Michigan Court of Appeals; Docket #299632; Unpublished
Judges O'Connell, Murray, and Donofrio; unanimous; per curiam
Official Michigan Reporter Citation: Not Applicable, Link to Opinion 
STATUTORY INDEXING:
Work Loss Benefits: Calculation of Benefits [§3107(1)(b)]
Governmental Benefits Subtraction; Pip Deductibles: Social Security Disability Benefits [§3109(1)]
Coordinated Coverages: Coordination with Other Health and Accident Disability Insurance [§3109a]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion, the Court of Appeals vacated judgment and remanded for an evidentiary hearing concerning issues related to calculation of work loss benefits after subtracting a retroactive Social Security disability award and disability insurance payments.
Mary Fox was injured in 2005. She received no-fault work loss benefits from Auto-Owners and disability insurance benefits from another insurer. Her monthly work loss benefits were initially calculated by subtracting the monthly amount of the disability insurance payments pursuant to a coordinated benefits provision in the Auto-Owners policy and the requirements of MCL 500.3109a.
After the three-year work loss benefits period expired, Mary Fox received a retroactive Social Security disability award. Auto-Owners then asserted a right of reimbursement, claiming that it had overpaid work loss benefits in light of the receipt of the Social Security disability award.
The Court of Appeals held that the Supreme Court in Mich Ed Mut Ins Co v Morris, 460 Mich 180 (1999) has determined that an insurer who has overpaid no-fault benefits as a result of the failure to offset Social Security benefits may seek reimbursement under the equitable doctrine of unjust enrichment. Auto-Owners sought to reduce the benefits it had previously paid by seeking reimbursement for the Social Security benefits that had been paid retroactively. The no-fault statute provides that benefits "provided or required to be provided under the laws of any state or the federal government shall be subtracted from the personal protection insurance benefits otherwise payable for the injury." MCL 500.3109(1).
Also, after Mary Fox received her Social Security disability benefits, the insurer that had previously provided disability payments to her pursuant to another insurance contract sought recoupment of the amount of Social Security benefits received pursuant to its contract with Mary Fox. Subsequently, the disability insurer sought to enforce its rights by reducing future payments to be received by its insured.
The Court of Appeals held in this case that neither the setoff provision nor the coordination of benefits provisions of the No-Fault Act allow the no-fault insurer to reduce work loss benefits below the benefit amount mandated in MCL 500.3107. The Court of Appeals stated, "In applying the setoff provisions under no-fault, the combination of all benefits should equal the work loss benefits amount, neither more nor less."
In vacating and remanding to the trial court for further proceedings, the court noted there was an absence of proof of overpayment or duplication of benefits and, therefore, Auto-Owners had not established entitlement to reimbursement from the Social Security disability benefit award. Based upon the record, the court could not determine whether Auto-Owners had in fact overpaid the work loss benefits and whether Mary Fox had received duplicative benefits. The court instructed that the calculation of the work loss benefit should include the following:
"To reiterate, these calculations must be made on a retroactive monthly basis to ensure that defendant retains monthly work loss benefits equal to the no-fault right mandated by MCL 500.3107(1)(b). The calculations must also account for any present and future offsets taken by the disability insurer."
