Case Name: BOWSER v. JACOBS; MILLER v. REDD; PAYNE v. BLACK
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 1971-10-19
Citations: 36 Mich. App. 320
Docket Number: Docket Nos. 8197, 8353, 8464
Parties: BOWSER v. JACOBS MILLER v. REDD PAYNE v. BLACK
Judges: Before: Lesinski, C. J., and R. B. Burns and Levin, JJ.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 36
Pages: 320–359

Head Matter:
BOWSER v. JACOBS MILLER v. REDD PAYNE v. BLACK
Opinion of the Court
1. Automobiles — Motor Vehicle Accident Claims Act — Purpose.
The purpose of the Motor Vehicle Accident Claims Act is to render relief to those who suffer damage attributable to uninsured motorists and who have no meaningful recovery (MCLA § 257.1101 et seq.).
2. Statutes — Classification—Legislative Discretion.
The Legislature is given great latitude in drawing classifications to effect social, economic, or regulatory legislation.
3. Automobiles — Motor Vehicle Accident Claims Act — Workmen’s Compensation — Statutes—Constitutional Law.
The section of the Motor Vehicle Accident Claims Act which prevents those covered by workmen’s compensation from applying to the Motor Vehicle Accident Claims Eund for payment for damages after being injured by an uninsured motorist is unconstitutionally discriminatory, because in several other instances the act allows other persons to reach alternative indemnities without prohibiting recovery from the fund (MCLA § 257.1101 et seq.).
Dissent by Levin, J.
4. Statutes — Classification—Constitutional Law.
A classification in a statute is not an invidious discrimination merely because the classification lacks the force of compelling logic or is incongruous; unless the classification is invidious, the courts may not interfere with the legislative judgment.
References for Points in Headnotes
[1, 3, 7-11,14,15] 7 Am Jur 2d, Automobiles and Highway Traffic §301.
Unsatisfied claim and judgment statutes; Validity and construction of provisions for deduction from awards of sums collectible by claimant from other sources. 7 ALR3d 836.
[2, 4-8,12-15] 16 Am Jur 2d, Constitutional Law § 494 et seq.
[16] 16 Am Jur 2d, Constitutional Law § 151.
5. Statutes — Legislative Judgments.
The courts have not been commissioned to substitute their concepts of fairness and common sense for the practical legislative judgments and compromises which must be made in order to enact innovative legislation addressed to the social problems of our times; if the courts, when passing on the constitutionality of such statutés, ignore the need for rough accomodations, the courts may discourage the Legislature from dealing with a problem at all.
6. Constitutional Law — Statutes—Classification—Equal Protection — Constitutional Standard.
A classification does not violate this state’s Equal Protection clause if there is a reasonable basis for the classification; the reasonable basis test must be used because it is the most recent pronouncement of the United States Supreme Court and because the Michigan Supreme Court has previously declared that the Michigan Equal Protection clause means the same thing as the Federal Equal Protection clause.
7. Automobiles — Motor Vehicle Accident Claims Fund — Workmen’s Compensation — Classification—Constitutional Law.
The statutory classification that prevents those covered by workmen’s compensation from applying to the Motor Vehicle Accident Claims Fund for payment after being involved in an automobile accident with an uninsured motorist must be sustained if there is a reasonable basis for the classification; the Court of Appeals must, in light of the decisions of the United States and Michigan Supreme Courts, proceed on the assumption that it may not balance the competing interests, comparing the relative importance to the discriminated class of the governmental benefit denied and the asserted state interest advanced in support of the classification (MCLA § 257.1101 et seq.J.
8. Automobiles — Motor Vehicle Accident Claims Act — Workmen’s Compensation — Classification — Reasonableness — Burden of Proof.
The state, not the claimant, has the burden of showing the reasonableness of the classification precluding those entitled to workmen’s compensation from recovering frém the Motor Vehicle Accident Claims Fund on account of an accident with an uninsured motorist; the burden is on the state because of the universality of the social problem sought to be dealt With by the Motor Vehicle Accident Claims Act, the omnipresence of the risk ameliorated, the breadth of the general right of recovery — all state residents, and the narrow exclusion — those residents injured in the course of their employment so that they are covered by workmen’s compensation (MCLA § 257.1101 et seq./
9. Automobiles — Motor Vehicle Accident Claims Act — Insurance Code — Uninsured Motorist Coverage — Purpose.
Motor Vehicle Accident Claims Act and the act amending the insurance code providing that any policy protecting a person from personal injury also protects against loss caused by an uninsured motorist unless uninsured motorist protection has been rejected are in pari materia; the amendment to the insurance code sought to encourage the purchase of uninsured motorist coverage and, thus, reduce the number of claims against the Motor Vehicle Accident Claims Fund.
10. AUTOMOBILES' — MOTOR VEHICLE ACCIDENT CLAIMS ACT-WORKMEN’S Compensation — Exclusion from Recovery — Purpose.
The legislative purpose in barring those covered by workmen’s compensation from recovery from the Motor Vehicle Accident Claims Fund for damages caused by an uninsured motorist was not based on the policy that the employees already had an adequate minimum source of recovery, because the only group having a collateral source of recovery barred from proceeding against the fund were injured employees entitled to workmen’s compensation (MCLA § 257.1101 et seq./
11. Automobiles — Motor Vehicle Accident Claims Act — Workmen’s Compensation — Exclusion from Recovery — Purpose.
The Legislature’s purpose in prohibiting employees who are covered by workmen’s compensation from suing the Motor Vehicle Accident Claims Fund for injuries caused by uninsured motorists was simply to reduce the fund’s exposure by eliminating a readily identifiable group of potential claimants who, arguably, were in less need of protection (MCLA-§ 257.1101 et seq./
12. Statutes — Classification—Constitutional Law.
The state may for sound reasons of public policy grant benefits to some and deny like benefits to others.
13. Statutes — Classification—Rational Basis,
A classification in a statute which does not foster the objective which impelled it is not rational.
14. Automobiles — Motor Vehicle Accident Claims Act — Workmen’s Compensation — Exclusion prom Becovery — Beasonableness.
The reasonableness of the classification barring claims for damages from uninsured motorists against the Motor Vehicle Accident Claims Fund by employees entitled to workmen’s compensation must be judged in the light of the objective sought to be served by the classification — the preservation of the fund’s financial soundness; if the classification bears no reasonable relationship to the purpose of protecting the fund’s actuarial soundness, the classification is irrational.
15. Automobiles — Motor Vehicle Accident Claims Act — Workmen’s Compensation — Exclusion prom Becovery — Beasonableness.
Actions questioning the constitutionality of the_provision barring those covered by workmen’s compensation from suing the Motor Vehicle Accident Claims Fund for injuries caused by uninsured motorists must be remanded for the taking of additional evidence, showing the fund’s present financiad condition, because the constitutionality of the provision depends on whether it is reasonably related to the preservation of the fund’s actuarial soundness (MCLA § 257.1101 et seqj.
16. Statutes — Constitutional Law — Changed Conditions.
A change in facts, conditions, or circumstances may render unconstitutional a statute valid when enacted.
Appeals from Wayne, George E. Bowles, Horace W. Gilmore, and. Thomas D. Ronmell, JJ.
Submitted Division 1 February 2, 1971, at Detroit.
(Docket Nos. 8197, 8353, 8464.)
Decided October 19, 1971.
Complaint by John Anthony Bowser against Paul E. Jacobs, Charles Furtaw, and the Secretary of State, as Director of the Motor Vehicle Accident Claims Fund, for damages for injuries received in an automobile accident with an uninsured motorist. Summary judgment granted defendant Secretary of State. Plaintiff appeals. (No. 8197.)
Complaint by Charles E. Miller, Jr., against James Redd for damages for injuries received in an automobile accident. The Secretary of State, as Director of the Motor Vehicle Accident Claims Fund, intervened as a defendant. Secretary of State’s motion for summary judgment denied. The Secretary of State appeals. (No. 8353.)
Complaint by Dorothy Ann Payne against Harvey Black and Charles Black for damages for injuries received in an automobile accident. The Secretary of State, as Director of the Motor Vehicle Accident Claims Fund intervened as a defendant. Secretary of State’s motion for summary judgment denied. The Secretary of State appeals. (No. 8464.)
Cases consolidated.
Reversed and remanded for trial as to plaintiff Bowser; remanded for trial as to plaintiffs Miller and Payne.
Sheldon L. Miller (Theodore M. Rosenberg, of counsel), for plaintiffs.
Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, Joseph B. Bilitske and Carl K. Carlsen, Assistants Attorney General, and John F. Botvin, Special Assistant Attorney General, for defendant Secretary of State.
Before: Lesinski, C. J., and R. B. Burns and Levin, JJ.

Opinion:
Lesinski, C. J.
In the cases before us we are squarely faced with determining the constitutionality of that portion of the Motor Vehicle Accident Claims Act (hereinafter the Act) which prevents those covered by workmen's compensation from applying to the Motor Vehicle Accident Claims Fund (hereinafter the Fund) for payment. MCLA § 257.1101, et seq. (Stat Ann 1968 Rev § 9.2801, et seq.).
To facilitate adjudication of this question, this Court ordered that the three causes captioned above be consolidated. All of the cases presently before us are factually identical: plaintiffs are taxicab operators who, while in the course and scope of their employment, were injured in automobile accidents allegedly caused by uninsured motorists. The plaintiffs brought the instant actions against the various uninsured motorists and the Secretary of State in his representative capacity as administrator of the Fund. In each of the cases, the Secretary, relying on § 29 of the Act, sought dismissal of the action against the Fund by way of motion for summary judgment. Plaintiffs resisted these motions by contending that the section was unconstitutional. In the Bowser case, the trial court upheld § 29 as constitutional and granted the Secretary's motion. In Miller and Payne, the trial courts struck down the section as violative of the Equal Protection clause of the Federal and State Constitutions; these lower courts denied the Secretary's motions with prejudice.
Section 29 of the Act bars the recovery by an injured person from the Fund if the claimant is covered by workmen's compensation with respect to such injury. Plaintiffs assert that this statutory classification is unreasonable, arbitrary, and contravenes the Equal Protection clause. The Secretary's position is that since the purpose of the Act is to render relief to those who suffer damage attributable to uninsured motorists (and who have no meaningful recovery), the Legislature's classification prohibiting those covered by workmen's compensation from proceeding against the Fund is a reasonable, constitutionally permissible distinction.
We accept the Secretary's statement of the purpose of such legislation. This interpretation is given weight by reference to decisions from the courts of other states. See, for example, Askey v. General Accident Fire & Life Assurance Corp. (1968) , 30 App Div 2d 632 (290 NYS2d 759), aff'd (1969), 24 NY2d 937 (302 NYS2d 576); Garcia v. Motor Vehicle Accident Indemnification Corp. (1964), 41 Misc 2d 858 (246 NYS2d 841); Corrigan v. Gassert (1958), 27 NJ 227 (142 A2d 209); Dixon v. Gassert (1958), 26 NJ 1 (138 A2d 14); Douglas v. Harris (1961), 35 NJ 270 (173 A2d 1); Proskurnja v. Elder (1962), 73 NJ Super 466 (180 A2d 200); Tschider v. Burtts (ND, 1967), 149 NW2d 710. Given this objective, we must examine the statutory differentiation presently challenged in light of the purposes of the legislative enactment. Fox v. Employment Security Commission (1967), 379 Mich 579, 588.
It remains axiomatic that the Legislature is to be given great latitude in drawing classifications to effect social, economic, or regulatory legislation. Fox v. Employment Security Commission, supra; Levy v. Louisiana (1968), 391 US 68 (88 S Ct 1509, 20 L Ed 2d 436). This holds true for uninsured or unsatisfied judgment fund statutes as well. See Allied American Mutual Fire Insurance Co. v. Commissioner of Motor Vehicles (1959), 219 Md 607 (150 A2d 421). See, also, Naudzius v. Lahr (1931), 253 Mich 216, 223.
We would be persuaded by tbe Secretary's argument, were it not for the fact that, in several other instances, the Act allows other persons to reach alternative indemnities without prohibiting recovery from the Fund.
The availability of any workmen's compensation totally bars an injured party from looking to the Fund for recovery of any amount. But § 22(4) of the Act, MCLA § 257.1122(4) (Stat Ann 1968 Rev § 9.2822 [4]), permits the beneficiaries of a life insurance policy to recover from the Fund for the death of a person caused by an uninsured motorist. Certainly it may be said that the existence of life insurance could adequately compensate survivors for their loss. The Act allows these persons to recover and, incongruously, refuses an employee to look to the Fund for relief. Furthermore, §¿3(2) of the Act, MCLA § 257.1123(2) (Stat Ann 1968 Rev § 9.2823 [2]), permits one to apply for payment out of the Fund even after exhausting one's coverage on a private policy of automobile insurance (presumably uninsured motorist coverage existing in many such policies).
In Green v. Blicharski (1971), 32 Mich App 15, plaintiff was injured by an uninsured motorist. Plaintiff owned a private automobile insurance policy with uninsured motorist coverage. Plaintiff's insurer paid $7,250 to plaintiff after plaintiff and the insurer arbitrated the claim. Plaintiff then sought damages from the uninsured motorist and the Fund; plaintiff obtained a judgment for $16,000. This Court held in that case that the Secretary was liable for the excess of the judgment over the payment made by the insurer. However, had plaintiff in the Green case received a workmen's compensation award of $7,250, he would have been unable to secure any amount from the Fund in excess of that paid to him by the employer or his workmen's compensation carrier.
The legislative aim of this social legislation, as noted above, is to compensate those injured by uninsured tortfeasors who would otherwise have had no source of recovery. But, as we have seen, some persons who have available avenues of recovery are permitted to reach the Fund but injured employees are not. We are constrained to agree that the Legislature has arbitrarily carved out this class from those who have recourse to the Fund. This classification is one made without the force of compelling logic; we find it unconstitutionally discriminatory.
In Fox v. Employment Security Commission, supra, several similar examples of discrimination were challenged. In that case, weekly unemployment benefits were denied by statute to those receiving total permanent, partial permanent, or temporary disability workmen's compensation payments as well as to those receiving weekly workmen's compensation benefits. However, the statute permitted recipients of death, workmen's compensation benefits, "specific loss" benefits, and those who had elected to accept their workmen's compensation award in a "lump sum" to receive unemployment compensation. Noting that the object of the statute was to preclude the possibility of duplication of benefits, the Court held the distinctions to be arbitrary since some persons were able, because of the statutory scheme, to reach unemployment benefits and others similarly situated were not.
We reverse and remand in the Bowser case with an order to the trial court to proceed to trial for a determination of liability.
We remand in the Miller and Payne cases with orders to try the cases so as to fix liability.
No costs, a public question being involved.
R B. Burns, J., concurred.
New Jersey has a similar provision in its statute. NJ Stat Ann § 39:6-70. Extensive research, however, has failed to uncover any decision which addresses itself to the constitutionality, vel non, of such a provision.
For example, a reading of MCLA § 257.1129 (Stat Ann 1968 Rev § 9.2829) indicates that an employee who suffers $50,000 in damages inflieted upon him by an uninsured motorist and to whom a workmen's compensation award with a present value of $20,000 is made, is unable to sue the Fund, regardless of the $30,000 in damages which would go uncompensated.
We need not pass upon the question of whether declaring § 29 unconstitutional grants the employer or his workmen's compensation carrier a derivative cause of action.