Michigan Court of Appeals; Docket #267924; Unpublished
Judges Zahra, Neff, and Owens; unanimous; per curiam
Official Michigan Reporter Citation: Not applicable, Link to Opinion 
STATUTORY INDEXING:
Not applicable
TOPICAL INDEXING:
Revised Judicature Act – Miscellaneous Provisions
Underinsured Motorist Benefits: Underinsured Motorist Coverage in General
CASE SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals determined that an insurer may be liable for underinsured motorist benefits, but only to the extent of the underinsured motorist’s individual liability.
In this case, the defendant’s decedent, Dorothy Blanchard, was killed while a passenger in a vehicle driven by David Gorman which collided with a vehicle driven by Lawrence DeHaan. Blanchard’s estate brought a wrongful death action against both drivers. The estate settled with DeHaan’s insurer for his $100,000 policy limits. The estate then settled with Gorman’s insurer for $50,000. Gorman had a no-fault policy with a $500,000 limit and a $1,000,000 umbrella policy. The estate then sought benefits pursuant to the decedent’s $250,000 underinsurance policy with plaintiff. Plaintiff brought this action for declaration that the decedent was not underinsured because of the amount available under Gorman’s insurance policies. The trial court granted plaintiff’s motion for summary disposition. The Court of Appeals affirmed in part, reversed in part, and remanded for further proceedings.
The Court of Appeals first agreed that DeHaan was the only underinsured driver and noted that the estate settled for DeHaan’s $100,000 policy limits. The court then noted that because the estate settled with Gorman for $50,000, that left $100,000 to be paid pursuant to the underinsurance policy. However, the court noted that under MCL 600.2956, when seeking damages for wrongful death, the liability of each defendant is several only. Therefore, whether the decedent’s insurer is liable for the $100,000 balance depends on the extent of DeHaan’s responsibility for the accident. Because the trial court did not address the extent of each party’s liability, the Court of Appeals remanded the matter for further proceedings. In this regard, the court stated:
“We conclude that defendant correctly identified DeHaan as the only underinsured driver in this situation, but this fact alone did not necessarily establish defendant’s entitlement to recover the full policy limit from plaintiff. . . . The policy specified that underinsurance benefits were payable when ‘[t]he limits of liability under any applicable bodily injury liability bonds or policies have been exhausted by payment of judgments or settlements. . . .’ The settlement with DeHaan for the limits of his policy did indeed exhaust available insurance from the only underinsured driver. The decedent’s underinsurance endorsement with plaintiff further provided that ‘the limit of liability shall be reduced by all sums paid because of the “bodily injury” by or on behalf of persons or organizations who may be legally responsible.’ Because the decedent’s policy with plaintiff had a limit of $250,000, and her estate received $50,000 from Gorman’s insurer and $100,000 from DeHaan’s insurer, the potential liability limit under plaintiff’s policy was reduced to $100,000.
However, whether DeHaan was responsible for damages beyond what his own insurance covered, thus triggering plaintiff’s actual liability for underinsurance benefits, depends on the extent of DeHaan’s responsibility for the decedent’s death. MCL 600.2956 provides that, but for exceptions not applicable here, in actions ‘seeking damages for personal injury, property damage, or wrongful death, the liability of each defendant for damages is several only and is not joint.’ See also MCL 600.2957(1) and MCL 600.6304(1), (4). Accordingly, each tortfeasor incurred liability to the decedent’s estate only to the extent of his respective share of responsibility. There was no indication in the record of a judicial determination or stipulation concerning actual total damages or percentages of fault. Although plaintiff was liable for underinsurance benefits in connection with DeHaan, this liability existed only to the extent to which the settlement at the policy limit from DeHaan’s insurer fell short of DeHaan’s actual share of responsibility for actual total damages. Remand is thus necessary for these determinations.”
The court then addressed plaintiff’s argument that because there was other insurance available that exceeded its policy limits, it had no liability. The policy provided that “if there is other applicable insurance available under one or more policies or provisions of coverage . . . any insurance we provide with respect to a vehicle you do not own shall be excess over any collectable insurance providing coverage on a primary basis.” Based on this language, the court agreed that the underinsurance provision was secondary to Gorman’s policy but explained that the other insurance provision merely reduced plaintiff’s liability to the extent that its insured collected from the other policy. Further, even though Gorman’s policy had a $500,000 limit, that did not mean the decedent’s estate was entitled to collect up to the $500,000 limit. Instead, the decedent’s estate was only entitled to collect to the extent of Gorman’s liability. In this regard, the court explained:
“The underinsurance endorsement . . . makes the underinsured motorist coverage secondary to the insurance coverage available through David Gorman. David Gorman did, indeed, have an insurance policy that applied to the incident giving rise to the insured’s claim. However, the above-quoted policy provision does not extinguish plaintiff’s liability under its underinsured motorist coverage merely because Gorman’s policy limits exceed the limits of the underinsured motorist coverage issued by plaintiff. . . . Contrary to plaintiff’s claim, Gorman’s insurance is not collectable up to $500,000 merely because he has a $500,000 policy limit. Rather, Gorman’s insurance is only collectable to the extent of Gorman’s liability. Here, defendant settled with Gorman’s insurer for $50,000. Nothing in the record or presented on appeal suggests that this settlement was made against the terms of the decedent’s policy with plaintiff, was made in bad faith, or otherwise failed to reflect the extent of Gorman’s liability to the decedent’s estate. The ‘other insurance’ provision provides nothing more than a set-off of the Gorman settlement against the potential liability plaintiff owed the decedent’s estate under the underinsured motorist coverage.”
