Michigan Court of Appeals; Docket No. 110157; Published
Judges McDonald, Michael J. Kelly, and Murphy; Unanimous
Official Michigan Reporter Citation: 182 Mich App 611; Link to Opinion 
STATUTORY INDEXING:
PIP Liens Regarding Out of State Tort Claims [§3116(2)]
No Lien As to Noneconomic or Excess Economic Loss [§3116(4)]
General / Miscellaneous [§3135]
TOPICAL INDEXING:
No-Fault Insurer Claims for Reimbursement
CASE SUMMARY:
In this unanimous Opinion by Judge Murphy, the Court of Appeals interpreted the reimbursement and lien provisions of §3116(2), allowing a no-fault insurer paying PIP benefits to obtain recovery of those benefits from the injured party's tort claim where the accident occurred outside of the state of Michigan.
In this case, Jewell was driving her car in Idaho with a passenger, Barton Hoag. Hoag was injured and received $23,000 in no-fault insurance benefits from Allstate. At the time of the accident, both Hoag and Jewell were domiciled in Michigan, and Jewell's car was insured by defendant Auto Club.
Hoag received a $30,000 settlement from Jewell's liability coverage with Auto Club. However, before execution of this settlement between Hoag and Jewell, Hoag's no-fault insurer, Allstate, placed the third-party insurer on notice that it was claiming a lien on the settlement for no-fault benefits paid to Hoag. The third-party settlement was paid to Hoag without recognition of the lien. Allstate then filed suit against Auto Club, Jewell and Hoag seeking reimbursement of the $23,000 it paid in no-fault benefits to Hoag.
The Court of Appeals interpreted the provisions of §3116(2) and (3) as permitting an insurer who has paid no-fault benefits to its insured to receive reimbursement from the insured's tort recovery only when the tort recovery compensates for damages already recovered through the no-fault benefits paid.
Allstate claimed that pursuant to §3135(2) of the Act, defendant Jewell's tort liability was not abolished because her liability did not arise from her use of the motor vehicle within Michigan as required by that section. Therefore, Jewell remained liable for both non-economic and economic losses. Consequently, Allstate claimed that the clear language of §3116(2) mandated reimbursement since the claim arose from an accident which took place outside of Michigan, and, therefore, Hoag was entitled to claim both economic and non-economic losses. The Court of Appeals relied upon the decision in Workman v DAIIE, 404 Mich 477 (1979), which found that the right to reimbursement under §3116 was limited only to situations where, and only to the extent that, the tort recovery includes damages for losses for which personal injury protection benefits were paid. The purpose of §3116 is to prevent double recovery of economic loss by those persons who retained their right to sue for economic loss under the Act.
The Court of Appeals in this case said it made no sense to hold that just because the accident in this case occurred outside the state of Michigan the injured party should be allowed a double recovery of economic losses. However, the record below was unclear as to whether Hoag's recovery from Jewell's insurer was for economic or non-economic loss. If Hoag recovered economic losses, Allstate is entitled to reimbursement to whatever extent the payment was for economic losses. However, if the settlement was for non-economic loses, Allstate is not entitled to reimbursement. The case was remanded for further proceedings.
