Great American Insurance v. Queen

86 Mich. App. 362 (1978) 272 N.W.2d 659 GREAT AMERICAN INSURANCE COMPANY v. QUEEN Docket No. 77-4457. Michigan Court of Appeals. Decided October 3, 1978. Johnson, Campbell & Moesta, P.C., for plaintiff. Freedman, Krochmal & Colman, for defendant Queen. Conklin & Maloney (Plunkett, Cooney, Rutt, Watters, Stanczyk & Pedersen, by John P. Jacobs, of counsel), for defendant Moore. Davidson, Gotshall, Kohl, Secrest, Wardle, Lynch & Clark (by Randall D. Bryant), for defendant Hughes. Before: ALLEN, P.J., and CYNAR and D.R. FREEMAN,[*] JJ. Decided October 3, 1978. Limited leave to appeal granted, 405 Mich 823. *364 PER CURIAM. The sole question in this case is whether a worker's compensation carrier is entitled to be reimbursed from the injured employee's recovery of noneconomic losses from the tortfeasors. The trial court held that they were not entitled to reimbursement and granted defendants' motions for summary judgment. Presently within this Court there exists a split of opinion on this issue. In Wrobel v Wayne County Road Comm, 79 Mich App 484; 261 NW2d 58 (1977), one panel of this Court relied upon the pre-no-fault case of Pelkey v Elsea Realty & Investment Co, 394 Mich 485; 232 NW2d 154 (1975), and held that the compensation carrier was entitled to reimbursement. However, more recently in Reliance Insurance Co v Messina Trucking, Inc, 83 Mich App 159; 268 NW2d 328 (1978), another panel of this Court distinguished Pelkey and held that reimbursement was not authorized. We believe that Reliance Insurance Co v Messina Trucking, Inc is the better reasoned opinion and we adopt its reasoning and result herein. It makes no sense to us to reimburse plaintiff for monies paid out for economic loss out of a later recovery for noneconomic loss. The two recoveries represent compensation for distinct losses, without providing any double recovery for the injured employee. To adopt plaintiff's argument would be to deny complete recovery to a seriously injured employee, while permitting any other person who suffers serious injury to recover in full. We do not believe that the Legislature, in enacting the worker's compensation and no-fault acts, intended such a result. Affirmed. No costs, a public question being involved. ALLEN, P.J. (concurring). I concur in the result *365 in this case but believe it necessary to emphasize the limited nature of the holding in Reliance Insurance Co v Messina Trucking, Inc, 83 Mich App 159; 268 NW2d 328 (1978), and hence the limited nature of the holding in the instant case. Section 827(5) of the Workers Disability Compensation Act, MCL 418.827(5); MSA 17.237(827)(5), provides that an employer or workers compensation insurance carrier shall be reimbursed for its payments from any tort recovery won by the injured employee. Since a recovery in tort virtually always compensated the injured person for his or her economic losses as well as other damages, the set-off provision of § 827(5) avoided a double recovery. With the advent of no-fault, tort recovery in automobile accidents was limited to a few situations not including the usual economic losses. MCL 500.3135; MSA 24.13135. An employee can no longer recover in tort for economic losses resulting from a traffic accident, and therefore there can be no double recovery from tort and workers compensation. It is the interplay between the limited tort recovery of the no-fault act and the set-off provision of the workers compensation act which creates the unconstitutional classification struck down in Reliance Insurance Co v Messina Trucking, Inc, supra. And it is only in this situation that § 827(5) is being held unconstitutional. NOTES [*] Circuit judge, sitting on the Court of Appeals by assignment.