Michigan Supreme Court; Docket No. 62185; Published
Opinion by Justice Levin; (With Justice Ryan, Coleman, Williams, and Moody Concurring in Result)
Official Michigan Reporter Citation: 410 Mich 73; Link to Opinion 
STATUTORY INDEXING:
Workers Comp Liens Regarding Auto Tort Claims [§3116]
TOPICAL INDEXING:
Workers Disability Compensation Act (MCL 418.1, et seq.)
CASE SUMMARY:
In an Opinion per Justice Levin, the Supreme Court has finally addressed the issue of the right of a workers' compensation insurance company to be reimbursed out of an employee's no-fault tort recovery pursuant to the lien provisions of the Workers' Compensation Act (MCLA 418.827). In the majority opinion, the Court held that where the workers' compensation carrier seeks reimbursement for certain payments it made which substituted for no-fault benefits that would have been otherwise payable had it not been for the governmental setoff provision of §3109(1), the workers' compensation carrier has no right of reimbursement out of the third party tort recovery. In that case, the right of the workers' comp carrier to be reimbursed is coextensive with the no-fault carrier's reimbursement rights. However, the Court went on to say that "the payment of workers' compensation benefits which do not substitute for no-fault benefits, because they exceed no-fault benefits in amount or duration, given rise to a right to reimbursement from third party tort recoveries in the same manner as the payment of workers' compensation benefits for non-motor vehicle related injuries." In reaching its conclusion, the Court adopted a statutory interpretation - legislative intent analysis and, accordingly, concluded that the workers' compensation lien had been modified in those cases where the no-fault statute was operative. In commenting on the interrelationship between the two statutes, Justice Levin stated:
"We are persuaded that had the legislature considered the Act's application to the case at bar — a motor vehicle accident occurring in the course of employment — it would have explicitly provided that when a workers' compensation carrier provides benefits which would be payable by the no-fault insurer had the accident not occurred in the scope of employment but are instead payable by the workers' compensation carrier because of the No-Fault Act's mandatory setoff provision, its reimbursement rights are coextensive with those of the no-fault insurer whose liability it replaces and are thus limited to cases where there is tort recovery for basic economic loss. That conclusion does not, however, compel total nullification of the workers' compensation carrier's reimbursement rights in cases involving motor vehicle accidents. When the carrier pays benefits which do not substitute for no-fault benefits, because they exceed no-fault benefits in amount or duration, it should be treated like all other workers' compensation carriers and be entitled to reimbursement out of any third party recovery."
In a further passage evidencing the Court's desire to equate the reimbursement rights of a workers' comp carrier to those of a no-fault insurer, the Court stated:
"The legislature provided that no-fault insurers are entitled to reimbursement from third party tort recoveries only to the extent recovery represents compensation for elements of loss compensated by no-fault benefits. The Legislature's decision to deny reimbursement rights unless there is double recovery expresses a judgment that tort recovery for noneconomic loss and excess economic loss should not be reduced by no-fault economic loss benefits. If that decision is not extended to workers' compensation benefits which substitute for no-fault benefits, the third party tort recovery of a person incurred in a motor vehicle accident in the course of his employment would be reduced by so much of the PIP benefits 'otherwise payable' as are paid by the workers' compensation carrier, while third party tort recovery of a person not injured in the course of his employment would not be reduced. We are persuaded...that the legislature did not intend that the third party recovery of a person injured in the course of his employment be subject to greater subrogation claims in favor of insurers simply because a portion of the benefits otherwise payable under the allowable expenses, work loss and survivor's loss sections are paid by a different source pursuant to the section requiring subtraction of benefits provided under state law [§3109]."
The majority Opinion also noted, "Our conclusion is not based on a constitutional right to be made whole or to retain damages recovered in tort unless there has been a double recovery." Furthermore, the majority felt that its opinion was consistent with a prior Supreme Court opinion in Peikey v Elsea Realty Company, 394 Mich 485 (1975), which dealt with a comp carrier's right to claim a reimbursement or credit out of an employee's tort recovery allocated to pain and suffering. The majority stated, "Our decision in Peikey requires that the employee who is permitted to sue a third party in tort be permitted to receive no more than one who is injured under similar circumstances but not in the course of his employment It is fully consistent with that holding to conclude that the workers' compensation carrier's right to reimbursement for benefits which substitute for no-fault benefits is governed by §3116 of the No-Fault Act."
Justice Levin's opinion was signed by Justice Kavanagh, Fitzgerald, and Coleman. Chief Justice Coleman wrote a separate Opinion advising that the legislature take corrective action.
Justice Ryan concurred in the result but filed a separate opinion to emphasize that there is no overlap between a no-fault tort recovery and workers' compensation benefits. Justice Ryan stated, "The legislative mandate is for reimbursement where there is double recovery. Without double recovery, there is no need for reimbursement."
Justice Williams also concurred in the result but filed a separate opinion which was joined by Justice Moody. In this Opinion, Justice Williams wrote that, "We find a clear and irreconcilable repugnance between the NFA and §827(5) of the WDCA. . . .Accordingly, because of this patent conflict, statutory construction mandates a repeal by implication of MTLA 418.827(5)." Accordingly, Justice Williams would find that the workers' comp lien provision is inapplicable to any recovery obtained under the pertinent provisions of the No-Fault Act.
