Michigan Court of Appeals; Docket No. 77-3556; Unpublished
Judges Brennan, R. B. Burns, and Kelly; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Calculation of Survivor’s Loss Benefits and Maximums [§3108(1)]
Standards for Deductibility of State And Federal Governmental Benefits [§3109(1)]
Social Security Survivor’s Benefits [§3109(1)]
Bona Fide Factual Uncertainty / Statutory Construction Defense [§3148]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In a per curiam Opinion, the Court of Appeals held that a no-fault carrier was not permitted under §3108 of the statute to deduct 15 percent from survivors' loss benefits to reflect tax savings that would have been paid on the decedent's gross wages. The Court held that the Legislature had not provided for a tax adjustment deduction in §3108 as they did in §3107 dealing with wage loss benefits and accordingly such a deduction would not be appropriate under the language of the statute. This conclusion is consistent with a similar holding by the Court of Appeals in the preceding case of Linda Miller v State Farm (item number 158).
In addition, the Court of Appeals affirmed the trial court's award of attorney fees on the overdue survivors' benefits. The defendant insurance company had withheld all survivors' benefits on the basis that the Social Security setoff issue had not yet been fully decided in the case of O'Donnell v State Farm and thus the insurance company was not unreasonable in disputing payment. The Court of Appeals held that even though a portion of the amount due may have been in dispute, the no-fault carrier was not justified in withholding the entire amount due. Accordingly, the award of attorney fees was affirmed.
Finally, this panel of the Court of Appeals felt that the Social Security setoff mandated by §3109(1) of the statute was unconstitutional and thus agreed with the previous Court of Appeals ruling in O'Donnell v State Farm. Since the rendering of this opinion, however, the Supreme Court has decided that such a Social Security setoff is in fact constitutional (see item number 142).
