Siller v. Employers Ins. of Wausau, Docket No. 62782
| Decision Date | 06 May 1983 |
| Docket Number | Docket No. 62782 |
| Citation | 333 N.W.2d 197,123 Mich.App. 140 |
| Parties | Rosemary A. SILLER, Plaintiff-Appellee, v. EMPLOYERS INSURANCE OF WAUSAU, Defendant-Appellant. |
| Court | Court of Appeal of Michigan — District of US |
McLean & McCarthy by John M. McCarthy, Houghton, for plaintiff-appellee.
Corcoran, Ingleson & Lewinski, P.C. by Harry Ingleson, II, and David E. Bulson, Sault Ste. Marie, for defendant-appellant.
Before WALSH, P.J., and ALLEN and CAVANAGH, JJ.
After being injured by an automobile, the plaintiff was entitled to receive benefits under two different insurance policies, one of which was carried by her parents and one of which was carried by her employer and had been issued by the defendant. Plaintiff collected payments for her hospital and medical expenses under the insurance policy carried by her parents and then filed a claim with the defendant to collect for these expenses under the defendant's policy. Defendant refused to pay the claim, citing the coordination of benefits clause contained within its master policy. Plaintiff filed suit against the defendant, and both parties moved for summary judgment. The trial court granted a summary judgment in favor of the plaintiff and also granted penalty interest, pursuant to M.C.L. § 500.2006; M.S.A. § 24.12006. Defendant appeals by right.
Defendant raises two issues on appeal. First, the defendant argues that its coordination of benefits clause is valid and enforceable and requires that any benefits owed to the plaintiff be reduced by the amount the plaintiff received under her parents' insurance policy. Second, the defendant argues that the trial court improperly assessed the penalty interest provided for in M.C.L. § 500.2006; M.S.A. § 24.12006. We disagree and affirm.
The insurance policy in question is subject to the provisions of the uniform disability insurance policy provisions law, M.C.L. § 500.3400 et seq.; M.S.A. § 24.13400 et seq. The purpose of this law is to provide for standardized language within insurance clauses so that disability insurance policies will be substantially uniform throughout the states.
The disability insurance clauses provided for in the act can be divided into two categories. First, the act provides for mandatory provisions which must appear in each policy issued to any person within this state, and these provisions must be stated in the words which appear in the relevant sections. See M.C.L. §§ 500.3407-500.3424; M.S.A. §§ 24.13407-24.13424. Second, the act provides for optional provisions which, although their inclusion in a policy is optional, must also be stated in the words which appear in the relevant sections of the act. See M.C.L. § 500.3430; M.S.A. § 24.13430, and M.C.L. §§ 500.3432-500.3454; M.S.A. §§ 24.13432-24.13454.
In comparing the defendant's coordination of benefits clause with the act's sections setting forth the language dealing with this matter, M.C.L. §§ 500.3438, 500.3440; M.S.A. §§ 24.13438, 24.13440, it is apparent that they are not the same. While the language of these optional clauses may be varied with the insurance commissioner's approval, the record indicates that such approval was not requested nor granted in this case. We conclude that the defendant's failure to include in its insurance policy the explicit statutory language pertaining to coordination of benefits clauses renders the policy's coordination of benefits clause invalid.
In light of our conclusion that the coordination of benefits clause in the defendant's insurance policy is invalid under the uniform disability insurance policy provisions law, we hold that the defendant is not entitled to reduce the benefits owed the plaintiff under its policy by the amount the plaintiff received under her parents' insurance policy. Plaintiff is entitled to collect the full benefits payable pursuant to the provisions of the defendant's disability insurance policy.
Defendant next argues that the trial court erroneously assessed a 12% interest penalty against the defendant, pursuant to M.C.L. § 500.2006; M.S.A. § 24.12006. Defendant reasons that it should not be penalized as a recalcitrant insurer when it was only reasonably asserting that it was not liable for the benefits because of its coordination of benefits clause.
M.C.L. § 500.2006; M.S.A. § 24.12006 provides in pertinent part:
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