Greer v. Advantage Health, 305 Mich. App. 192

Birth-related malpractice allegedly injured infant Makenzie (hypoxic brain injury) and mother Elizabeth; Kenneth (husband) asserted derivative claims. All plaintiffs were without fault, so liability was joint and several.
St. Mary’s Hospital (a settling joint tortfeasor) paid a lump-sum $600,000 pretrial to settle "any and all claims" by Elizabeth and Kenneth (individually and as Makenzie’s conservator); the settlement did not allocate the sum among plaintiffs or claims.
At trial the jury awarded Makenzie past medical expenses equal to the full billed amount ($425,533.75) and other damages, but found no cause of action for Elizabeth’s and Kenneth’s claims.
Defendants (nonsettling codefendants) moved to: (1) set off the full $600,000 settlement against the verdict; and (2) reduce past-medical-expense awards to amounts actually paid by insurers (accounting for insurer discounts/lien issues).
Trial court: (a) allowed only a one-third ($200,000) setoff (allocating the settlement equally among three plaintiffs) and (b) refused to reduce past-medical awards by insurer discounts because insurers asserted contractual liens under MCL 600.6303.
On appeal the court (Markey, J.) affirmed the collateral-source ruling (insurer payments and discounts excluded under § 600.6303(4) when lien exercised) but reversed the partial setoff, holding the entire $600,000 must be applied pro tanto against the joint-and-several recovery.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Application/amount of common-law setoff for lump-sum settlement paid by a jointly liable codefendant	Settlement should not wholly offset Makenzie’s verdict because payment covered claims of three plaintiffs; equitable to allocate only Makenzie’s share (trial court: one-third).	Entire $600,000 settlement must reduce the nonsettling defendants’ judgment pro tanto against plaintiffs’ identical malpractice claims.	Reversed trial court: full $600,000 setoff required against the final judgment for the single injury (no judicial reallocation of undifferentiated lump-sum).
Whether insurer-negotiated discounts/payments are collateral-source benefits subject to reduction under MCL 600.6303 when insurers assert contractual liens	Plaintiffs: insurer payments and negotiated discounts are benefits from insurance but are excluded from collateral-source reduction where the insurer timely exercised its lien.	Defendants: discounts should reduce recoverable past medical damages (i.e., not excluded).	Affirmed trial court: insurer payments and discounts are "benefits paid or payable" under § 600.6303(4) but are excluded from collateral-source setoff when the contractual lien has been exercised; thus no reduction for discounts.

Zdrojewski v Murphy, 254 Mich. App. 50 (examining collateral-source lien exercise and exclusion under MCL 600.6303)
Thick v Lapeer Metal Prod, 419 Mich. 342 (describing common-law pro tanto setoff among joint tortfeasors)
Velez v Tuma, 492 Mich. 1 (holding common-law setoff applies to retained joint-and-several medical-malpractice claims and addressing allocation concerns)
Markley v Oak Health Care Investors of Coldwater, Inc., 255 Mich. App. 245 (discussing one recovery principle and setoff in joint-and-several contexts)
Great Northern Packaging, Inc v Gen Tire & Rubber Co, 154 Mich. App. 777 (stating recovery for identical injury must be deducted from other award)