STATE OF MICHIGAN COURT OF APPEALS

Transcription

1 STATE OF MICHIGAN COURT OF APPEALS HESSLEY HEMPSTEAD, Plaintiff-Appellant, UNPUBLISHED January 3, 2003 v No WCAC DETROIT LIONS, INC., and LC No LIBERTY MUTUAL INSURANCE CO., Defendants-Appellees. Before: Griffin, P.J., and White and Murray, JJ. PER CURIAM. Plaintiff Hessley Hempstead appeals by leave granted a final order of the Workers Compensation Appellate Commission (WCAC), which reversed the magistrate s ruling that plaintiff s benefits were not subject to coordination. We affirm. I. Introduction Plaintiff was employed as a professional football player for the Detroit Lions, Inc., a National Football League (NFL) franchise. Plaintiff claimed injuries that occurred in July, 1997 to his right shoulder in a collision with an opposing player, as well as to his neck while blocking an opposing player. Additionally, plaintiff claimed an injury to his left lower extremity as a result of his left leg locking in artificial turf while performing a running drill on April 6, As a result, he receives line-of-duty disability pension benefits pursuant to the Bert Bell/Pete Rozelle NFL Player Retirement Plan (PRP). PRP benefits are governed by the collective bargaining agreement between the NFL Players Association and the NFL Management Council. The stipulated issue presented to the workers compensation magistrate was whether plaintiff s PRP disability pension benefits were to be coordinated with his worker s compensation benefits. The parties provided no live testimony to the magistrate. Instead, they submitted three depositions and had several documents admitted as exhibits. 1 1 In their brief on appeal defendants argue that the NFL Standardized Contract supports their position. However, that document is not properly before this Court as it was never admitted into evidence before the magistrate or WCAC. We therefore decline to review it in coming to our (continued ) -1-

2 Before 1993, the PRP was known as the Bert Bell NFL Player Retirement Plan (the Bell Plan). Article 6 of the Bell Plan provided for offset by worker s compensation benefits. In 1993, however, the Bell Plan was merged with the Pete Rozelle plan. Article 6 was amended as follows regarding the offset of benefits: Applicability and Special Rules. The above provisions of this Article 6 will apply to Players who first make application for line-of-duty disability benefits in the 1993 Plan year or later and who earn a Credited Season in 1993 or later. Players not described in the preceding sentence are subject to the following special rules: * * * (c) The following sentence is added to the end of Section 6.1: A Player s monthly line-of-duty benefit will be reduced by the payment for that month or the monthly equivalent of any lump sum payment for the same disablement which the Player receives as worker s compensation. [Emphasis added.] Subsection (c) clearly provides for coordination between the line of duty benefit and workers compensation benefits. It is equally clear that Article 6, subsection (c) does not apply to workers who first make application for benefits after 1993, a group that undisputedly includes plaintiff. In his opinion dated March 16, 2001, Magistrate Patrick J. MacLean first found that plaintiff had been receiving line-of-duty disability benefits since March 1, 1999, based on four credited seasons with the Lions. The Lions contributed funding for the line-of-duty benefits pursuant to a multi-employer pension plan. The magistrate opined that because the line-of-duty disability benefits are part of the NFL players retirement plan, then said benefits are part of a disability pension plan, not any other type of benefit plan. After reviewing the testimony of several persons involved in the negotiations of the PRP, the magistrate observed that, prior to 1993, line-of-duty disability benefits under the PRP had been subject to offset by worker s compensation benefits. The 1993 amendment to the PRP, however, limited the offset to benefits pertaining to 1992 and earlier. The magistrate thus determined that the PRP provisions were ambiguous because they were subject to two or more interpretations. Further, the magistrate found the line-of-duty disability provisions were not silent regarding coordination because the absence of coordination language that long had been in the PRP illustrated an intent to treat the two different time periods (pre-amendment and postamendment) differently regarding coordination of benefits. The magistrate concluded: Accordingly, I find that per the parties intent, as well as the express language of the 1993 line-of-duty disability amendments/provisions, plaintiff met his burden of proof to show that the line line-of-duty disability provisions prohibit ( continued) decision. Hawkins v Murphy, 222 Mich App 664, 670; 565 NW2d 674 (1997). -2-

3 coordination with workers compensation benefits pursuant to MCL (14). Accordingly, defendants may not coordinate plaintiff s line-of-duty disability benefits with plaintiff s workers compensation benefits. In its opinion of February 13, 2002, the WCAC reversed. The WCAC noted that the magistrate had based his opinion on the testimony of Yaras-Davis, but she testified that the PRP did not contain language about coordinating benefits because the prior coordination language was removed. The WCAC therefore concluded: It is clear to us that there is no provision in the Plan that waives coordination of the disability pension benefits, as required by Section (14) of the Act. Magistrate MacLean construes the Plan s silence as an ambiguity in the contract that invites (indeed requires) examination of the parties intent. We disagree. Silence does not infer more than one possible meaning. Section (14) of the Act requires that the parties act affirmatively to opt out of the coordination. They must provide that the payments under the plan shall not be coordinated. If the plan is silent on the subject, disability compensation benefits are subject to coordination. Sterner v McLouth Steel Products, 211 Mich App 354, ; 536 NW2d 225 (1995), citing Scott v Jones Laughlin Steel Corp (On Remand), 202 Mich App 408; 509 NW2d 841 (1993). Since the Plan is silent coordination must be permitted. Magistrate MacLean s decision denying coordination is hereby reversed. II. Standard of Review The WCAC must consider the magistrate's findings of fact conclusive if they are supported by competent, material, and substantial evidence on the entire record. MCL a(3); Mattison v Pontiac Osteopathic Hosp, 242 Mich App 664, 670; 620 NW2d 313 (2000), citing Mudel v Great Atlantic & Pacific Tea Co, 462 Mich 691, ; 614 NW2d 607 (2000). Substantial evidence is evidence that a reasonable person would accept as adequate to justify a conclusion. Mattison, supra. Where substantial evidence on the whole record does not exist to support the magistrate's factual finding, the WCAC may substitute its own finding of fact for that of the magistrate. Id. In contrast, in the absence of fraud, this Court must treat findings of fact made by the WCAC acting within its powers as conclusive. MCL a(14). This Court may review questions of law involved with any final order of the WCAC. MCL a(3) and (14). This Court, however, does not independently review whether the magistrate's findings of fact are supported by substantial evidence. Id. Rather, this Court's review is complete once it is satisfied that the WCAC has understood and properly applied its own standard of review. Id. at As long as the WCAC did not misapprehend or grossly misapply the substantial evidence standard test and the record reflects evidence supporting the WCAC's decision, then this Court must treat the WCAC's factual decisions as conclusive. Id. at 671. The magistrate and the WCAC differed on one crucial point: whether the PRP was ambiguous regarding the coordination of worker s compensation benefits. The existence of an ambiguity is a question of law, which we review de novo on appeal. Farm Bureau Mut Ins Co v -3-

4 Buckallew, 246 Mich App 607, 612; 633 NW2d 473 (2001). As such, neither we nor the WCAC are required to defer to the magistrate s conclusion as to the existence of an ambiguity. MCL (1) sets forth the requirement that, except as otherwise provided for in that section, an employer s obligation to pay weekly workers compensation benefits shall be reduced in the amount set forth in subsection 1(a) (f). MCL (14) contains an exception to this general rule, in that it provides that parties to a disability pension plan, such as the PRP, may opt out of coordination with workers compensation benefits: This section does not apply to any payments received or to be received under a disability pension plan provided by the same employer which plan is in existence on March 31, Any disability pension plan entered into or renewed after March 31, 1982 may provide that the payments under that disability pension plan provided by the employer shall not be coordinated pursuant to this section. [MCL (14) (emphasis added).] The parties do not dispute that the PRP here is subject to the above opt-out provision, since the PRP was entered into after Thus, because the statute permits parties to pension plans to affirmatively decline to coordinate benefits, we examine the PRP s language for any evidence that the parties in this case opted out of coordination. The interplay between the general rule of subsection 1, and the permissive grant under subsection 14, was described in Murphy v Pontiac, 221 Mich App 639, 643; 561 NW2d 882 (1997): Section 354 generally allows coordination of benefits. However, subsection 14 exempts from coordination disability pension plans in existence on March 31, 1982, the effective date of the coordination provision. That subsection further provides that the disability pension plan renewed or entered into after that date may exclude benefits from coordination. Because the statute requires some affirmative statement in a plan to be exempt from coordination, we have previously held that [i]f the plan is silent on the subject, disability compensation benefits are subject to coordination. Sterner v McLouth Steel Products, 211 Mich App 354, ; 536 NW2d 225 (1995). The critical issue in this case is whether the failure of the parties to address coordination in the PRP for post-1993 players, i.e., the PRP s silence, causes the PRP to be ambiguous (as the magistrate concluded) or requires coordination because of the failure to provide for an exception from the statutory requirement (as the WCAC concluded). We conclude that the WCAC came to the correct legal conclusion. As the WCAC opinion makes clear, this is a rather straightforward case, resolved by five principles. First, state law generally provides for coordination of benefits. MCL (l); Murphy, supra. Second, the only way to avoid the coordination of benefits is if the plan provide[d] that the payments under that disability pension plan provided by the employer shall not be coordinated... MCL (14); Murphy, supra. Third, because the statute requires some affirmative indication in the plan that benefits are to be exempt, silence in a plan requires -4-

5 coordination of benefits. Sterner, supra. Fourth, because the PRP contains no indication that the benefits of post-1993 players are not to be coordinated, under the statute and case law, they are to be coordinated. Id. Fifth, because the statute fills in the gap created by the PRP s silence, the silence does not create an ambiguity in the contract. Norman v Norman, 201 Mich App 182, 184; 506 NW2d 254 (1993)( silence does not equal ambiguity if the law provides a rule to be applied in the absence of a provision to the contrary ). Norman is illustrative of why this result is compelled. In that case, the parties consent judgment of divorce provided that the lien on the marital home would accrue interest, but did not specify whether the interest was simple or compound. Norman, supra at The trial court determined that the silence as to what type of interest to apply created an ambiguity, and thus made an equitable determination. This Court reversed, holding that the failure to specify (i.e., the silence) in the judgment did not create an ambiguous document, because the law filled in the ultimate answer the law disfavored compound interest unless it was specifically provided for in the agreement. Id. at 187. Here, as in Norman, the law provides the answer to the silence of the parties as to whether the benefits are to be coordinated: benefits are to be coordinated in the absence of a specification otherwise. The magistrate committed two legal errors which resulted in its erroneous decision. First, the magistrate failed to apply the PRP as written. The magistrate failed to do so by not recognizing (and accepting) the fact that the PRP contains no language providing for an exemption, and by not following the resulting conclusion that must be made under the statute from that silence. Sterner, supra. Second, by concluding that the PRP s specific coordination language for pre-1993 players created an ambiguity as to the parties intent for the post-1993 players (because of the silence on the issue as to these players), the magistrate elevated the probable intent of the parties over the plain terms (or, more precisely, the lack of such terms) of the PRP. In other words, if the law says one must do a specific affirmative act in order to accomplish a particular result, which is what MCL (14) requires, then the failure to do that affirmative act, which the Sterner Court determined also compels a particular result, cannot create an ambiguity. Norman, supra. Moreover, the PRP s silence as to post-1993 players and the specific coordination language for pre-1993 players do not conflict, as under both provisions player benefits are coordinated with workers compensation benefits. Petovello v Murray, 139 Mich App 639, 642; 362 NW2d 857 (1984)(contract is ambiguous if terms are inconsistent). Acceptance of the magistrate s conclusion would in no uncertain terms require us to ignore the language in the PRP actually agreed to by the parties, and in doing so rely on what after-the-fact testimony establishes as the parties intent. This we cannot do. Amtower v William C Roney & Co, 232 Mich App 226, 233; 590 NW2d 580 (1998). We also are unwilling to redraft the PRP by judicial construction, which is what we would be doing if we were to construe silence as a positive, affirmative statement to exempt the players benefits from the coordination requirements of state law. Finally, we do not believe the Sterner decision controls this case. The plan in Sterner, unlike the PRP, had a provision specifically indicating the parties intent to not have pension benefits coordinated with workers compensation benefits. Sterner, supra at 356. This is a -5-

6 significant distinction, because the sole issue in this case is how to treat the PRP s purported failure to address the coordination issue for post-1993 players. 2 Affirmed. /s/ Richard Allen Griffin /s/ Christopher M. Murray 2 Sterner also contains statements with which we do not agree. In its decision, the Sterner Court criticized the WCAC for relying on the plain language of the agreement, rather than relying on the probable intent of the parties. Sterner, supra at 357. In our view, what is paramount is the plain language used in the contract itself. Amtower, supra. See also Kleczewski v McLouth Steel Products Corp, 465 Mich 904, 635 NW2d 306 (2001)(Statement of Justice Markman criticizing the contract analysis found in Sterner). Additionally, the Sterner Court found an ambiguity because of different interpretations given to the language by the parties and the lower tribunals, a principle to which we do not adhere. See Henderson v State Farm First Casualty, 460 Mich 348, 355 n 3; 596 NW2d 190 (1999); Adair v State of Michigan, 250 Mich App 691, 708; 651 NW2d 393 (2002). -6-

7 STATE OF MICHIGAN COURT OF APPEALS HESSLEY HEMPSTEAD, Plaintiff-Appellant, UNPUBLISHED January 3, 2003 v No WCAC DETROIT LIONS, INC., and LIBERTY LC No MUTUAL INSURANCE CO., Defendants-Appellees. Before: Griffin, P.J., and White and Murray, JJ. WHITE, J. (dissenting). I respectfully dissent. I do not agree with the majority s dispositive conclusion that the Bert Bell/Pete Rozelle NFL Player Retirement Plan (PRP) is silent on the question of coordination. Rather, the language of the plan evinces an intent to preclude coordination for those who first make application in the 1993 plan year or later, and is, at a minimum, ambiguous. Further, the intent of the parties, as found by the magistrate, is supported by the record. Article 6 of the agreement provides: Line of-duty Disability 6.1 Line-of-Duty Disability Benefits. Any Player who incurs a substantial disablement (as defined in Section 6.4(a) and (b)) arising out of League football activities (as defined in Section 6.4(c)) will receive a monthly line-of-duty disability benefit equal to the greater of (a) the sum of the Player s Benefit Credits at the date the Player s disability qualifies as a substantial disablement, including, if applicable, the scheduled Benefit Credit, as provided in Section 1.10(c)(3), for the Plan Year in which the disability that subsequently qualifies as a substantial disablement, is incurred, and (b) $1,000. The benefit will be payable monthly, beginning as of the first day of the month following the date the disability qualifies as a substantial disablement, and continuing for the duration of the substantial disablement but not for longer than 90 months. * * * -1-

8 6.3 Procedures. Any claim for line-of-duty disability benefits must be submitted in writing to the Plan Director within 48 months after a Player ceases to be an Active Player, but this period will be tolled for any period of time during which such Player is found by the Retirement Board to be physically or mentally incapacitated in a manner that substantially interferes with the filing of such claim. The Retirement Board will determine a Player s substantial disablement, and may, but need not, rely on reports from a physician or physicians approved by the Retirement Board. The examined Player will pay the expense of the first examination, but the Plan will reimburse the Player if the Player qualifies for lineof-duty disability benefits Definitions. (a) A substantial disablement is a permanent disability that: (1) Results in a partial bodily disability of 50% or more; or the loss of 50% or more of speech or sight; or 50% or more loss of the use of the neck or back; or (2) Results in 55% or more loss of use of the hearing or an arm, shoulder, leg or hip; or (3) Results in 70% or more loss of use of a hand, wrist, elbow, foot, ankle or knee; or (4) Is the primary or contributory cause of the surgical removal or major functional impairment of a vital bodily organ or part of the central nervous system. (b) A disability will be deemed to be permanent if it has persisted or is expected to persist for at least 12 months from the date of its occurrence and was the most significant factor in the Player s retirement from League football. (c) Arising out of League football activities means a disablement arising out of any League pre-season, regular-season, or post-season game, or any combination thereof, or out of League football activity supervised by an Employer, including all required or directed activities. Arising out of League football activities does not include, without limitation, any disablement resulting from other employment, or athletic activity for recreational purposes. 6.5 Applicability and Special Rules. The above provisions of this Article 6 will apply to Players who first make application for line-of-duty disability benefits in the 1993 Plan Year or later and who earn a Credited Season in 1993 or later. Players not described in the preceding sentence are subject to the following special rules: -2-

9 (a) 60 months is substituted for 90 months in Section 6.1. (b) 36 months is substituted for 48 months in Section 6.3. (c) The following sentence is added to the end of Section 6.1: A Player s monthly line-of-duty disability benefit will be reduced by the payment for that month or the monthly equivalent of any lump sum payment for the same disablement which the Player receives as worker s compensation. (d) 60% is substituted for 55% in Section 6.4(a)(2). (e) 80% is substituted for 70% in Section 6.4(a)(3). (f) The phrase and has resulted in is substituted for the phrase and was the most significant factor in in Section 6.4(b). (g) The following sentence is substituted for the final sentence in Section 6.4(c): Arising out of League football activities will not include any disablement resulting from other employment or activity initiated by the Player outside of official pre-season training, including athletic activity for recreation or for the general purpose of maintaining or achieving playing condition. MCL (14) clearly provides that a disability pension plan may provide that the payments under that plan shall not be coordinated pursuant to that section. The question is thus whether the PRP provides that payments under the PRP shall not be coordinated. Section 6.1 of the PRP provides that in the event a player incurs a substantial disability as defined, he will receive a monthly payment equal to the greater of the sum of his benefit credits or $1000. Payments are limited to ninety months. The procedures for making a claim are set forth, and substantial disablement, permanent and arising out of League football activities are defined. The PRP then provides that these provisions only apply to those who, like plaintiff, first seek benefits in 1993 or later. Special rules modifying the various formulas and requirements are set forth for those who do not first seek benefits in 1993 or later. Thus, the formula set forth in section 6.1 applies to plaintiff and states the amount he is to receive. For those who do not first seek benefits in 1993 or later, the provisions are modified so that the duration of benefits is confined to sixty months, and the monthly benefit otherwise set forth in section 6.1 is reduced by the amount of worker s compensation received. To be sure, the PRP does not state For claims first made in 1993 or later, disability benefits will not be reduced by payments received as worker s compensation. It does not, however, follow that the PRP is silent on the question whether such benefits are to be coordinated. Article 6 of the PRP was clearly intended to be read as a whole, and should be so read in determining whether it provides that payments under the plan shall not be coordinated. Murphy v Pontiac, 221 Mich App 639, 643; 561 NW2d 882 (1997), Sterner v McLouth Steel Products, 211 Mich App 354, ; 536 NW2d 225 (1995), and Norman v Norman, 201 Mich App 182, 184; 506 NW2d 254 (1993), relied on by the majority, do not compel affirmance. These cases stand for the propositions that where the plan is silent on the subject, benefits are coordinated, and that silence does not create ambiguity. However, in none of these cases did the plan, or in Norman the judgment, purport to address the subject of coordination. These cases are -3-

10 not helpful in determining whether the instant plan is in fact silent on the subject of coordination. In sum, I do not agree that [a]cceptance of the magistrate s conclusion would in no uncertain terms require us to ignore the language in the PRP actually agreed to by the parties, and in doing so rely on what after-the-fact testimony establishes as the parties intent. Rather, I conclude that the PRP itself evinces an intent to afford monthly benefits in the amount of the greater of the player s benefit service credits or $1000, unless the player first made application before 1993, in which case that sum shall be reduced by payments received as worker s compensation. Notwithstanding this construction, article 6 may indeed be ambiguous, but it is not silent. I would reverse and remand for consideration of defendants remaining arguments not addressed by the WCAC. /s/ Helene N. White -4-