Michigan Court of Appeals; Docket No. 147868; Unpublished
Judges Reilly, Sawyer, and Clulo; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
Private Contract (Meaning and Intent)
Underinsured Motorist Coverage: Underinsured Motorist Coverage in General
Underinsured Motorist Coverage: Setoffs Applicable to Underinsured Motorist Cases
In this unanimous per curiam unpublished Opinion, the Court of Appeals interpreted the provisions of an underinsured motorist clause in a no-fault automobile insurance policy to provide that the maximum amount payable under that clause was the $100,000 limits minus amounts paid by the at-fault drunk driver and a dram shop defendant.
Plaintiff Mead was injured when she was involved in an accident with a drunk driver. She brought suit against the driver and the bar that had served the driver. Her case mediated for $450,000 against the drunk driver and $50,000 against the bar. The lawsuit was settled in the amount of $65,000 total, representing $20,000 from the drunk driver and $45,000 from the bar. Plaintiff then requested that her no-fault insurer pay under its underinsured motorist coverage the $100,000 limits available under that policy. Aetna paid $35,000, representing the underinsured policy limit of $100,000 minus the $65,000 paid to plaintiff from the drunk driver's insurance company and the dram shop defendant. Plaintiff argued that she was entitled to the entire $100,000 coverage limits, contending that the $65,000 received from other sources should have been deducted from the total amount of her damages, not from the coverage limit under her underinsured motorist policy.
The policy in question provided that "any amounts otherwise payable for damages wider this coverage shall be reduced by... all sums paid because of the bodily injury by or on behalf of persons or organizations who may be legally responsible."
The Court of Appeals agreed with the trial court that this language was unambiguous on its face and provided that the offset should be against coverage limits, not against the total of damages. The amount that is "otherwise payable" "under this coverage" refers to, in this case, the policy limits of $100,000. The court relied on its prior decision in Parker v Nationwide Mutual Insurance Company, 188 Mich App 354 (1991) to support its holding.