Court Opinion

ID: 9659962
Source: CourtListenerOpinion
Date Created: 2023-08-23 21:59:40.228911+00
Date Added: 2024-06-11T18:14:13.421649
License: Public Domain

Markman, P.J.
(dissenting). Although the facts are accurately set forth in the majority opinion, the majority’s extension of the logic of the cited cases effects a windfall recovery for the plaintiff and is, in my view, insupportable. I therefore respectfully dissent.
Section 3109a of the Insurance Code, MCL 500.3109a; MSA 24.13109(1), provides:
An insurer providing personal protection insurance benefits shall offer, at appropriately reduced premium rates, deductibles and exclusions reasonably related to other *69health and accident coverage on the insured. The deductibles and exclusions required to be offered by this section shall be subject to prior approval by the commissioner and shall apply only to benefits payable to the person named in the policy, the spouse of the insured and any relative of either domiciled in the same household.
Before the advent of statutory no-fault insurance in Michigan, persons injured in motor vehicle accidents bore the resulting financial burdens if negligent or contributorily negligent, or if no one else involved in the accident was negligent. By mandating first-party insurance without regard to fault, the no-fault system changed all of this, guaranteeing that injured motorists, passengers, and pedestrians alike will have their medical costs and some or all of their wage losses and incidental expenses covered by required insurance or through the assigned claims facility, MCL 500.3172 et seq.; MSA 24.13172 et seq.1
Within this scheme of mandatory first-party insurance, the Legislature, in order to help make the required insurance affordable, added § 3109a within two years of enacting the original no-fault act. This section requires no-fault insurers to offer their insureds the option of coordinated benefits at a reduced premium. O'Donnell v State Farm Mut Automobile Ins Co, 404 Mich 524; 273 NW2d 829 (1979), app dis 444 US 803; 100 S Ct 22; 62 L Ed 2d 16 (1979); Smith v Physicians Health Plan, Inc, 444 Mich 743; 514 NW2d 150 (1994). Fundamental to this statutory amendment is that insurers have no choice—they must offer such an option to their insureds. The *70insureds then have the right to elect coordinated medical benefits in exchange for a reduced no-fault insurance premium, or to reject that opportunity for such savings and, in the event of subsequent injury, to recoup a double recovery that is not a “windfall.”2 Tousignant v Allstate Ins Co, 444 Mich 301; 506 NW2d 844 (1993).
Perhaps the most fundamental rule of Michigan insurance jurisprudence is that an insurer can never be held liable for a risk it did not assume and for which it did not charge or receive any premium. Ruddock v Detroit Life Ins Co, 209 Mich 638, 653; 117 NW 242 (1920); Lee v Evergreen Regency Cooperative, 151 Mich App 281, 285-286; 390 NW2d 183 (1986); South Macomb Disposal Authority v American Ins Co (On Remand), 225 Mich App 635, 695-696; 572 NW2d 686 (1997). Yet this rule has been effectively nullified in the context of the instant case by a focus on tensions between the language of benefit plans under the Employee Retirement Income Security Act of 1974 (ERISA), 29 USC 1001 et seq., and § 3109a, because ERISA plans apparently have free reign under federal law to countercoordinate health and accident benefits with no-fault benefits so as to make the latter primary. That is undoubtedly the logical consequence of the ERISA’s preemptive effect on state law by virtue of the Supremacy Clause, US Const, art VI, cl 2. Auto-Club Ins Ass’n v Frederick & Herrud, Inc (After Remand), 443 Mich 358, 387; 505 NW2d 820 (1993). But nothing within this principle, in my judgment, requires a holding that insureds must be allowed to *71exact from insurers coverage the insureds opted not to purchase.
In this case, plaintiff pocketed the savings generated by electing to coordinate her employer-sponsored health and accident benefits with her no-fault insurance, thereby reducing her no-fault insurance premiums. Yet although she reduced her premiums in this way, she appears to have given up nothing in reality because the liability of the no-fault insurer is apparently unaffected by the reduced premiums under the analysis of the majority. The insurer here is held to have provided coverage exactly equivalent to what would have been appropriate had it not received a reduced premium.
There is, of course, a loser in this affair. Because insurance merely represents the pooling of risks, all others in Michigan who purchase no-fault insurance are apparently responsible for subsidizing persons like plaintiff, who elect a reduced premium—which the Legislature has mandated be charged by insurers—but who obtain the same level of no-fault coverage as those not paying a reduced premium. As with all such governmental subsidies, overall the net effect is that of a zero-sum game or—when administrative costs, including the attorney fees paid by insurers to defend cases such as the instant one are considered in the balance—a negative-sum game for the people of Michigan.
However, this windfall to persons in plaintiffs position will not likely continue indefinitely. By this decision, a reasonable insurer will be forced to demand copies of health and accident coverage policies whenever an insured elects coordination under § 3109a. The insurers will have to scrutinize such policies, *72both to identify those insurers protected by the erisa from becoming primary insurers except by consent and to undertake a parsing of their language for possible countercoordination clauses that will require a readjustment of the actuarial risk and thus of the premium. Principally lawyers, conversant with the jurisprudence in this area of insurance law, will be competent to perform this examination. As a result, administrative costs will increase substantially and insureds as a class will pay higher no-fault premiums so that a minority can enjoy a minimal premium reduction through exercise of the § 3109a election.
This anomaly arises only because plaintiff was injured through the negligence of another driver and to an extent in excess of the threshold for tort liability under § 3135 of the Insurance Code, MCL 500.3135; MSA 24.13135.3 Plaintiff, by the majority’s lights, thus properly avails herself of two state legislative dispensations, a reduced premium and residual tort liability, but finds herself free, ostensibly because of federal legislative action and misinterpretation of the decisions cited by the majority, of the concomitant quid pro quo of reduced benefits.4
*73The majority has erred, in my judgment, in overlooking a crucial fact. In Sibley v DAIIE, 431 Mich 164; 427 NW2d 528 (1988), the issue was whether benefits initially tendered to the insured under the Federal Employees’ Compensation Act, 5 USC 8101 et seq., but recouped by the federal government pursuant to its statutory right of subrogation, 5 USC 8132, from the insured’s third-party tort claim, should nonetheless be treated as “[b]enefits provided or required to be provided under the laws of . . . the federal government” for purposes of MCL 500.3109(1); MSA 24.13109(1). The Supreme Court of Michigan answered that question in the negative, and correctly so, in my judgment. What distinguishes Sibley from the present case, however, is that, in Sibley, the insured did not arrange a lower premium on the basis of such federal benefits; rather, insureds generally receive the benefit of lower premiums because the no-fault statute requires that state and federal benefits of that type be deducted from no-fault benefits. Insurers thus calculate actuarially the extent to which the general population of insureds will be able to avail itself of such benefits, and premiums are determined accordingly, without regard to individual cases. Thus, in Sibley, the Court merely announced to the actuaries that they should consider only benefits to be paid and retained under such federal and state programs as being within the offset allowed.
Here, in contrast, the ERlSA-plan benefits are not provided “under the laws of any state or the federal government,” that is, from the public treasury, but rather by virtue of funding furnished by plaintiff’s employer. To reduce its costs, the employer has established subrogation rights, but this has nothing to do *74with defendant no-fault insurer, which was not informed by plaintiff of her election to sign the subrogation agreement before reducing plaintiffs no-fault premium pursuant to her § 3109a election. Rather, this is between plaintiff and the ERISA plan. Presumably, by the manner in which the erisa plan subrogates itself to plaintiffs tort recovery, it reduces the cost of the plan to the employer, and thereby either allows the employer to afford the plan at all or encourages the employer to provide a better benefit package for its employees. Either way, that is a direct benefit to plaintiff, but the quid pro quo is that she must reimburse the erisa plan where, as here, she obtains a tort recovery for the same injury. There is no reason why this must absolve plaintiff of the consequences of her election of coordinated benefits for a reduced premium or why the insurer must pay no-fault benefits as though plaintiff had not elected coordination.
This is not a dispute over priority as between the ERISA plan and the no-fault insurer; as has been acknowledged, in that situation the erisa plan would prevail, assuming a suitable coordination of benefits clause in the plan’s charter. Frederick & Herrud, supra at 387. Nor is this a case in which a non-ERISA health insurer seeks to enforce subrogation rights against a tort recovery; that is precluded by § 3116 of the Insurance Code, MCL 500.3116; MSA 24.13116. Great Lakes American Life Ins Co v Citizens Ins Co, 191 Mich App 589; 479 NW2d 20 (1991). This is the only holding in Great Lakes; there is nothing therein, even dictum, that addresses the present factual situation or suggests a resolution of the issue here presented. This is a suit by an insured who has invoked her statutory right to a reduced premium in *75exchange for coordinated benefits and who opted to use as her primary medical insurance an ERISA plan that reserved and invoked subrogation rights against an eventual tort recovery. No one forced her to make that election, but now that it has come time to accept the consequences of that election, there is no reason in law or logic to relieve her of the concomitant burdens that attend the reduced premium benefits already enjoyed.
Therefore, defendant AAA is entitled to summary disposition. I would reverse summary disposition in favor of plaintiff and, pursuant to MCR 7.216(A)(7), remand with instructions to grant summary disposition in favor of AAA.

 Except for vehicle thieves and those motor vehicle owners who violate their legal duty to procure such insurance, MCL 500.3113(a) and (b); MSA 24.13113(a) and (b).

 Such double recovery would not be a “windfall,” because the insured will have paid double premiums.

 This anomaly is a function of the erisa plan’s limitation of countercoordination to the situation in which its insureds obtains third-party tort recoveries. Because the erisa plan might equally for present purposes have utilized a broader countercoordination strategy, my concerns over the manner in which the state legislative goal of making no-fault insurance more affordable has been eroded are general rather than specific to this particular situation.

 While plaintiff here has not obtained a double recovery of medical benefits, she reduced her no-fault premium by electing coordination of benefits, and her employer likewise reduced its health and accident insurance costs by virtue of the reserved right of the erisa plan to countercoordinate benefits, a savings that redounded to plaintiff’s benefit, both directly or indirectly through some combination of higher wages and better employer-funded health and accident coverage.