Michigan Supreme Court; Docket No. 121970; Published
Per Curiam Opinion; Unanimous (Justices Cavanagh and Kelly granting leave to appeal)
Official Michigan Reporter: 469 Mich. 401, Link to Opinion 
STATUTORY INDEXING:
Allowable Expenses for Funeral and Burial Expenses [3107(1)(a)]
Nature of Survivor’s Loss Benefits [3108(1)]
Calculation of Survivor’s Loss Benefits and Maximums [3108(1)]
Standards for Deductibility of State and Federal Governmental Benefits [3109(1)]
TOPICAL INDEXING:
Not applicable
CASE SUMMARY:
In this per curiam opinion, the Supreme Court reversed the Court of Appeals [Item No. 2308] with respect to the methodology for calculating the liability of a no-fault insurer for payment of survivor’s loss benefits consisting of economic loss and replacement services, and subtracting any applicable governmental benefits.
In remanding to the Court of Appeals for further proceedings, the Supreme Court set forth a specific methodology for proper calculation of insurance company liability for payment of replacement service benefits under MCL 500.3108, in light of the statutory maximum benefit contained in MCL 500.3108 and the setoff provision for governmental benefits in MCL 500.3109.
The court noted that a survivor’s loss benefit under 3108(1) consists of two elements: (1) economic loss (EL), which is the loss of contributions of tangible things of economic value, not including services, and (2) replacement services (RS), which are the expenses, not exceeding $20 per day, reasonably incurred in replacing ordinary and necessary services. Under 3108(1), the survivor’s loss benefit (SLB) cannot exceed the statutory maximum (SM).
Further, section 3109(1) provides that benefits provided or required to be provided under the laws of any state or the federal government shall be “subtracted from the personal protection insurance benefits otherwise payable for the injury.”
The court noted that because neither workers’ compensation, survivor’s benefits, nor social security survivor’s benefits include, or are required to include, replacement service costs, the subsection 3109(1) setoff benefits (SO) pertain only to economic loss benefits (EL).
The Supreme Court agreed with Auto-Owners’ position that the method for calculating the benefit due is to determine first the survivor’s loss benefit and then compare it to the statutory maximum ceiling. The court restated the proper steps for calculating the survivor’s loss benefits as follows:
“To restate, the proper steps in the process are as follows:
(1) calculate SLB (EL plus RS = SLB);
(2) compare SLB to SM (SLB ≤ SM) to determine the amount payable under MCL 500.3108 (AP); and
(3) determine the no-fault insurer’s payment liability (NFIL) in light of the setoff benefit amount (SO).
Because the setoff benefit (SO) serves to reimburse economic loss (EL), the total setoff cannot exceed economic loss. Thus, if EL ≥ SO, then NFIL = AP - SO; if EL ≤ SO, then NFIL = AP - EL.”
In a second issue addressed in this decision, the Supreme Court affirmed the judgment of the Court of Appeals, holding that the funeral and burial expense benefit contained in section 3107(1)(a) is not to be considered a “personal protection insurance benefit,” and therefore, no amounts received from governmental sources can be setoff against the no-fault funeral and burial expense under the governmental benefit setoff provisions of section 3109(1).
