SEBASTIAN KUHLGERT, Conservator of ELISABETH OSTENDORF, Plaintiff-Appellee,
MICHIGAN STATE UNIVERSITY, and BOARD OF TRUSTEES OF MICHIGAN STATE UNIVERSITY, Defendants, and UNITED EDUCATORS, Intervening Defendant-Appellant. ELISABETH OSTENDORF, Plaintiff-Appellee, and UNITED EDUCATORS, Intervening Plaintiff-Appellant, and STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Intervening Plaintiff,
MICHIGAN STATE UNIVERSITY, Defendant-Appellee.
of Claims LC No. 15-000047-MZ
Before: Swartzle, P.J., and Cavanagh and Cameron, JJ.
consolidated appeals all concern whether the injuries that
plaintiff Elisabeth Ostendorf (hereinafter Ostendorf), a
German national, suffered when a truck owned by Michigan
State University (MSU) struck her as she was walking on the
campus triggers the exclusive-remedy provision of the
Worker's Disability Compensation Act (WDCA), MCL 418.101
et seq. See MCL 418.131(1) (except where an
intentional tort is involved, benefits as provided by the
WDCA constitute an employee's "exclusive remedy
against the employer for a personal injury"). If not,
then MSU's no-fault insurer, State Farm Mutual Automobile
Insurance Company, and its excess liability insurer, United
Educators (hereinafter UE), are responsible for providing
insurance coverage for her injuries. We affirm.
was a post-doctoral research associate at MSU and lead
scientist involving a project funded through a grant from the
Advanced Research Projects Agency for the Department of
Energy. She was in the United States on a J-1 Visa as a
participant in an exchange visitor program as authorized
under the Mutual Educational and Cultural Exchange Act
(MECEA), 22 USC 2451 et seq. The goal of
Ostendorf's project was to screen plants for increased
photosynthetic capacity. She began her work in 2012 for a
one-year term, with the anticipation that the project could
be renewed annually and last for three or more years. She was
injured during her third term.
October 2014, Ostendorf left the Food and Safety Toxicology
Building where she worked and walked towards her vehicle
parked in a lot located elsewhere on the MSU campus. She had
walked approximately 900 feet when, while completing a text
message, she emerged from the sidewalk abutting a driveway
and was struck by a truck. At that time, Cole Gibson was
backing up his truck-an MSU vehicle-toward a loading dock.
Ostendorf suffered severe injuries.
case involves a lengthy, complicated procedural history. In
March 2015, Ostendorf's conservator, plaintiff Sebastian
Kuhlgert (hereinafter "plaintiff"), commenced a
negligence action in the Court of Claims against MSU and its
Board of Trustees. Plaintiff did not file a claim for
workers' compensation benefits, and MSU did not report an
injury to the workers' compensation bureau. MSU has an
excess liability insurance policy through UE, and the policy
does not provide coverage for any obligation for which the
insured may be held liable under any workers'
compensation law. Over a year after the complaint was filed,
UE filed a motion to intervene in the action because it
believed that MSU failed to pursue the argument that
plaintiff's claims were barred by the exclusive-remedy
provision in the WDCA. The Court of Claims held that the
motion to intervene was untimely and that MSU had adequately
represented UE's interests by raising the
exclusive-remedy provision in its affirmative defenses. The
court further noted that the exclusive-remedy provision would
not apply if, at the time of the accident, Ostendorf was not
on the premises of where her work was performed. We denied
UE's application for leave to appeal, and UE filed an
application for leave to appeal with the Michigan Supreme
the application for leave was pending in our Supreme Court,
UE and State Farm filed applications for mediation or
petitions to intervene in a separate proceeding with the
Workers' Compensation Board of Magistrates. At issue in
that proceeding was not the extent to which Ostendorf was
engaged in her employment with MSU at the moment of her
accident, but rather whether she was exempted from
workers' compensation coverage through an exemption of
the definition of "employee" set forth in MCL
418.161(1)(b) for "[n]ationals of foreign countries
employed pursuant to section 102(a)(1) of the mutual
educational and cultural exchange act of 1961 . . . ."
November 2016, our Supreme Court remanded the first case to
this Court for consideration as on leave granted with
instructions to address the exclusive-remedy provision of the
WDCA and whether UE could intervene. Kuhlgert v Michigan
State Univ, 500 Mich. 890 (2016). The Court ordered:
The Court of Appeals shall consider: (1) whether the
plaintiff's claims are barred by the exclusive remedy
provision of the [WDCA], see MCL 418.131(1); Sewell v
Clearing Machine Corp, 419 Mich. 56, 62; 347 N.W.2d 447
(1984); and if not, (2) whether the Court of Claims erred by
denying [UE's] motion to intervene. [Kuhlgert,
500 Mich. at 890.]
February 2017, UE moved this Court to stay the appeal pending
the outcome of the workers' compensation proceedings. We
granted UE's request and agreed to hold the appeal in
abeyance until the workers' compensation magistrate
issued a decision.
Workers' Compensation Board of Magistrates proceeding,
the magistrate examined the text and history of the pertinent
legislation, along with Ostendorf's documents relating to
her status as a foreign national in the United States.
However, before the magistrate issued its opinion, plaintiff
sought relief from the Court of Claims in a third proceeding,
asking the Court of Claims to consider the issue that was
currently before the magistrate-whether Ostendorf's
employment status itself exempted her from the definition of
"employee" for purposes of the WDCA. UE requested
that the Court of Claims decline to address the issue in
deference to the workers' compensation proceedings, and
again sought to intervene so that it could challenge
Ostendorf's status as exempting her from coverage under
the WDCA should the court elect to decide that issue.
the Court of Claims could render a decision, the WDCA
magistrate issued an opinion and concluded that Ostendorf
"was a research scholar employed by MSU pursuant to . .
. the MECEA and therefore considered not to be an
employee." In March 2017, UE filed a claim for review
with the Michigan Compensation Appellate Commission (MCAC).
In April 2017, the Court of Claims again denied UE's
motion to intervene in the third case. UE then filed an
application for leave to appeal that decision in May 2017.
After the appeal was filed, the Court of Claims issued
another opinion and order holding that "the errand that
took Dr. Ostendorf to the accident site was purely personal
and in no way related to her employment at MSU" and,
alternatively, that Ostendorf "was employed by MSU under
the United States J-1 Visa program and as such was not
eligible for workers [sic] compensation." We granted
leave to appeal, consolidated the appeal from the third case
with that in the first case, and ultimately stayed the
proceedings pending the outcome of the proceedings before the
MCAC issued its opinion and order on June 6, 2018, noting the
lack of factual disputes in the case and adopting in full the
magistrate's legal conclusion that Ostendorf "is not
considered an employee of Michigan State University covered
under the Worker's Disability Compensation Act"
because of her employment status. UE filed its application
for leave to appeal in this Court on July 5, 2018. This Court
granted leave and also consolidated the appeal with those in
the other two cases. Ostendorf v Mich. State Univ,
unpublished order of the Court of Appeals, entered September
6, 2018 (Docket No. 344533).
Supreme Court has directed this Court to determine whether
plaintiffs' claims are barred by the exclusive-remedy
provision of the WDCA; and if not, whether the Court of
Claims erred by denying UE's motion to intervene.
EXCLUSIVE REMEDY UNDER MCL 418.131(1)
argues that the Court of Claims erred for two reasons when it
concluded that compensation under the WDCA was not
Ostendorf's exclusive remedy for her injuries as provided
under MCL 418.131(1). First, UE argues that Ostendorf is not
exempted as a foreign national under MCL 418.161(1)(b) of the
WDCA. Second, UE argues that Ostendorf's injuries
occurred while in the course of her employment, and
therefore, workers' compensation is her exclusive remedy.
FOREIGN NATIONALS EXEMPTION UNDER MCL 418.161(1)(B)
first argues that the Court of Claims and the MCAC erred when
they concluded that Ostendorf's employment status removed
her from coverage under the WDCA by way of MCL
418.161(1)(b)-which exempts "foreign nationals"
from the definition of "employee." We disagree.
Court reviews a trial court's findings of fact for clear
error. MCR 2.613(C). Questions of law, including statutory
interpretation, are reviewed de novo. See Thompson v
Thompson, 261 Mich.App. 353, 358; 683 N.W.2d 250 (2004).
MCAC reviews a decision of the Workers' Compensation
Board of Magistrates for whether the decision is supported by
competent, material, and substantial evidence on the whole
record; absent fraud, the MCAC's factual conclusions are
conclusive on appeal if supported by competent record
evidence. Omian v Chrysler Group LLC, 309 Mich.App.
297, 306; 869 N.W.2d 625 (2015). A decision of the MCAC is
subject to reversal if it is based on erroneous legal
reasoning or the wrong legal framework. Id.
"Although judicial review of a decision by the MCAC is
limited, questions of law in a workers' compensation
case, including the proper interpretation of a statute, are
reviewed de novo." Arbuckle v Gen Motors LLC,
499 Mich. 521, 531; 885 N.W.2d 232 (2016).
undisputed that MSU, as an employer, generally comes under
the protections and requirements of the WDCA. The
exclusive-remedy provision under the WDCA requires that
"[a]n employee" receive compensation as
provided under the Act. See MCL 418.301(1) (emphasis added).
The WDCA defines "employee" broadly, see MCL
418.161, but in doing so sets forth the following exemption:
"Nationals of foreign countries employed pursuant to
section 102(a)(1) of the [MECEA], shall not be considered
employees under this act." MCL 418.161(1)(b).
also undisputed that, as the WDCA magistrate had found,
"the Exchange Visitor Program (EVP) is an international
exchange program administered by the Department of State to
implement the MECEA by means of educational and cultural
programs," that "[t]he EVP program is commonly
known as the 'J visa program' as participants in the
program are issued a 'J' non-immigrant visa for entry
into the United States," or that Ostendorf was "in
the United States under a 'J-1 visa.'" Instead,
UE maintains that Ostendorf was not an exempt employee
because MSU, not the State Department, paid her salary.
WDCA magistrate acknowledged that the MECEA was
"subsequently codified in 22 USC Section 2451, et
seq." That section was incorporated by reference in MCL
418.161(1)(b), which sets forth the activities authorized
under the MECEA, and it is now designated as 22 USC 2452. The
latter's Subsection (a) authorizes the Director of the
United States Information Agency, in the interests of