Crowley v. Detroit Automobile Inter-Insurance Exchange

144 Mich. App. 394 | Mich. Ct. App. | 1985

Per Curiam.

Plaintiff instituted this action against the Detroit Automobile Inter-Insurance Exchange and the Western Casualty and Surety Company* ¹ seeking personal protection insurance benefits under the Michigan no-fault act. Plaintiff was seriously injured in an automobile accident and has been rendered a paraplegic. Plaintiff’s medical and health expenses have been paid for by the United States Navy and the Veterans’ Administration. The trial court ruled that those benefits were not subject to the mandatory setoff provision, MCL 500.3109(1); MSA 24.13109(1), and held that DAIIE was liable for no-fault benefits in the amount of $145,150 plus interest. DAIIE appeals as of right.

The sole question presented to us on appeal is whether the benefits provided by the military are "other medical coverage” subject to the permissive setoff of MCL 500.3109a; MSA 24.13109(1):

"Sec. 3019a. An insurer providing personal protection insurance benefits shall offer, at appropriately reduced premium rates, deductibles and exclusions reasonably related to other health and accident coverage on the insured. The deductibles and exclusions required to be offered by this section shall be subject to prior approval by the commissioner and shall apply only to benefits payable to the person named in the policy, the spouse of the insured and any relative of either domiciled in the same household.”

Or, if these benefits are "provided or required to be provided” pursuant to MCL 500.3109(1); MSA 24.13109(1):

"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.”

This Court has twice held that military health benefits fall within the purview of § 3109(1). Bagley v State Farm Mutual Automobile Ins Co, 101 Mich App 733; 300 NW2d 322 (1980), and Dengler v State Farm Mutual Ins Co, 135 Mich App 645, 650; 354 NW2d 294 (1984). Plaintiff, however, suggests that these cases are inapplicable as LeBlanc v State Farm Mutual Automobile Ins Co, 410 Mich 173; 301 NW2d 775 (1981), was not distinguished. LeBlanc dealt with Medicare insurance and held that:

"Medicare is 'other health and accident coverage’ qualifying for § 3109a’s permissive set-off. We perceive no just reason to differentiate Medicare from other, more traditional, forms of health and accident coverage which irrefutably are with the scope of § 3109a.” 410 Mich 205.

Plaintiff argues that Medicare and military benefits should be treated the same and asks us to extend LeBlanc to the instant situation. We decline to do so.

The Court in LeBlanc, specifically limited its holding to only Medicare and did not express an opinion as to other possible forms of health coverage. 410 Mich 207. Furthermore we find the two programs distinguishable. The military is required to provide medical care, 10 USC 1071, while Medicare is only a federally funded insurance program for the elderly. 410 Mich 198. The military provides 100 percent coverage and Medicare only covers a percentage of the cost. Additionally, we note that neither party has presented evidence regarding the essential purpose of § 3109a, which was to reduce duplicative insurance coverage, thereby reducing insurance premiums. 410 Mich 197. Plaintiff has not presented evidence that defendant was unaware of his military status and that such status would have reduced his no-fault premiums. Nor has plaintiff shown that he has incurred any expenses not already covered by the military. While LeBlanc stated that a certain amount of duplicate coverage may be unavoidable, nowhere do we find support for the proposition that plaintiff should be entitled to a windfall in the amount of the expense of his entire medical care. Permitting plaintiff to retain this windfall would be contrary to the purposes of the no-fault act.

The Legislature intended duplicate benefits to be offset to help reduce or contain the cost of insurance. O’Donnell v State Farm Mutual Automobile Ins Co, 404 Mich 524, 544; 273 NW2d 829 (1979). The test for determining whether the benefits fall under § 3109(1) is stated in Jarosz v DAIIE, 418 Mich 565, 577; 345 NW2d 563 (1984).

"We conclude that the correct test is: state or federal benefits 'provided or required to be provided’ must be deducted from no-fault benefits under § 3109(1) if they:

"1) Serve the same purpose as the no-fault benefits, and

"2) Are provided or are required to be provided as a result of the same accident.” (Footnote omitted.)

The military benefits serve the same purpose as no-fault benefits. Both benefits would be for plaintiffs medical care from the same injury for the exact same procedures, tests, care and doctors. Such benefits are triggered by the same accident and are only payable due to plaintiff’s injury. Accordingly, we find that the trial court erred in awarding duplicate benefits. Military benefits fall under the mandatory setoff provision of § 3109(1), Bagley, supra, and Dengler, supra.

Reversed. Costs to appellant.

1 Western was dismissed from this action and is not a party to this appeal. Additionally, the dismissal of Western is not being appealed by either party.