Banner v. Travelers Ins. Co.

188 N.W.2d 51, 31 Mich. App. 608, 1971 Mich. App. LEXIS 2130

• Court: Michigan Court of Appeals
• Decided: March 24, 1971
• Status: Published

Opinions

Lesinski, C. J.

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 Act¹ 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.

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 language² 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.

After a review of divergent authority from other jurisdictions,³ we conclude that resolution of the issue depends upon the interpretation given various state compensation schemes, and not upon principles of constitutional law.⁴

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.

Beversed and remanded for action not inconsistent with this opinion. Costs to plaintiff.

Levin, J., concurred.

1 MCLA § 418.101 et seq. (Stat Ann 1971 Cum Supp § 17.237 [101] et seq.).

2 At the time Ray v. Transameriea Insurance Company (1968), 10 Mich App 55, was decided, MCLA § 413.15 (Stat Ann 1960 Rev § 17.189), embodied the present provision.

3 Fabricius v. Montgomery Elevator Co. (1963), 254 Iowa 1319 (121 NW2d 361); Mager v. United Hospitals of Newark (1965), 88 NJ Super 421 (212 A2d 664), affirmed (1966), 46 NJ 398 (217 A2d 325); Kerner v. Employers Mutual Liability Insurance Company (1967), 35 Wis 2d 391 (151 NW2d 72); Flood v. Merchants Mutual Insurance Company (1963), 230 Md 373 (187 A2d 320).

4 Defendant asserted below that the decision in Bay, fn 2, supra, unconstitutionally impaired existing insurance contracts. We find no merit in this contention. See Ruth v. Bituminous Casualty Corporation (CA6, 1970), 427 F2d 290.