Joseph Canty v. Michael Chester Mason ( 2024 )

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
JOSEPH CANTY, FOR PUBLICATION
October 04, 2024
Plaintiff-Appellee, 1:14 PM
v No. 365327
Wayne Circuit Court
MICHAEL CHESTER MASON, LC No. 21-004799-NI
Defendant-Appellant.
Before: MARKEY, P.J., and SWARTZLE and MARIANI, JJ.
PER CURIAM.
In 2019, the Michigan Legislature made sweeping changes to the no-fault act, MCL
500.3101 et seq., through the enactment of 2019 PA 21 and 2019 PA 22. This appeal requires us
to construe the interplay between several statutory provisions that were subject to amendment.
Plaintiff, Joseph Canty, seeks to recover medical expenses incurred to treat injuries allegedly
sustained in a motor-vehicle accident involving defendant, Michael Chester Mason. In pursuing
the action, Canty is relying on the tort exception found in MCL 500.3135(3)(c), allowing recovery
of “allowable expenses” by persons who elect not to maintain personal protection insurance (PIP)
coverage under their automobile insurance policies. Canty was permitted to make that election
because he has Medicare coverage; however, it was not used to pay for any of his accident-related
medical expenses. Mason moved for partial summary disposition under MCR 2.116(C)(10),
arguing that Canty’s medical expenses had to be reasonable under MCL 500.3107(1)(a), that Canty
had a duty to mitigate his damages by employing his Medicare coverage to pay the medical bills,
and that the no-fault fee schedules in MCL 500.3157 apply to a suit brought under MCL
500.3135(3)(c). The trial court granted in part and denied in part Mason’s motion for summary
disposition. The court concluded that Canty’s allowable medical expenses had to be reasonable,
that he had no duty to mitigate damages by using his Medicare coverage, and that the fee schedules
were inapplicable. Mason appeals by leave granted. We affirm in part and reverse in part.
I. BACKGROUND
This case arose out of an automobile accident that occurred in February 2021. Canty filed
a complaint against Mason, alleging that Mason negligently caused the accident by, in part,
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traveling too fast for conditions and failing to maintain proper distance, which resulted in Mason’s
vehicle skidding and rear-ending Canty’s car. Canty alleged that he sustained physical injuries in
the accident and, as a result, incurred medical expenses for treatment rendered by healthcare
providers. Canty asserted that he had a statutory right to recover those expenses from Mason under
MCL 500.3135(3)(c), which provides, in pertinent part:
(3) Notwithstanding any other provision of law, tort liability arising from
the ownership, maintenance, or use within this state of a motor vehicle with respect
to which the security required by section 3101(1) was in effect is abolished except
as to:
***
(c) Damages for allowable expenses, work loss, and survivor’s loss as
defined in sections 3107 to 3110, including all future allowable expenses and work
loss, in excess of any applicable limit under section 3107c or the daily, monthly,
and 3-year limitations contained in those sections, or without limit for allowable
expenses if an election to not maintain that coverage was made under section 3107d
or if an exclusion under section 3109a(2) applies. . . . . [Emphasis added.1]
Canty was covered by an automobile insurance policy; however, he had “elect[ed] to not
maintain coverage for [PIP] benefits payable under section 3107(1)(a).” MCL 500.3107d(1).2 He
was able to do so because he otherwise had “qualified health coverage,” MCL 500.3107d(1), in
the form of “parts A and B of the federal Medicare program,” MCL 500.3107d(7)(b)(ii). We note
that “[b]enefits provided or required to be provided under the laws of any state or the federal
government shall be subtracted from the [PIP] benefits otherwise payable for the injury under this
chapter.” MCL 500.3109(1). Additionally, relevant to this case and appeal, MCL 500.3157
contains fee schedules that limit a medical provider’s reimbursement amount.
Subsequently, Mason moved for partial summary disposition under MCR 2.116(C)(10).
He argued that the “without limit” nomenclature used in MCL 500.3135(3)(c) does not mean that
there are no limits on Canty’s recovery of allowable expenses.3 Rather, the medical charges had
to be reasonable and incurred for reasonably necessary services so as to be in compliance with the
definition of “allowable expenses” in MCL 500.3107(1)(a), which provision is incorporated by
express reference in MCL 500.3135(3)(c). Further, Mason contended that Canty and his
healthcare providers had a duty to mitigate damages by utilizing Canty’s Medicare coverage,
1
We note that Canty also alleged a claim for noneconomic damages, asserting that he suffered a
serious impairment of body function as a result of the accident. See MCL 500.3135(1) and (5).
2
MCL 500.3107(1)(a) provides that PIP benefits are payable for, in part, “[a]llowable expenses
consisting of reasonable charges incurred for reasonably necessary products, services and
accommodations for an injured person’s care, recovery, or rehabilitation.”
3
Mason posited that the phrase “without limit” in MCL 500.3135(3)(c) simply references the fact
that there is no PIP coverage limit to exhaust before seeking damages from a tortfeasor, and not
that an injured party is entitled to unlimited expenses from the tortfeasor.
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which was not done. Mason maintained that Canty treated with many providers who accepted
Medicare, yet Medicare was not billed for the services, nor were Medicare rates charged for the
care and treatment. Mason asked the trial court to dismiss all claims for which Canty did not
attempt to bill Medicare. He additionally argued that any recovery of allowable expenses is subject
to the fee schedules in MCL 500.3157. In response, on the issue of mitigation, Canty argued that
MCL 500.3135(3)(c) did not restrict his choice of medical providers, nor did it require him to
submit claims to Medicare for purposes of his cause of action. Moreover, according to Canty,
MCL 500.3135(3)(c) allows recovery “without limit” and does not reference or otherwise
incorporate MCL 500.3157, thereby excluding application of the fee schedules.
Eventually, at a hearing to settle an order regarding a ruling made by the trial court from
the bench on Mason’s motion for summary disposition, the court entertained further argument on
the motion and partially altered its prior ruling, which we need not explore. The trial court now
ruled that Canty had no duty to mitigate damages or expenses “because Medicare and Medicaid
are exempt from the no fault statute.” The court further determined that Canty had to show that
the charges by his medical providers were reasonable and necessary under MCL 500.3107(1)(a)’s
definition of “allowable expenses.” Thus, the charges and expenses were not without some limit.
But the trial court also found that the fee schedules in MCL 500.3157 do not apply to Canty’s
action brought under MCL 500.3135(3)(c). The court entered an order granting in part and
denying in part Mason’s motion for summary disposition. Mason appeals by leave granted. Canty
v Mason, unpublished order of the Court of Appeals, entered August 28, 2023 (Docket No.
365327).
II. ANALYSIS
A. STANDARD OF REVIEW
We review de novo a trial court’s ruling on a motion for summary disposition. Champine
v Dep’t of Transp, 509 Mich 447, 452; 983 NW2d 741 (2022). This Court also reviews de novo
issues of statutory construction. Estes v Titus, 481 Mich 573, 578-579; 751 NW2d 493 (2008).
De novo review “means that we review the issues independently, with no required deference to
the trial court.” People v Beck, 504 Mich 605, 618; 939 NW2d 213 (2019).
B. SUMMARY DISPOSITION PRINCIPLES – MCR 2.116(C)(10)
In Anderson v Transdev Servs, Inc, 341 Mich App 501, 506-507; 991 NW2d 230 (2022),
this Court recited the principles that govern the analysis of a motion brought pursuant to MCR
2.116(C)(10):
MCR 2.116(C)(10) provides that summary disposition is appropriate when,
“[e]xcept as to the amount of damages, there is no genuine issue as to any material
fact, and the moving party is entitled to judgment or partial judgment as a matter of
law.” A motion brought pursuant to MCR 2.116(C)(10) tests the factual support for
a party’s action. “Affidavits, depositions, admissions, or other documentary
evidence in support of the grounds asserted in the motion are required . . . when
judgment is sought based on subrule (C)(10),” MCR 2.116(G)(3)(b), and such
evidence, along with the pleadings, must be considered by the court when ruling on
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the (C)(10) motion, MCR 2.116(G)(5). “When a motion under subrule (C)(10) is
made and supported . . ., an adverse party may not rest upon the mere allegations
or denials of his or her pleading, but must, by affidavits or as otherwise provided in
this rule, set forth specific facts showing that there is a genuine issue for trial.”
MCR 2.116(G)(4).
A trial court may grant a motion for summary disposition under MCR
2.116(C)(10) if the pleadings, affidavits, and other documentary evidence, when
viewed in a light most favorable to the nonmovant, show that there is no genuine
issue with respect to any material fact. A genuine issue of material fact exists when
the record, giving the benefit of reasonable doubt to the opposing party, leaves open
an issue upon which reasonable minds might differ. The trial court is not permitted
to assess credibility, weigh the evidence, or resolve factual disputes, and if material
evidence conflicts, it is not appropriate to grant a motion for summary disposition
under MCR 2.116(C)(10). Like the trial court’s inquiry, when an appellate court
reviews a motion for summary disposition, it makes all legitimate inferences in
favor of the nonmoving party. Speculation is insufficient to create an issue of fact.
A court may only consider substantively admissible evidence actually proffered by
the parties when ruling on the motion. [Quotation marks, citations, and brackets
omitted.]
C. RULES OF STATUTORY CONSTRUCTION
With respect to the rules of statutory interpretation, this Court in Slis v Michigan, 332 Mich
App 312, 335-336; 956 NW2d 569 (2020), observed:
This Court’s role in construing statutory language is to discern and ascertain
the intent of the Legislature, which may reasonably be inferred from the words in
the statute. We must focus our analysis on the express language of the statute
because it offers the most reliable evidence of legislative intent. When statutory
language is clear and unambiguous, we must apply the statute as written. A court
is not permitted to read anything into an unambiguous statute that is not within the
manifest intent of the Legislature. Furthermore, this Court may not rewrite the plain
statutory language or substitute its own policy decisions for those decisions already
made by the Legislature.
Judicial construction of a statute is only permitted when statutory language
is ambiguous. A statute is ambiguous when an irreconcilable conflict exists
between statutory provisions or when a statute is equally susceptible to more than
one meaning. When faced with two alternative reasonable interpretations of a word
in a statute, we should give effect to the interpretation that more faithfully advances
the legislative purpose behind the statute. [Quotation marks and citations omitted.]
D. DISCUSSION AND RESOLUTION
Abiding by the plain and unambiguous language of the various statutory provisions
implicated in this case and the uncontroverted caselaw on mitigation of damages, we conclude that
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resolution of this appeal is fairly straightforward. With respect to MCL 500.3135(3)(c), an injured
person with standard PIP coverage under a no-fault insurance policy and an injured person who
elected not to maintain such coverage and instead had a qualified-health-coverage (QHC) plan can
both recover damages in a traditional tort action for “allowable expenses” as defined in MCL
500.3107 to MCL 500.3110. A distinction between these two individuals is that the person
carrying PIP coverage under a no-fault policy is limited to recovering only amounts in “excess of”
certain statutory limitations on the payment of PIP benefits, but recovery of allowable expenses
by a person who elected not to maintain PIP coverage is “without limit.” MCL 500.3135(3)(c).
We conclude that the “without limit” language of MCL 500.3135(3)(c) cannot be construed to
mean that there are no parameters whatsoever on the amount of recovery. Rather, the “without
limit” phrase, when read in context, simply means that the recovery of allowable expenses does
not solely encompass amounts in excess of the statutory limitations, as is the case with respect to
a party pursuing a tort action after no more PIP benefits are available under a no-fault policy
because the statutory limitations on coverage were met or exhausted. In other words, a person in
Canty’s shoes who elected not to have PIP coverage through an auto insurance policy can recover
dollar one in allowable expenses from the tortfeasor.4 The “without limit” terminology in MCL
500.3135(3)(c) cannot be viewed in a vacuum, and the grammatical structure of Subsection (3)(c)
supports our interpretation of the provision.
Furthermore, under MCL 500.3135(3)(c), the “allowable expenses” available to Canty, if
successful in his tort action, are those defined in MCL 500.3107 to MCL 500.3110. And, as noted
earlier, under MCL 500.3107(1)(a), “allowable expenses” are defined as “reasonable charges
incurred for reasonably necessary products, services and accommodations for an injured person’s
care, recovery, or rehabilitation.”5 We therefore conclude that the trial court properly ruled that
MCL 500.3107(1)(a) limits any recovery by Canty under MCL 500.3135(3)(c) to those expenses
that were reasonable and that were for reasonably necessary services.6
The next issue posed in this case is whether the fee schedules in MCL 500.3157 apply to a
tort action under MCL 500.3135(3)(c). MCL 500.3135(3)(c), while referencing and incorporating
MCL 500.3107 to MCL 500.3110, makes no express mention of MCL 500.3157. But the
introductory or prefatory language of MCL 500.3107(1) states that the provisions found within the
statute, which includes the definition of “allowable expenses,” are “[s]ubject to the exceptions and
limitations in this chapter[.]” And that chapter is Chapter 31 of the Insurance Code of 1956, MCL
500.100 et seq. Chapter 31 encompasses MCL 500.3157; therefore, MCL 500.3135(3)(c), by
incorporating MCL 500.3107, necessarily also incorporates the fee schedules in MCL 500.3157,
4
This proposition is subject to our holding regarding the duty to mitigate damages.
5
Our Supreme Court has “recognized that the plain language of this provision imposes four
requirements that a . . . claimant must prove before recovering benefits for allowable expenses: (1)
the expense must be for an injured person’s care, recovery, or rehabilitation, (2) the expense must
be reasonably necessary, (3) the expense must be incurred, and (4) the charge must be reasonable.”
Douglas v Allstate Ins Co, 492 Mich 241, 259; 821 NW2d 472 (2012).
6
There are additional qualifiers, criteria, and exceptions in MCL 500.3107 to MCL 500.3110 for
purposes of identifying allowable expenses that are recoverable under MCL 500.3135(3)(c).
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making them applicable to this case. Accordingly, the trial court erred by ruling that the fee
schedules cannot be applied to limit Canty’s recovery.
Our concurring-dissenting colleague disagrees with our analysis and resolution of the issue
concerning the fee schedules in MCL 500.3157. He argues that the Legislature did not expressly
identify MCL 500.3157 in the language of the tort-damages provision, MCL 500.3135(3)(c);
therefore, we should not construe MCL 500.3135(3)(c) as if the Legislature had done so. We
respectfully disagree. The Legislature is presumed to be aware of and to have considered existing
statutes when enacting new laws. See Milne v Robinson, 513 Mich 1, 18; 6 NW3d 40 (2024). We
must thus assume that when the Legislature crafted MCL 500.3135(3)(c), which expressly
references MCL 500.3107, it knew quite well that MCL 500.3107 placed restrictions on the
amount of recoverable allowable expenses through limitations and exceptions found in Chapter
31, including the fee schedules. Effectively, the Legislature did indeed identify MCL 500.3157 as
a statutory provision that is to be considered for purposes of setting tort damages under MCL
500.3135(3)(c).
The concurrence/dissent asserts that our interpretation disregards the legislatively-chosen
range specifically targeted in MCL 500.3135(3)(c), i.e., MCL 500.3107 to MCL 500.3110,
improperly expanding the range to incorporate all of Chapter 31, which the Legislature could have
stated outright in MCL 500.3135(3)(c) had that been its intent. We again disagree. First, for the
reasons discussed above, we conclude that if MCL 500.3157 is not taken into consideration, the
plain and unambiguous language of MCL 500.3107(1) referencing Chapter 31, as incorporated by
MCL 500.3135(3)(c), is not being honored and is, instead, rendered surplusage and nugatory. See
Empire Iron Mining Partnership v Tilden Twp, 337 Mich App 579, 586; 977 NW2d 128 (2021)
(in construing statutory language, every word should be given meaning, and we must avoid an
interpretation that would render any part of a statute surplusage or nugatory). Moreover, folding
Chapter 31 into the definition of “allowable expenses” does not implicate each and every provision
in Chapter 31, but only those few that would restrict or limit the amount of allowable expenses,
such as MCL 500.3157.
The concurrence/dissent also contends that the prefatory language of MCL 500.3107(1)
that references Chapter 31 pertains to the availability of insurance or PIP benefits, while MCL
500.3135(3)(c) concerns the availability of tort damages. Therefore, the prefatory language is
inapplicable in relation to MCL 500.3135(3)(c). But the same can be said with respect to the
definition of “allowable expenses” in MCL 500.3107(1)(a): it regards the availability of insurance
or PIP benefits, yet there is no dispute, and the concurrence/dissent agrees, that it also sets the
parameters of tort damages available under MCL 500.3135(3)(c).7
7
We recognize that MCL 500.3107(1) limits the recovery of PIP benefits on the basis of any
pertinent provisions in Chapter 31, but the prefatory language also necessarily places a limit on
the calculation of recoverable allowable expenses. The recovery of PIP benefits encompasses the
recovery of compensation to pay for allowable expenses; the two are inextricably intertwined. If
an expense is not an allowable expense, one cannot recover PIP benefits in relation to that expense.
We do not believe that there is a relevant distinction between PIP benefits and allowable expenses
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The final question concerns mitigation of damages, which requires us to also consider the
impact of the setoff language in MCL 500.3109(1). “Mitigation of damages is a legal doctrine that
seeks to minimize the economic harm arising from wrongdoing.” Morris v Clawson Tank Co, 459
Mich 256, 263; 587 NW2d 253 (1998). It is incumbent on a person who has been harmed by the
commission of a tort to use such means that are reasonable under the circumstances to minimize
or mitigate the amount of damages. Id. A person wronged by a tortfeasor is not entitled to recover
for any item of damage that could have been avoided. Id. at 263-264.
This Court had held that because the no-fault act does not specifically abrogate the
common-law principle that a plaintiff is obligated in a tort action to mitigate his or her damages,
the defense remains viable. Lee v Detroit Med Ctr, 285 Mich App 51, 67; 775 NW2d 326 (2009);
Bak v Citizens Ins Co of America, 199 Mich App 730, 737-738; 503 NW2d 94 (1993).8 Moreover,
and importantly, MCL 500.3135(3)(c) carves out an exception to the abolishment of tort liability
arising from the ownership, maintenance, or use of a motor vehicle. Consequently, Canty’s lawsuit
is a true tort action. Thus, the doctrine of mitigation of damages is applicable.
We reject the trial court’s finding or suggestion that Medicare benefits cannot be taken into
consideration on the issue of mitigation of damages because such benefits were not available to
cover Canty’s medical expenses given that the case arises out of the no-fault act and Medicare is
exempt from the act. In John Hancock Prop & Cas Ins Cos v Blue Cross & Blue Shield of Mich,
437 Mich 368, 373; 471 NW2d 541 (1991), the Michigan Supreme Court, citing 42 USC
1395y(b)(2)(A) (Medicare secondary payer), which is part of the Omnibus Reconciliation Act of
1980, stated:
A federal statute provides that Medicare benefits are not payable where the
medical expense is covered under an automobile insurance policy or plan or under
no-fault insurance. The federal statute thus allocates to automobile insurers the
primary burden of paying the medical expense, arising out of automobile accidents,
of persons covered by the Medicare program.
In this case, Canty did not have PIP coverage for allowable medical expenses through an
automobile insurance policy or no-fault insurance plan because he had healthcare coverage under
parts A and B of Medicare, as expressly permitted by the Legislature under MCL 500.3107d(1)
and (7)(b)(ii). The trial court’s ruling circumvents the legislative goal of allowing motorists to opt
out of PIP coverage where they have QHC through Medicare, leaving the motorist without any
medical coverage for injuries sustained in a motor-vehicle accident. Accordingly, federal law did
for purposes of employing Chapter 31 in relation to calculating damages under MCL
500.3135(3)(c).
8
The Supreme Court in Marquis v Hartford Accident & Indemnity, 444 Mich 638, 651; 513 NW2d
799 (1994), voiced its approval of the Bak decision on the mitigation-of-damages issue in the
context of the no-fault act.
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not prohibit Canty from receiving Medicare benefits for medical expenses incurred as a result of
the accident.
Furthermore, MCL 500.3135(3)(c) incorporates MCL 500.3109(1), which, as quoted
earlier, provides that “[b]enefits provided or required to be provided under the laws of any state
or the federal government shall be subtracted from . . . benefits otherwise payable for the injury
under this chapter.” (Emphasis added.) In general, Medicare healthcare benefits constitute
benefits provided under the laws of the federal government. See 42 USC 1395 et seq. And Canty
has Medicare coverage. Apparently, no Medicare benefits have been provided to or on behalf of
Canty in relation to medical expenses incurred as a result of the accident. Therefore, the question
becomes whether Medicare benefits would have been required to be provided to him or his
providers had any of the pertinent medical bills been submitted to Medicare for payment. And to
that extent, Mason is entitled to a setoff under MCL 500.3109(1) for purposes of any damage
calculation on a finding of liability. We would also reach that same conclusion solely under
common-law mitigation principles because the failure to seek payment from Medicare would not
have been reasonable as a matter of law if the medical provider accepted Medicare.9
III. CONCLUSION
We conclude (1) that any damages recoverable by Canty under MCL 500.3135(3)(c) must
constitute “allowable expenses” under MCL 500.3107 to MCL 500.3110, (2) that the fee schedules
in MCL 500.3157 apply to Canty’s action, (3) that common-law, mitigation-of-damages principles
are also applicable, (4) that under either MCL 500.3109(1) or common-law mitigation principles,
Mason is entitled to a setoff for medical expenses that would have been covered by Medicare, and
(5) that, if necessary, the trier of fact must resolve whether any incurred expenses for services
rendered by providers who did not accept Medicare were reasonably incurred for purposes of
mitigating damages. With these guideposts in place, Mason is free to renew his motion for
summary disposition should he be so inclined.
We affirm in part and reverse and remand in part for further proceedings consistent with
this opinion. We do not retain jurisdiction. We decline to tax costs under MCR 7.219.
/s/ Jane E. Markey
/s/ Brock A. Swartzle
9
We wish to make clear that if Canty received pertinent medical services and treatment from a
provider who did not accept Medicare, those expenses might still be recoverable. In that situation,
the issue to be resolved by the trier of fact in relation to mitigation would concern whether it was
reasonable under all of the surrounding circumstances for Canty to see a provider who did not
accept Medicare.
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