Dunn v. DAIIE, Docket No. 230793.

CourtCourt of Appeal of Michigan (US)
Citation254 Mich. App. 256,657 N.W.2d 153
Docket NumberDocket No. 230793.
PartiesBradley DUNN, Plaintiff-Appellee, v. DETROIT AUTOMOBILE INTER-INSURANCE EXCHANGE, Defendant-Appellant.
Decision Date21 February 2003

657 N.W.2d 153
254 Mich.
App. 256

Bradley DUNN, Plaintiff-Appellee,

Docket No. 230793.

Court of Appeals of Michigan.

Submitted September 5, 2002, at Detroit.

Decided December 3, 2002, at 9:25 a.m.

Released for Publication February 21, 2003.

Barbara H. Goldman and Richard E. Shaw, Southfield, for the plaintiff.

Schoolmaster, Hom, Killeen, Siefer & Arene (by Elaine I. Harding) (John A. Lydick, of counsel), Detroit, Detroit, for the defendant.


657 N.W.2d 154

Defendant Detroit Automobile Inter-Insurance Exchange (DAIIE), appeals as of right the lower court's order granting plaintiff Bradley Dunn summary disposition in this no-fault automobile insurance benefits action. We reverse and remand.

The facts in this case are largely undisputed. Plaintiff was injured in an automobile accident in April 1997. Plaintiff's primary health insurance provider, Rockwell International Corporation Employee Health Plan (Rockwell), provided personal injury benefits, in the amount of $96,125.65, to cover plaintiff's medical expenses.1 At the time of the accident, plaintiff also had a no-fault insurance policy with defendant, which provided for the coordination of benefits (COB). Specifically, the COB clause provided:

If the Declaration Certificate shows "COORDINATED MEDICAL BENEFITS", it is agreed that all other medical insurance or health care benefit plans available to you or a resident relative are your primary source of protection. We will pay benefits for all reasonable charges incurred for reasonably necessary products, services (including chiropractic services) and accommodations for the care, recovery or rehabilitation of you or a resident relative, except to the extent that (1) benefits are paid or payable under your primary protection;....

In October 1997, plaintiff initiated a third-party lawsuit for noneconomic damages resulting from the accident. The parties settled this suit for an undisclosed amount. Plaintiff's policy with Rockwell contained a provision that required plaintiff to reimburse Rockwell from any third-party recovery for any sums expended on plaintiff's behalf for the accident. Therefore, when plaintiff failed to reimburse Rockwell, Rockwell initiated suit in federal court (Rockwell v. DAIIE, 1999 U.S. Dist LEXIS 20284 [WD Mich, 1999]). The district court concluded that Rockwell was entitled to reimbursement from plaintiff. Rockwell, supra. In December 1999, plaintiff filed the instant action seeking reimbursement from DAIIE for the $96,152.65 that plaintiff paid to Rockwell.

In April 2000, plaintiff filed a motion for summary disposition, arguing that defendant was contractually bound for any and all benefits that were not paid or were not payable from any other source. Plaintiff argued that the requirement that he reimburse Rockwell for the $96,152.65 effectively forced him to pay his own medical expenses in contradiction to the no-fault act. Plaintiff also argued that under stare decisis, the trial court was bound by this Court's decision in Yerkovich v. AAA, 231 Mich.App. 54, 585 N.W.2d 318 (1998), rev'd on other grounds 461 Mich. 732, 610 N.W.2d 542 (2000), which held that a no-fault insurer was required to reimburse an insured for sums paid by the insured to an ERISA plan.

In response, relying on the dissent in Yerkovich, defendant argued that the plain language of DAIIE's coordination of benefits provision provided that plaintiff's voluntary election to have Rockwell listed as his primary insurer entitled him to receive a reduced premium, and thus, plaintiff should not be allowed to reap the benefits of a reduced premium, while obligating defendant to reimburse plaintiff for sums paid to his primary insurer. Defendant argued that while the no-fault act was concerned with the guaranteed recovery

657 N.W.2d 155
by a motor vehicle accident victim of economic losses, it was not "so concerned" about recovering in tort for noneconomic losses because that is the trade-off of the no-fault system. Further, defendant argued that plaintiff did not lose any benefits under the no-fault policy; rather, plaintiff only lost a portion of his third-party tort recovery, which would not have occurred had there been no tort recovery. Finally, defendant argued that plaintiff's reliance on Yerkovich was misplaced because the Supreme Court reversed Yerkovich on other grounds, and thus, Yerkovich had no precedential value

The trial court held that defendant was required to pay plaintiff $96,152.65, the amount plaintiff reimbursed to Rockwell. The trial court concluded that when the Supreme Court reversed Yerkovich, it never addressed the no-fault insurer's obligation to reimburse an insured for sums paid to an ERISA fund from a third-party tort recovery, and noted that the Supreme Court specifically declined to address the issue. In ruling in favor of plaintiff, the trial court noted that it agreed with Judge, now Justice, Markman's dissent because the effect of the majority's opinion in Yerkovich subjected defendant to a risk that it did not assume because plaintiff's choice to pursue coordinated benefits in exchange for a discounted premium. However, the trial court found that it was bound by this Court's decision in Yerkovich.

Because the facts in this case are largely undisputed, we are faced with two issues: (1) whether the trial court was bound to follow this Court's majority opinion in Yerkovich, and (2) if the trial court was not bound by the decision, whether Yerkovich was correctly decided—i.e., whether defendant must refund to plaintiff the reimbursement to plaintiff's health insurance provider.


MCR 7.215(I)(1)(formerly MCR 7.215[H][1]), provides that this Court must follow the rule of law established by a prior published decision of the Court issued on or after November 1, 1990, that has not been reversed or modified by the Supreme Court or a special conflict panel of this Court. The interpretation of a court rule, like a matter of statutory interpretation, is a question of law that this Court reviews de novo. CAM Constr. v. Lake Edgewood Condo. Ass'n, 465 Mich. 549, 553, 640 N.W.2d 256 (2002).

This Court recently interpreted the court rule in Taylor v. Kurapati, 236 Mich.App. 315, 600 N.W.2d 670 (1999). In Taylor, this Court held that where a decision of this Court is reversed, even if on other grounds that were decisive of the entire case, this Court is not required to follow the decision. For an understanding of the application of MCR 7.215(I)(1) to Taylor, we will briefly outline the facts of the case.

In Taylor, this Court addressed whether, absent legislative action, the tort of wrongful birth had a rightful place in Michigan jurisprudence. Taylor, supra at 319, 600 N.W.2d 670. In a detailed opinion, this Court addressed the question whether it was proper to allow a plaintiff to receive, as an element of damages, the costs of raising a child in a wrongful birth action. Id. at 325, 600 N.W.2d 670. In addressing the issue, this Court discussed the birth-related torts of wrongful conception and wrongful life. This Court noted that the torts of wrongful conception and wrongful life were closely similar to the birth-related tort of wrongful birth. Id. at 342, 600 N.W.2d 670. Accordingly, this Court addressed two post-November 1, 1990, Court of Appeals decisions that involved wrongful birth claims—Rouse v. Wesley, 196 Mich.App. 624, 627, 494 N.W.2d 7 (1992), and Blair v. Hutzel

657 N.W.2d 156
Hosp., 217 Mich.App. 502, 552 N.W.2d 507 (1996), rev'd on other grounds 456 Mich. 877, 569 N.W.2d 167 (1997). In discussing these decisions, this Court recognized that under MCR 7.215(I), "unless one can distinguish these two cases or unless they have been later reversed or modified, [this Court] must apply [Rouse and Blair]." With regard to the present issue, this Court found that it was not bound by the Blair decision because the Supreme Court reversed Blair entirely, and, thus, this Court was free to address the viability of wrongful birth claims. Specifically with regard to this issue, this Court stated, "[b]ecause the Supreme Court entirely reversed the Blair panel's decision, we conclude that under the plain language of MCR 7.215(H)(1), nothing in the Blair panel's opinion is binding precedent under that subrule. We observe that MCR 7.215(H)(1) establishes a bright-line test and that such a test cannot be maintained if every opinion is to be parsed into its smallest components." Taylor, supra at 346, n. 42, 600 N.W.2d 670

Under Taylor, a prior Court of Appeals decision that has been reversed on other grounds has no precedential value. See also People v. Crear, 242 Mich.App. 158, 165, 618 N.W.2d 91 (2000). However, our Supreme Court has also addressed this issue. In Horace v. City of Pontiac, 456 Mich. 744, 754-755, 575 N.W.2d 762 (1998), our Supreme Court held that where the Supreme Court reverses a Court of Appeals decision on one issue and does not specifically address a second issue in the case, no rule of law remains from the Court of Appeals decision.

Horace involved a slip and fall action. On appeal, this Court remanded the case to the trial court for reconsideration in light of the recent decision in Maurer v. Oakland Co. Parks & Recreation Dep't (On Remand), 201 Mich.App. 223, 506 N.W.2d 261 (1993), rev'd 449 Mich. 606, 537 N.W.2d 185 (1995). However, the Supreme Court granted leave to appeal because fourteen days before this Court's decision, the Supreme Court had reversed Maurer. In Maurer, this Court held that the plaintiff's claim was not barred by the open and obvious danger doctrine and that the claim came within the public building exception. Horace, supra at 754, 575 N.W.2d 762. The Supreme Court reversed, finding that the claim was barred by the open and obvious danger doctrine, and thus, it did not specifically address the governmental...

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