Michigan Supreme Court

Lansing, Michigan

Robert P. Young, Jr., Chief Justice

Stephen J. Markman

Brian K. Zahra

Bridget M. McCormack

David F. Viviano 

Richard H. Bernstein

Joan L. Larsen, Justices

Order 

July 8, 2016

149494 & (50)

MAKENZIE GREER, a Minor,

KENNETH GREER, Individually and

as Conservator, and ELIZABETH

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).
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

4

Clerk

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.