McKenney v. Crum & Forster

554 N.W.2d 600 (1996) 218 Mich. App. 619

Michael P. McKENNEY, Tami L. McKenney, Patrick McKenney, Deena McKenney and Stephen McKenney, Plaintiff-Appellants,
v.
CRUM & FORSTER, Intervenor-Appellee.

Docket Nos. 179937, 181319.

Court of Appeals of Michigan.

Submitted May 14, 1996, at Detroit. Decided September 6, 1996, at 9:15 a.m. Released for Publication October 25, 1996.

Mark Granzotto, Detroit, J. Martin Bartnick, Southfield, for Michael P. McKenney and others.

Galbraith & Booms by Steven B. Galbraith and Paul B. Hines, Southfield, for Crum & Forster.

Before TAYLOR, P.J., and MURPHY and E.J. GRANT,^[*] JJ.

TAYLOR, Presiding Judge.

The uncontested facts show that plaintiff Michael McKenney was injured at his place of employment, Cryogenic Transport, while trying to prevent defendant Ranson Kelly, an employee of defendant Seng Tire, from being injured by a rolling truck owned by Seng Tire. State Farm (Cryogenic's no-fault carrier) paid plaintiff no-fault benefits for injuries sustained in the accident. Crum & Forster (Cryogenic's worker's compensation insurer) also paid plaintiff worker's compensation benefits. The worker's compensation benefits were coordinated with plaintiff's no-fault benefits such that the no-fault insurer subtracted the worker's compensation benefits from the no-fault benefits that it would otherwise have paid to McKenney. Plaintiffs settled with defendant Mercy Hospital, Port Huron, a claim of medical malpractice, in which it was alleged that the hospital failed to properly treat Michael McKenney's injuries. Plaintiffs settled negligence claims against Seng Tire and Ranson Kelly.

In Docket No. 179937, plaintiffs appeal as of right from an order allowing Crum & Forster to intervene to assert a worker's compensation lien pursuant to M.C.L. § 418.827(5); M.S.A. § 17.237(827)(5) on plaintiffs' settlement with defendant Mercy Hospital. In Docket No. 181319, Crum & Forster appeals as of right from an order entered by the original judge's successor, who denied its motion to intervene to assert a worker's compensation lien on plaintiffs' settlements with defendants Seng Tire and Ranson Kelly. The appeals were consolidated by this Court. We reverse in Docket No. 179937 and affirm in Docket No. 181319.

In Docket No. 179937, plaintiffs argue that the trial court erred in ruling that Crum & Forster had the right to assert a lien with respect to the settlement they reached with Mercy Hospital. Crum & Forster's right to intervene was contingent on its right to assert a worker's compensation lien. This issue presents a question of law that we review de novo. Cardinal Mooney High School v. Michigan High School Athletic Ass'n, 437 Mich. 75, 80, 467 N.W.2d 21 (1991). The trial court determined that the no-fault carrier improperly paid McKenney no-fault benefits, finding that the no-fault act (M.C.L. § 500.3101 et seq.; M.S.A. § 24.13101 et seq.) did not apply. The trial court held that the truck was the site but not the instrumentality of the accident. We disagree and reverse.

Because Crum & Forster does not allege that any portion of its payments to McKenney was in excess of those available under the no-fault act, there is no question that Crum & Forster would not have been entitled to a lien if no-fault benefits were properly paid. Gibson v. American Motors Corp., 208 Mich.App. 470, 471-472, 528 N.W.2d 742 (1994); Bialochowski v. Cross Concrete Pumping Co., 428 Mich. 219, 225, 407 N.W.2d 355 (1987), overruled in part on other grounds Winter v. Automobile Club of Michigan, 433 Mich. 446, 458, n. 10, 446 N.W.2d 132 (1989); Great American Ins. Co. v. Queen, 410 Mich. 73, 300 N.W.2d 895 (1980).

At the outset we find that State Farm's payment of no-fault benefits does not bar Crum & Forster as a matter of law from claiming McKenney was not entitled to no-fault benefits. It is conceivable that a no-fault carrier, because of a misapprehension of the law or facts or some other reason, would make no-fault payments where none were due. In such a circumstance, the worker's compensation carrier may seek to intervene and can request a determination from the court of the propriety of the payment of no-fault benefits and thus obtain a ruling whether it is barred from seeking reimbursement. If the court finds under the facts of the case that payment of benefits was improvidently made by the no-fault carrier, the court should grant the motion to intervene so the worker's compensation carrier can assert its lien.

Thus, the issue is whether no-fault benefits were properly paid. We find that they were. The no-fault act is remedial in nature. No-fault benefits are payable for certain accidental bodily injuries arising out of the ownership, operation, maintenance, or use of a motor vehicle as a motor vehicle. M.C.L. § 500.3105; M.S.A. § 24.13105. The act must be liberally construed in favor of those for whom benefit was intended, i.e., persons injured in motor vehicle accidents. Lee v. Nat'l Union Fire Ins. Co., 207 Mich.App. 323, 327, 523 N.W.2d 900 (1994). Whether an injury arises out of the use of a motor vehicle must be determined case by case. Gordon v. Allstate Ins. Co., 197 Mich.App. 609, 614, 496 N.W.2d 357 (1992). In making this determination, the causal connection between the injury and the use of the motor vehicle must be more than incidental, fortuitous, or but for. Thornton v. Allstate Ins. Co., 425 Mich. 643, 660, 391 N.W.2d 320 (1986). In the case at bar, we are convinced that there was a sufficient causal connection between McKenney's injury and Seng Tire's truck. At the time McKenney was injured, the truck's engine was running and the vehicle had just rolled down an incline, trapping Kelly's arm between the door of the vehicle and the door frame of the terminal. McKenney successfully pulled the truck back, freeing Kelly's arm. Inasmuch as the injury occurred while the engine was running and during an attempt to backup the vehicle, we conclude the injury arose out of the use of the truck and, accordingly, no-fault benefits were properly paid. Gordon, supra at 614, 496 N.W.2d 357; McMullen v. Motors Ins. Corp., 203 Mich.App. 102, 103-105, 512 N.W.2d 38 (1993); Thompson v. TNT Overland Express, 201 Mich.App. 336, 343, 505 N.W.2d 918 (1993); Wright v. League General Ins. Co., 167 Mich.App. 238, 244-245, 421 N.W.2d 647 (1988).

Because Crum & Forster paid McKenney benefits that substituted for no-fault benefits that would have otherwise been paid by the no-fault insurer, it stands in the place of a no-fault insurer and is limited to the reimbursement permitted a no-fault insurer under the no-fault act. Bialochowski, supra at 225, 407 N.W.2d 355. Because a no-fault insurer would not be entitled to reimbursement from a plaintiff's recovery from a nonmotorist tortfeasor whose liability arises outside the ownership or operation of a motor vehicle, Crum & Forster, standing in the place of a no-fault insurer, is not entitled to assert lien rights on plaintiffs' settlement with defendant Mercy Hospital. Gibson, supra; Ryan v. Ford Motor Co., 141 Mich.App. 762, 768-769, 368 N.W.2d 266 (1985).

In Docket No. 181319, Crum & Forster asserts that the trial court erred in disallowing its intervention with reference to the settlement with Seng Tire and Kelly. We disagree for the reasons set forth above. Crum & Forster stands in the place of a no-fault insurer. If the worker's compensation payments had exceeded the no-fault benefits that plaintiff's no-fault insurer would have paid, Crum & Forster would have been entitled to a recovery according to Bialochowski, supra at 224-225, 407 N.W.2d 355. Because Crum & Forster did not pay worker's compensation benefits in excess of no-fault benefits that plaintiff would have otherwise received, it was not entitled to a lien against plaintiffs' settlement with Seng Tire and Kelly. Gibson, supra.

The order at issue in Docket No. 179937 is reversed. The order at issue in Docket No. 181319 is affirmed.

NOTES

[*] Edward J. Grant, 4th Judicial Circuit Judge, sitting on Court of Appeals by assignment pursuant to Const.1963, Art. 6, Sec. 23, as amended 1968.