Michigan Court of Appeals; Docket No. 79366; Pubished
Judges Maher, Branson, and Walsh; Unanimous; Per Curiam
Official Michigan Reporter Citation: 149 Mich App 643; Link to Opinion 
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Private Contract (Meaning and Intent)
Uninsured Motorist Benefits: Uninsured Motorist Coverage in General
Uninsured Motorist Benefits: Setoffs Applicable to Uninsured Motorist Case
CASE SUMMARY:
In this unanimous per curiam Opinion, the Court of Appeals upheld the validity of an uninsured motorist setoff clause which required the reduction of uninsured motorist benefits by the amount paid to the injured person under the residual liability provisions of the policy. In this particular case, defendant Mary Lydon was a passenger in a vehicle driven by her husband which collided with an uninsured vehicle. She maintained an uninsured motorist action under her husband's insurance policy, as well as a negligence action against her husband for causing the accident. Under the language of the uninsured motorist setoff clause, any payment under the uninsured coverage would be reduced by any amounts recovered under the residual bodily injury liability coverage. In upholding the validity of the setoff clause, the court distinguished the Supreme Court's decision in Bradley v Mid-Century Ins Co (Item No. 312). In Bradley, an uninsured motorist setoff policy was held invalid to the extent that it permitted uninsured motorist benefits to be reduced by PIP benefits paid. Such a setoff clause was invalid because it would make the uninsured motorist coverage "illusory," and defeat the reasonable expectations of the insureds. Such was not the situation with the setoff involved in the case at bar. The court held that "since uninsured motorist coverage substitutes for residual liability coverage, an insurance contract may provide that benefits paid under one may be set off against benefits payable under the other."
