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Harris v ACIA and Blue Cross Blue Shield of Michigan; (MSC-PUB, 7/29/2013; RB #3348)


Michigan Supreme Court; Docket No. 144579; Published  
Opinion by Justice Young; 6-1 (with Cavanagh, J. Dissenting)  
Official Michigan Reporter Citation: ___ Mich ___; Link to Opinion alt  

Exception for Motorcycle Injuries [§3114(5)]  
Coordination with Other Health and Accident Medical Insurance [§3109a]  
Duplicate Recovery [§3109a]

Not Applicable  

In this 6-1 opinion by Justice Young, the Supreme Court held that plaintiff could not make a double recovery for PIP benefits paid on his behalf under an uncoordinated health insurance policy issued to him by Blue Cross Blue Shield of Michigan (BCBSM) and under an uncoordinated no-fault policy issued by ACIA to the registrant driver of a motor vehicle who struck plaintiff while he was on a motorcycle, because: (1) the plaintiff did not pay a premium or otherwise procure the no-fault policy issued by ACIA, and his entitlement to benefits thereunder only arose by operation of law under MCL 500 3.114; and (2) the BSBSM policy excluded coverage for expenses that the insured was not legally obligated to pay, and the court held that plaintiff was not legally obligated to pay for the PIP benefits at issue because ACIA was obligated to pay for them under the no-fault Act once plaintiff became entitled to receive them.   

The Plaintiff in this case was injured while on a motorcycle after being involved in an accident with a motor vehicle.  At the time of the accident, the plaintiff was insured under an uncoordinated health insurance policy issued by Blue Cross Blue Shield of Michigan (BCBSM) which provided that “[w]e do not pay for the following care and services: those for which you legally do not have to pay or for which you would not have been charged if you did not have coverage under this certificate.”  BCBSM initially paid $19,801.75 for medical services paid on his behalf for injuries relating to his accident.  However, BCBSM later retracted those payments and denied coverage based on provisions in its policy stating that BCBSM would not pay benefits for medical services paid by another plan.  After BCBSM denied coverage, the Plaintiff began receiving PIP benefits from ACIA pursuant to MCL 500.3114(5)(1) under an uncoordinated no-fault policy issued to the driver registrant of the motor vehicle.  ACIA paid benefits “in excess of $85,000.00.”

The Plaintiff brought suit against ACIA alleging that ACIA was also required to pay him for the amount that BCBSM paid for medical services rendered on his behalf initially.  ACIA subsequently filed a third-party Complaint against BCBSM, and the Plaintiff amended his Complaint to name BCBSM and to recover under his BCBSM health insurance policy the amount of the PIP benefits paid by ACIA.  Summary disposition was granted by the trial court in favor of BCBSM, and the claims asserted against BCBSM by the Plaintiff and by ACIA were dismissed.  Plaintiff’s claims against ACIA were similarly dismissed by the trial court.  Following these dismissals, Plaintiff sought review on appeal, but only as to the Circuit Court’s Order dismissing his claims against BCBSM.  The Court of Appeals subsequently reversed the trial court’s decision in part, finding that the trial court erred in concluding that the BCBSM was coordinated, and finding that the Plaintiff had incurred expenses for medical treatment he received.  In finding that the plaintiff had incurred expenses, the Court of Appeals relied on the cases of Shanafelt v Allstate, 217 Mich App 625 (1996) and Bombalski v AOIC, 247 Mich App 536 (2001), for the proposition  that “a party receiving services has a legal obligation to pay for them when rendered and incurs the expense even if the expense is paid by an insurer.”  The Supreme Court granted BCBSM’s application for leave to appeal and considered the issue of whether the Plaintiff was “entitled to a double recovery from both ACIA and BCBSM with medical expenses arising from a motorcycle accident involving a motor vehicle.”

The Supreme Court reversed the Court of Appeals decision finding that the Plaintiff was not entitled to a double recovery under either of the two policies.  However, the court acknowledged that double recovery is permissible in some cases.  In this regard, the Supreme Court explained that “when both the no-fault automobile insurance and the health insurance are uncoordinated policies . . . multiple recovery is possible for the insured.”  The Court further noted that the Shanafelt case relied on by the Court of Appeals was one such case where an insured was entitled to a double recovery under an uncoordinated no-fault policy and further acknowledged the Bombalski case where double recovery was permitted.  However, the Supreme Court found plaintiff Harris’s claim to be distinguishable from those cases, stating that “claim is fundamentally at odds with those cases”  The Supreme Court found it significant that the plaintiff had not procured the ACIA policy and held that is entitlement to benefits under that policy ultimately arise by operation of law:

“Unlike the claimant in Shanafelt, and other cases in which a double recovery in insurance benefits was awarded, Harris is not claiming benefits under a no-fault insurance policy that he or anyone else procured.  Harris is neither a third-party beneficiary not a subrogee of a no-fault policy issued to the person that struck him and thus he is not eligible to receive benefits under that policy.  Rather Harris’s right to PIP benefits arises solely by statute.”

The Supreme Court therefore concluded that the Plaintiff was not entitled to a double recovery under the uncoordinated no-fault policy issued by ACIA to the driver registrant of the motor vehicle involved in the accident. 

With regard to plaintiff's claims for double recovery under the BCBSM policy, the Court concluded that the Plaintiff was not legally obligated to pay for the medical services paid for by ACIA and therefore was not entitled to a double recovery under the language of the BCBSM policy, which provided that BCBSM would not pay for benefits that the insured was not legally obligated to pay for. In concluding that Harris was not legally obligated to pay for the benefits at issue, the Court held that “as a matter of law, ACIA was liable for Harris’s PIP expenses” under MCL 500.3114(5)(a). The Court further held that this conclusion will result “regardless of when Harris first received treatment, when Harris filed a Complaint against BCBSM or when Harris submitted his demand to BCBSM.”

Justice Cavanagh dissented from the majority Opinion because in his view, the Court of Appeals properly concluded that “Harris legally had to pay his medical expenses at the time he received care and services” and therefore was not precluded from recovering medical expenses under the BCBSM policy language.

Lansing car accident lawyer Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit

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