O'Donnell v. State Farm Mut. Auto. Ins. Co.
Decision Date | 04 January 1979 |
Docket Number | Docket No. 58833,No. 13,13 |
Citation | 273 N.W.2d 829,404 Mich. 524 |
Parties | , 10 A.L.R.4th 958 Heather Elizabeth O'DONNELL and Kathleen Anne O'Donnell, Michael Brent O'Donnell and Timothy Hugh O'Donnell, by their next friend, Heather Anne O'Donnell, Plaintiffs-Appellees, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, an Illinois Insurance Corporation, Defendant-Appellant. Calendar |
Court | Michigan Supreme Court |
Calder & Kirkendall, P. C., by Robert E. Logeman, Ypsilanti, for plaintiffs-appellees.
Foster, Swift & Collins, P. C., Lansing, for American Mut. Ins. Alliance, amicus curiae, by Webb A. Smith, David W. McKeague, Lansing.
Gerald E. Mugan, Eugene F. Black, Port Huron, as amicus on behalf of plaintiffs.
Bodman, Longley, Bogle & Dahling by Theodore Souris, James R. Buschmann, Detroit, DeVine & DeVine by Allyn D. Kantor, Ann Arbor, for State Farm Mut. Auto. Ins. Co.
Bush, Luce, Henderson & Bankson by Robert James Henderson, Port Huron, for Allstate Ins. Co.
Section 3109(1) 1 of the Michigan No-Fault Insurance Act 2 requires that the amount of benefits payable under any no-fault insurance policy must be reduced by the amount of benefits payable to a beneficiary by the state or Federal government, but it does not also require an analogous set-off of benefits payable to a beneficiary by private health or accident insurance programs, which persons may voluntarily add to the basic no-fault insurance. The principal question presented is whether § 3109(1) discriminates against the recipients of government benefits in violation of the Equal Protection Clause of the state or Federal constitutions. 3 The Court of Appeals ruled in a 2 to 1 decision that § 3109(1) was unconstitutional. 4 We reverse the decision of the Court of Appeals. The Legislature's judgment that the recipients of private benefits should be treated differently from the recipients of government benefits is supported by a rational basis and should therefore be sustained. This distinction rationally promotes the legitimate legislative objectives of enabling persons with economic needs and/or wages exceeding the maximum benefits permitted under the No-Fault Act to obtain the supplemental coverage they need and of placing the burden of such extra coverage directly on the shoulders of those persons, instead of spreading it throughout the ranks of no-fault insureds.
A subsidiary question is whether § 3109(1) requires a set-off of Federal social security survivors' benefits such as those received by the plaintiffs as a result of decedent's death and, if so, whether this is totally arbitrary and thus violative of the Due Process Clause of the state or Federal constitutions. 5 We conclude that § 3109(1) does require a set-off of these government benefits but is not arbitrary because the benefits are paid as a result of the same accident and duplicate in varying degrees the no-fault benefits otherwise due. All persons who receive redundant government survivors' benefits arising from one accident are treated the same and all are guaranteed a maximum survivor's loss benefit of $1000 per month for three years. It therefore does not violate the Due Process Clause of the state or Federal constitutions.
This opinion is confined to the facts before the Court and does not purport to encompass other possible government benefits.
Plaintiffs' decedent was killed in an automobile accident in 1974. Plaintiffs qualified for survivors' benefits under certain subdivisions of § 202 6 of the Federal Social Security Act 7 which provide for the payment of secondary benefits to the dependents of a wage earner who is fully qualified to receive primary social security benefits at the time of death. 8 Plaintiffs also qualified for survivors' benefits under the no-fault insurance policy issued by the defendant to the decedent.
Section 3109(1) of the No-Fault Act requires the subtraction of government benefits from no-fault benefits otherwise due:
"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." 9
The no-fault policy issued by the defendant to the decedent incorporated this legislatively mandated provision:
"Any amount payable by the company under the terms of this insurance shall be reduced by (a) the amount paid, payable or required to be provided under the laws of any state or the federal government * * * ." 10
Pursuant to this provision, the defendant subtracted the amount of survivors' benefits payable by the Federal government to the plaintiffs from the amount of survivors' benefits payable under the decedent's no-fault policy and sent the plaintiffs a monthly check for the difference. The actual amount received by the plaintiffs from the Federal government and the defendant totaled $1000 per month, the maximum amount authorized by § 3108 11 of the No-Fault Act.
Plaintiffs sued the defendant in circuit court, alleging a breach of the insurance contract and contending that § 3109(1) violated the Due Process and Equal Protection Clauses of the Michigan and United States Constitutions. The Circuit Court granted a defense motion for summary judgment. The plaintiffs appealed to the Court of Appeals and that court reversed in a 2 to 1 decision, the majority declaring that § 3109(1) was unconstitutional. 12 The defendant appealed and we granted leave to appeal. 13
In Shavers v. Attorney General, 402 Mich. 554, 267 N.W.2d 72 (1978), Justice Williams explained the proper approach this Court must take when confronted with an equal protection or due process challenge to socioeconomic legislation such as the No-Fault Act:
14
In a footnote at the very end of this passage, further guidance was offered as to the limited nature of the Court's role:
The proper test for judging socioeconomic legislation such as the No-Fault Act was also stated in Shavers :
" 'Under traditional equal protection analysis, a legislative classification must be sustained, if the classification itself is rationally related to a legitimate governmental interest.' " 16
This test recognizes and preserves the constitutional principle of separation of powers, which forms the fundamental framework of our system of government. Its purpose is to make certain that the judiciary does not substitute its judgment for that of the Legislature as to what is best or what is wisest. So long as the Legislature's judgment is supported by a rational or reasonable basis, the choices made and the distinctions drawn are constitutional. The United States Supreme Court and our Court have instructed:
"If the classification has some 'reasonable basis', it does not offend the Constitution simply because the classification 'is not made with mathematical nicety or because in practice it results in some inequality'. * * * 'The problems of government are practical ones and may justify, if they do not require, rough accommodations * * * ' ". 17
"If it be said, the law is unnecessarily severe, and may sometimes do injustice, without fault in the sufferer under it, our reply is: these are considerations that may very properly be addressed to the legislature, but not to the judiciary they go to the expediency of the law, and not to its constitutionality." 18
The responsibility for drawing lines in a society as complex as ours of identifying priorities, weighing the relevant considerations and choosing between competing alternatives is the Legislature's, not the judiciary's. Perfection is not required:
19
Nor is it necessary that the Legislature deal with every aspect of a problem at the same time:
"(W)e are guided by the familiar principles that a 'statute is not invalid under the Constitution because it might have gone farther than it did,' * * * that a legislature need not 'strike at all evils at the same time,' * * * and that 'reform...
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