Watts v. Department of State

50 Mich. App. 147 | Mich. Ct. App. | 1973

Per Curiam.

On October 15, 1966, plaintiffs sustained personal injuries in an automobile accident. At the time of the accident they were insured against injuries sustained by virtue of uninsured motorist coverage in their own insurance policy. This policy afforded benefits not to exceed $10,000 for each of the two plaintiffs.

The plaintiffs instituted arbitration proceedings against their carrier pursuant to the provisions of the policy. The parties subsequently entered into a voluntary settlement for less than policy limits and discontinued the arbitration proceedings.

On August 17, 1970, the plaintiffs obtained a judgment against Mr. and Mrs. Henry Ford, the uninsured tortfeasors, for amounts in excess of the policy limits under the uninsured motorist sections of their own policies. Plaintiffs then attempted to satisfy this judgment against the Motor Vehicle Accident Claims Fund¹ claiming an amount equal to the difference between the voluntary settlement they reached with their carrier and the amount of their judgments. The fund paid only the difference between the judgment and the policy limits. Procedurally, the Court of Claims decided in favor of the plaintiffs and defendant fund appealed.

The issue for decision is:

Whether the Motor Vehicle Accident Claims Fund is liable for the difference between a voluntary settlement and policy limits as negotiated without the fund as a party and where the plaintiffs subsequently obtained a judgment against the uninsured tortfeasor in excess of the policy limits.

This very issue has recently been considered by another panel of our Court. Brunner v Secretary of State, 48 Mich App 535; 210 NW2d 786 (1973). In Brunner the Court considered our prior decision dealing with a settlement effected after contested proceedings.² Green is distinguishable from the instant case, which arose from a voluntary settlement. In Brunner it was reasoned that:

"Although there is no indication in the case at bar of fraud or collusion between plaintiff and his insurer, extension of the Green holding to the present facts would place the fund at the mercy of future private settlements which are negotiated in the absence of the Secretary of State, over which he has no power of approval, and which — unlike Green —are not concluded by an independent, impartial arbitrator whose presence would preclude any inference of impropriety.” (Brunner, supra, at 541-542; 210 NW2d at 790.)

We find the reasoning and result of Brunner persuasive. The fund, where there has been only a voluntary settlement, is only liable for the difference between the policy limit and the subsequent judgment against the uninsured tortfeasor. The judgment of the Court of Claims is reversed and the case is remanded for proceedings not inconsistent with this opinion.

Reversed and remanded.

1 MCLA 257.1101 et seq.; MSA 9.2801 etseq.

2 Green v Blicharski, 32 Mich App 15; 118 NW2d 113 (1971).