Michigan Court of Appeals; Docket #311141; Unpublished
Judges Owens, Jansen, and Hoekstra; Unanimous; Per Curiam;
Official Michigan Reporter Citation: Not applicable; Link to Opinion 
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Underinsured Motorist Coverage: Underinsured Motorist Coverage in General
Underinsured Motorist Coverage: Setoffs Applicable to Underinsured Motorist Cases
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion, the Michigan Court of Appeals reversed the trial court grant of summary disposition in favor of plaintiff and held that, in reliance upon the Supreme Court decision in Ile v Foremost Ins Co, 493 Mich 915 (2012), the provisions of State Farm’s underinsured motorist coverage providing for benefits with limits of $20,000/$40,000 were not “illusory” and were, therefore, enforceable.
In this case, plaintiff was injured in an automobile accident when his vehicle was struck by defendant Busser. Busser’s liability limit provided for coverage in the amount of $20,000/$40,000 liability limits. Plaintiff Showman had underinsured coverage through State Farm in the same limits as defendant Busser, which are the minimum required by Michigan statute [MCL 500.3009(1)], in the amount of $20,000 per person and $40,000 per occurrence.
The State Farm policy defined an underinsured motor vehicle as one where there was a liability insurance policy or bond but the total limits of such insurance or bond “are less than the underinsured motor vehicle coverage limits of this policy” or “have been reduced by payments to persons other than you and resident-relatives to less than the underinsured motor vehicle coverage limits of this policy.”
Plaintiff argued that the coverage under the underinsured motorist coverage was illusory because those limits equaled the statutory minimum required by Michigan law for liability coverage and, therefore, there could never be any payment of underinsured motorist coverage under the State Farm policy. State Farm contended that the underinsured motorist coverage was not illusory because of the language in its policy that allowed for payments in situations where the liability limits were “reduced by payments to persons other than the named insured and resident-relatives.” Further, State Farm argued that the underinsured coverage also provided coverage when in another state with lower minimum liability limits such as Ohio which has limits of $12,500.
In reversing the trial court determination in favor of the plaintiff, the Court of Appeals relied upon the Supreme Court decision in Ile v Foremost Ins Co, 493 Mich 915 (2012), which found similar language in the Foremost policy to not be illusory coverage and to be enforceable. The court stated that when looking at the plain language of the policy, as a whole, the policy is not illusory. Referring to the language which allows coverage in situations where the liability limits of another state are less than $20,000, and the language that allows coverage where the liability limits are reduced by payments to others, the court stated that, “by the plain language of the policy, there are circumstances where the insured’s coverage is triggered, and thus, the policy is not illusory.”