Michigan Court of Appeals; Docket No. 77-3932; Published
Judges Cavanagh, Bashara, and Allen; Unanimous; Opinion by Judge Allen
Official Michigan Reporter Citation: 88 Mich App 576; Link to Opinion
Casualty Insurance Policies – Minimum Coverages and Required Provisions (MCL 500.3009)
Legislative Purpose and Intent
Motor Vehicle Code (Financial Responsibility Act) (MCL 257.501, et seq.)
No-Fault Insurer Claims for Reimbursement
In a lengthy unanimous Opinion by Judge Allen, the Court of Appeals rejected the so-called "unlimited liability theory" and held that the passage of the no-fault law and, in particular, the language of §3131 did not repeal the $20,000/$40,000 insurance liability limitations contained in the Financial Responsibility Act (MCLA 257.520) and §3009 of the insurance code.
The Court presented several reasons for rejecting plaintiff’s theory and in so doing, made other observations regarding various aspects of the no-fault law which may have some relevance in future no-fault litigation. For instance, the Court noted that the Insurance Commissioner had issued a bulletin in April of 1973 rejecting plaintiff’s argument and that this interpretation is entitled to great weight. Second, the Court noted that a subsequent legislation amendment passed during a period when uncertainty existed regarding a section of the statute may be deemed to constitute legislative intent to clarify the original enactment. Third, the Court commented on the Supreme's Court decision in Workmen v DAIIE (item number 143) dealing with §3116 and characterized that opinion as concluding that an insurer is entitled to reimbursement from a tort recovery to the extent that the tort recovery includes damages for which the insurer paid benefits.