William Joseph Batts v. Titan Insurance Company, 322 Mich. App. 278

Background

Plaintiff, a veteran, was injured when his scooter struck a car that ran a stop sign; the other vehicle was unidentified.
Plaintiff received some treatment from the VA and other treatment from non-VA providers; he had no applicable private no-fault policy in his household, so his claim proceeded through the assigned claims plan, which assigned the claim to Titan.
Titan refused to pay any PIP benefits, arguing the VA constituted primary health coverage (like an HMO) and that statutory coordination/set-off rules excused Titan’s liability for care received outside the VA.
Plaintiff contended the VA is not an insurer for non-service-connected injuries and pointed to 38 U.S.C. § 1729, which permits the United States to seek reimbursement from third parties for VA-provided care related to motor-vehicle accidents.
The trial court denied Titan’s summary-disposition motion (holding Titan liable insofar as VA could not provide the needed services); parties later entered a stipulated judgment; Titan appealed the denial. The Court of Appeals affirmed but remanded to enter summary disposition for plaintiff.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Applicability of MCL 500.3109a (coordination of benefits in coordinated/no-fault policies)	3109a does not apply because Batts did not purchase a coordinated no-fault policy.	VA coverage functions like an HMO/primary health insurer under 3109a, so Titan not liable for care available from VA.	3109a inapplicable: provision governs insureds who purchased coordinated no-fault policies; Batts did not.
MCL 500.3172(2) (assigned-claims coordination with other benefit sources)	VA eligibility is not a benefit source that relieves Titan because 38 U.S.C. § 1729 makes the United States a subrogated third-party creditor, not a primary insurer.	VA health-care eligibility is a benefit source; assigned-claims benefits should be reduced to the extent other sources cover the same loss.	State statute cannot be applied to defeat the federal reimbursement scheme; VA care does not operate as duplicative government benefits that eliminate Titan’s PIP obligation.
MCL 500.3109(1) (set-off for government benefits)	No duplicative government benefit exists because federal law gives the United States a right to recover from third parties for VA-provided care (so VA care is subject to reimbursement, not a duplicative government benefit).	Titan is entitled to a set-off for federal/VA benefits against PIP owed.	Titan is not entitled to a set-off for VA-provided care here; 38 U.S.C. § 1729 means the United States seeks reimbursement rather than providing duplicative free benefits.
Entitlement to summary disposition	Batts sought judgment as a matter of law because Titan’s defenses were unreasonable and federal law preempts Titan’s defenses.	Titan argued factual and legal bases excused payment; summary disposition for Titan was proper.	Court affirms denial of Titan’s motion but for the right reasons grants Batts summary disposition and remands for entry of judgment for plaintiff.

Key Cases Cited

Tousignant v. Allstate Ins. Co., 444 Mich. 301 (1993) (coordination rules apply when insured purchased coordinated no-fault/HMO coverage)
Owens v. Auto Club Ins. Ass'n, 444 Mich. 314 (1993) (discusses coordination where insured was active military with alternative federal coverage)
St. John Macomb-Oakland Hosp. v. State Farm Mut. Auto. Ins. Co., 318 Mich. App. 256 (2016) (no-fault insurer not liable for medical expenses that a coordinated health insurer must pay)
O'Donnell v. State Farm Mut. Auto. Ins. Co., 404 Mich. 524 (1979) (legislative intent behind § 3109(1) set-off for government benefits)
Whitman v. City of Burton, 493 Mich. 303 (2013) (statutory interpretation: clear language controls)
Ter Beek v. City of Wyoming, 495 Mich. 1 (2014) (Supremacy Clause and preemption principles)
Morgan v. Citizens Ins. Co. of America, 432 Mich. 640 (1989) (distinguishes cases where plaintiff was active military at time of accident)