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Citizens Insurance Co of America v Tuttle; (MSC-PUB, 8/24/1981; RB #429)


Michigan Supreme Court; Docket No. 65132; Published    
Opinion by Justice Levin; Unanimous  
Official Michigan Reporter Citation: 411 Mich 536; Link to Opinion alt    

No Lien as to Non Motorist Tort Recoveries [§3116]  
General / Miscellaneous [§3116]  
Liability of Non-Motorist Defendants [§3135]  
General / Miscellaneous [§3135]

Legislative Purpose and Intent
No-Fault Insurer Claims for Reimbursement
Uniform Motor Vehicle Accident Reparations Act (UMVARA)    

In this unanimous Opinion by Justice Levin, the Supreme Court reversed the Court of Appeals (Item No. 299) and held that the type of tort liability which is abolished by §3135 of the No-Fault Act is only that liability which arises out of the tortfeasor's ownership, maintenance or use of a motor vehicle, not liability which arises out of other conduct, such as the negligent keeping of cattle. The court stated: "The abolition of tort liability for injuries or damage caused by (arising from) the ownership, maintenance or use of a motor vehicle, therefore, does not abolish the tort liability of the nonmotorist tortfeasor." In so holding, the court referred to the Uniform Motor Vehicle Accident Reparations Act (UMVARA), which was one of the model acts utilized as a source material in the drafting of the No-Fault Act. The Supreme Court quoted with approval the comment to §5 of this Act, which states:

“‘[T]he only tort actions which are abolished are those which arise from the defendant's ownership, maintenance or use of a motor vehicle. Among the potential tort actions thus retained by an automobile accident victim would be those against an automobile manufacturer for products liability or against a railroad in the case of an automobile-train collision."'

In quoting this passage with approval, the court stated: "It is probable that the legislature, in using the language of the model act, intended the meaning ascribed to that language by the drafters of the model act, particularly where that meaning is the most natural sense of the language used."

In reaching its conclusion, the court made some important observations regarding the 1978 amendment to the lien provisions of §3116 of the Act Specifically, the court rejected defendant's argument that by amending §3116 so as to restrict an insurer's right to reimbursement to recoveries only from motorist tortfeasors, the legislature intended to amend; by implication, the tort abolition provisions of §3135. The court agreed that the amended version of §3116 did indeed limit the no-fault carrier's right of reimbursement only to tort recoveries from motorist tortfeasors. However, the court said this was insufficient to justify the conclusion that the tort abrogation provisions of §3135 were likewise limited. In this regard, the court stated:

"The no-fault insurer's right to subtraction or reimbursement is limited by §3116(2) to recoveries from motorist tortfeasors or for intentional torts. There is no right to subtraction or reimbursement with respect to a tort recovery from a nonmotorist defendant which duplicates personal protection insurance benefits. . . .The amendment to §3116 specifying the types of tort recovery for which subtraction or reimbursement was permitted should not be read as amending by implication the original meaning of §3135 unless a clear intent to do so can be ascertained."

In a separate concurrence, Justice Levin stated that because of the "possibility of duplication of personal insurance protection benefits by a tortfeasor from a nonmotorist tortfeasor," the legislature should conduct a "comprehensive legislative review of the No-Fault Act as we approach its first decade of operation."

[Author's Comment This opinion contains potentially important dicta with respect to the extent to which an uninsured tortfeasor's liability is abolished by the No-Fault Statute. In discussing the operation of the tort abrogation provisions of §3135, Justice Levin used language which suggests that the uninsured motorist tortfeasor has no more tort immunity than the "nonmotorist" tortfeasor. This would mean that the uninsured motorist tortfeasor would be fully liable for all economic loss and noneconomic loss falling below the threshold. In this regard, Justice Levin stated:

"Moreover, Subsection 2 [§3135(2)] abolishes tort liability arising from the ownership, maintenance or use only of vehicles for which the required no-fault insurance or other security has been obtained. The policy apparently expressed in so conditioning the abolition of tort liability upon the obtaining of no-fault coverage is that a person is to be relieved of tort liability only upon participating, through the payment of premiums, in a system for spreading the costs of compensating vehicular injuries without regard to fault. . . .The nonmotorist tortfeasor is the equivalent of the uninsured motorist and should be treated similarly. Both are outside the basic no-fault system of allocating the costs of accidents and both remain subject to tort liability."]

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