Michigan Court of Appeals; Docket No. 112453; Unpublished
Judges Holbrook, Jr., Wahls, and T.M. Burns; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Standards for Deductibility of State and Federal Governmental Benefits [§3109(1)]
Federal Workers Compensation Benefits [§3109(1)]
12% Interest Penalty on Overdue Benefits – Nature and Scope [§3142(2), (3)]
TOPICAL INDEXING:
Federal Workers Compensation Benefits
CASE SUMMARY:
In this unanimous per curiam Opinion, the Court of Appeals addressed two issues on remand from the Supreme Court decision in Sibley v DAIIE, 431 Mich 164 (1988) (Item No. 1146), in which the Supreme Court held that plaintiff was entitled to reimbursement of a previous setoff taken by DAIIE for federal governmental benefits received by the plaintiff.
In the original case, plaintiff was injured in a 1978 automobile accident during the course of his employment with the United States Postal Service. Plaintiff claimed and received $17,221.87 in federal workers' compensation benefits. Plaintiff also claimed no-fault benefits from his automobile insurance, which claim was honored but from which defendant deducted the benefits received pursuant to the Federal Workers' Compensation Act. Plaintiff then pursued a tort claim against the owner and driver of the other vehicle, and received a tort settlement. From this settlement, the United States Department of Labor demanded and received reimbursement of workers' compensation benefits previously paid to the plaintiff. The plaintiff was required to repay the federal government the sum of $12,186.69 plus $2,195.60 in interest. Plaintiff then sought reimbursement of this payment from DAIIE, on the basis that a setoff should not be allowed where plaintiff is required to repay the governmental benefits out of a tort recovery. The Supreme Court held that plaintiff was entitled to reimbursement and remanded the matter to the circuit court. On remand, plaintiff requested a judgment in the amount of $17,221.87, representing the amount setoff by defendant. Plaintiff also sought no-fault penalty interest pursuant to §3142 of the No-Fault Act.
On appeal, plaintiff asserted that the trial court erred in denying his request for the full amount of $17,221.87 taken as a setoff by defendant In affirming the trial court, the Court of Appeals held that plaintiff was entitled to recover only that amount which he repaid to the federal government as reimbursement out of his tort recovery. The Court of Appeals interpreted the Supreme Court decision in Sibley, supra, as entitling plaintiff to reimbursement of only those monies he actually paid back to the federal government.
With regard to plaintiff's claim for no-fault penalty interest, the Court of Appeals affirmed the trial court's decision to disallow any penalty interest under §3142. The Court of Appeals held that since a legitimate question of statutory construction was presented in the case at bar, no-fault penalty interest would not have been appropriate. Referring to the Supreme Court decision in Sibley, supra, the court held that if the Supreme Court had intended that no-fault penalty interest be paid, it would have stated so explicitly. Reference to judgment "plus interest" was interpreted by the Court of Appeals to mean pre-judgment and post-judgment interest only, and not no-fault penalty interest.
[Author's Comment: This decision with regard to disallowing penalty interest is clearly contrary to numerous other cases which have held that no-fault penalty interest is taxable as a matter of right without regard to the good faith or reasonableness of the insurer's non-payment of benefits. See, for example, Cook v DAIIE, 114 Mich App 53 (1982) (Item No. 443) and Bloemsa v ACIA , 174 Mich App 692 (1989) (Item No. 1220). The precedential value of this decision on this issue is, therefore, questionable.]
