Petersen v. Magna Corporation, 755 N.W.2d 658 (2008), S.Ct. No. 136542-43
Plaintiff Rick Petersen is a truck driver who suffered a number of injuries in November 1997 while employed at Magna Corporation. The pertinent issues are as follows: whether Plaintiff’s counsel is entitled to a 30 percent attorney fee on unpaid medical bills for which he expends time and effort to obtain payment, and if so, who is responsible for payment of same?

The Magistrate found Plaintiff’s counsel entitled to a 30 percent attorney fee on unpaid medical bills when the Defendant was ordered to pay medical bills, relying largely on the last two sentences of Section 315(1) of the Act, which states “If the employer fails, neglects, or refuses so to do [pay reasonable and necessary medical expenses], the employee shall be reimbursed for the reasonable expense paid by the employee, or payment shall be made on behalf of the employee to persons to who the unpaid expenses may be owing, by order of the workers’ compensation magistrate. The workers’ compensation magistrate may prorate attorney fees at the contingent fee rate paid by the employee.” The magistrate ordered the Defendant to pay the Plaintiff’s 30 percent attorney fee, and the WCAC agreed with the Magistrate’s decision, as did the Court of Appeals.

The matter is currently before the Michigan Supreme Court for a determination as to whether MCL 418.351(1) permits a Magistrate to order an employer and/or workers’ compensation insurance carrier to pay a Plaintiff’s attorney fee based on collection and payment of medical bills.

Oral argument was heard on January 22, 2009, and the Court focus largely on legislative history and intent of Section 315(1): did the legislature intend an attorney fee pro-ration between the employee and the medical provider, thereby reducing the amount recovered by a non-party medical provider, or in the alternative, did the legislature intend to add the attorney fee on top of the unpaid medical bill resulting in an additional cost to the Defendant?

The current session of the Michigan Supreme Court ends in July 2009. The workers’ compensation community is hopeful the Court will issue an opinion with regard to this matter prior to breaking at that time.