Michigan Court of Appeals; Docket No. 174510; Published
Judges Markman, Wahls, and Meister; Unanimous; Opinion by Judge Markman
Official Michigan Reporter Citation: 216 Mich App 217; Link to Opinion 
STATUTORY INDEXING:
PIP Insurer’s Right to Reimbursement for Claims Paid Arising Out of Uninsured Vehicle Injuries [§3177(1)]
TOPICAL INDEXING:
Uninsured Motorist Benefits
CASE SUMMARY:
In this unanimous published Opinion by Judge Markman, the Court of Appeals held that under the "subrogation" provisions of §3177, a no-fault insurer was entitled to sue an uninsured tortfeasor to recover no-fault PIP funeral and burial expenses it paid to its insured decedent as a result of an accident arising out of the uninsured vehicle. The court permitted this subrogation claim, even though the decedent's insurance company would still have been required to pay the PIP benefits had the uninsured driver been insured. The decedent in this case was a minor child who was killed while riding a bicycle that was struck by an uninsured driver. Plaintiff Citizens Insurance Company insured the minor child's parents and paid no-fault PIP benefits. Those benefits would have been paid regardless of the insurance status of the driver of the car who caused the accident. In holding that §3177 permitted the decedent's insurance company to sue the uninsured tortfeasor for reimbursement of PIP benefits, the court stated the following:
"If defendant had been properly insured, plaintiff would not have been able to recover this expense from defendant because the no-fault act abolishes certain tort liability when no-fault insurance is in effect. . . . However, an uninsured motorist does not share in this immunity and may be sued under the no-fault act for recovery of personal protection insurance benefits that an insurer is obligated to pay.... Thus, under this statutory section [§3177], plaintiff was entitled to recover from defendant the personal protection insurance benefits that it was contractually obligated to pay.... Section 3177 was one of the measures enacted by the Legislature to ensure that owners and registrants of motor vehicles required to be registered in Michigan obtain the requisite security.... Thus, given that plaintiff seeks to recover for no-fault benefit it was obligated to pay, its claim is properly brought under §3177. Under §3177, plaintiff was entitled to bring a direct action In fact, §3177 has been referred to as a subrogation provision."
The court then addressed the question of whether plaintiff insurance company could recover from the uninsured defendant, the sum of $97,000 it paid to decedent's estate in the form of uninsured motorist benefits. The court ruled that plaintiff insurance company was entitled to pursue such a reimbursement claim as "an action for equitable subrogation." The court stated that equitable subrogation claims are independent of wrongful death claims, and thus are not subject to the requirements and preconditions of the wrongful death statute which only permit wrongful death claims to be pursued by the personal representative of the estate of the decedent. The court noted that the doctrine of equitable subrogation rests upon the principal that "one who, in order to protect the security held by him, is compelled to pay a debt for which another is primarily liable, is entitled to be substituted in the place of and to be vested with the rights of the person to whom such payment is made, without agreement to that effect." The court held that although §3177 does not authorize recoupment of uninsured motorist benefits, the doctrine of equitable subrogation permits such a claim where the plaintiff insurance company, as in this case, compensates its policy holder for damages that should have been the responsibility of the uninsured tortfeasor.
