Makenzie Greer v. Advantage Health

Order Michigan Supreme Court
Lansing, Michigan
July 8, 2016 Robert P. Young, Jr.,
Chief Justice
149494 & (50) Stephen J. Markman
Brian K. Zahra
Bridget M. McCormack
David F. Viviano
MAKENZIE GREER, a Minor, Richard H. Bernstein
KENNETH GREER, Individually and Joan L. Larsen,
as Conservator, and ELIZABETH Justices
GREER,
Plaintiffs-Appellees/
Cross-Appellants,
v SC: 149494
COA: 312655
Kent CC: 10-009033-NH
ADVANTAGE HEALTH and ANITA
R. AVERY, M.D.,
Defendants-Appellants/
Cross-Appellees,
and
TRINITY HEALTH MICHIGAN, d/b/a
ST. MARY’S HOSPITAL and KRISTINA
MIXER, M.D.,
Defendants.
____________________________________/
On order of the Court, leave to appeal having been granted and the briefs and oral
arguments of the parties having been considered by the Court, we VACATE our order of
December 10, 2014. The application for leave to appeal the May 13, 2014 judgment of
the Court of Appeals and the application for leave to appeal as cross-appellants are
DENIED, because we are no longer persuaded that the questions presented should be
reviewed by this Court.
ZAHRA, J. (concurring).
I concur in the majority’s conclusion that leave to appeal was improvidently
granted in this case. I write separately to bring this case to the attention of the
Legislature. To the extent the Legislature did not intend MCL 600.6303(4) to exclude
from the statutory collateral-source rule anything greater than the actual amount of a
contractual lien exercised by a lienholder, it needs to amend the statute to expressly state
its intent.
“ ‘[T]he common-law collateral-source rule provides that the recovery of damages
from a tortfeasor is not reduced by the plaintiff’s receipt of money in compensation for
2
his injuries from other sources.’ ” 1 The rule was first recognized in 1854, at about the
same time the theory of liability based on fault was established. 2 Under the common-law
rule, an injured person was allowed to retain the proceeds of insurance paid to him or her
as a policyholder and recover a second time from a tortfeasor. 3 The justifications
underlying the common-law rule included its punishment objective and deterrent effect in
tort law. 4
In 1986, the Legislature abrogated the common-law collateral-source rule for tort
claims when it enacted MCL 600.6303 (the statutory collateral-source rule) as part of a
wave of comprehensive tort reforms. 5 In contrast to the common-law rule, the statute
1
Nasser v Auto Club Ins Ass’n, 435 Mich 33, 58 (1990), quoting Tebo v Havlik, 418
Mich 350, 366 (1984) (opinion by BRICKLEY, J.); see also Motts v Mich Cab Co, 274
Mich 437, 443-446 (1936).
2
See Propeller Monticello v Mollison, 58 US (17 How) 152, 155 (1854) (often credited
as the first case applying the common-law collateral-source rule); Comment, The
Collateral Source Rule: Double Recovery and Indifference to Societal Interests in the
Law of Tort Damages, 2 U Puget Sound L Rev 197, 198-199 (1978) (noting Propeller
Monticello as the first United States case recognizing the collateral-source rule).
3
Tebo, 418 Mich at 366 (opinion by BRICKLEY, J.). See also Senate Select Committee
on Civil Justice Reform, A Report on Civil Justice in Michigan (presented to the
Michigan Senate on September 26, 1985, in fulfillment of Senate Resolution No. 204).
4
See 4 Restatement Torts, 2d, § 901(c), p 451 (stating that one of the purposes of tort
damages is to “punish wrongdoers and deter wrongful conduct”). See also Perrott v
Shearer, 17 Mich 48, 55-56 (1868); Gypsum Carrier, Inc v Handelsman, 307 F2d 525,
534 (CA 9, 1962).
5
MCL 600.6303 provides in relevant part:
(1) In a personal injury action in which the plaintiff seeks to recover
for the expense of medical care, rehabilitation services, loss of earnings,
loss of earning capacity, or other economic loss, evidence to establish that
the expense or loss was paid or is payable, in whole or in part, by a
collateral source shall be admissible to the court in which the action was
brought after a verdict for the plaintiff and before a judgment is entered on
the verdict. Subject to subsection (5), if the court determines that all or part
of the plaintiff's expense or loss has been paid or is payable by a collateral
source, the court shall reduce that portion of the judgment which represents
damages paid or payable by a collateral source by an amount equal to the
sum determined pursuant to subsection (2). This reduction shall not exceed
3
allows for the reduction of a plaintiff’s award for past economic damages by payments
from collateral sources after a verdict has been rendered. The legislative intent in
enacting the statutory collateral-source rule was “to prevent personal injury plaintiffs
from being compensated twice for the same injury.” 6 Given this legislative purpose, it
seems counterintuitive that the Legislature would enact the statute with a loophole that
permits a plaintiff to recover for medical expenses never owed or paid.
In this case, the Court of Appeals determined that the negotiated insurance
discounts, which reduced the amount of the medical expenses that plaintiffs would
otherwise have been responsible to pay, are “ ‘benefits received or receivable from an
insurance policy’ and, therefore, a ‘collateral source’ within the meaning of the first
sentence of MCL 600.6303(4).” 7 The Court of Appeals further determined that “the
insurance discounts are also ‘benefits paid or payable’ within the plain and ordinary
the amount of the judgment for economic loss or that portion of the verdict
which represents damages paid or payable by a collateral source.
* * *
(4) As used in this section, “collateral source” means benefits
received or receivable from an insurance policy; benefits payable pursuant
to a contract with a health care corporation, dental care corporation, or
health maintenance organization; employee benefits; social security
benefits; worker's compensation benefits; or medicare benefits. Collateral
source does not include life insurance benefits or benefits paid by a person,
partnership, association, corporation, or other legal entity entitled by law to
a lien against the proceeds of a recovery by a plaintiff in a civil action for
damages. Collateral source does not include benefits paid or payable by a
person, partnership, association, corporation, or other legal entity entitled
by contract to a lien against the proceeds of a recovery by a plaintiff in a
civil action for damages, if the contractual lien has been exercised pursuant
to subsection (3).
6
Heinz v Chicago Rd Investment Co, 216 Mich App 289, 301 (1996). See also State Auto
Mut Ins Co v Fieger, 477 Mich 1068, 1072 (2007) (statement by YOUNG, J., concurring).
7
Greer v Advantage Health, 305 Mich App 192, 210 (2014) (emphasis added).
4
meaning of the last sentence of [MCL 600.6303(4)].” 8 The Court then held that under the
terms of the exclusion from the statutory collateral-source rule stated in MCL
600.6303(4), when a contractual lien is exercised, as was the case here by defendants, the
exclusion “applies to all benefits that were paid or payable” by the entity entitled to the
lien. 9
This result is at odds with my understanding of the purpose of the collateral-source
statute. As is evident from the Court of Appeals’ opinion, the Legislature did not
expressly limit its exclusion from the collateral-source rule to the amount actually paid
for medical services by the lienholder. The Court of Appeals’ opinion will ultimately
authorize some amount of recovery for medical expenses never incurred by injured
plaintiffs. The Legislature may have assumed that the statutory exclusion from the
collateral-source rule for contractual liens would be limited to the actual amount paid for
full satisfaction of medical care. Perhaps the Legislature did not anticipate that payment
of a discounted amount that fully satisfied the amount due for medical care would bring
within the collateral-source exclusion the healthcare providers’ original asking price for
the medical care provided. To the extent that the Legislature did not intend to allow a
windfall recovery of the retail price for medical services that were provided at a discount,
the statute needs to be amended.
YOUNG, C.J., and MARKMAN, J., join in the statement of ZAHRA, J.
8
Id. at 211 (emphasis added).
9
Id. at 213. The Court of Appeals held that “both the cash payments and discount, i.e.,
the ‘benefits received or receivable from an insurance policy,’ are excluded as statutory
collateral source benefits.” Id. at 212. The Court noted that the Legislature did not
“write the statute to say that the [MCL 600.6303(4)] collateral source exclusion is limited
to the ‘amount of’ a validly exercised lien.” Id. The Court concluded that when a
contractual lien is exercised, the exclusion from the statutory collateral-source rule of
MCL 600.6303(4) is not limited to the amount of the lien, but rather applies to all
benefits that were “paid or payable” and “received or receivable from an insurance
policy.” Id. at 212-213.
I, Larry S. Royster, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
July 8, 2016
t0705
Clerk