# Lahti v. Fosterling

> Michigan Supreme Court · November 24, 1959 · 357 Mich. 578

URL: https://www.frixlaw.com/law-library/cases/9727088

## Case

- **Full name:** Lahti v. Fosterling
- **Court:** Michigan Supreme Court
- **Decided:** November 24, 1959
- **Citations:** 357 Mich. 578; 99 N.W.2d 490; 1959 Mich. LEXIS 334
- **Precedential status:** Published
- **Opinion:** Dissent by Carr
- **Judges:** Klavanagh, Smith, Black, Edwards, Voelker, Kavanagh, Dethmers, Kelly, Carr
- **Cited by:** 101 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9727088

## How later opinions describe it (automated extraction)

- noting caselaw addressing and rejecting the argument that amendments to workers’ compensation laws unconstitutionally impair the contract between an employer and its insurer

## Opinion text

Carr, J.
(dissenting). Plaintiff instituted this proceeding under the provisions of the workmen’s-compensation law of the State. * The question at issue is whether an employee suffering a compensable injury arising out of and in the course of his employment is subject, as to medical and hospital expenses, to the provision of the statute in effect at the time of such disability. The facts are not in dispute, and in submitting the case to the referee,, counsel entered into a stipulation relating thereto' in lieu of proofs.
It appears that on October 4, 1954, defendant employer was subject to the provisions of the workmen’s compensation law, that plaintiff John Lahti' was on said date employed in cutting pulpwood, and that plaintiff ivas seriously injured as the result of' being struck by a falling tree. It was further agreed' as follows:
“That respondent insurance company has provided, on behalf of said defendant, adequate and reasonable medical, surgical and hospital services-' and medicines for 4 consecutive 6-month periods beginning on the date of said accident and ending-October 4, 1956. Said insurer has further paid the-said plaintiff, on behalf of said defendant, the sum *597 of $20 per week as compensation for said plaintiff’s wage loss, from October 4, 1954 and continues to pay said sum weekly to plaintiff.”
Plaintiff sought an award including payment for medical and hospital services rendered to him subsequent to the expiration of the 24-month period for which such expenses had been voluntarily paid by the employer’s insurance carrier. The referee in rendering his decision granted plaintiff compensation at the rate of $34 per week for total disability until further order of the department. Liability for the medical and hospital expenses that had been paid was recognized, but the referee found that defendants had paid to the plaintiff or his guardian “all of the medical bills which they are obligated to pay in this cause.” Defendants were also given credit for the compensation that had been voluntarily paid. The workmen’s compensation appeal board affirmed the award as made by the referee, and plaintiff has appealed.
At the time plaintiff sustained his disabling injury, part 2, § 4, of the workmen’s compensation act, as amended (CLS 1954, § 412.4 [Stat Ann 1950 Eev § 17.154]), read as follows:
“The employer shall furnish, or cause to be furnished, reasonable medical, surgical, and hospital services and medicines when they are needed, for the first 6 months after the injury and thereafter for not more than 3 additional 6 month periods in the discretion of the commission, upon written request of the employee to the commission for each period and after the employer or his insurer has been given an opportunity to file objections thereto and to be heard thereon. The employer shall also supply to such injured employee dental service, crutches, artificial limbs, eyes, teeth, eye glasses, hearing apparatus and such other appliances as may be necessary to cure, so far as reasonably possible, and relieve from *598 the effects of the injury. If the employer shall fail, neglect or refuse so to do such employee shall be reimbursed for the reasonable expense incurred by or on his behalf in providing the same, by an award of the commission.”
Said section was further amended by PA 1955, No 250, effective June 25, 1955 (CLS 1956, § 412.4 [Stat Ann 1957 Cum Supp § 17.154]). As so amended the section reads:
“The employer shall furnish, or cause to be furnished, to an employee who receives a personal injury arising out of and in the course of his employment, reasonable medical, surgical and hospital services and medicines or other attendance or treatment recognized by the laws of this State as legal, when they are needed, for the first 6 months after the injury and thereafter for such additional 6 month periods as the commission may in its discretion order. Such additional 6 month periods shall be granted only upon written request of the employee to the commission for each period and after the employer or his insurer has been given an opportunity to file objections thereto and to be heard thereon. The employer shall also supply to such injured employee dental service, crutches, artificial limbs, eyes, teeth, eye glasses, hearing apparatus and such other appliances as may be necessary to cure, so far as reasonably possible, and relieve from the effects of the injury. If the employer shall fail, neglect or refuse so to do such employee shall be reimbursed for the reasonable expense incurred by or on his behalf in providing the same, by an award of the commission.”
It thus appears that at the time the plaintiff was injured and became disabled the statute granted him the right to have the expenses of reasonable medical and hospital services incurred by him during the first 6 months after the injury, and thereafter for not more than 3 additional 6-month periods “in the *599 discretion of the commission,” paid by the employer or his insurance carrier. By the amendment of 1955 the commission was authorized to award such payments for additional 6-month periods with no limitation as to the number thereof being imposed. It is the claim of appellant in this case that the referee and the workmen’s compensation appeal board were authorized to make a further award covering medical and hospital expenses, notwithstanding that defendants had voluntarily paid for such services in accordance with the statute in effect at the time the disability occurred. The referee and the appeal board declined to accept such interpretation of the law, finding that plaintiff had already received at the time the award was made the maximum amount of payment for medical and hospital services that he was entitled to receive. Mr. Justice Kavanagh has written to reverse the action of the appeal board and to remand the proceeding “for the entry of relief in accordance with this opinion.” We are not in accord with his conclusion. In our opinion the referee and the appeal board correctly determined the question of law involved, and the award as made should be affirmed.
It is not questioned that the right to compensation under the statute is subject to the provisions thereof in effect at the time such right accrues. Mason v. Michigan Trading Corp., 308 Mich 702 ; Thomas v. Continental Motors Corp., 315 Mich 27 . In the latter case it was said (p 37):
“In the instant case the department awarded dependency compensation in accordance with the statute in effect at the time the disability arose. The department also awarded death benefits (expenses of last sickness and funeral) in accordance with the statute in effect at the time the death of the employee occurred. The awards are affirmed.”
*600 In Tarnow v. Railway Express Agency, 331 Mich 558 , plaintiff employee’s injury was sustained in October, 1938. He was paid compensation for approximately 10 weeks, at the expiration of which period he returned to work. His physical condition became worse, however, with the lapse of time, and in September, 1949, he filed an application for hearing and adjustment of his claim for compensation. Under a 1943 amendment to the statute, if applicable, the claim was barred, such amendment precluding the allowance of compensation for more than 1 year prior to the date of filing same. In said case the beginning of such 1-year period was subsequent to the expiration of the compensable period of 500 weeks as prescribed by the statute. In consequence, the question was squarely presented as to whether the amendment of the statute subsequent to plaintiff’s injury controlled with reference to his right to an award of further compensation. On behalf of defendant it was contended, as in the case at bar, that said amendment related to procedure rather than to a substantive right and should, in consequence, be given a retroactive effect. This Court, in rejecting such claim, said, in part (pp 565, 566):
“The amendment here in question may not be regarded as wholly procedural in character, as defendant contends. Obviously its effect, if so applied under the facts before us in this case, would result in taking from the plaintiff a right which the statute, in force at the time of his injury, granted to him. There is nothing in the amendment in question here indicating that the legislature intended any such possible result. In other words, there is nothing to overcome the presumption that prospective operation only was intended. It seems obvious that the purpose of the amendment was to limit the amount of recovery in certain cases. Such result must follow in any instance where the statute in its present form *601 is invoked to defeat recovery, partially or wholly, and is applicable. The amendment may not be regarded as relating merely to procedure, nor may it be classed as remedial legislation. Under the general rule followed by this Court in the cases above cited, it should not be given a retroactive effect in the instant case.”
In accordance with the conclusion indicated in the opinion, the award to plaintiff was affirmed. We believe the Tarnow Case was correctly decided and that an amendment to the workmen’s compensation law enacted after the disability occurred and affecting the right to an award or the amount thereof is not applicable, if giving it effect would bar or decrease an award to an injured employee, or would create or increase liability on the part of the employer. The provisions in effect at the timé the right to compensation accrues are controlling.
This brings us to a consideration of the question as to whether the payment of expenses for medical and hospital services furnished to an injured employee is to be regarded as compensation. It will be noted that the provisions of the statute relating to such expenses are in part 2 thereof, which deals with the subject of compensation. The title of the statute, likewise, indicates that the purpose of the legislature in enacting the law was “providing compensation for the disability or death resulting from occupational injuries or disease or accidental injury to or death of employees.” It appears from' the provisions of the act that the purpose thereof was to allow the payment of compensation to the employee in accordance with the provisions of the enactment for loss of earning ability, for the expense of medical and hospital services incurred as the result of a compensable disability, and for funeral expenses in certain cases. In Munson v. Christie, 270 Mich 94, 99 , it was said:
*602 , “The fcompensation’ provided for the' employee and. his. dependents is not only the award in lieu of . prospective earnings which the employee loses in,.consequence of his injury, hut ‘compensation’ in its broader sense as used in this statute includes what ■ may be termed sick benefits for the 90-day period next ensuing the accident and ‘in addition’ it includes in the eyent of his death as a result of the injury, the expense/of his last sickness and burial, this latter item being limited to $200. These provisions for his care during the first 90 days and for the-expense .of last sickness and burial are clearly compensation to the employee and his dependents in that-they are thereby saved from and compensated for the .burden and expense to which they or some of thejn presumably would otherwise be subjected. While it is true that in some instances in the workmen^ compensation act the expression ‘compensation’ is not used in this broad sense and that the respective phases of compensation are specifically referred to in other terms, still consideration of the act as a whole leads to the conclusion that in order to carry out the legislative intent and to properly construe the act, ‘compensation’ recoverable by the employee and his dependents must usually be understood in its broader sense.”
In Michigan Boiler & Sheet Iron Works v. Dressler, 286 Mich 502 , the question was raised whether funeral expenses were to be considered compensation. Commenting thereon, it was said (p 513):
“Defendant finally contends that funeral expenses are not compensation and that therefore they cannot be recovered in this action. Under statutes in effect in other jurisdictions, hospital, medical, and surgical bills have been held to be ‘compensation,’ recoverable in a suit by an employer, against a negligent third party who has injured an employee. Klotz v. Pfister & Vogel Leather Co., 220 Wis 57 ( 264 NW 495 ); Bruso’s Case, 295 Mass 531 ( 4 NE2d 308 ). •'We believe it to have been the legislative intent that *603 funeral expenses should be recoverable as ‘compensation’ in this particular instance.” .
In Dornbos v. Bloch & Guggenheimer, Inc., 326 Mich 626 , certain provisions of the workmen’s com! pensation act were considered, and decisions of this Court and of courts in other States, as well as the supreme court of the United States, were discussed. The conclusion reached was indicated in the following language (p 637): •
“Construing the provisions of the statute here in issue in the light of the general purpose of the entire act, and in conjunction with other pertinent provisions indicating the legislative intent, we think a claim for medical and hospital expenses must be regarded as one for compensation and subject accordingly to the prescribed requirements as to the time within which such claim shall be made.”
See, also, Bennish v. Cadillac Show Case Co., 306 Mich 244 , where it was recognized that:
“The date of disability is the controlling factor insofar as the right to medical services is concerned.”
, In support of his claim that the' 195’5 ’amendment should be given retroactive effect in the instant case, counsel for appellant calls attention to Rookledge v. Garwood, 340 Mich 444 . In that case, however, the change in the law made by amendment to part 3, § 15, did not operate to either lessen or increase liability imposed by the provisions of the statute in force and effect .at the time of plaintiff’s injury. On the contrary, it affected matters relating to procedure. It operated to deprive an alleged tortfeasor of the possible defense of election of remedies, previously existing. There was no vested right in such defense. The Rookledge Case was followed in Horn v. Davis Brothers, Inc., 340 Mich 460 ; Woods v. Ford Motor Company, 342 Mich 518 ; and Johnson v. Motor City Sales Corporation, 352 Mich 56 . *604 The case at bar is clearly distinguishable on the facts. Here we are concerned with a subsequent amendment to the law that, if applicable, would permit an increase in the amount of compensation recoverable over and above that provided by the statute in effect when the injury and disability occurred and consequently would impose on the employer a greater measure of liability than was created under the statute in force at the time the right to compensation accrued.
The 1955 amendment did not operate to remove a defense that might be interposed to a claim. The right to compensation rests wholly on the statute, and the legislature in its discretion imposed a limitation in effect at the time plaintiff was injured. It did not, in other words, grant an unlimited right to compensation for medical and hospital expenses. The amendment of 1955 was designed to permit an increase in an award for such expenses. In other words, it contemplated an extension of liability. It affected the substantive rights of the employee with a corresponding increase in the obligation of the employer. That it was intended by the legislature to be prospective in operation is scarcely open to question. Obviously, if given a retroactive effect a like claim may be made as to any amendment to the act changing rates of compensation for loss of earning ability, or compensation otherwise based.
It is further suggested on behalf of appellant that, since the payments made by defendant were voluntary and not made pursuant to an award based on a written request from the plaintiff, they should not be regarded as made in accordance with the statute. The claim is without merit. Defendants may not be penalized because they voluntarily made the payments for medical and hospital expenses necessitated by the injury to plaintiff instead of waiting for an award to be made. Such payments must *605 be regarded as in compliance with the obligation imposed by tbe statute, and should be considered accordingly. Their status is the same as that of disability payments voluntarily made, for which credit, as a matter of practice, is properly allowed. This was done in the instant case and apparently is not questioned. See Marlowe v. Huron Mountain Club, 271 Mich 107, 112 ; Tomes v. General Motors Corporation, 318 Mich 168, 173, 174 .
Payment by an employer of expenses for hospital and medical services required by an employee as a result of a compensable disability is compensation, and liability therefor is governed by the provisions of the statute in effect at the time of the disability. It is then that the right accrues to the employee with a corresponding obligation on the part of the employer. A subsequent amendment to the law altering the amount of compensation to be paid involves substantive rights and duties, and may not be regarded as merely a procedural change. The previously created rights and obligations of the parties to the instant proceeding were not affected by the 1955 amendment in question. It does not appear that the legislature intended that said amendment should operate retroactively.
The award as made by the referee and sustained by the workmen’s compensation appeal board should be affirmed. The questions at issue being matters of public concern, no costs should be allowed.
Dethmers, C. J., and Kelly, J., concurred with Carr, J.
PA 1912 (1st Ex Sess), No 10, as amended (CL 1948, §411.1' et seq., as amended [Stat Ann 1950 Rev § 17.141 et seq., as amended]).

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9727088. Public record. Not legal advice.