Opinion ID: 848657
Heading Depth: 2
Heading Rank: 2

Heading: Spencer v. Hartford Accident & Indemnity Co.

Text: In Spencer, supra, the plaintiff was injured during the course of his employment and was unable to return to work. After the accident, the plaintiff received worker's compensation benefits. Additionally, under the terms of a collective bargaining agreement between the plaintiff's union and his employer, the plaintiff received the difference between his worker's compensation benefits and his base rate of pay. The defendant insurance company denied liability for no-fault work-loss benefits, claiming, among other things, that the wage continuation benefits were subject to setoff pursuant to MCL 500.3109a. The Spencer panel noted that the purpose of § 3109a is to reduce the cost of no-fault insurance by allowing insurers to offer policies that coordinate benefits with other similar coverages in return for charging a statutorily mandated reduced premium. Spencer, supra at 396, 445 N.W.2d 520. The Court of Appeals reasoned that § 3109a expressly limits setoff to health and accident coverage on the insured and, therefore, the issue was whether the additional wages the plaintiff received pursuant to a collective bargaining agreement constituted other health and accident coverage under § 3109a. The Court of Appeals held that the Legislature did not intend for § 3109a to apply to the type of benefits the plaintiff received. After detailing this Court's decision in LeBlanc v. State Farm Mut. Automobile Ins. Co., 410 Mich. 173, 301 N.W.2d 775 (1981), as well as its own decision in Orr v. DAIIE, 90 Mich.App. 687, 282 N.W.2d 177 (1979), the Court of Appeals noted that the scope of coverages within the meaning of other health and accident coverage had been subsequently expanded. However, the cases so doing have generally been limited to benefits corresponding to typical health insurance plans. Spencer, supra at 398, 445 N.W.2d 520. In light of these decisions, and the absence of a clear construction of the phrase other health and accident coverage, the Court of Appeals observed: It is also helpful when construing provisions of the Michigan no-fault insurance act to look to the Uniform Motor Vehicle Accident Reparations Act (UMVARA). The UMVARA is one of the model acts which was utilized as source material in the drafting of the no-fault act. Citizens Ins. Co. of America v. Tuttle, 411 Mich. 536, 309 N.W.2d 174 (1981). Thus, where a provision of the no-fault act is virtually identical to a provision of the UMVARA, the UMVARA will be looked to for guidance in construing a provision of the no-fault act. See MacDonald v. State Farm Mutual Ins. Co., 419 Mich. 146, 350 N.W.2d 233 (1984). However, where there is an absence of a comparable provision in the Michigan act, it is presumed the Legislature considered but rejected the proposed language in the uniform act. See Michigan Mutual Ins. Co. v. Carson City Texaco, Inc., 421 Mich. 144, 365 N.W.2d 89 (1984). [ Id. at 398-399, 445 N.W.2d 520.] The Spencer Court then examined the language and official comments of the counterpart of § 3109a in the model act, 14 U.L.A. Civil Procedural and Remedial Laws, UMVARA, § 14(b)(2). Notably, the Court of Appeals quoted the official comments to § 14(b)(2): The cost reductions may be significant, however, in the case of an insurer offering to sell basic reparation policies to the employees of a large employer, who have defined, generous wage-continuation and accident and health benefits under a common employer-furnished or trade union plan. [ Spencer, supra at 399-400, 445 N.W.2d 520.] In light of the differences between Michigan's no-fault act and the model act, the Court of Appeals reasoned: Thus, it is clear from the comments that, under the UMVARA, wage continuation benefits pursuant to a union agreement were intended to be coordinated with no-fault benefits otherwise payable. Instead of adopting the broader language of the uniform act, however, the Michigan act was drafted much more narrowly, and limited coordination to other health and accident coverage. It appears, therefore, that in enacting the Michigan act the Legislature did not intend for no-fault benefits to be coordinated with a broad array of other benefits which may perhaps be equally duplicative. [ Id. at 400, 445 N.W.2d 520.] Thus, the Court of Appeals in Spencer held that the plaintiff's wage continuation benefits pursuant to a collective bargaining agreement did not constitute other health and accident coverage within the meaning of § 3109a.