Opinion
Decided March 24, 1971. Leave to appeal denied June 30, 1971, 385 Mich. 760.
Appeal from Wayne, Thomas Roumell, J. Submitted Division 1 December 7, 1970, at Detroit. Decided March 24, 1971. Leave to appeal denied June 30, 1971, 385 Mich. 760.
Complaint by Michael Banner by Ralph Banner, his next friend, against The Travelers Insurance Co. for negligent performance of contract with plaintiff's employer. Summary judgment for defendant. Plaintiff appeals. Reversed and remanded with instructions.
Plunkett, Cooney, Rutt Peacock (by Boleslaus I. Stanczyk and Joel S. Morse) for plaintiffs.
Vandeveer, Doelle, Garzia, Tonkin Kerr (by Buell Doelle) and Travis, Warren, Nayer Burgoyne (by Harry M. Nayer), for defendant.
OPINION OF THE COURT
Plaintiff Michael Banner brought this action against his employer's workmen's compensation insurance carrier, defendant Travelers Insurance Company, alleging that negligence during the performance of a contract with the employer to provide safety inspections and safety engineering services was the proximate cause of his injury. Defendant moved for and was granted summary judgment on the ground that the suit was barred by the Workmen's Compensation Act and that this Court's prior interpretation of that act in Ray v. Transamerica Insurance Company (1968), 10 Mich. App. 55, was incorrect. Plaintiff appeals as of right.
MCLA § 418.101 et seq. (Stat Ann 1971 Cum Supp § 17.237[101] et seq.).
The Workmen's Compensation Act allows an employee to sue third parties whose acts of negligence cause injury. MCLA § 418.827(1) (Stat Ann 1971 Cum Supp § 17.237[827][1]), provides:
"Where the injury for which compensation is payable under this act was caused under circumstances creating a legal liability in some person other than a natural person in the same employ or the employer to pay damages in respect thereof, the acceptance of compensation benefits or the taking of proceedings to enforce compensation payments shall not act as an election of remedies but the injured employee or his dependents or personal representative may also proceed to enforce the liability of the third party for damages in accordance with the provisions of this section." (Emphasis supplied.)
In Ray, supra, this Court construed the above-quoted language to mean that the insurance carrier was a "third party", rather than an "employer", and not immune from common-law tort liability for its own acts of negligence.
At the time Ray v. Transamerica Insurance Company (1968), 10 Mich. App. 55, was decided, MCLA § 413.15 (Stat Ann 1960 Rev § 17.189), embodied the present provision.
After a review of divergent authority from other jurisdictions, we conclude that resolution of the issue depends upon the interpretation given various state compensation schemes, and not upon principles of constitutional law.
Fabricius v. Montgomery Elevator Co. (1963), 254 Iowa 1319 ( 121 N.W.2d 361); Mager v. United Hospitals of Newark (1965), 88 N.J. Super. 421 ( 212 A.2d 664), affirmed (1966), 46 N.J. 398 ( 217 A.2d 325); Kerner v. Employers Mutual Liability Insurance Company (1967), 35 Wis.2d 391 ( 151 N.W.2d 72); Flood v. Merchants Mutual Insurance Company (1963), 230 Md. 373 ( 187 A.2d 320).
Defendant asserted below that the decision in Ray, fn 2, supra, unconstitutionally impaired existing insurance contracts. We find no merit in this contention. See Ruth v. Bituminous Casualty Corporation (CA6, 1970), 427 F.2d 290.
We conclude that the decision in Ray, supra, was a correct interpretation of legislative intent. It was error to grant defendant's motion for summary judgment.
Reversed and remanded for action not inconsistent with this opinion. Costs to plaintiff.
LEVIN, J., concurred.
I regard it my duty, as well as the duty of the trial bench, to follow the settled law of this state.
Ray v. Transamerica Insurance Company (1968), 10 Mich. App. 55, is settled law. No panel of this Court has held to the contrary. The Supreme Court has not spoken on the issue.
I am not persuaded that a constitutional question is presented as urged by appellee insurer. Hence, I do not address myself to that issue.
I do record my own judicial disagreement with Ray.
The liability of the insurance carrier under the Michigan Workmen's Compensation Act is primary. It is not the liability of an indemnitor nor guarantor. It is a named party defendant in claims brought by employees under the act, as distinguished from the claims asserted against defendants in other negligence actions where the insurer cannot be named. The insurer is required to respond directly when benefits are awarded under the act. Within the terms of the concerned statute the employer and the insurer are indistinguishable in law and in fact.
The act permits an employer to be a self-insurer. It can hardly be seriously contended that if the employer in the case at bar were a self-insurer, the separate cause of action here asserted could be maintained against the employer because it negligently inspected its own premises or equipment. How then does the existence of insurance coverage create one?
Be all this as it may, Ray is the law of this state. I am constrained to add that if it so flagrantly offended against the legislative intent as judicially construed, the legislature has had the opportunity to express a contrary intent by amendment. It has not done so, and Ray remains the settled law. The failure of the trial judge to apply it was clearly and reversibly erroneous.
I concur with the Chief Judge.