Michigan Court of Appeals; Docket No. 107502; Published
Judges Kelly, Sullivan, and Allen; Unanimous; Per Curiam
Official Michigan Reporter Citation: 183 Mich App 299; Link to Opinion 
STATUTORY INDEXING:
Injured Person and Dependents as Payees [§3112]
Payment in Good Faith Defense [§3112]
TOPICAL INDEXING:
Injunctive and Equitable Relief in PIP Cases
CASE SUMMARY:
In this unanimous written Opinion by Judge Kelly, the Court of Appeals made two significant holdings regarding the proper way to pay no-fault benefits to a minor who is injured in an automobile accident. The case involved the two minor sons of Kenneth Commire who were injured in a single car accident when their father was driving. At the time of the accident, Kenneth Commire lived with his sons but was in the process of divorcing their mother. After Kenneth Commire moved out of the family home, defendant Auto Club issued a check to Kenneth Commire for medical expenses incurred by his children. Auto Club paid $7,346.64 on behalf of one son and $278 on behalf of the other son. Kenneth Commire kept this money instead of giving it to his children's guardian or trustee. The children then filed a lawsuit against Auto Club and Kenneth Commire seeking reimbursement. Auto Club argued that its liability to pay no-fault benefits was discharged by §3112 of the No-Fault Act which states in pertinent part, "payment by an insurer in good faith of personal protection insurance benefits to or for the benefit of a person who it believes is entitled to the benefits, discharges the insurer's liability. . . ." In its first holding, the court ruled that defendant Auto Club had no basis to conclude that Kenneth Commire was entitled to the benefits. In the earlier case of Geiger v DAIIE (Item No. 510), the court held that the right to collect no-fault insurance benefits accrues to the injured person even though another person may be legally responsible for the expenses incurred as a result of the injury. Therefore, under §3112, the no-fault benefits were payable to Kenneth Commire's minor children. Accordingly, defendant Auto Club did not, in good faith, mistake the party to whom the benefits were payable. Therefore, §3112 does not operate to discharge Auto Club.
In its second holding, the court ruled that Auto Club's obligation to pay the minor children was partially discharged by §403 of the Probate Court. Under this section, a person who owes a duty to pay money to a minor may perform that duty by paying no more than $5,000 a year to the parent of a minor. The court held that under §403, this permissible payment is not limited to parents with whom the minor actually resides. Rather, the protection of §403 includes payments to non-resident parents. This construction is made clear by a recent amendment to the Probate Code that occurred in 1979.
Therefore, under the facts of this case, defendant Auto Club discharged its obligation to pay $278 to Robert Commire by delivering that amount to his father. Likewise, $5,000 of Auto Club's obligation to pay $7,346.64 to Ronald Commire was discharged by delivery of the money to Kenneth Commire, leaving an unpaid balance of $2,346.64 plus interest, costs, and fees which Auto Club still owes Ronald Commire.