Michigan Court of Appeals; Docket No. 53114; Published
Judges Holbrook, Cavanagh, and Beasley; Unanimous
Official Michigan Reporter Citation: 109 Mich App 674; Link to Opinion 
STATUTORY INDEXING:
PIP Liens Regarding Out of State Tort Claims [§3116(2)]
No Lien as to Noneconomic or Excess Economic Loss [§3116(4)]
TOPICAL INDEXING:
Legislative Purpose and Intent
CASE SUMMARY:
In this unanimous Opinion by Judge Cavanagh, the Court of Appeals held that the amended version of the no-fault lien provisions of §3116 apply to an out-of-state automobile tort recovery only to the extent that the tort recovery included damages for economic losses which were paid by the no-fault carrier to the plaintiff. No reimbursement is due the no-fault carrier from that portion of an out-of-state tort recovery which is for noneconomic losses. Thus, where, as in this case, the plaintiff entered into a tort settlement with the out-of-state tortfeasor specifying that the settlement was only for noneconomic losses, the plaintiff’s no-fault insurer is precluded from obtaining any reimbursement under §3116. Furthermore, the court held that if there is no right to reimbursement under §3116, the no-fault carrier has no right to participate in the settlement agreement made between the plaintiff and the third-party tort defendant. The court stated that there is nothing which appears in the language of amended §3116 which can be interpreted as a mandate to a plaintiff to pursue a tort claim. Thus, where a plaintiff negotiates "in good faith" a settlement of an out-of-state, tort recovery so that the recovery, is for noneconomic losses only, the plaintiff’s no-fault carrier cannot assert lien rights under §3116. In this case, the court noted that the settlement was negotiated in good faith and that the amount recovered for noneconomic loss had a reasonable basis in fact.
