Michigan Supreme Court; Docket Nos. 108600 and 109351; Published
Unanimous Opinion by Justice Brickley
Official Michigan Reporter Citation: 460 Mich 180; Link to Opinion 
STATUTORY INDEXING:
Standards for Deductibility of State and Federal Governmental Benefits [§3109(1)]
Social Security Disability Benefits [§3109(1)]
TOPICAL INDEXING:
Equitable Estoppel
CASE SUMMARY:
In this unanimous Opinion by Justice Brickley, the Supreme Court held that its earlier decision in Profit v Citizens Insurance Company of America, 444 Mich 281 (1993) [Item No. 1632] should be retroactively applied so that the plaintiff insurance companies in the present case could obtain reimbursement from the defendant insureds for the amount of no-fault wage loss benefits that were overpaid because social security benefits were not withheld from those wage loss benefits.
The court further held that the insurer's right to reimbursement is a common law right which is equitable, and thus, it was necessary to remand the case to the trial court for an evidentiary hearing in order to determine if reimbursement would be equitable under the specific circumstances of this case. Finally, the Supreme Court held that the doctrine of laches did not bar the insurers' claim for reimbursement, given the fact that the reimbursement claim was asserted by the insurers within the applicable six (6) year statute of limitations.
The Supreme Court’s decision in Profit v Citizens Insurance, supra, reversed the Court of Appeals, and held that social security disability benefits should be subtracted from no-fault work loss benefits. In holding that this decision should be given retroactive application, the Supreme Court noted the general rule that decisions should be given full retroactive application, unless the decision overrules clear and uncontradicted case law. This was not the situation with the decision in Profit v Citizens Insurance, supra.
The Supreme Court noted that prior to the Court of Appeals decision in Profit, the Supreme Court had, on two (2) separate occasions, ruled that social security survivor benefits were to be offset against no-fault personal protection insurance benefits under section 3109(1). These holdings came in the cases of O 'Donnell v State Farm, 404 Mich 524 (1979) [Item No. 142] and Thompson v DAIIE, 418 Mich 610 (1984) [Item No. 703]. Therefore, the Supreme Court held that its decision in Profit overruling what was clearly an aberrant Court of Appeals decision,
"... was not an unforeseeable decision that had the effect of changing the law, nor did it establish a new rule of law. Rather, it reaffirmed the existing law that was misinterpreted by the Court of Appeals. Accordingly, we hold that the Court of Appeals misinterpreted the law as it existed at the time. This misinterpretation was in direct conflict with the plain language of the statute, the legislative intent, and two prior decisions of this Court. Therefore, this Court's subsequent overruling of the Court of Appeals is to be given retroactive application in the present cases."
In light of the court's ruling extending full retroactive application to Profit, the defendant insureds in this case had received payments to which they were not entitled. However, that did not necessarily mean the plaintiff insurers were entitled to reimbursement of those overpayments. The court held that whether the insurers were entitled to reimbursement and the amount of the reimbursement was an issue that should be decided by application of the equitable doctrine of unjust enrichment and equitable restitution.
In this regard, the Supreme Court stated, "Because [plaintiff insurers'] only right to recover overpayments is equitable in nature, the trial courts must consider all factors in determining whether [plaintiff insurers] are entitled to reimbursement." Therefore, the cases were remanded for evidentiary hearings to determine whether the insurers were equitably entitled to reimbursement, and if so, the amount of the reimbursement due. Regarding the remand process, the Supreme Court stated:
"In making this equitable determination, the trial court should consider all relevant circumstances. Those circumstances include (1) the timing of [defendant insurers'] notice to [plaintiff insureds] that they were receiving social security benefits, and (2) the timing of [plaintiff insurers'] notice to [defendant insureds] that they were asserting a right to set off the amount of the social security payments. The trial court should also bear in mind the relevant legal background. Among the relevant considerations in this vain are (I) that the no-fault act and court decisions encourage prompt payment of insurance benefits even when there is some doubt about the insureds' entitlement to the payment, and (2) under MCR 7.215(C)(2), the Court of Appeals decision in Profit was binding authority from the date it was issued until this Court reversed it. Finally, in determining plaintiffs' entitlement to reimbursement, the trial court should consider any detrimental reliance claim made by defendants."
Finally, the court held that the doctrine of laches did not bar the claim for reimbursement, because laches is concerned with unreasonable delay and "generally acts to bar a claim entirely in much the same way as a statute of limitation." In holding the doctrine of laches inapplicable, the Supreme Court stated, "Here, because MEEMIC filed this case within the six year period of limitation, any delay in the filing of the complaint was presumptively reasonable and the doctrine of laches is simply inapplicable."
