Workman v. Detroit Auto. Inter-Insurance Exchange

• Decision Date: 04 January 1979
• Docket Number: No. 12,Docket No. 58106,INTER-INSURANCE,12
• Parties: Deborah L. WORKMAN, Plaintiff-Appellee and Cross-Appellant, v. DETROIT AUTOMOBILEEXCHANGE, Defendant and Cross-Appellee, and Community Services Insurance Company, Defendant-Appellant and Cross-Appellee. Calendar
• Court: Michigan Supreme Court

Page 373

274 N.W.2d 373

404 Mich. 477

Deborah L. WORKMAN, Plaintiff-Appellee and Cross-Appellant, v. DETROIT AUTOMOBILE INTER-INSURANCE EXCHANGE, Defendant and Cross-Appellee, and Community Services Insurance Company, Defendant-Appellant

and Cross-Appellee.

Docket No. 58106.

Calendar No. 12.

Supreme Court of Michigan.

Argued March 3, 1977.

Decided Jan. 4, 1979.

Dilley & Dilley by Robert W. Dilley, Grand Rapids, for plaintiff-appellee and cross-appellant.

Allaben, Massie, Vander Weyden & Timmer, Grand Rapids (Keith A. Vander Weyden, Grand Rapids, of counsel), for defendant and cross-appellee, Detroit Auto. Inter-Insurance Exchange.

Cholette, Perkins & Buchanan, Grand Rapids (Edward D. Wells, Grand Rapids, of counsel), for defendant-appellant and cross-appellee.

WILLIAMS, Justice.

This No-Fault Insurance Act (M.C.L. § 500.3101 Et seq.; M.S.A. § 24.13101 Et seq., as amended) case, involving a woman passenger who lost the use of her limbs as the result of an accident in an automobile owned and driven by her sister, raises three issues: (1) the legal interpretation and application of "relative of either domiciled in the same household" in § 3114 of the act, because plaintiff had been living with her husband and child in a mobile home some 40 or 50 feet from her husband's parents' house, although they at the time of the accident were temporarily staying with plaintiff's younger sister in her mother's house while her mother was away; (2) whether § 3109(1) of the act, which 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" entitles the liable insurance carrier to subtract from personal injury protection insurance benefits otherwise due plaintiff the amount paid by medicaid for plaintiff's medical expenses; (3) whether, under § 3116 of the act (which provides "after recovery * * * a subtraction shall be made to the extent of the recovery * * * "), the liable insurance carrier may subtract from the personal injury protection insurance no-fault benefits otherwise due plaintiff the amount of her recovery from the tortfeasor recovered pursuant to § 3135 of the act, which permits suit in tort "for noneconomic loss * * * if the injured person has suffered death, serious impairment of body function or permanent serious disfigurement".

First, we affirm, applying a four-point test to the facts, the trial court's holding that plaintiff, living in the mobile home next to her father-in-law, was "domiciled in the same household" as her father-in-law. Second, we affirm the trial court on different grounds and remand in accordance with our holding that since plaintiff is not eligible for a governmental medicaid benefit "provided or required to be provided under the laws of any state", any set-off pursuant to § 3109(1) is impermissible as no cognizable governmental benefit exists to be subtracted. We express no opinion with respect to the propriety of a set-off of redundant, accident-related, Ex gratia governmental transfer coverage. Finally, we hold that the seemingly absolute language of § 3116 which permits subtraction of tort recoveries from personal injury protection no-fault benefits must be read in connection with § 3135, which allows tort recovery for "non-economic loss," to the effect that there may be subtraction for tort recoveries when the tort recovery includes damages for losses for which personal injury protection benefits were paid, but not for non-economic recoveries permitted under § 3135.

I. FACTS

Plaintiff Deborah Workman was injured and rendered a paraplegic in a one-vehicle automobile accident on August 22, 1974, in Newaygo County, while an occupant of an automobile owned and being operated by her sister, Nancy Jo Fessenden (now Nancy Jo Magoon). As a consequence of the accident plaintiff sustained severe and disabling injuries (Appellant's and Cross-Appellant's Appendix, hereinafter referred to as "Appendix", p. 39a).

In early August, 1974, plaintiff, her husband James Workman, Jr., and their child moved from an apartment into a travel trailer owned by plaintiff's father-in-law, James Workman, Sr. The trailer was located on James Workman, Sr.'s property, approximately forty to fifty feet from his house (Appendix, pp. 43a, 46a).

In mid-August, 1974, either three or four days prior to the accident, plaintiff, her husband, and child went to stay with plaintiff's younger sister, Jody Fessenden, at the residence of her mother, Mrs. Joann Fessenden, so the younger sister would not be alone while her mother was away on vacation. (Appendix, 48a) When the accident occurred on August 22, 1974, plaintiff, her husband, and child were still staying at Mrs. Fessenden's residence. However, they planned to return to the trailer as soon as Mr. Workman's parents returned from a vacation they were to take when their son and his family went to Mrs. Fessenden's (Appendix 48a, 57a).

When the accident occurred, neither plaintiff nor her husband owned a motor vehicle (Appendix, p. 20a). Because of this fact, on November 29, 1974, plaintiff filed suit to obtain Declaratory Judgment in Kent Circuit Court to determine which of three insurance companies was responsible for providing her personal injury protection insurance benefits under Michigan's No-Fault Insurance Act, 1972 P.A. 294 as amended, M.C.L.A. § 500.3101 Et seq.; M.S.A. § 24.13101 Et seq. (hereinafter referred to as the "No-Fault Act" or "the act"). Because neither plaintiff nor her husband owned a motor vehicle themselves, the relevant statutory provision for determining which insurer was responsible to her for personal injury protection insurance benefits is § 3114. Under § 3114(1), as amended by 1975 P.A. 137, "a personal protection insurance policy applies to accidental bodily injury to the person named in the policy, his spouse And a relative of either domiciled in the same household ". Thus, arguably, plaintiff's mother's insurer, Wolverine Insurance Company, was responsible for providing plaintiff's personal injury benefits if plaintiff was "domiciled in the same household" as her mother. Or, arguably, plaintiff's father-in-law's insurer, Community Services Insurance Company, was responsible for providing plaintiff's personal injury benefits if plaintiff was "a relative" to him and was "domiciled in the same household". However, if neither of the above situations were applicable, I. e., § 3114(1) was not applicable to this case, then § 3114(4)(a) would come into effect. This provision states:

"(4) Except as provided in subsections (1) to (3), a person suffering accidental bodily injury while an occupant of a motor vehicle shall claim personal protection insurance benefits from insurers in the following order of priority:

"(a) The insurer of the owner or registrant of the vehicle occupied." M.C.L. § 500.3114(4); M.S.A. § 24.13114(4).

If § 3114(4)(a) were applicable, plaintiff's sister Nancy Jo Fessenden's insurer, Detroit Automobile Inter-Insurance Exchange, would be responsible for providing her personal injury benefits.

On May 5, 1975, the trial court granted a summary judgment of no cause of action to Wolverine Insurance Company on the insurance policy covering plaintiff's mother, Mrs. Joann Fessenden, on the basis that plaintiff was not domiciled at her mother's residence when the accident occurred.

On September 19, 1975, after trial between plaintiff and the remaining two defendants, Community Services Insurance Company and Detroit Automobile Inter-Insurance Exchange, the court held defendant Community Services Insurance Company (plaintiff's father-in-law's insurer) responsible for providing plaintiff personal injury protection insurance benefits under the No-Fault Act. In addition, the court held there was no cause of action as to defendant Detroit Automobile Inter-Insurance Exchange (plaintiff's sister's insurer).

The proceedings at this point become factually complicated.

On October 2, 1975, plaintiff made a motion to reopen proofs and for summary judgment with respect to the following relief she prayed for in the first amended complaint of April 18, 1975:

"COMES NOW the above named plaintiff and amends her Complaint by addition to the prayer for relief as follows:

"(e) determine that benefits payable to plaintiff under the No Fault Automobile Insurance Statute are not subject to reduction by benefits paid or payable to plaintiff by Michigan Department of Social Services under its Medicaid program; that is (M.C.L. § 500.3109(1); M.S.A. § 24.13109(1)) does not apply to benefits paid or payable under the Medicaid program operated by Michigan Department of Social Services."

On October 10, 1975, defendant Community Services Insurance Company appealed the judgment in favor of Detroit Automobile Inter-Insurance Exchange to the Court of Appeals. On October 14, 1975, plaintiff cross-appealed. On this same date, the court also granted plaintiff's October 2 motion to reopen proofs with respect to the issue stated in her April 18 amended complaint. On November 28, 1975, plaintiff filed a second amended complaint, and the court granted leave to further amend her complaint, this time to include the following issue:

"COMES NOW the above named plaintiff and further amends her Complaint as amended on April 18, 1975, by addition to the prayer for relief as follows:

"(f) determine that the defendant adjudged by this Court to be liable to plaintiff for No Fault Benefits is not entitled to subtraction from No Fault Benefits accrued nor reimbursement for No Fault Benefits paid, in respect to plaintiff's recovery from the third party tortfeasor."

Importantly, while the above proceedings were taking place, plaintiff and her husband had brought suit in tort for the injuries she sustained in the accident. The elements of damages claimed in their complaint were limited to "noneconomic loss" as...