Michigan Court of Appeals; Docket No. 67009; Published
Judges Gillis, Holbrook, and Ernst; Unanimous; Opinion by Judge Holbrook
Official Michigan Reporter Citation:130 Mich App 767; Link to Opinion 
STATUTORY INDEXING:
No Lien as to Non Motorist Tort Recoveries [§3116]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
This unanimous Opinion by Judge Holbrook dealt with the right of a no-fault insurer to be reimbursed out of a plaintiff’s tort recovery against a non-motorist tort-feasor under the pre-amended versions of §3116 of the Act This issue has previously produced a split of authority in the Court of Appeals. In the case of Schwark v Lilly (item number 218), a no-fault insurer was denied reimbursement rights out of a plaintiff’s dram shop recovery. In State Farm v Soo Line RR Co (item number 404) a no-fault insurer was held to have a right of reimbursement out of a railroad crossing tort recovery.
The Court noted that under the amended version of §3116, a no-fault insurer may only claim reimbursement in three types of cases: (1) where the insured person is injured by an uninsured motorist, (2) where the insured person is injured in another state, and (3) where the insured person suffers an intentionally caused injury. However, the pre-amendment version of §3116 did not specifically define the types of tort recoveries out of which reimbursement could be claimed. In Workman v DAIIE (item number 143) the Supreme Court had occasion to interpret the application of the pre-amended version of §3116 in a traditional automobile negligence case where §313S of the Act limited tort recovery to non-economic losses. In Workman, the Court stated that a no-fault carrier paying PIP benefits was entitled to reimbursement "only if, and to the extent that, the tort recovery includes damages for losses for which personal protection benefits were paid."
Relying on Workman, this panel of the Court of Appeals held that Auto Club was entitled to reimbursement for no-fault benefits paid to plaintiff out of plaintiff’s highway defect tort recovery. Furthermore, Auto Club was entitled to an offset for future medical expenses against the tort recovery. The Court felt that the analysis employed in State Farm v Soo Line RR was more persuasive than the Schwark decision for the reason that the Workman Court had indicated that the essential purpose of §3116 was to "prevent double recovery."
[Author's Comment: The opinion in the above case fails to mention that the opinion in State Farm v Soo Line RR was the minority opinion prior to this decision. The case of Auto-Owners v Employer's Insurance of Wausaw (item number 382) squarely embraced the rationale of Schwark v Lilly. In addition, the Court of Appeals opinion in Tebo v Havlik (item number 433), although not directly on point, cites Schwark approvingly.]
