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Cannell v Riverside Insurance Co; (COA-PUB, 5/9/1985; RB #898)


Michigan Court of Appeals; Docket No. 66429; Published  
Judges D. E. Holbrook, Jr., MacKenzie, and Lamb; Unanimous; Per Curiam    
Official Michigan Reporter Citation: 147 Mich App 699; Link to Opinion alt    

Standards for Deductibility of State and Federal Governmental Benefits [§3109(1)]  
State Workers Compensation Benefits [§3109(1)]  
Requirement That Benefits Were Unreasonably Delayed or Denied [§3148(1)]  
Conduct Establishing Unreasonable Delay or Denial [§3148]

Workers Disability Compensation Act (MCL 418.1, et seq.)    

In this unanimous per curiam Opinion, the Court of Appeals reversed and remanded a judgment in favor of plaintiff on the issue of her no-fault insurance carrier's entitlement to setoff and reimbursement from a workers' compensation settlement.

Plaintiff received partially incapacitating injuries while driving her car home from a meeting. After the accident, plaintiff petitioned for a hearing before the Workers' Disability Compensation Board. This dispute was settled for $22,500, consisting of $10,000 for medical expenses, $3,630 for attorney fees and $8,870 for the balance of her claim. The defendant claimed entitlement to this recovery as setoff and reimbursement, and refused to pay further no-fault benefits, claiming that such were covered by workers' compensation benefits.

The insurance company claimed on appeal that the trial court erred in not allowing it to setoff the entire amount that plaintiff received, or was entitled to receive from workers' compensation. Plaintiff claimed that she was not entitled to worker's compensation benefits, and the lump sum that she was paid was a "bonus."

The Court of Appeals noted that even if the Workers' Compensation Act was found not to be applicable to plaintiff’s injuries, defendant would still be entitled to a setoff for those amounts plaintiff received for the same injuries. However, the determination of whether the injuries were suffered in the course of employment is within the exclusive jurisdiction of the Workers' Compensation Act, and therefore the case was remanded to the circuit court with instructions that plaintiff shall file a petition in the Workers' Compensation Bureau for a determination of compensable injuries. The Court of Appeals instructed that if plaintiff fails to petition, or if it is determined that her injury is a compensable injury, then defendant shall be granted a setoff for the entire amount plaintiff would have received from workers' compensation. If not compensable, then defendant may only set off the amount received that was for the same injury.

Plaintiff also claimed that she was entitled to penalty interest in addition to her unpaid medical expenses, since defendant was overdue in making the payments and unreasonably terminated her medical benefits.

The Court of Appeals held that the defendant did act unreasonably in terminating plaintiff’s medical benefits, since the only dispute was which insurer was liable to pay those benefits. Just because defendant may be entitled to reimbursement under §3109 is not a sufficient reason to withhold benefits.

The Court of Appeals denied plaintiff’s claim for mental anguish and distress, noting that even if it were to assume that mere is such a tort, plaintiff had not proved that defendant committed that tort.

In a separate concurring opinion, Judge MacKenzie agreed with the majority's remand to the Workers' Disability Compensation Board, and noted in her agreement that she adopted the reasoning of the majority in Thacker v DAIIE, 114 Mich App 374; 319 NW2d 349 (1982). Judge MacKenzie also noted that the Court of Appeals is split on the issue of whether, under §3109(1), a no-fault insurer is entitled to setoff the amount an injured worker would have collected had he continued to receive periodic workers' compensation payments rather than the actual amount received by the worker under a redemption agreement See Gregory v Transamerica Insurance Co (Item No. 792), Divito v Transamerica Corp (Item No. 822), James v Allstate Insurance Co (Item No. 726) and Thacker v DAIIE (Item No. 511).

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