Michigan Court of Appeals; Docket # 331082; Unpublished
Judges Talbot, Beckering and M.J. Kelly; Unanimous, per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
General/Miscellaneous
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals affirmed the lower court’s holding that pursuant to the plain language of MCL 500.3116, plaintiff Grange Insurance Company (“Grange”) was not entitled to reimbursement for PIP benefits it had paid, or a subtraction from the PIP benefits that might become payable in the future, because the facts of the case did not fit into any of the exceptions under MCL 500.3116.
After hearing a “loud pop,” Heather Achenbach lost control of her 2001 Ford Windstar. The Windstar rolled multiple times and Achenbach and her passengers, Kiara and Hannah Achenbach, were severely injured. The crash was allegedly caused by a defective axle manufactured by defendant Benteler Automotive Corporation (“Benteler”) and installed by defendant Ford Motor Company (“Ford”). Grange filed this reimbursement action after allegedly paying more than $340,000 in PIP benefits. Grange asserted it would be required to pay additional benefits on behalf of Kiara and Hannah. Grange brought claims for negligence, breach of express and implied warranties, and violation of the Michigan Consumer Protection Act. In response, defendants moved for summary disposition, arguing that Grange’s claim was barred by MCL 500.3116. The trial court granted summary disposition for defendants.
The Court of Appeals affirmed and, in so ruling, the Court noted that under MCL 500.3116(1), if a tort claim is based on the same accidental bodily injury as the claim for PIP benefits, the no-fault insurer cannot subtract from the PIP benefits it owes to the insured. Applying this rationale, the Court said that because the product liability claim and the PIP benefits were “based on the same accidental bodily injury,” plaintiff could not subtract from the PIP benefits paid or future benefits payable to Kiara and Hannah, unless an exception in MCL 500.3116(2) applied. Therefore, the Court of Appeals examined whether an exception in MCL 500.3116(2) was applicable.
Looking at the language of MCL 500.3116(2), the Court of Appeals found that there were three exceptions that would allow subtraction or reimbursement: (1) a claim arising from an out-of-state accident, (2) a tort claim against an uninsured driver or (3) an intentional tort claim. Additionally, the insured must have actually received benefits duplicative of the PIP benefits he or she recovered in the tort. Therefore, to receive reimbursement for PIP benefits, the following two elements must be met: (1) the claim against the third-party tortfeasor must fall within one of the three exceptions and (2) the insured must have actually received benefits duplicative of the PIP benefits he or she recovered in tort.
Applying these principles to the present case, the Court of Appeals found that Grange’s claims did not fall within any of the exceptions in MCL 500.3116(2). Further, the Court noted that in a settlement agreement with defendants, Kiara and Hannah did not actually receive benefits duplicative of the PIP benefits paid by plaintiff. Therefore, under the plain language of MCL 500.3116(2), plaintiff was not entitled to reimbursement of the PIP benefits it paid, or a subtraction from the PIP benefits that may become payable in the future. Finally, the Court found that MCL 500.3116 had been applied to cases where the no-fault insurer was seeking a lien in its insured’s recovery and in cases where the no-fault insurer was acting as a subrogee of its insured’s rights.
Therefore, in order to be reimbursed for PIP benefits paid or payable, (1) the claim against the third-party tortfeasor must fall within one of the three situations set forth in the first part of the first sentence and (2) the insured must have actually received benefits duplicative of the PIP benefits in its recovery in the third-party tort. Here, the claim against Benteler Automotive and Ford Motor Company does not fall within the three situations set forth in the first part of the first sentence of § 3116(2). Further, in their settlement with Benteler Automotive and Ford Motor Company, the insureds, Kiara and Hannah, did not actually receive benefits duplicative of the PIP benefits paid by Grange Insurance. Therefore, under the plain language of the statute, Grange Insurance is not entitled to a reimbursement for the PIP benefits it paid or a subtraction from the PIP benefits that may become payable in the future.
Grange argued that Citizens Ins Co v Tutttle, 411 Mich 536; 309 NW2d 174 (1981) allowed it seek reimbursement without an application of MCL 500.3116. However, the Court of Appeals explained that Tuttle was interpreting MCL 500.3135(2) and it was distinguishable from this case. Further, the Court had previously interpreted much of the broad language covered in Tuttle as non-binding dicta in Citizens Ins Co v Pezzani & Reid Equip Co (On Remand), 202 Mich App 278; 507 NW2d 833 (1993). Finally, the Court rejected Grange’s argument that State Auto Ins Co v Velazquez, 266 Mich App 726; 703 NW2d 223 (2005) controlled this case because Velazquez did not interpret the three situations set forth in MCL 500.3116(2).
However, Tuttle was interpreting MCL 500.3135(2), which provided that “tort liability arising from the ownership, maintenance, or use within this state of a motor vehicle . . . is abolished” with certain exceptions. Interpreting that statute, the Court concluded that because the tort liability against the cow’s owner arose from his allegedly negligent keeping of a cow, not from the “ownership, maintenance, or use” of a motor vehicle, § 3135(2) did not abolish the cow owner’s tort liability. Tuttle, 411 Mich at 545-546. Therefore, although, out-of-context, the above quote appears to be directly on point, in context, it only refers to whether tort liability was abolished under § 3135.
Thus, the Court affirmed the lower court’s grant of summary disposition for the defendants.
