Auto Club Ins. Ass'n v. Hill

• Decision Date: 07 October 1988
• Docket Number: No. 7,Docket No. 80966,7
• Citation: 430 N.W.2d 636,431 Mich. 449
• Parties: AUTO CLUB INSURANCE ASSOCIATION, a Michigan insurance corporation, Plaintiff-Appellant, v. Gregory J. HILL, Defendant-Appellee. Calendar
• Court: Michigan Supreme Court

Page 636

430 N.W.2d 636

431 Mich. 449

AUTO CLUB INSURANCE ASSOCIATION, a Michigan insurance corporation, Plaintiff-Appellant, v. Gregory J. HILL, Defendant-Appellee.

Docket No. 80966.

Calendar No. 7.

Supreme Court of Michigan.

Argued March 9, 1988.

Decided Oct. 7, 1988.

Zimostrad & Zimostrad, P.C. by Stanley Zimostrad, Bay City, MacArthur, Cheatham, Acker & Smith, P.C. by James G. Gross, Dwight R. Robinson, Detroit, for plaintiff-appellant.

John C. Leaming, Bay City, Van Benschoten, Hurlburt & Tsiros, P.C., Harvey E. Van Benschoten, Mandel I. Allweil, Saginaw, for defendant-appellee.

ARCHER, Justice.

We granted leave to appeal to decide whether the threshold requirements of M.C.L. § 500.3135(1); MSA § 24.13135(1) ¹ apply when a motorist seeks benefits for noneconomic loss under the uninsured motorist provision of his no-fault policy. As a preliminary issue, we must determine the scope of tort liability of any uninsured motorist for noneconomic damages arising from an automobile collision.

We hold that uninsured motorists are subject to tort liability for noneconomic loss only if the injured person has suffered death, serious impairment of body function, or permanent serious disfigurement. M.C.L § 500.3135; M.S.A. § 24.13135. On the basis of the insurance agreement between the parties at bar, we hold that the insured party is not entitled to damages for noneconomic loss unless his injuries meet the threshold set forth in § 3135. Therefore, we reverse the judgment of the Court of Appeals and remand this case to the trial court for further proceedings not inconsistent with this opinion.

I

On April 9, 1981, the vehicle of defendant-appellee Gregory J. Hill was struck from the rear by an uninsured motorist. Mr. Hill filed a claim with his automobile insurance provider, plaintiff-appellant Auto Club Insurance Association (ACIA), for damages for noneconomic loss suffered as a result of the collision. This claim was pursuant to the following provision of his no-fault insurance contract with ACIA:

"Uninsured Motorists Coverage.

"We will pay damages for bodily injury which an insured person is legally entitled to recover from the owner or operator of an uninsured motor vehicle. Bodily injury must be caused by accident and arise out of the ownership, operation, maintenance or use of the uninsured motor vehicle."

Mr. Hill's claim was denied. Pursuant to a clause in the insurance policy, the dispute was submitted for arbitration. The arbitration panel awarded defendant $11,000, inclusive of damages for noneconomic loss.

The ACIA petitioned the Circuit Court of the Eighteenth Judicial Circuit to vacate the award of the arbitration panel. The petition asserted that the defendant had not alleged that he sustained injuries that met the threshold requirements as set forth in § 3135 for receipt of damages for noneconomic loss. ² Defendant Hill responded with a petition to affirm the award. The latter petition was granted.

Plaintiff sought relief in the Court of Appeals. The Court of Appeals affirmed the finding of the circuit court. ³ Plaintiff- appellant's subsequent motion for rehearing was denied.

The ACIA now seeks relief in this Court. We granted leave to appeal limited to the issue whether the threshold requirements of M.C.L. § 500.3135(1); M.S.A. § 24.13135(1) apply when an insured motorist seeks benefits for noneconomic loss under the uninsured motorist provision of a no-fault policy. ⁴

II

In order to give proper effect to § 3135, ⁵ this Court must enforce the clear and unambiguous language of the statute as drafted by the Legislature. In Browder v. Int'l Fidelity Ins. Co., 413 Mich. 603, 611, 321 N.W.2d 668 (1982), this Court stated:

"A basic rule of statutory construction is that where the Legislature uses certain and unambiguous language, the plain meaning of the statute must be followed." (Citations omitted.)

This Court may not impose its view of the best means to achieve a legislative purpose. In construing a statute, this Court must discern the intent of the Legislature in enacting the relevant provision. In doing so, we must first look to the language of the statute itself. Thornton v. Allstate Ins. Co., 425 Mich. 643, 391 N.W.2d 320 (1986). After considering the language and general scope of the act, we may determine legislative intent in light of the purpose it seeks to accomplish or the evil it seeks to remedy. Longstreth v. Gensel, 423 Mich. 675, 377 N.W.2d 804 (1985).

A

Section 3135(1) of the no-fault act provides:

"A person remains subject to tort liability for noneconomic loss ... only if the injured person has suffered ... serious impairment of body function...." M.C.L. § 500.3135(1); M.S.A. § 24.13135(1).

This section unambiguously governs liability for noneconomic loss, as distinguished from damages for economic loss which the no-fault insurer is liable to pay under §§ 3107 to 3110 of the act. ⁶ Bradley v. Mid-Century Ins. Co., 409 Mich. 1, 62, 294 N.W.2d 141 (1980). The section also clearly specifies to whom its terms apply. The Legislature did not qualify the term "person" with any distinction between persons insured and those who are uninsured. ⁷

In contrast, § 3135(2) governs general tort liability. It applies only where the required no-fault coverage is in effect: "[T]ort liability arising from the ownership, maintenance or use [of a properly insured vehicle] ⁸ is abolished" except under certain specific enumerated circumstances, including damages for noneconomic loss "as provided and limited in subsection (1)." M.C.L. § 500.3135(2)(b); M.S.A. § 500.13135(2)(b).

Defendant-appellee Hill contends that the exception to the abolition of tort liability in § 3135(2)(b) circumscribes the scope of tort immunity granted in § 3135(1). He argues that the reference to § 3135(1) in § 3135(2)(b) imposes a requirement of no-fault insurance for immunity from tort liability for below threshold noneconomic loss. We find no basis for adopting such a strained construction of the tort immunity granted in § 3135(1).

B

There is no qualification in the language of § 3135(1) referring to § 3135(2). Although the same general subject, i.e., tort liability, is treated in both subsections, they apply to two distinct types of liability. Subsection (1) governs immunity from tort liability for noneconomic loss. Subsection (2) abolishes general tort liability with several enumerated exceptions.

The reference in § 3135(2)(b) to § 3135(1) does not change the meaning of § 3135(1) itself. That reference limits the subsection (2)(b) exception from the abolition of tort liability for noneconomic loss to above-the-threshold noneconomic loss. Thus, the reference to § 3135(1) merely obviates the need to enumerate the circumstances under which tort liability for noneconomic loss is excepted from the general abolition of tort liability contained in § 3135(2). In other words, if not for the reference to § 3135(1) in § 3135(2)(b), the latter subsection would read: "damages for noneconomic loss, if the injured person has suffered death, serious impairment of body function, or permanent serious disfigurement."

If the Legislature had intended to qualify the tort immunity granted in § 3135(1) by requiring proper no-fault insurance, ⁹ it could have expressly done so as it did with respect to the tort immunity granted in § 3135(2).

C

Our construction of § 3135 is consistent with the policies and legislative purpose underpinning its promulgation.

The basic goal of the personal injury provisions of the no-fault insurance act is to provide individuals injured in motor vehicle accidents assured, adequate and prompt reparation for certain economic losses. Babbitt v. Employers Ins. of Wausau, 136 Mich.App. 198, 355 N.W.2d 635 (1984). This Court has held, however, that the Legislature's purpose in establishing the alternative criteria of death, permanent serious disfigurement or serious impairment of body function as prerequisites for collection of noneconomic damages, "was simply to weed out from the tort system claims for injuries less severe than the criteria." Byer v. Smith, 419 Mich. 541, 546, 357 N.W.2d 644 (1984). The Legislature intended to bar "any recovery whatsoever for noneconomic loss unless the injury is serious and [to relieve] the courts of the burden of litigation where the injury is not serious." Id. at 545, 357 N.W.2d 644.

III

In addition to its consistency with this Court's interpretation of legislative policy, we find direct support in case law for our construction of § 3135.

In Bradley v. Mid-Century Ins. Co., supra, the Court resolved a series of companion cases involving certain contractual limitations in uninsured motorist endorsements of automobile insurance policies. In parts II and III of the Bradley opinion, the Court discussed the relationship between uninsured motorist coverage and first-party benefits under the no-fault act.

A

In part II of Bradley, the Court discussed and decided whether uninsured motorist coverage under more than one policy could be stacked to provide recovery for damages sustained in an accident which occurred after the enactment of the no-fault act and the simultaneous repeal of the uninsured motorist amendment of the Insurance Code, M.C.L. § 500.3010; M.S.A. § 24.13010. Bradley, supra 409 Mich. at 46-60, 294 N.W.2d 141. The plaintiff in part II, Gary Davidson, argued that "anti-stacking provisions" contained in his automobile insurance policy were violative of public policy. The Court held that the clauses at issue were enforceable. Id. at 54, 294 N.W.2d 141.

In discussing the purposes and policy involved in promulgation by the Legislature of the no-fault insurance act, the Court made several observations relevant to resolution of the issue at bar. The Court analyzed the purpose of uninsured motorist coverage before and after the passage of the no-fault act. Prior to promulgation of the act, uninsured motorist coverage was designed to protect the...