Michigan Court of Appeals; Docket No. 70094; Published
Judges Bronson, R. B. Burns, and Borsos; Unanimous; Opinion by Judge R. B. Burns
Official Michigan Reporter Citation: 135 Mich App 76; Link to Opinion 
STATUTORY INDEXING:
Coordination with Other Health and Accident Medical Insurance [§3109a]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
This unanimous Opinion by Judge R. B. Burns attempts to resolve the priority of payment problem which is involved where a no-fault policy and a health insurance policy both contain "coordination of benefits" provisions making that particular policy secondary to the other.
The "escape clause" in the health insurance policy stated, "under no-fault legislation the benefits of this plan shall be determined after the benefits provided by no-fault legislation in those states where such legislation is in force and allowable by law."
The "coordinated benefits clause" in the no-fault policy stated, "this insurance does not apply to the extent that any amounts are paid or payable for allowable expenses to or on behalf of such named insured or relative under the provisions of any other insurance, service, benefit or reimbursement plan providing similar direct benefits, without regard to fault, for bodily injury sustained as a result of the operation, maintenance, or use, including the loading or unloading, of a motor vehicle."
The circuit court held that there was no conflict between these two "escape clauses" because no money was "paid or payable" under the health insurance policy and, therefore, the no-fault coordinated policy was primary.
The Court of Appeals reversed and adopted the reasoning in the non-no-fault opinion of Farm Bureau v Horace Mann Insurance Company, 131 Mich App 98 (1983). That case adopted the so called "minority view" that where coordination clauses conflict, bom must be rejected and the liability for the insured's claim must be prorated between the insurers. Based upon that rule of law, this panel of the Court of Appeals concluded:
"We agree with the reasoning in Farm Bureau and adopt such reasoning. Each insurer's liability will be prorated based on the proportion of the combined policy limits represented by the limits of each insurer's policy. Reversed."
[Author's Comment: It is unclear how this "proration" will be mathematically calculated given the fact that a no-fault insurer has unlimited liability for medical expenses under the statute. Perhaps, for purposes of working the computation, a no-fault insurer's maximum exposure for medical expenses will be considered to be $250,000 as set forth in the catastrophic claims provision of the statute (§3104). Under that section, medical expenses in excess of $250,000 are handled by the association.]
