Court Opinion

ID: 9686142
Source: CourtListenerOpinion
Date Created: 2023-08-24 15:30:58.681099+00
Date Added: 2024-06-11T18:18:15.387136
License: Public Domain

Cavanagh, J.
(dissenting). The majority holds that a no-fault insurer’s liability for personal protection insurance benefits should be offset by the amount of workers’ compensation benefits the injured employee would have received if he had not entered into a redemption agreement. The majority reaches this conclusion on the basis of cases which we believe are factually distinguishable. We *637would hold that where there is a legitimate dispute between an injured employee and a workers’ compensation carrier, and the parties in good faith enter into a redemption agreement, only the amount of workers’ compensation benefits provided or required to be provided under the agreement should ordinarily be set off pursuant to § 3109(1) of the no-fault act.1
An employee who suffers accidental bodily injury in the course of his employment while occupying his employer’s motor vehicle is entitled to collect both no-fault and workers’ compensation benefits from his employer’s insurers. Mathis v Interstate Motor Freight System, 408 Mich 164, 175; 289 NW2d 708 (1980). To prevent the employee from receiving a double recovery, § 3109(1) of the no-fault act permits the no-fault insurer to set off workers’ compensation benefits "provided or required to be provided” to the employee. Id., pp 186-187.2
Plaintiff in this case is not seeking to recover duplicate benefits from defendant no-fault insurer. He only wishes to obtain benefits for wage loss *638which were not provided to him under the terms of the workers’ compensation redemption agreement. There is also no question that plaintiff promptly sought reinstatement of his workers’ compensation benefits. Although defendant challenges the apportionment of the settlement between medical expenses and wage loss, there is no allegation that the total amount of the settlement was unreasonably low.
The phrase "provided or required to be provided” is not so clear and unambiguous as to be susceptible of only one interpretation. Perez v State Farm Mutual Automobile Ins Co, 418 Mich 634, 642; 344 NW2d 773 (1984); Davis v Auto-Owners Ins Co, 116 Mich App 402, 413; 323 NW2d 418 (1982). The instant case and those discussed in Section iv of the majority opinion involve three distinct fact patterns. In Perez and Davis, the employer failed to obtain workers’ compensation insurance. In this factual situation, the no-fault insurer cannot set off the amount of workers’ compensation benefits theoretically available to the injured employee because the employee will never actually receive these benefits. Although the no-fault insurer is forced to bear the entire loss, this is preferable to denying the employee a full and adequate recovery for his injuries.
Thacker v DAIIE, 114 Mich App 374; 319 NW2d 349 (1982), and James v Allstate Ins Co, 137 Mich App 222; 358 NW2d 1 (1984), lv den 419 Mich 946 (1984), present a different fact pattern. In each case, the employer carried workers’ compensation insurance, and the plaintiff employee was entitled to such benefits. The employees and the workers’ compensation carriers agreed to settle the claims for lump sums. The parties stipulated that the total amount of workers’ compensation benefits would have been significantly larger if the employ*639ees had elected to receive monthly benefits. The Court of Appeals, in both cases, concluded that the no-fault insurer could set off the amount of benefits the employees would have received had they not elected to receive lump sums.
That is not the situation presented here, or in Divito v Transamerica Corp of America, 141 Mich App 29; 366 NW2d 231 (1985). In these cases, the workers’ compensation carriers maintained that the injured employees were not entitled to further benefits. Rather than litigate the matter before the Bureau of Workers’ Compensation, the employees and the carriers entered into redemption agreements. The Court of Appeals, in both cases, concluded that the no-fault insurers could set off only the amount of benefits actually received by the employees under the terms of the redemption agreements.
Where there is a legitimate dispute over an employee’s eligibility for workers’ compensation benefits, and that dispute is voluntarily resolved through a redemption agreement, the benefits required to be provided to the employee are ordinarily those set forth in the agreement.3 When a redemption amount is approved by a referee, the worker has discharged his obligation "to use reasonable efforts to obtain payments that are available from a workers’ compensation insurer.”4 That amount becomes the amount "provided or required to be provided,” unless the no-fault carrier can persuade the circuit judge that the redemption amount is not a fair and reasonable settlement of the dispute between the employee and the work*640ers’ compensation carrier.5 In this situation, we would construe § 3109(1) as follows: If the redemption amount has been paid by the time the no-fault insurer attempts to offset its liability, the payment would constitute "benefits provided.” Where the redemption amount has not yet been paid, this amount would constitute "benefits . . . required to be provided.”
The majority, in contrast, concludes that the benefits "required to be provided” are those which an employee would have received but for the redemption agreement. Unlike Thacker and James, the workers’ compensation carrier in this case has never admitted that it was liable for more benefits than it paid. In order to determine what an employee theoretically would have received, the courts would have to determine the merits of the underlying workers’ compensation claim. The majority’s interpretation would encourage employees to pursue their workers’ compensation claims, rather than redeem them, in order to receive the full amount of benefits due. Such litigation would not further the primary goal of either the workers’ compensation or the no-fault acts, i.e., to provide injured persons with an assured, adequate, and prompt recovery.6
*641The majority worries that if only the amount of workers’ compensation benefits actually received can be subtracted from the no-fault benefits otherwise owed, employees and workers’ compensation carriers will structure their redemption agreements so as to require the no-fault insurer to pay most of the benefits. We would not be so quick to reach such a conclusion. If there is evidence that the redemption agreement is not a fair and reasonable compromise, the no-fault insurer may attack the agreement.7 Defendant has not produced such evidence.8
In short, we would interpret § 3109(1) to require setoff only for the amount of benefits actually provided, or required to be provided, under the terms of a fair and reasonable workers’ compensation redemption agreement, which was entered *642into in good faith to resolve a legitimate dispute as to workers’ compensation liability. The majority’s contrary conclusion encourages litigation and prevents employees, who settle their workers’ compensation claims in good faith, from obtaining one full recovery.9 We would therefore affirm the decision of the Court of Appeals.
Levin, J., concurred with Cavanagh, J.
Archer, J., took no part in the decision of this case.____

 MCL 500.3109(1); MSA 24.13109(1) provides:
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.
The Workers’ Disability Compensation Act provides that a payment under the act "shall not be assignable.” This provision does "not apply to or affect the validity of an assignment made to an insurance company . . . .” MCL 418.821; MSA 17.237(821). It does not appear that Gregory sought to assign his claim against the workers’ compensation carrier to the defendant no-fault insurer and that the no-fault insurer refused to accept such an assignment and to pay the full no-fault benefit.

 Setoff is only permitted where the no-fault and workers’ compensation benefits serve the same purpose and are provided, or are required to be provided, as a result of the same accident. Jarosz v DAIIE, 418 Mich 565, 577; 345 NW2d 563 (1984).

 The redemption agreement must be approved by the Bureau of Workers’ Compensation. See MCL 418.835-418.837; MSA 17.237(835)-17.237(837).

 Perez v State Farm Mutual Automobile Ins Co, 418 Mich 634, 645; 344 NW2d 773 (1984).

 The circuit judge could substitute his judgment only when the evidence demonstrates that the redemption amount is less than the minimum amount within the spectrum of a fair and reasonable settlement of the dispute. If the circuit judge finds that the redemption amount is below such minimum amount, the minimum amount that the circuit court decides would be a fair and reasonable settlement is the amount "provided or required to be provided.”

 There may be instances where a redemption agreement between an employee and a workers’ compensation carrier will benefit a no-fault insurer. For example, if the Bureau of Workers’ Compensation determines that the employee was not injured during the course of employment, the no-fault insurer must shoulder the entire loss. If the employee and the carrier had entered into a redemption agreement, however, the amount of the agreement would have been set off against the no-fault insurer’s liability.

 Even the majority’s holding could be improperly manipulated. For example, an insurer who provides both workers’ compensation and no-fault coverage to an employer could negotiate a low workers’ compensation redemption agreement. The insurer could then claim a setoff against its no-fault liability for the amount the employee could have received if he had pursued his claim.

 Defendant argues that the $12,500 workers’ compensation redemption was improperly apportioned between medical expenses and wage loss. The validity of the redemption agreement does not depend on the validity of the apportionment. We would hold that the defendant no-fault insurer is entitled to credit for the $12,500 against the first monies otherwise payable by it (whether for medical expense or wage loss) that, but for the redemption, would have been required to be paid by the workers’ compensation carrier, until said sum of $12,500 has been exhausted.
Defendant has not alleged that plaintiff did not, or will not, incur $12,000 worth of medical expenses as a result of the motor vehicle accident. Defendant only argues that plaintiff "must” have incurred more than $500 in wage loss, in light of his extensive medical expenses.
A no-fault insurer must provide personal protection insurance benefits for both reasonable medical expenses and up to three years of wage loss. MCL 500.3107; MSA 24.13107. If more of the settlement had been apportioned to wage loss, and plaintiff had incurred $12,000 in medical expenses, plaintiff could have sought reimbursement for those medical expenses not covered by the redemption agreement. In either event, defendant’s total liability would be approximately the same.

 Since it is unnecessary to the resolution of this case, we express no opinion as to the validity of the Court of Appeals decisions in Thacker and James.