William Joseph Batts v. Titan Insurance Company
William Joseph Batts v. Titan Insurance Company
Opinion
*488 *281 Defendant appeals as of right a stipulated judgment entered following the trial court's order denying defendant's motion for summary disposition in this no-fault insurance dispute. We affirm and remand for entry of an order granting summary disposition in plaintiff's favor.
Plaintiff, a military veteran, was riding a motor scooter and was injured when he struck a vehicle that failed to stop at an intersection stop sign. The vehicle could not be identified. Plaintiff received various medical treatments through the Veterans Health Administration of the United States Department of Veterans Affairs (the VA) for his injuries, but he also received medical care from non-VA medical providers, including Serenity Personal Care, an assisted-living facility. Plaintiff did not have a policy of no-fault insurance available to him in his household. Therefore, plaintiff filed a claim for no-fault personal protection insurance (PIP) benefits through the assigned claims plan, which assigned the claim to defendant. Defendant refused to pay any of the requested PIP benefits on the ground that plaintiff was entitled to healthcare benefits through the VA, and thus, the VA was the primary insurer responsible for plaintiff's medical care and expenses.
Plaintiff then filed his complaint seeking payment of PIP benefits from defendant. Plaintiff alleged that defendant had refused to pay any PIP benefits, including medical, attendant care, replacement service, and transportation benefits.
Defendant moved for summary disposition under MCR 2.116(C)(10), arguing that as a military veteran plaintiff had health "insurance" coverage through the VA that, like a health maintenance organization (HMO), required plaintiff to receive medical treatment *282 within the VA system. Consequently, under the coordination of benefits provision of MCL 500.3109a, defendant argued that it was not liable for the cost of any medical treatment received by plaintiff outside the VA system. Similarly, because benefits through the assigned claims carrier are coordinated under MCL 500.3172(2) and plaintiff had healthcare coverage through the VA, defendant argued that it was not liable for any of plaintiff's medical expenses. Further, under the set-off provision of MCL 500.3109(1), defendant alleged that it was entitled to a set-off against federal benefits to which plaintiff was entitled. And, in this case, the VA health system could provide the same treatments and services plaintiff received from non-VA providers after his motor vehicle accident; thus, defendant was asserted that it not liable for those expenses. That is, although plaintiff's case manager, Monica Gay, testified that a VA social worker contacted her to locate 24-hour care for plaintiff following a surgical procedure, Gay did not seek that care from a VA facility before having him placed at Serenity Personal Care. Further, a social worker at the VA, Pamela Mackey, testified that although the VA does not provide 24-hour care, a veteran can apply to a VA-run *489 medical foster-care program that requires a veteran to privately pay to receive care by individuals who are reviewed by VA staff. Therefore, defendant argued, plaintiff's complaint seeking PIP benefits should be summarily dismissed.
Plaintiff responded to defendant's motion for summary disposition and requested summary disposition in his favor under MCR 2.116(I)(2). First, plaintiff argued, the VA is not a health insurance company; it is a medical provider of last resort for veterans unless they have a service-connected injury. Federal law-specifically
Second, plaintiff argued, the no-fault provisions and cases defendant relies upon in support of its legal position are inapposite. In this case, plaintiff did not choose to purchase a coordinated automobile insurance policy that offered reduced healthcare benefits. Moreover, again, the VA is not a health insurance company. That is why the VA actually sought payment from defendant through its numerous billings for medical services provided to plaintiff as a consequence of the motor vehicle accident. Further, defendant was sent a letter from a staff attorney at the VA General Counsel Office that set forth the legal authority, including 38 USC 1729, supporting its efforts to seek reimbursement for medical services provided to plaintiff as a result of the motor vehicle accident. In summary, plaintiff argued, he was wrongfully denied PIP benefits and was entitled to summary disposition in his favor.
Following oral argument, the trial court denied defendant's motion for summary disposition. The trial court held that because the VA did not offer the services that plaintiff needed, defendant was liable for *284 those expenses incurred outside the VA. Subsequently, the trial court granted defendant's motion to stay proceedings pending this Court's decision on defendant's application for leave to appeal. After this Court issued an order denying defendant's application, the parties agreed to a contingent award of damages pending appeal and the trial court entered a stipulated judgment that closed the case. This appeal of right followed.
Defendant argues that plaintiff had health insurance coverage through the VA and was required under provisions of the no-fault act to seek and receive all medical treatment within the VA system. Therefore, defendant argues that it was not liable for any outstanding PIP benefits and that the trial court erred by denying its motion for summary disposition. We disagree.
We review de novo a trial court's decision to grant a motion for summary disposition.
Lakeview Commons Ltd. Partnership v. Empower Yourself, LLC
,
We also review de novo questions of statutory interpretation.
Dextrom v. Wexford Co
,
Under the assigned claims statutory scheme, including MCL 500.3172(3)(b) and MCL 500.3175(1), defendant was required to make prompt payment for plaintiff's losses suffered as a consequence of the motor vehicle accident in accordance with the no-fault act, MCL 500.3101 et seq. Defendant has asserted three untenable excuses for failing to do so. First, defendant claims that under the coordination of benefits provision of MCL 500.3109a, it was not liable for medical expenses incurred by plaintiff inside or outside the VA system. MCL 500.3109a provides, in pertinent part:
An insurer providing personal protection insurance benefits under this chapter may offer, at appropriately reduced premium rates, deductibles and exclusions reasonably related to other health and accident coverage on the insured.
This provision plainly refers to "coordinated" no-fault policies, i.e., no-fault policies that are purchased by the insured that coordinate the insured's no-fault and health insurance coverage in exchange for a reduced premium.
St. John Macomb-Oakland Hosp. v. State Farm Mut. Auto Ins. Co.
,
*286
In this case, however, plaintiff did not purchase either a no-fault policy or a
coordinated
no-fault insurance policy; therefore, MCL 500.3109a is not applicable. Accordingly, defendant's argument premised on the holdings in
Tousignant
and
Owens v. Auto Club Ins. Ass'n
,
The second reason provided by defendant for failing to promptly pay plaintiff's PIP claim is that, under MCL 500.3172(2), benefits through the assigned claims plan are coordinated with a claimant's benefits received from other sources, *491 including healthcare benefits through the VA. MCL 500.3172(2) provides:
Except as otherwise provided in this subsection, personal protection insurance benefits, including benefits arising from accidents occurring before March 29, 1985, payable through the assigned claims plan shall be reduced to the extent that benefits covering the same loss are available from other sources , regardless of the nature or number of benefit sources available and regardless of the nature or form of the benefits, to a person claiming *287 personal protection insurance benefits through the assigned claims plan. This subsection only applies if the personal protection insurance benefits are payable through the assigned claims plan because no personal protection insurance is applicable to the injury, no personal protection insurance applicable to the injury can be identified, or the only identifiable personal protection insurance applicable to the injury is, because of financial inability of 1 or more insurers to fulfill their obligations, inadequate to provide benefits up to the maximum prescribed. As used in this subsection, "sources" and "benefit sources" do not include the program for medical assistance for the medically indigent under the social welfare act,1939 PA 280 , MCL 400.1 to 400.119b, or insurance under the health insurance for the aged act, title XVIII of the social security act, 42 USC 1395 to 1395kkk-1. [Emphasis added.]
Defendant claims that plaintiff's eligibility to receive healthcare services through the VA constituted a "benefit source," which therefore relieved defendant of its obligation to pay for any medical care or services required by plaintiff for his motor vehicle accident injuries. We do not agree.
As plaintiff argued in the trial court, the VA has the same right to recover payment for medical care and services provided to plaintiff as any private hospital or medical facility. That is so because of a federal statute, 38 USC 1729, which states:
(a)(1) Subject to the provisions of this section, in any case in which a veteran is furnished care or services under this chapter for a non-service-connected disability described in paragraph (2) of this subsection, the United States has the right to recover or collect reasonable charges for such care or services (as determined by the Secretary) from a third party to the extent that the veteran (or the provider of the care or services) would be eligible to receive payment for such care or services from *288 such third party if the care or services had not been furnished by a department or agency of the United States.
(2) Paragraph (1) of this subsection applies to a non-service-connected disability-
* * *
(B) that is incurred as the result of a motor vehicle accident to which applies a State law that requires the owners or operators of motor vehicles registered in that State to have in force automobile accident reparations insurance;
* * *
(b)(1) As to the right provided in subsection (a) of this section, the United States shall be subrogated to any right or claim that the veteran ... may have against a third party.
* * *
(f) No law of any State or of any political subdivision of a State, and no provision of any contract or other agreement, shall operate to prevent recovery or collection by the United States under this section....
These provisions clearly allow the United States to recover the cost of providing *492 medical care to a veteran through the VA system for injuries sustained in a motor vehicle accident.
The Supremacy Clause of the United States Constitution, U.S. Const., art. VI, cl 2, gives Congress the authority to preempt state laws that interfere with, or are contrary to, federal law. See
Ter Beek v. City of Wyoming
,
The third reason provided by defendant for failing to promptly pay plaintiff's PIP claim is that, under MCL 500.3109(1), defendant was entitled to a set-off against federal benefits to which plaintiff was entitled, including healthcare benefits through the VA. MCL 500.3109(1) states:
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 under this chapter.
As our Supreme Court explained, "The history of § 3109(1) indicates that the Legislature's intent was to require a set-off of those government benefits that duplicated the no-fault benefits payable because of the accident and thereby reduce or contain the cost of basic insurance."
O'Donnell v. State Farm Mut. Auto. Ins. Co.
,
In summary, defendant, as the assigned claims insurer, was required under the no-fault act to promptly pay plaintiff's PIP
*493 benefits, and defendant's reasons for refusing to pay any benefits at all were unreasonable. Therefore, defendant's motion for summary disposition premised on those same reasons was properly denied, albeit for the wrong reason. And plaintiff's request for summary disposition in his favor under MCR 2.116(I)(2) should have been granted. Accordingly, we affirm the trial court's decision but remand for entry of an order granting summary disposition in plaintiff's favor. Because the parties' stipulated award of damages is "inclusive of no-fault penalty interest, no-fault attorney *291 fees, and taxable costs," we need not remand for further proceedings in that regard.
Affirmed, but remanded for entry of an order granting summary disposition in plaintiff's favor. We do not retain jurisdiction. Plaintiff is entitled to costs as the prevailing party. MCR 7.219(A).
Jansen, P.J., and Cameron, J., concurred with Cavanaugh, J.
Cf.
Morgan v. Citizens Ins. Co. of America
,
Reference
- Full Case Name
- William Joseph BATTS, Plaintiff-Appellee, v. TITAN INSURANCE COMPANY, Defendant-Appellant.
- Cited By
- 4 cases
- Status
- Published