Michigan Court of Appeals; Docket No. 107368; Unpublished
Judges Sawyer, Doctoroff, and R. B. Burns; Unanimous; (Opinion by Judge Doctoroff)
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
Motorcycle First Party Coverage: Duty to Offer / Coverage Available [§3103]
General Rule of Priority [§3114(1)]
Resident Relatives [§3114(1)]
Exception for Motorcycle Injuries [§3114(5)]
Legislative Purpose and Intent
This unanimous Court of Appeals decision written by Judge Doctoroff interpreting a 1980 amendment to §3114(1) of the No-Fault Act has potentially far reaching implications in situations where no-fault benefits are payable to an injured person under his/her own no-fault policy and would also be payable under the policy of a resident, relative or spouse. The court interpreted the third sentence of this section to eliminate the first line priority of the insurer of a named insured, except in cases involving motorcycle PIP policies. The statutory section, as amended in 1980, reads as follows:
"Section 3114. (1) Except as provided in subsections (2), (3), and (5), a personal protection insurance policy described in §3101(1) applies to accidental bodily injury to the person named in the policy, the person's spouse, and a relative of either domiciled in the same household, if the injury arises from a motor vehicle accident. A personal injury insurance policy described in §3103(2) applies to accidental bodily injury to the person named in the policy, the person's spouse, and a relative of either domiciled in the same household, if the injury arises from a motorcycle accident When personal protection insurance benefits or personal injury benefits described in §3103(2) are payable to or for the benefit of an injured person under his or her own policy and would also be payable under the policy of his or her spouse, relative, or relative's spouse, the injured person's insurer shall pay all of the benefits and shall not be entitled to recoupment from the other insurer."
The court interpreted the third sentence as follows:
"The first sentence in the amended statute is essentially the same as the first sentence in the prior statute. The second sentence is new, and applies only to motorcycle policies. The third sentence, which incorporates the recoupment language of the second sentence of the former statute, also as a result of the amendment, applies only to motorcycle policies. Hence, the Legislature, in amending the statute, made a substantial change. Language of the former statute which established the clear priority of the insurer of a named insured over the insurers of his or her spouse or domiciled relatives is applicable now only to motorcycle policies. The conclusion to be drawn is that, because the law prior to the amendment had language which established priority in all cases and the Legislature changed it to language which established priority only in motorcycle policies, the Legislature, thus, intended that in all other policies the insurers of persons named in the policies stand in the same order of relatives domiciled in the same household." (footnote omitted) (emphasis added)
Pursuant to this holding, the Court of Appeals concludes that there are no longer any recoupment actions permitted by insurers of named insureds against other insurers of resident relatives. Any appellate decisions holding to the contrary, "are no longer good law," if they interpret §3114(1) prior to the 1980 amendment.
[Editor's Comment: It is respectfully submitted that the panel may have read too much into the 1980 amendment to §3114(1). The focus of the court's attention is the third sentence of the section which begins, "When personal protection insurance benefits or personal injury benefits described in §3103(2) are payable...." Because the first part of that sentence is identical to the original version of §3114(1), it is reasonable to conclude that it applies to standard no-fault PIP benefits rather than only "motorcycle PIP benefits" payable under §3103(2). In other words, the insurer of the named insureds under both standard automobile no-fault policies and motorcycle PIP policies would have front line priority with no rights of recoupment. Under the court's decision, only the insurers of named insureds in motorcycle policies have first line priority with no right of recoupment. This decision will create a major restructuring of no-fault priorities in garden variety automobile accident cases where the victim has a separate policy and also resides in an household with insured relatives.]