91 Mich. App. 189

SCHWARK v LILLY

Docket No. 78-648.

Submitted February 6, 1979, at Grand Rapids.

Decided July 9, 1979.

*191Sloan, Zarbock, Risdon, Beneñel & Farrer, for plaintiffs.

James, Dark & Brill, for defendant State Farm Mutual Automobile Insurance Company.

Before: D. F. Walsh, P.J., and J. H. Gillis and T. M. Burns, JJ.

D. F. Walsh, P.J.

Defendant State Farm Mutual Automobile Insurance Company (hereinafter "defendant”) appeals the entry of judgment for plaintiffs in the amount of $9,445.49, representing the personal protection insurance benefits payable to plaintiffs as survivors of the deceased Naomi Schwark.

This cáse arose out of an August 3, 1975, automobile accident in which a car driven by defendant Max E. Lilly collided with a car driven by Naomi Schwark. Mrs. Schwark was killed and four of her children, passengers in the automobile, were injured in the accident. Plaintiff Guy Schwark, husband of Naomi Schwark and father of the injured children, filed suit individually and as *192administrator of his wife’s estate. He also sued as next friend of the four minor Schwark children, three of whom were injured in the accident. The Schwark’s only adult child, Guy Schwark III, was among those injured in the accident and joined in the suit. The defendants were Mr. Lilly, Duane K. Wiltse d/b/a The Lazy Lounge, VFW Mecwarf Post 5319 (Kenneth Suit, Commander) and State Farm Mutual Automobile Insurance Company. Pursuant to settlements, plaintiffs’ claims against all defendants except State Farm were dismissed. The claims against Mr. Wiltse and the VFW post were based on alleged dramshop liability. MCL 436.22; MSA 18.933.

Trial was held on December 6, 1977. The parties agreed that the sole remaining issues concerned: (1) whether Social Security benefits paid to plaintiffs as a result of Mrs. Schwark’s death could be deducted from survivors’ benefits owed to plaintiffs by defendant under the no-fault act, MCL 500.3109(1); MSA 24.13109(1);1 (2) the amount of survivors’ benefits owed to plaintiffs by defendant under the no-fault act, MCL 500.3108; MSA 24.13108;2 and (3) whether defendant could be reimbursed from the amount paid to plaintiffs by the dramshop defendants, MCL 500.3116; MSA 24.13116.

The trial court found that § 3109 of the no-fault act was unconstitutional and ruled that defendant was not entitled to a setoff for Social Security benefits. The court also found that § 3116 of the act was unconstitutional and that defendant was *193not entitled to reimbursement from plaintiffs’ dramshop recovery.

At trial it was established that Naomi Schwark had been employed outside the home at the time of her death. Her gross weekly earnings were approximately $90. Her weekly take home pay was $69.12. Her husband testified repeatedly that he did not know what portion of those earnings had been used for family purposes and what portion had been used by Mrs. Schwark for her own personal needs. In his final response to questioning along this line, he estimated that half of his wife’s income had been used for family purposes.3

*194The trial judge found that survivors’ benefits due plaintiffs under § 3108 of the no-fault act were equal to Mrs. Schwark’s take-home pay of $69.12 per week. The court interpreted § 3108 as requiring payment of something less than the deceased’s gross income. With regard to Mr. Schwark’s testimony as to the portion of Mrs. Schwark’s income which was used for family purposes, the court found that the evidence was "at best * * * untrustworthy. For example, the amount spent on gasoline and repairs for the decedent’s automobile, although used for taking her to and from her place of employment, could have been used for the benefit of the dependents.”

We address three issues on appeal:

*1951. Did the trial court err in ruling that defendant was not entitled to subtract from personal protection insurance benefits the Social Security benefits paid to plaintiffs as a result of Mrs. Schwark’s death?

2. Did the trial court properly compute the amount of personal protection insurance benefits payable to plaintiffs as dependent survivors of Mrs. Schwark?

3. Did the trial court err in ruling that defendant was not entitled to reimbursement out of plaintiffs’ dramshop recovery from the dismissed defendants?

I. Social Security Setoff

The Supreme Court recently held that the setoff provision of § 3109 of the no-fault act is constitutional and enforceable as it relates to Social Security benefits. O’Donnell v State Farm Mutual Automobile Ins Co, 404 Mich 524; 273 NW2d 829 (1979). The trial court’s ruling to the contrary is, therefore, reversed.4

*196II. Computation of Personal Protection Insurance Beneñts for Survivors’ Losses

MCL 500.3108, provides:

"Personal protection insurance benefits are payable for a survivors’ loss which consists of a loss, after the date on which the deceased died, of contributions of tangible things of economic value, not including services, that dependents of the deceased at the time of his death would have received for support during their dependency from the deceased if he had not suffered the accidental bodily injury causing death and ex*197penses, not exceeding $20.00 per day, reasonably incurred by these dependents during their dependency and after the date on which the deceased died in obtaining ordinary and necessary services in lieu of those that the deceased would have performed for their benefit if he had not suffered the injury causing death. The benefits payable for survivors’ loss in connection with the death of a person in a single 30-day period shall not exceed $1,000.00 and is not payable beyond the first 3 years after the date of the accident.”

In Miller v State Farm Mutual Automobile Ins Co, 88 Mich App 175; 276 NW2d 873 (1979), a panel of this Court held that the Legislature did not intend that survivors’ benefits under § 3108 be reduced by the amount the decedent would have paid in taxes but did intend that such benefits be reduced by the amount used for the decedent’s personal consumption.

We concur in the latter conclusion and so rule in this case. With respect to the former conclusion, however, we disagree with the Miller panel and rule to the contrary.

Under generally recognized principles of statutory construction, when there is no necessity to reconcile conflicting statutes, Wayne County Civil Service Comm v Board of Supervisors, 384 Mich 363; 184 NW2d 201 (1971), when there is no absence of adequate operational definitions of relevant terms, Prisoners’ Labor Union v Dep’t of Corrections, 61 Mich App 328; 232 NW2d 699 (1975), lv den 394 Mich 843 (1975), and when the statutory language is plain and unambiguous, Jones v Grand Ledge Public Schools, 349 Mich 1, 9-10; 84 NW2d 327 (1957), judicial construction or attempted interpretation to vary the plain meaning of a statute is precluded.

The language employed by the Legislature in *198MCL 500.3108, is explicit and unambiguous. It clearly expresses the intent of the Legislature that "benefits are payable for a survivors’ loss” and that the "loss” consists of "tangible things of economic value” which the dependents of the deceased "would have received” from the deceased for support during their dependency. The dependents of the deceased, however, would not have received any amounts of the decedent’s income which the decedent was required to pay in taxes.

The case is remanded to the circuit court for proper determination of the amount of the "tangible things of economic value” which the dependents of Naomi Schwark would have received from her for support if she "had not suffered the accidental bodily injury causing death”. In making this determination the triál court must reduce Mrs. Schwark’s gross wages by an amount fairly representing her personal consumption and also by the amount she would have paid in taxes. It should be noted, however, that this panel agrees with the trial judge that Mr. Schwark’s statement that one half of his wife’s income was used for family purposes, when read in context, was not sufficiently trustworthy to be relied upon as determinative of the amount of her personal consumption.

III. Applicability of the No-Fault Act’s Reimbursement Provision When Recovery From Third Parties is Based on Dramshop Liability

In ruling that defendant was not entitled to reimbursement for personal protection insurance benefits from plaintiffs’ recovery from the dram-shop defendants, the trial court relied on Murray v Ferris, 74 Mich App 91; 253 NW2d 365 (1977). The court found § 3116 of the no-fault act unconstitutional and declined to allow reimbursement *199from that portion of the dramshop recovery which represented plaintiffs’ noneconomic damages.

At the time of the accident which gave rise to this lawsuit, MCL 500.3116(1); MSA 24.13116(1) provided:

"A subtraction from personal protection insurance benefits shall not be made because of the value of a claim in tort based on the same accidental bodily injury. However, after recovery is realized upon a tort claim, a subtraction shall be made to the extent of the recovery, exclusive of reasonable attorneys’ fees and other reasonable expenses incurred in effecting the recovery. If personal protection insurance benefits have already been received, the claimant shall repay to the insurers out of the recovery a sum equal to the benefits received, but not more than the recovery exclusive of reasonable attorneys’ fees and other reasonable expenses incurred in effecting the recovery. The insurer shall have a lien on the recovery to this extent. A recovery by an injured person or his estate for loss suffered by him shall not be subtracted in calculating benefits due a dependent after the death and a recovery by a dependent for loss suffered by the dependent after the death shall not be subtracted in calculating benefits due the injured person.”

The Supreme Court recently declined to follow the approach taken in Murray v Ferris, supra. Applying established rules of statutory construction in Workman v Detroit Automobile Inter-Insurance Exchange, 404 Mich 477; 274 NW2d 373 (1979), the Court interpreted § 3116 so as not to allow unconditional reimbursement of no-fault insurance carriers out of tort recoveries from third parties. The Court found that it was necessary to construe § 3116 in light of § 31355 of the no-fault *200act. To do otherwise would allow the absurd result of depriving an injured person of the limited tort remedy provided in § 3135. The Court held that, under § 3116,

"an insurance carrier paying personal injury protection benefits is entitled to reimbursement from the tort recovery of a person injured as a result of a motor vehicle accident only if, and to the extent that, the tort recovery includes damages for losses for which personal injury protection benefits were paid.” Id. at 510 (opinion of Williams, J.).

This interpretation of § 3116 gives full effect to § 3135, and effectuates the essential purpose of § 3116 — i.e., to prevent double recovery of economic loss by persons whose right to sue in tort for economic loss is not abolished by § 3135. The Court noted that such double recovery might occur with respect to: (1) persons injured by uninsured motorists, § 3135(2); (2) persons injured in automobile accidents in another state, § 3135(2); and (3) persons suffering intentionally caused harm in *201auto accidents, § 3135(2)(a). Id. at 510, fn 15 (opinion of Williams, J.).

Concurring in the result on this issue, Justices Levin and Kavanagh found that the Legislature’s recent amendment of § 3116 provided the definitive answer in the controversy over the proper construction and validity of the section. As amended, the section provides for reimbursement for economic benefits out of third-party tort recoveries only where the defendant is uninsured, the accident occurs out of the state, or the injury is intentionally inflicted.6

*202On appeal in the instant case, defendant concedes that it is not entitled to reimbursement from that part of the dramshop recovery which represents plaintiffs’ noneconomic losses. It argues only that that portion of the dramshop recovery representing economic losses for which defendant is liable to plaintiffs under the no-fault act should be subject to its right of reimbursement.

If we were to adopt the analysis of Justices Levin and Kavanagh, we would reject defendant’s argument summarily, since, as recently amended, § 8116 clearly has no applicability to the instant fact situation. We are also persuaded, however, that the analysis of the Workman majority compels us to reject defendant’s argument. Section 3116 must be construed in light of and together with § 3135. In the latter section the Legislature discusses only "tort liability arising out of the ownership, maintenance or use * * * of a motor vehicle”. § 3135(2). The liability of the dramshop defendants did not arise out of the ownership, maintenance or use of an automobile. Instead their liability arose from their alleged "unlawful selling, giving or furnishing * * * intoxicating liquor” to "a visibly intoxicated person”. MCL 436.22.

In enacting the no-fault act the Legislature addressed only one type of tort liability. The act comprehensively covers only tort liability arising out of the ownership, maintenance or use of motor vehicles. To extend its provisions to liability arising outside its intended scope would circumvent *203the legislative process.7 We rule, therefore, that the defendant is not entitled to reimbursement for personal protection insurance benefits from plaintiffs’ recovery from the dramshop defendants.

Affirmed in part; reversed in part; remanded for determination of the amount of no-fault benefits still owed to plaintiffs by defendant. No costs, each party having partially prevailed.

J. H. Gillis, J., concurred.

T. M. Burns, J.,

(concurring in part, dissenting in part). I concur in Judge Walsh’s opinion in all respects save one. I would hold that the conclusion expressed in Miller v State Farm Mutual Automobile Ins Co, 88 Mich App 175; 276 NW2d 873 (1979), concerning deduction for amounts the deceased would have paid in taxes is correct. MCL 500.3108; MSA 24.13108, does not expressly provide for such deduction, as does MCL 500.3107; MSA 24.13107, and I would not read this requirement into the act.

Schwark v. Lilly
91 Mich. App. 189

Case Details

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Schwark v. Lilly
Decision Date
Jul 9, 1979
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91 Mich. App. 189

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Michigan

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