Michigan Court of Appeals; Docket No. 136382; Unpublished
Judges Fitzgerald, Hood, and Kingsley; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
In this unanimous per curiam Opinion, the Court of Appeals affirmed the trial court holding that the "set off" provision contained in Auto Club's policy, precluded the payment of both residual liability benefits and uninsured motorist benefits, where the uninsured motorist benefits were less than the residual liability coverage provided to the plaintiff in this case.
Plaintiff was a passenger in a car driven by her husband and insured by Auto Club. Plaintiff’s husband swerved to avoid another car, went off the road, and collided with a utility pole. Plaintiff’s husband died as a result of the accident, and plaintiff was seriously injured. The identity of the other driver who ran the red light is unknown, and therefore, within the meaning of the policy a claim for uninsured motorist benefits existed as to the unknown driver.
Plaintiff filed a claim against Auto Club based upon her husband's negligence and received $25,000 from the residual liability coverage. She also filed a claim against Auto Club for the uninsured motorist coverage under the same policy based upon the negligence of the driver who ran the red light Auto Club refused to arbitrate the claim because, under the terms of the policy, the uninsured motorist coverage of $25,000 is to be reduced by any amount recovered under the liability coverage.
The Court of Appeals affirmed the trial court's reliance upon Auto Owners Insurance Company v Lidon, 149 Mich App 643 (1986) which held that an insurance contract may validly provide that benefits paid under one form of coverage may be set off against benefits payable under the other. In this case, the "limits of liability" provision for uninsured motorist coverage provided that any amount payable under that coverage would be reduced by payments under the liability insurance coverage of this policy.
The Court of Appeals held that the setoff provision clearly precluded payment of additional non-economic or excess economic benefits to plaintiff.