employee's "general field of employment" pursuant to § 301(4).