Michigan Court of Appeals; Docket No. 240513; Unpublished
Judges Fitzgerald, Griffin and Saad; unanimous; per curiam
Official Michigan Reporter Citation: Not applicable, Link to Opinion 
STATUTORY INDEXING:
Not applicable
TOPICAL INDEXING:
Uninsured Motorist Benefits: Setoffs Applicable to Uninsured Cases
CASE SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals held that a recovery of damages in a third-party negligence action was properly deducted from amounts payable under plaintiff’s uninsured motorist coverages, even though those damages were described in the settlement documents as “exclusively for the survivors’ loss of society and companionship.”
Plaintiffs Arnold and Herr with both killed in a motor vehicle accident that was the result of two separate drivers, one driving the wrong way on I-96 causing westbound traffic to come to a stop, and the other driver driving intoxicated, crashing into the rear of the plaintiff’s vehicle which was one of the westbound stopped vehicles.
Claims against the two negligent drivers and a dram shop claim were settled for a combined total of $315,000. The settlement documents provided that the payments were exclusively for the survivors’ loss of society and companionship. Each estate also took a default judgment against one of the drivers in the amount of $1,000,000, exclusively for the plaintiff’s conscious pain and suffering. That driver was not insured.
The parents of both plaintiffs had no-fault insurance policies that included uninsured motorist coverage. Auto-Owners insured Arnold for $250,000 per person. State Farm insured Herr for $100,000 per person. Both policies provided offset language allowing for the reduction from those limits “by any amounts paid or payable for the same bodily injury by or on behalf of any person or organization who may be legally responsible for the bodily injury.”
The Court of Appeals noted that the Auto-Owners policy defined the term “bodily injury” as “physical injury, sickness, or disease sustained by a person including resulting death of that person.” Loss of society and companionship do not constitute bodily injuries for purposes of the Auto-Owners insurance contract. However, although the claim for loss of society and companionship is a separate claim with separate injuries, the claim arises from the same bodily injury as the claim for the decedent’s conscious pain and suffering. The claim is therefore derivative and is subject to the policy limitations imposed on the uninsured motorist coverage in Auto-Owners’ policy.
The State Farm policy contained slightly different language, but required the coverage amount to be reduced by any amount paid to or for the insured by any person or organization who was legally liable for the bodily injury to the insured. The court held that this language clearly indicates that the setoff follows from the liability for the bodily injury. Who sustained the injury is irrelevant for setoff purposes.
Plaintiffs also contended that even if the setoff provisions applied, the setoff must be applied against the total damages to each estate, not to the limits of coverage. The Court of Appeals held that the language of both policies clearly provided evidence of intent that the policy limits are to be reduced by the sums paid from other sources, and not the total damages to each estate.
