Michigan Court of Appeals; Docket No. 190815; Unpublished
Judges Cavanagh, Reilly, and White; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Uninsured Motorist Benefits: Setoffs Applicable to Underinsured Motorist Cases
Private Contract (Meaning and Intent)
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion, the Court of Appeals interpreted the "set-off" language of uninsured motorist insurance coverage provisions in Auto Club Insurance Association's policy, and found it to be ambiguous, thereby resulting in affirmance of an arbitration award finding that the set-off could not be used to reduce the amount of recovery claimed by plaintiff by amounts paid under the liability portion of the policy.
In this case, an unidentified vehicle struck plaintiffs car, causing the car to hit a guardrail resulting in the death of one of the occupants, and injuries to all of the other occupants.
AAA insured plaintiff’s car under a liability policy with limits of $20,000 per person, and $40,000 per occurrence. That same policy also provided uninsured motorist benefits with the same $20,000/540,000 limits.
Claims were brought against plaintiff as the driver of that vehicle, resulting in AAA paying $20,000 to the estate of the person killed, and the remaining $20,000 was split among the injured parties, not including plaintiff. Thereafter, plaintiff and all of the other injured parties, together with the estate, brought an action seeking benefits under the uninsured motorist portion of plaintiff s policy. In response to plaintiffs claim for his injuries, AAA asserted a provision in its uninsured motorist endorsement allowing it to offset the amount it paid under the liability portions of its policy. The language of the uninsured motorist insurance coverage policy provision states:
"Any amount payable will be reduced by:
payment made under the Liability Insurance Coverage of this policy;"
It was AAA's claim that the language allowing for set-off for "payment made under the liability insurance coverage of this policy" allowed it to offset from plaintiffs claim the full $40,000 that it had already paid under its residual liability policy provision. The matter was submitted to arbitration, and the arbitrators concluded that the set-off provision was ambiguous and unenforceable.
The Court of Appeals upheld the arbitrators' decision and refused to vacate the award, finding that the policy language of the uninsured motorist set-off provision was ambiguous:
"The second part of the set-off provision does not identify the recipient of the payment that will reduce an individual's UM recovery. Defendant has taken the position that amounts paid to individuals other than the plaintiff.. .should be deducted from any amount plaintiff would have been entitled to recover under the UM provisions. However, an alternative interpretation of the second subpart would limit the amount an individual's UM recovery is reduced to the amount received by that individual under the liability provisions of the policy. According to this interpretation, the $20,000 payable to plaintiff under the UM provision would not be reduced because he did not receive any amount under the liability provisions of the policy.
Because the second subpart of the set-off provision may reasonably be understood in different ways, it is ambiguous and must be construed against the insurer."
In refusing to vacate the arbitrators' award, the court held that the set-off language did not apply to the plaintiff who did not receive any part of the liability coverage payment under AAA's liability coverage.
