Wieringa v. Blue Care Network

• Decision Date: 03 October 1994
• Docket Number: Docket No. 160244
• Citation: 207 Mich.App. 142,523 N.W.2d 872
• Parties: William R. WIERINGA, Barbara Jean Wieringa, and Nikole Wieringa, Plaintiffs-Appellees, v. BLUE CARE NETWORK, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 872

523 N.W.2d 872

207 Mich.App. 142

William R. WIERINGA, Barbara Jean Wieringa, and Nikole Wieringa, Plaintiffs-Appellees, v. BLUE CARE NETWORK, Defendant-Appellant.

Docket No. 160244.

Court of Appeals of Michigan.

Submitted April 12, 1994, at Grand Rapids.

Decided Oct. 3, 1994, at 9:20 a.m.

Released for Publication Dec. 2, 1994.

Dilley, Dewey, Damon & Condon, P.C. by Jonathan S. Damon, Grand Rapids, for plaintiffs.

Schenk, Boncher & Prasher by Frederick J. Boncher and Curtis D. Rypma, Grand Rapids, for defendant.

Before MICHAEL J. KELLY, P.J., and HOOD and MILLER, ^* JJ.

HOOD, Judge.

Defendant Blue Care Network appeals as of right the trial court's order denying defendant's motion for summary disposition and granting summary disposition in favor of plaintiffs. We affirm.

The relevant facts are undisputed. Plaintiffs, who are Michigan residents, were injured in an automobile accident while traveling in Pennsylvania. At the time of the accident, defendant was plaintiffs' health insurer. Plaintiffs were also insured under a coordinated motor vehicle insurance policy issued by Wolverine Mutual Insurance Company. Under the coordinated policy, defendant became the primary health insurer for plaintiffs, while Wolverine was designated the secondary insurer. Consequently, defendant, as the primary insurer, paid medical expenses in the amount of $29,716.44 on behalf of plaintiffs for injuries sustained in the accident.

Plaintiffs subsequently instituted a third-party tort claim against Anthony T. Gonczarow, who drove the other vehicle involved in the accident. Like plaintiffs, Mr. Gonczarow did not live in Pennsylvania at the time of the accident. He was an Indiana resident. Before plaintiffs actually filed their claim, Gonczarow and his insurer, Hawkeye-Security Insurance Company, agreed to settle. The settlement amount exceeded the $29,716.44 currently in dispute. However, because defendant had asserted a lien against the settlement, seeking reimbursement of the $29,716.44, Hawkeye issued two checks totaling $29,716.44 to plaintiffs and defendant jointly (one check for $27,439.74 was made payable to plaintiffs William and Barbara Wieringa and defendant and one check for $2,276.70 was made payable to Nikole Wieringa and defendant). The checks were held in escrow pending resolution of this matter.

Plaintiffs filed a declaratory action, asserting that they were entitled to the escrowed funds. Plaintiffs also claimed that defendant's lien was void. Defendant then filed its own declaratory action against plaintiffs, asserting that it was entitled to the $29,716.44 as reimbursement for medical expenses pursuant to the subrogation language of the insurance contract. Competing motions for summary disposition were filed. The trial court granted plaintiffs' motion for summary disposition, entered a declaratory judgment against defendant, and awarded plaintiffs the escrowed funds. Defendant claims that the trial court erred in granting summary disposition and declaratory relief to plaintiffs. We disagree.

In reviewing a trial court's decision to grant summary disposition, this Court conducts a review de novo to determine whether the pleadings showed that a party was entitled to judgment as a matter of law or whether affidavits or other documentary evidence showed that no genuine issue of material fact existed. MCR 2.116(I)(1); Asher v. Exxon Co., U.S.A., 200 Mich.App. 635, 638, 504 N.W.2d 728 (1993). If either inquiry results in an affirmative response, the trial court should have rendered judgment without delay. Id.

Defendant claims that it is entitled to reimbursement pursuant to the subrogation clause contained in the insurance contract. More specifically, defendant argues that the trial court erred in treating it, a health and accident insurer, as a no-fault insurer and treating benefits it paid to plaintiffs as no-fault benefits. Defendant asserts that it should not be required to comply with the requirements of the no-fault act simply because plaintiffs elected to coordinate insurance coverage and look to defendant for primary no-fault coverage. According to defendant, it is not a no-fault insurer and, thus, the language of the contract should control.

Defendant relies on Auto Club Ins. Ass'n v. New York Life Ins. Co., 440 Mich. 126, 485 N.W.2d 695 (1992), in support of this position. In that case, Auto Club Insurance Association, a no-fault insurance carrier, brought an action against New York Life Insurance Company, a health insurance carrier, seeking reimbursement for coordinated medical expenses paid to an insured for injuries sustained in an automobile accident. New York Life moved for summary disposition, claiming that Auto Club's suit was barred because it had not been filed within the one-year limitation period provided in § 3145(1) of the no-fault act, M.C.L. § 500.3145(1); M.S.A. § 24.13145(1). The trial court denied New York Life's motion for summary disposition and found § 3145 inapplicable. In so doing, the trial court concluded that Auto Club's suit was not an action for personal protection insurance benefits, but rather an action for health and accident benefits under the insurance contract issued by New York Life. Therefore, the trial court concluded that the action was governed by the six- year statute of limitations applicable to contract actions.

A panel of this Court reversed the trial court's decision, 187 Mich.App. 276, 466 N.W.2d 711 (1991), and concluded that no matter how the action was characterized, it was one for recovery of no-fault benefits paid. Therefore, the one-year limitation period under the no-fault act was deemed applicable. This decision was reversed by the Michigan Supreme Court. The Supreme Court reaffirmed the trial court's conclusion that the action was not controlled by the one-year period of limitation set forth in the no-fault act but, instead, was governed by the six-year period of limitation for contract actions. In so concluding, the Supreme Court stated that, "[e]ven though, as a result of coordination, the obligation of NY Life to provide benefits became primary, it does not follow that NY Life was transformed into a no-fault insurer any more than it follows that the benefits due under its policy were transformed into no-fault benefits." 440 Mich. at 139, 485 N.W.2d 695. In concluding, the Supreme Court stated that § 3145(1) of the no-fault act did not apply to plaintiff's common-law action as subrogee to recover benefits due under the health and accident insurance contract issued by defendant. 440 Mich. at 140, 485 N.W.2d 695.

Though the issue decided in Auto Club (competing statutes of limitations) is unrelated and dissimilar to the question presented here, defendant relies on the above-quoted language to support its argument that the provisions of the no-fault act are inapplicable in this case because it is not a no-fault insurer. Defendant, citing Auto Club, contends that even though it was the primary provider under the coordinated no-fault policy and paid medical bills as a result of the accident, it is not a no-fault insurer.

Section 3116(4) of the no-fault act, M.C.L. § 500.3116(4); M.S.A. § 24.13116(4), which limits the ability of insurers to obtain reimbursement after they pay benefits to insureds, provides:

A subtraction or reimbursement shall not be due the claimant's insurer from that portion of any recovery to the extent that recovery is realized for noneconomic loss as provided in section 3135(1) and (2)(b) or for allowable expenses, work loss, and survivor's loss as defined in sections 3107 to 3110 in excess of the amount recovered by the claimant from his or her insurer. [Emphasis added.]

Defendant argues that it was not placed in the same status as a no-fault insurer simply because plaintiffs elected to coordinate their insurance coverage and defendant was the primary insurer. Therefore, according to defendant, it is not bound by the limitations on reimbursement set forth in § 3116(4). Instead, defendant argues that the subrogation clause contained in the insurance contract should govern. For several reasons, we disagree.

Section 3.04 of the parties' insurance contract provides:

A. Subrogation means that Health Plan will have the same right as a Member to recover expenses for treatment of an injury or illness for which another person or organization is legally liable, to the extent Health Plan provides services in such situations. Health Plan will be subrogated to the Member's right of recovery against the responsible person or organization.

B. The Member agrees, by acceptance of an...