Mathis v. Interstate Motor Freight System

• Decision Date: 20 March 1980
• Docket Number: AUTO-OWNERS,M,61725 and 62782,HAWKEYE-SECURITY,Nos. 4-7,Docket Nos. 59454,61470,s. 4-7
• Citation: 289 N.W.2d 708,408 Mich. 164
• Parties: Buster MATHIS, Plaintiff-Appellant, v. INTERSTATE MOTOR FREIGHT SYSTEM, Defendant-Appellee. David HAWKINS, Plaintiff-Appellee, v.INSURANCE COMPANY, Defendant-Appellant. Deborah OTTENWESS (Schroeder), Individually, and as Next Friend of Her Minor Children, Michael and Susan, Plaintiff-Appellee, v.INSURANCE COMPANY, Defendant-Appellant, and Travelers Insurance Company, Defendant-Appellee. In re CERTIFIED QUESTIONS FROM UNITED STATES DISTRICT COURT, EASTERN DISTRICT OF MICHIGAN, SOUTHERN DIVISION. Andrew JOSEPH, Plaintiff, v. TRANSPORT INDEMNITY COMPANY, a Foreign Insurance Corporation, Defendant. ay Term. Calendar
• Court: Michigan Supreme Court

Page 708

289 N.W.2d 708

408 Mich. 164

Buster MATHIS, Plaintiff-Appellant, v. INTERSTATE MOTOR FREIGHT SYSTEM, Defendant-Appellee.

David HAWKINS, Plaintiff-Appellee, v. AUTO-OWNERS INSURANCE COMPANY, Defendant-Appellant.

Deborah OTTENWESS (Schroeder), Individually, and as Next

Friend of Her Minor Children, Michael and Susan, Plaintiff-Appellee, v. HAWKEYE-SECURITY INSURANCE COMPANY, Defendant-Appellant, and Travelers Insurance Company, Defendant-Appellee.

In re CERTIFIED QUESTIONS FROM UNITED STATES DISTRICT COURT,

EASTERN DISTRICT OF MICHIGAN, SOUTHERN DIVISION.

Andrew JOSEPH, Plaintiff, v. TRANSPORT INDEMNITY COMPANY, a Foreign Insurance

Corporation, Defendant.

Docket Nos. 59454, 61470, 61725 and 62782, May Term.

Calendar Nos. 4-7.

Supreme Court of Michigan.

Argued May 30, 1979.

Decided March 20, 1980.

Reamon, Williams, Klukowski, Wood & Drew, P. C., by William G. Reamon, Themis J. Fotieo, Grand Rapids, for Buster Mathis.

Warner, Norcross & Judd by William K. Holmes, Linda R. Witte, Grand Rapids, for Interstate Motor Freight System.

McCroskey, Libner, Van Leuven, Feldman, Kortering, Cochrane & Brock, P. C., by Robert O. Chessman, Muskegon, for David Hawkins.

Hillman, Baxter & Hammond by Michael D. Wade, Grand Rapids, for Deborah Ottenwess.

Linsey, Strain & Worsfold, P. C., Dale M. Strain, Grand Rapids, for Auto Owners Ins. Co.

Robert H. Gillette, Wheeler, Upham, Bryant & Uhl by Susan B. Flakne, Kenneth E. Tiews, Grand Rapids, for Travelers Ins. Co.

Posner, Posner & Posner by Samuel Posner and Gerald F. Posner, Detroit, for Andrew Joseph.

Plunkett, Cooney, Rutt, Watters, Stanczyk & Pedersen, P. C., by Charles A. Huckabay, Detroit, for Transport Indem. Co.

Selby, Dickinson, Pike, Mourad & Brandt, Detroit, for Detroit Automobile Inter-Insurance Exchange amicus curiae; Gromek, Bendure & Thomas, Detroit, of counsel.

KAVANAGH, Justice.

These cases all involve the injury of an employee in the course of his employment while occupying a motor vehicle owned by his employer. Each employee, or his dependents, has received workers' compensation benefits as a result of his injury. Each beneficiary is seeking to recover personal protection insurance benefits under the Michigan No-Fault Insurance Act. M.C.L. §§ 500.3101-500.3179; M.S.A. §§ 24.13101-24.13179.

The major issue raised by these cases is whether the sole remedy of an employee injured in the course of his employment in a motor vehicle accident is the benefit allowable under the Worker's Disability Compensation Act, M.C.L. §§ 418.101-418.941; M.S.A. §§ 17.237(101)-17.237(941), or may the employee collect in addition thereto no-fault insurance benefits under M.C.L. §§ 500.3101-500.3179; M.S.A. §§ 24.13101-24.13179, from the insurer of the employer's vehicle.

Corollary issues are:

(1) Whether such employee is precluded by section 131 of the Worker's Disability Compensation Act, M.C.L. § 418.131; M.S.A. § 17.237(131) from collecting no-fault insurance benefits when the employer is self-insured under the No-Fault Act.

(2) Whether such employee may recover no-fault benefits from the insurer of his personal vehicle in addition to workmen's compensation benefits.

(3) Whether section 3109(1), M.C.L. § 500.3109(1); M.S.A. § 24.13109(1) requires a setoff of the workmen's compensation benefits against the no-fault benefits otherwise due.

(4) Whether section 3109(1) and insurance policy provisions based thereon are constitutional under the constitution of the State of Michigan.

We hold that an employee who suffers accidental bodily injury in the course of his employment while occupying a motor vehicle owned by the employer is entitled to collect no-fault benefits from the no-fault insurance carrier insuring the employer's vehicle, and is not limited to Workers' Compensation as his sole remedy. M.C.L. § 500.3114, subds. (3) and (4); M.S.A. § 24.13114, subds. (3) and (4), precludes recovery from the no-fault insurer of the employee's private vehicle under the facts of these cases. Where the employer is self-insured under the No-Fault Act, the employee may collect no-fault benefits from the employer in his role as insurer in addition to workers' compensation benefits.

We also hold that the no-fault insurance carrier, or the employer, if self- insured under the no-fault act, may set off the workers' compensation benefits against the no-fault benefits pursuant to section 3109(1) of the No-Fault Act. Section 3109(1) as applied to Workers' Compensation benefits is constitutional under the Michigan Constitution.

The facts of the consolidated cases are as follows:

A. MATHIS

On September 30, 1974, plaintiff Mathis was injured while loading and unloading a semi-trailer in the course of his employment with defendant Interstate. As a result of this injury, he applied for and received workers' compensation benefits.

In addition to receiving workers' compensation benefits, Mathis applied to Interstate for no-fault personal protection insurance benefits. Interstate was a self-insurer under the No-Fault Act. The claim was denied by Interstate on the ground that Mathis' exclusive remedy against his self-insured employer was workers' compensation benefits under M.C.L. § 418.131; M.S.A. § 17.237(131).

The trial court granted Interstate's motion for accelerated and/or summary judgment on the basis of § 131 of the WDCA. The Court of Appeals affirmed. 73 Mich.App. 602, 252 N.W.2d 842 (1977).

B. HAWKINS

On June 7, 1976, plaintiff Hawkins was injured while driving one of his employer's trucks in the course of his employment with Acme Disposal, Inc. As a result of this injury, Hawkins applied for and received workers' compensation benefits which were paid by Acme's workers' compensation carrier.

In addition to receiving workers' compensation benefits, Hawkins filed suit against his employer's No-Fault insurer, defendant Auto-Owners Insurance Company, seeking payment of all personal protection benefits due to him under the Michigan No-Fault Act. The trial court granted Auto-Owners' motion for an accelerated judgment. On May 9, 1978, the Court of Appeals set aside the accelerated judgment and remanded the case for further proceedings. The Court of Appeals held that the Worker's Disability Compensation Act does not operate as a bar to the employee's action. 83 Mich.App. 225, 268 N.W.2d 534 (1978).

C. OTTENWESS

Plaintiff-appellees' decedent, Michael Ottenwess, was an employee of Wickes Lumber Company. On September 16, 1975, Ottenwess attempted to examine or repair an apparent malfunction of the mechanism which raised and lowered the dump box on the dump truck he was operating in the course of his employment. Ottenwess was crushed to death when the dump box suddenly came down on him, trapping him between the box and the frame of the truck.

At the time of the accident, Ottenwess' employer's no-fault insurer was Travelers Insurance Company. Ottenwess was the owner of a private automobile covered by no-fault insurance issued by the Hawkeye-Security Insurance Company.

On September 16, 1976, plaintiff-appellee Deborah Ottenwess (Schroeder) filed suit in Kent Circuit Court against Travelers Insurance Company and Hawkeye-Security Insurance Company claiming no-fault benefits for the death of Michael H. Ottenwess. Both insurance companies filed motions for summary judgment which were granted by the circuit court.

The Court of Appeals held that the summary judgment in favor of Travelers Insurance Company, insurer of the employer, was proper, but that the summary judgment in favor of Hawkeye-Security Insurance Company, insurer of decedent's private car, was improper, and remanded the case to the trial court for a trial upon the merits. 84 Mich.App. 292, 269 N.W.2d 570 (1978).

D. IN re CERTIFIED QUESTIONS (JOSEPH)

On October 26, 1974, plaintiff Joseph was injured in the course of his employment while driving a truck owned by his employer, IML Freight Company. Joseph has received Workers' Compensation benefits as a result of this injury.

Defendant Transport Indemnity Company paid Joseph no-fault work loss benefits from the date of the accident through August 21, 1976, but deducted the sum of $117 per week. The amount deducted was the amount plaintiff received as Workers' Compensation.

No-fault benefits paid through January 8, 1977 were in the amount of $16,941.90. No no-fault benefits have been paid since that date. Defendant relied on the decisions of the trial court and the Court of Appeals in Mathis v. Interstate Motor Freight System, 73 Mich.App. 602, 252 N.W.2d 842 (1977), for stopping payment of no-fault benefits.

Plaintiff brought suit in Wayne Circuit Court on July 12, 1977. The action was subsequently removed by the defendant to the United States District Court for the Eastern District of Michigan, Southern Division. The parties entered into a stipulation of facts and agreed that the issues to be determined were issues of law. Plaintiff and defendant filed a motion for summary judgment and a counter-motion for summary judgment, respectively.

On February 13, 1979, Judge Kennedy entered an order of certification of questions to this Court, which we accepted.

II

The Worker's Disability Compensation Act (WDCA) and the No-Fault Insurance Act are complete and self-contained legislative schemes addressing discrete problems. Neither act refers expressly to the other.

The WDCA provides a substitute for common-law tort liability founded upon an employer's negligence in failing to maintain a safe working environment. Compensation under this act is for industrial injuries arising out and in the course of the injured person's employment. Compensation is paid by the employer or the employer's workers' compensation insurer under an indemnity contract.

The No-Fault Act provides a substitute for common-law tort liability based upon the ownership or operation of a motor vehicle. Under this act, victims of motor accidents receive insurance benefits from a no-fault insurance...