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Mathis v Auto Owners, et al (COA – PUB 11/9/2021; RB #4339)

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Michigan Court of Appeals; Docket #354824; Published
Judges Murray, Markey, and Riordan; Per Curiam
Official Michigan Reporter Citation: Forthcoming; Link to Opinion


STATUTORY INDEXING:
Exception for Parked Vehicles Covered by Workers Comp [§3106(2)]

TOPICAL INDEXING:
Workers Disability Compensation Act (MCL 418.1, Et Seq.)


SUMMARY:
In this unanimous published per curiam decision, the Court of Appeals affirmed the trial court’s order granting Defendant Michigan Property & Casualty Guaranty Association’s (“MPCGA”) motion for summary disposition. Plaintiff Gary Mathis was injured as he alighted from his parked semi-truck in the course and scope of his employment, and thereafter received worker’s compensation benefits from Guaranty Insurance. While Mathis continued to receive treatment for his injuries, Guaranty Insurance became insolvent, and the MPCGA assumed responsibility for his claim. The MPCGA refused to pay Mathis further benefits under his former policy with Guaranty, however, arguing that, pursuant to the Property and Casualty Guaranty Association Act (“the Guaranty Act”), MCL 500.7901 et seq, Mathis had to first exhaust all benefits available from any other applicable insurer—i.e. Home-Owners Insurance Company (“Home-Owners”), the insurer of Mathis’s employer’s truck—before turning to the MPCGA. The Court of Appeals agreed with the MPCGA’s argument and held that, since Home-Owners was an applicable insurer, Mathis would have to first exhaust all available benefits under the Home-Owners policy before the MPCGA would become obligated to resume payment of the benefits Mathis had been receiving under the Guaranty Insurance policy. Notably, in determining that Mathis was entitled to no-fault PIP benefits from Home-Owners for this incident, the Court of Appeals concluded that Mathis was not precluded from recovering PIP benefits under MCL 500.3106(2)(a), because that statutory subsection was created to prevent injured persons from obtaining a double recovery under both the no-fault act and the worker’s compensation disability act.  In this case, however, because of the MPCGA's requirement that an injured person exhaust all other benefits before turning to the MPCGA, Mathis could not recover duplicative no-fault and worker's compensation benefits.

Mathis was injured in the course and scope of his employment while alighting from a semitruck. Mathis’s employer maintained worker’s disability compensation insurance through Guaranty Insurance, and no-fault insurance on the semitruck through Home-Owners. After his injury, Mathis received benefits under the Guaranty Insurance policy for a time, but Guaranty Insurance became insolvent shortly thereafter. The MPCGA—“a legislatively created means of paying and discharging obligations of insolvent insurers”—then assumed responsibility for Mathis’s claim. The MPCGA refused to pay Mathis further benefits under the Guaranty Insurance policy, however, arguing that Home-Owners now had priority for payment of Mathis’s expenses related to his injuries. Home-Owners disagreed, arguing that Mathis was not entitled to no-fault PIP benefits at all for his injuries, because MCL 500.3106(2)(a) precludes individuals who would otherwise qualify for PIP benefits under one of the no-fault act’s parked vehicle exceptions from recovering said benefits if they are also entitled to worker’s compensation benefits for the same injury. The trial court disagreed and granted summary disposition in the MPCGA’s favor.

The Court of Appeals affirmed the trial court’s summary disposition order, observing preliminarily that the MPCGA is, in fact, an insurer of last resort, and that, under the statutory scheme of the Guaranty Act, the MPCGA only becomes responsible for paying and discharging the obligations of an insolvent insurer once all benefits available to a claimant under insurance policies other than the policy of the insolvent insurer have been exhausted. In this case, the Court of Appeals held that PIP benefits were available to Mathis under his employer’s no-fault policy with Home-Owners, and that Mathis was not barred from recovering PIP benefits under MCL 500.3106(2)(a).  This is because MCL 500.3106(2)(a) was designed to “prevent an injured person from receiving duplicative benefits under both [the] no-fault insurance act and worker’s compensation.” Because the MPCGA was an insurer only of last resort, an injured person can never make a double recovery from both the MPCGA and a no-fault insurer, and thus MCL 500.3106(2)(a) did not apply.

“It is undisputed that plaintiff’s claim is a ‘covered claim’ as defined by the Guaranty Act. See MCL 500.7925. However, under MCL 500.7931(3), the MPCGA is not obligated to pay all benefits on all covered claims. Rather, the MPCGA is entitled to a credit for any covered claim if damages or benefits are recoverable by plaintiff from a solvent insurer. See MCL 500.7931(3); Meridian, 207 Mich App 41-42.2 Here, when Guaranty Insurance became insolvent and plaintiff could no longer collect benefits under that policy, plaintiff could turn to Home-Owners’s no-fault insurance policy for benefits. In other words, the MPCGA was entitled to a ‘credit,’ i.e., a reduction in its obligation, to the extent that Home-Owners was available to pay benefits to plaintiff. Simply put, the MPCGA can only be an insurer of last resort and, therefore, cannot be the first-priority insurer ahead of Home-Owners. See Meridian, 207 Mich App at 41-42.

We also note that MCL 500.3106 is intended to preclude double recovery by injured persons under both no-fault insurance and worker’s compensation insurance. See Adanalic, 309 Mich App at 188. By determining that the MPCGA is obligated only to pay benefits once all other potential benefits have been paid and that the MPCGA is entitled to a credit for all benefits paid by other insurers, there is no possibility that plaintiff could receive benefits from both Home-Owners and the MPCGA.”

The Court of Appeals also rejected Home-Owners' argument that the last sentence of the Guaranty Act precludes the MPCGA from receiving a credit for a claim arising under the worker’s compensation disability act. In this regard, the Court provided:

“Home-Owners additionally argues that the MPCGA is precluded from receiving a credit for a claim arising out of the Worker’s Disability Compensation Act by the final sentence of the credit provision of the Guaranty Act. See MCL 500.7931(3). This sentence states that

[i]f the claims made arise under the worker’s disability compensation act of 1969, 1969 PA 317, MCL 418.101 to 418.941, this subsection does not provide credits in excess of those specified in section 354 of the worker’s disability compensation act of 1969, 1969 PA 317, MCL 418.354, and does not limit the liability of the guaranty association or the insured under a policy of the insolvent insurer for benefits provided under the worker’s disability compensation act of 1969, 1969 PA 317, MCL 418.101 to 418.941. [MCL 500.7931(3).]

Home-Owners contends that this sentence, which states that MCL 500.7931(3) ‘does not limit the liability of the guaranty association or the insured under a policy of the insolvent insurer for benefits provided under the worker’s disability compensation act,’ means that the MPCGA cannot receive a credit for any claims under the Worker’s Disability Compensation Act. Home-Owners therefore concludes that the MPCGA cannot receive a credit for plaintiff’s claim because such benefits are provided under the Worker’s Disability Compensation Act. This argument misses the mark. ‘MCL 418.354 provides for the coordination of benefits, reducing an employer’s obligation to pay weekly wage benefits under the WDCA when an employee simultaneously receives payments in accordance with specified benefit programs.’ Smitter v Thornapple Twp, 494 Mich 121, 130; 833 NW2d 875 (2013). The sentence of MCL 500.7931(3) in question merely provides that the obligation of the MPCGA with respect to worker’s compensation benefits cannot be reduced by an amount greater than that set forth in MCL 418.354. It does not replace the priority scheme otherwise set forth by the Guaranty Act.”


Lansing car accident lawyer Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit SinasDramis.com.

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