Michigan Court of Appeals; Docket Nos. 171787 and 179930; Published
Judges Fitzgerald, Corrigan, and Schmucker; 2-1 (with Judge Fitzgerald Dissenting); Opinion by Judge Corrigan
Official Michigan Reporter Citation: 219 Mich App 62; Link to Opinion 
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Uninsured Motorist Benefits: Setoffs Applicable to Uninsured Motorist Case
Legislative Purpose and Intent
CASE SUMMARY:
This 2-1 published Opinion by Judge Corrigan with Judge Schmucker concurring, held that under the facts of this case, workers' compensation and social security disability benefits were a permissible setoff against amounts awarded under the uninsured motorist coverage of an insurance policy. In her opinion, Judge Corrigan emphasized that the uninsured motorist coverage did not permit "double compensation" for the same loss. In her view, the plaintiff had improperly attempted to recast his economic damage claim at arbitration by withdrawing his claim for excess wage loss in order to avoid the effect of the set off language in the policy allowing set off of other sums payable under workers' compensation, disability benefits or similar law. Judge Fitzgerald, in a separate dissenting opinion, would have affirmed the award of the arbitrators concluding that workers' compensation and social security disability benefits were not a permissible setoff under the uninsured motorist policy language, even where that language was clear, because to permit such a setoff would result in the uninsured motorist coverage being illusory and defeat the reasonable expectations of the insured by allowing the setoff of non-like kind benefits from the uninsured motorist coverage.
Plaintiff was injured while driving a truck which was struck by a hit and run driver. Plaintiff filed suit to compel arbitration of his claim under the uninsured motorist coverage of the applicable no-fault policy. An arbitration panel heard the case, and at the suggestion of the neutral arbitrator, plaintiff withdrew his claim for excess wage loss damages to avoid the set off. The arbitrators then determined that plaintiff was entitled to substantial damages with no setoff of workers' compensation and social security disability payments received by the plaintiff. Defendant also argued that the arbitrators' award should be set aside, because the arbitrators made an error of law in holding that a setoff clause in the uninsured motorist provision of the policy requiring deduction of social security disability and workers' compensation benefits was contrary to public policy and was not enforceable.
Judges Corrigan and Schmucker concurred in their opinions that the arbitration award should be reversed on the issue regarding the setoff.
The applicable language of the insurance policy was as follows:
"Any amount payable under this coverage shall be reduced by:
(a) All sums paid or payable under any workers' compensation, disability benefits or similar law..."
In her Opinion, Judge Corrigan noted the purpose of the uninsured motorist provision is to prevent "double recovery," and despite plaintiff’s successful tactic at arbitration in withdrawing his claim for excess wage loss, the set off still should occur under the policy language. Judge Fitzgerald in his dissent would hold the setoff impermissible under Bradley v Mid-Century Insurance Company, 409 Mich 1, 62; 294 NW2d 141 (1980). Pursuant to Bradley, benefits received under an uninsured motorist provision that are not of like kind to those recoverable against the insurer under the uninsured motorist provision are not a permissible setoff even where policy language is clear and unambiguous that a setoff was provided. According to Judge Fitzgerald, if the setoff of workers' compensation and social security disability benefits were to be enforced in the manner defendant seeks, it would make the coverage for non-economic damages illusory and defeat the reasonable expectations of the insured and the policy of the no-fault act to distinguish between economic and non-economic loss.
