Cannell v. Riverside Insurance

147 Mich. App. 699 (1985) 383 N.W.2d 89

CANNELL
v.
RIVERSIDE INSURANCE COMPANY

Docket No. 66429.

Michigan Court of Appeals.

Decided May 9, 1985.

Terrence H. Bloomquist, for plaintiff.

Timothy L. Hass, for defendant.

Before: D.E. HOLBROOK, JR., P.J., and MacKENZIE and R.R. LAMB,^[*] JJ.

PER CURIAM.

Defendant appeals as of right and plaintiff cross-appeals from a judgment in favor of plaintiff on certain issues and a judgment of no cause of action against defendant. This action arose from an accident while plaintiff was driving her car home from a meeting. A pick-up truck collided with her car, causing her injuries that are at least partially incapacitating. Defendant is plaintiff's no-fault insurance carrier. After the accident, plaintiff petitioned for a hearing before the Bureau of Workers' Disability Compensation. This dispute was settled for $22,500,^[1] which defendant claims should be relinquished to it as setoff and reimbursement. Defendant thereafter refused to disburse any further monies to plaintiff, asserting that the injuries were covered by workers' compensation benefits.

On appeal, defendant contends that it may claim the full amounts which plaintiff is due from workers' compensation; that in the alternative, defendant is entitled to a setoff for medical benefits; that plaintiff's claim for replacement services is barred by the statutory period of limitation; and that plaintiff should not be entitled to recover for mental anguish and emotional distress.

Plaintiff alleges that she is entitled to penalty interest for defendant's refusal to pay medical bills and that the termination of benefits in 1979 was unreasonable.

Defendant alleges that the trial court erred in not allowing it to set off the entire amount which plaintiff received or was entitled to receive from workers' compensation. MCL 500.3109; MSA 24.13109 provides: "(1) 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." The Supreme Court has defined the "required to be provided" clause as:

"The ``required to be provided' clause of § 3109(1) means only that the injured person is obliged to use reasonable efforts to obtain available workers' compensation payments. The clause does not authorize subtraction of unavailable workers' compensation benefits." Perez v State Farm Mutual Automobile Ins Co, 418 Mich 634, 650; 344 NW2d 773 (1984).

Plaintiff alleges that she was not entitled to workers' compensation payments and, thus, the lump sum she was paid was a bonus. It is clear that plaintiff is not entitled to a double recovery, Combs v Commercial Carriers, Inc, 117 Mich App 67, 75; 323 NW2d 594 (1982), and Thick v Lapeer Metal Products, 419 Mich 342, 347; 353 NW2d 464 (1984). Even if the Worker's Disability Compensation Act were found not to be applicable to plaintiff's injuries, defendant would still be entitled to a setoff for those amounts which plaintiff received for the same injuries. Thick, supra, pp 348-351. However, we do not know if plaintiff would have been entitled to full workers' compensation benefits. The determination of whether the injuries were suffered in the course of employment is within the exclusive jurisdiction of the Bureau of Workers' Disability Compensation. Sewell v Clearing Machine Corp, 419 Mich 56; 347 NW2d 447 (1984). We must remand for a determination of this issue.

As was said in Perez, supra, p 646:

"If workers' compensation payments are available to him, he does not have a choice of seeking workers' compensation or no-fault benefits; the no-fault insurer is entitled to subtract the available workers' compensation payments even if they are not in fact paid because of the failure of the injured person to use reasonable efforts to obtain them." (Emphasis supplied.)

Accordingly, we remand to the circuit court with instructions that plaintiff shall have 20 days after the filing of this opinion to petition the bureau for a determination of compensable injury. If plaintiff fails to petition, or if the bureau finds that it was a compensable injury, then the circuit court shall grant defendant a setoff for the entire amount plaintiff would have received from workers' compensation. If the injury is not compensable, then defendant may only set off the amount received for the same injury.

Defendant argues that it should be allowed to set off the amount plaintiff actually received from workers' compensation for medical benefits. We have already agreed with this, see Thick, supra, and Perez, supra.

Defendant alleges that plaintiffs claim for replacement service benefits is barred by the statutory period of limitation. Plaintiff was injured on January 8, 1976, and by her own admission made no claim until March of 1980. MCL 500.3145; MSA 24.13145 requires that notice be given to the carrier within one year after the most recent allowable expense. Since the last allowable expense for replacement services must have arisen within three years of the accident, MCL 500.3107; MSA 24.13107, the last date plaintiff could have claimed these benefits was January 9, 1979. By her own admission, plaintiff failed to do so. As plaintiff did not file a suit or give notice to defendant, her claim is barred.

Plaintiff contends that she should receive penalty interest in addition to her medical expenses, as defendant was overdue in making the payments and unreasonable in terminating her medical benefits. MCL 500.3142(2); MSA 24.13142(2) provides in part that "[p]ersonal protection insurance benefits are overdue if not paid within 30 days after an insurer receives reasonable proof of the fact and the loss sustained". Such overdue payments bear simple interest at the rate of 12 percent per annum. MCL 500.3142(3); MSA 24.13142(3). The statute requires that the insurer be presented with a reasonable proof of loss before the payment becomes due. Fortier v Aetna Casualty & Surety Co, 131 Mich App 784, 793; 346 NW2d 874 (1984); Nash v DAIIE, 120 Mich App 568, 572; 327 NW2d 521 (1982), and Sharpe v DAIIE, 126 Mich App 144, 148; 337 NW2d 12 (1983). The trial court held that plaintiff had submitted such reasonable proof.

We need not decide the good faith issue defendant raised, as we find that assessment of penalty interest should have occurred here due to defendant's behavior. Wood v DAIIE, 413 Mich 573, fn 17; 321 NW2d 653 (1982). We find that defendant did act unreasonably in terminating plaintiff's medical benefits. Since the only dispute was which insurer was liable, we agree with Kalin v DAIIE, 112 Mich App 497, 510; 316 NW2d 467 (1982), where we said:

"A claimant who is clearly entitled to no-fault benefits should not be forced to hire an attorney merely because the circumstances of his accident create problems of priority among insurers."

In the instant case plaintiff clearly would have been entitled to no-fault benefits as a result of her car accident. However, an issue had arisen regarding whether workers' compensation was liable for her injuries. Just because defendant may be entitled to reimbursement under MCL 500.3109; MSA 24.13109 is not a sufficient reason to withhold benefits. As the purpose of no-fault insurance is to pay insureds promptly for economic losses, Shavers v Attorney General, 65 Mich App 355; 237 NW2d 325 (1975), aff'd in part 402 Mich 554; 267 NW2d 72 (1978), it would defeat the purpose of no-fault insurance if we were to allow an insurance company to delay payments in its hope that it was entitled to reimbursement. Accordingly, we find defendant liable for penalty interest under MCL 500.3142; MSA 24.13142 and remand for a determination of the date when plaintiff was unreasonably denied benefits and the amount of the benefits. Interest should then run from 30 days after that date.

Plaintiff also contends that she should be entitled to compensation for mental anguish and emotional distress. We do not agree. Even if we were to assume that there is such a tort, plaintiff has not proven that defendant committed that tort. Butt v DAIIE, 129 Mich App 211; 341 NW2d 474 (1983). While defendant may have acted wrongfully in refusing to pay plaintiff's medical benefits, we do not find defendant's actions to constitute extreme or outrageous behavior.

Reversed and remanded with instructions. Costs to abide the final result.

MacKENZIE, J. (concurring).

I concur separately in the majority's remand for a determination of compensable injury by the Bureau of Workers' Disability Compensation to allow setoff of the amount of benefits the workers' compensation carrier would have been required to provide had the claim not been redeemed. I adopt the reasoning of the majority in Thacker v DAIIE, 114 Mich App 374; 319 NW2d 349 (1982).

This Court is split on the issue of whether, under MCL 500.3109(1); MSA 24.13109(1), a no-fault insurer is entitled to set off the amount an injured worker would have collected had he continued to receive periodic workers' compensation payments rather than the actual amount received by the worker under a redemption agreement. Compare Gregory v Transamerica Ins Co, 139 Mich App 327; 362 NW2d 268 (1984), and Divito v Transamerica Corp, 141 Mich App 29; 366 NW2d 231 (1985), with James v Allstate Ins Co, 137 Mich App 222; 358 NW2d 1 (1984), following Thacker.

I also agree that plaintiff's claim for replacement services is barred by the statutory period of limitation contained in MCL 500.3145; MSA 24.13145 and with the majority's disposition of the penalty interest issue under MCL 500.3142; MSA 24.13142.

Further, I concur in the determination that plaintiff is not entitled to compensation for mental anguish and distress.

NOTES

[*] Circuit judge sitting on the Court of Appeals by assignment.

[1] This figure represents $3,630 for attorney fees, $10,000 for medical expenses, and $8,870 for the balance of her claim.