Perez v. State Farm Mut. Auto. Ins. Co.
| Citation | 418 Mich. 634,344 N.W.2d 773 |
| Decision Date | 12 March 1984 |
| Docket Number | No. 13,Docket No. 67122,13 |
| Parties | Herminio PEREZ and Matilde Perez, husband and wife, and Emilio P. Lopez, Plaintiffs-Appellants, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, an Illinois corporation, Defendant-Appellee. Calendar |
| Court | Michigan Supreme Court |
William E. Rheaume, Abood, Abood & Rheaume, P.C., Lansing, for plaintiffs-appellants.
Everett R. Trebilcock, Joel E. Dowley, Fraser, Trebilcock, Davis & Foster, P.C., Lansing, for defendant-appellee.
LEVIN, Justice (for reversal).
The question presented is whether amounts required to be paid as workers' compensation that have not been and will not be provided to a worker injured in a motor vehicle accident because the employer did not have workers' compensation coverage are required to be subtracted from work-loss benefits otherwise required to be paid under the no-fault automobile liability act. The Court of Appeals held that the amount so payable but not paid is required to be subtracted from work-loss benefits by § 3109(1) of the no-fault act; one judge dissented. Perez v. State Farm Mutual Automobile Ins. Co., 105 Mich.App. 202, 306 N.W.2d 451 (1981). A second panel of the Court of Appeals relied on the dissenting opinion in Perez in reaching the opposite conclusion in Davis v. Auto-Owners Ins. Co., 116 Mich.App. 402, 323 N.W.2d 418 (1982).
We would hold, in agreement with the result reached by the Court of Appeals in Davis, 1 that the amount so payable but not paid is not required to be subtracted from work-loss benefits. Workers' compensation benefits that will not be paid because the employer failed to purchase insurance are not "the kind of governmental benefits the Legislature intended to be subtracted from no-fault benefits". Jarosz v. DAIIE, 418 Mich. 565, 345 N.W.2d 563 (1984). The "required to be provided" clause of § 3109(1) does not unambiguously alter this conclusion, and was apparently drafted with a different situation in mind. Construing § 3109(1) to mean that it does not require the subtraction of workers' compensation benefits payable but not paid implements the legislative intent underlying the no-fault act and the legislative intent to render the workers' compensation act and the no-fault act complete and self-contained statutory schemes.
On March 23, 1979, plaintiffs Herminio Perez and Emilio Lopez were injured when the truck in which they were riding collided with a tractor-trailer. They were using the truck in connection with the business of their employer at the time of the accident. Perez was a stockholder of the employer. He and the other stockholder were the only full-time employees. Lopez was a part-time employee. The employer had not secured workers' compensation insurance.
State Farm Mutual Automobile Insurance Company, the no-fault insurer of the truck, refused to pay no-fault medical and work-loss benefits to Perez and Lopez. State Farm claims that workers' compensation benefits, because they are "required to be provided" under state law, may be subtracted from no-fault benefits although workers' compensation benefits are unavailable to the injured worker because the employer has failed to provide workers' compensation coverage. 2
Section 3109(1) provides:
"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." 3
The legislative purpose in providing work-loss benefits to an injured person under the no-fault act is to compensate him (and his dependents) by providing protection from the economic hardship caused by the loss of the wage earner's income as a result of an automobile accident. O'Donnell v. State Farm Mutual Automobile Ins. Co., 404 Mich. 524, 545-546, 273 N.W.2d 829 (1979), app. dis. 444 U.S. 803, 100 S.Ct. 22, 62 L.Ed.2d 16 (1979); Jarosz v. DAIIE, supra, 418 Mich. p. 573, 345 N.W.2d 563.
Amounts payable as workers' compensation benefits that will not be paid to an injured worker because his employer failed to obtain workers' compensation coverage cannot duplicate no-fault work-loss benefits and are not required to be subtracted from no-fault work-loss benefits. 4 There cannot be a duplicative recovery where only a single recovery is available. 5
The dissenting opinion would permit the setoff by applying, without construction or interpretation, the "required to be provided" clause of § 3109(1), which it finds to be unambiguous:
"In the context in which it is used in § 3109(1), the language chosen by the Legislature conveys a single and unambiguous meaning: that a setoff shall be made either when the workers' compensation benefits are provided or when they are not provided, but are 'required to be provided'.
"Section 3109(1) is not, on its face, ambiguous." 6
After noting that "[w]here there is no ambiguity [in a statute, courts] are not free to interpret or construe, but are bound to apply the provision as written", 7 the opinion concludes that amounts payable as workers' compensation are "required to be provided", and therefore must be subtracted from a no-fault recovery although they are not actually paid because the employer failed to obtain workers' compensation coverage.
To be sure, this Court has said that "[i]f the language employed in a statute is plain, certain and unambiguous, a bare reading suffices and no interpretation is necessary". Grand Rapids v. Crocker, 219 Mich. 178, 182, 189 N.W. 221 (1922). 8 We do not agree, however, that the "required to be provided" clause of § 3109(1) is so clear and unambiguous. 9
The most unambiguous aspect of § 3109(1) is the term "benefits". The literal meaning of that term would require that all governmentally mandated benefits be subtracted from a no-fault recovery.
Despite this unambiguous term, however, this Court today declares that "[c]ertainly not all '[b]enefits provided or required to be provided under the laws of any state or the federal government' must be subtracted from no-fault personal protection insurance benefits otherwise due". Jarosz v. DAIIE, supra, 418 Mich. p. ---, --- N.W.2d ---- (emphasis in original). The Court sets forth a two-part test for determining which governmentally mandated payments within the literal terms of § 3109(1) are "benefits" required to be subtracted and which government payments, though also falling within the literal terms of § 3109(1), are not "benefits" required to be subtracted from a no-fault recovery. This test is then applied in such a way as to hold that although the social security retirement payments at issue in Jarosz are "benefits provided * * * under the laws of * * * the federal government", they are not "benefits" required by § 3109(1) to be subtracted.
The dissenting opinion does not explain why the "required to be provided" clause of § 3109(1) is so unambiguous as to require mere application, while the term "benefits" is sufficiently ambiguous to require the formal two-part test enunciated in Jarosz to properly construe that term. Just as this Court construed the term "benefits" in Jarosz and concluded that some government payments but not others are "benefits", so this Court today construes the "required to be provided" clause to determine whether sums payable as workers' compensation that are not paid to an injured worker because his employer failed to obtain workers' compensation coverage may nevertheless be subtracted from no-fault work-loss benefits.
Section 3109(1) is based on two model acts: UMVARA 10 and MVBPIA. 11 Both of these model acts provide for the subtraction of benefits and advantages a person "receives or is entitled to receive" because of the injury. 12 The "provided or required to be provided" language of § 3109(1) is functionally equivalent to the "received or is entitled to receive" language of UMVARA and MVBPIA; there is no indication that the Legislature intended any substantive change in the meaning or content of the provision when it altered the words contained in the two model acts. 13 This language appears to have been addressed to the question whether a person entitled to no-fault benefits may either deliberately or unwittingly forego governmentally mandated payments and nonetheless be entitled to full no-fault benefits. Schermer,Automobile Liability Insurance (2d ed.), § 8.01, pp. 8-3 to 8-4. 14
Some state statutes provide that only benefits "received" or "recovered" are required to be subtracted. 15 "The implication is, therefore, that an insured may forego taking such benefits without incurring the risk of a deduction." Id., pp. 8-4 to 8-5. Other state statutes as well as UMVARA and MVBPIA, on the other hand, permit the subtraction of workers' compensation payments that the insured is "entitled to receive", or that are "payable" or "collectible" by him, 16 "and thus it would appear [they] are deductible upon a showing of availability to the insured". Id., p. 8-4.
By enacting the "required to be provided" language of § 3109(1), the Legislature seems to have aligned the Michigan no-fault act with the latter group of states and with UMVARA and MVBPIA. By declaring that workers' compensation payments "provided or required to be provided" are to be subtracted from a no-fault recovery, the Legislature appears to have set forth a straightforward answer to the question it was addressing: an injured worker must pursue available workers' compensation payments because they are deductible simply by virtue of their availability. The "required to be provided" clause does not mean that sums payable as workers' compensation that are not available to the injured worker because his employer failed to provide workers' compensation coverage are nonetheless to be subtracted from no-fault work-loss benefits. 17
The "required to be provided" clause of § 3109(1) means that the injured person is obliged to use reasonable...
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