Michigan Court of Appeals; Docket No. 253886; Published
Judges Hoekstra, Jansen and Kelly; unanimous; per curiam
Official Michigan Reporter Citation: 266 Mich. App. 726, Link to Opinion 
STATUTORY INDEXING:
PIP Liens Regarding Out of State Tort Claims [3116(2)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this published unanimous per curiam opinion, the Court of Appeals held that a Michigan tort claimant who settled a tort claim against a non-immune out-of-state tort-feasor for noneconomic damages only cannot cut off the subrogation rights of the claimant’s Michigan no-fault PIP insurer for reimbursement of PIP benefits the PIP insurer previously paid to the claimant. The decision in this case is written in such a way that not all the salient facts are clearly discernable. Presumably, this case deals with a Michigan claimant who settled a tort claim against an out-of-state defendant which arose out of an out-of-state accident. The defendant was not insured under the Michigan No-Fault Act and therefore, had no tort immunities of any type. Therefore, the claimant had the right to sue the defendant for all damages, noneconomic and economic, including economic damages for which the claimant received no-fault PIP benefits from his no-fault insurer. In his settlement with the out-of-state tort-feasor, the claimant received $197,500 for what the Court of Appeals characterized were “noneconomic damages and economic damages beyond the statutory limits for PIP benefits recovery.” The court further stated that the claimant “did not make a claim for any of those expenses or damages already redressed through PIP benefits.” After the claimant settled his case with the tort-feasor, the claimant’s no-fault PIP insurer sued the out-of-state tort-feasor on the theory that the no-fault insurer was subrogated to the claimant’s right to recover economic loss damages against the tort-feasor, including damages for which the claimant received PIP benefits. The court stated that the no-fault insurer became subrogated to the claimant’s right at the point in time when the no-fault insurer paid the PIP benefits. Therefore, the court reasoned that the claimant could not cut off the no-fault insurer’s subrogation rights by entering into a release with the tort-feasor at a point in time after which the no-fault insurer’s subrogation rights attached. Accordingly, the tort-feasor had ongoing liability to the claimant’s no-fault insurer under this subrogation theory. In this regard, the Court of Appeals held:
“. . . although defendants are not liable under the no-fault act for the payment of PIP benefits to [the injured claimant], this does not automatically mean that they are not liable for the same economic damages redressed by PIP benefits based on fault. . . . Such damages would include . . . medical expenses and lost wages, which are also covered by PIP benefits. As such, defendants’ assertion that [injured claimant] had no right against them for PIP benefits means little where the [injured claimant] possessed the right to recover the same type of damages from defendants in his tort negligence suit. While [the injured claimant] chose not to request such damages so as to relieve himself of the duty to reimburse [his no-fault insurer] out of his recovery pursuant to MCL 500.3116, he still possessed the right to request such damages. Therefore, [claimant’s no-fault insurer], as the insured’s subrogee, also possessed the right to request such damages. . . . As noted above, [claimant’s no-fault insurer] became subrogated to its insured’s right against defendants for the type of damages provided in PIP benefits when [claimant’s no-fault insurer] paid such benefits. [Claimant’s no-fault insurer] paid PIP benefits to its insured before the signing of the release in question and even before the filing of [the injured claimant’s] suit against defendants in tort for negligence. Therefore, [claimant’s no-fault insurer] was already standing in ‘the shoes of the subrogor’ insured with regard to the paid benefits and [injured claimant] no longer had the ability to sign away [no-fault insurer’s] rights in this regard. For this reason, the September 18, 2003, release did not extinguish [no-fault insurer’s] subrogation claim.”
