Michigan Court of Appeals; Docket No. 77-4423; Published
Judges T. M. Burns, Kelly, and Walsh; Unanimous
Official Michigan Reporter Citation: 125 Mich App 779; Link to Opinion 
STATUTORY INDEXING:
No Lien as to Noneconomic or Excess Economic Loss [§3116(4)]
TOPICAL INDEXING:
No-Fault Insurer Claims for Reimbursement
CASE SUMMARY:
In a unanimous decision by Judge Walsh, the Court of Appeals held that a health insurance carrier providing medical expense benefits did not have a valid right of contractual subrogation as against noneconomic losses recovered by the insured person from a negligent automobile tort feasor. By operation of §3135 of the no-fault act, the injured person was only legally entitled to recover noneconomic losses from the negligent defendant. The Court noted that it is well established that a subrogee acquires no greater rights than those possessed by his subrogor. If the parties to an insurance contract intend to expand the traditional right of subrogation to permit reimbursement to the insurer out of any sums recovered by the insured regardless of the nature of those sums, then that intention must be specifically and unambiguously stated in the contract.
In this case, the subrogation clause was "internally inconsistent." The Court noted that the provisions of the coordination of benefits section of the policy clearly indicate that the intent of the policy was to make the insured whole and to minimize the instances of double recovery. The Court felt that this intention would be thwarted if the insurance company, after paying economic losses, was allowed to be subrogated to the insured's no-fault rights against the tort feasor for noneconomic losses. Accordingly, the Court held that the so-called "subrogation clause" of the contract involved in this case did not confer upon the insurer the right to be reimbursed out of the insured's non-economic tort recovery.
