Davey v. Detroit Automobile Inter-Insurance Exchange

322 N.W.2d 541, 414 Mich. 1, 1982 Mich. LEXIS 545
CourtMichigan Supreme Court
DecidedAugust 9, 1982
Docket65227, (Calendar No. 9)
StatusPublished
Cited by19 cases

This text of 322 N.W.2d 541 (Davey v. Detroit Automobile Inter-Insurance Exchange) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Davey v. Detroit Automobile Inter-Insurance Exchange, 322 N.W.2d 541, 414 Mich. 1, 1982 Mich. LEXIS 545 (Mich. 1982).

Opinions

Williams, J.

This case concerns whether the Legislature violated constitutional due process or equal protection in providing for cost-of-living increases for no-fault insurance work loss benefits under MCL 500.3107(b); MSA 24.13107(b) but not [4]*4for no-fault insurance survivors’ loss benefits under MCL 500.3108; MSA 24.13108. Plaintiff argues increases in the cost of living affect both classes alike. However, we find that the greater pecuniary benefit provided by survivors’ loss benefits supports the legislative decision to provide cost-of-living increases for work loss benefits but not for survivors’ loss benefits. Therefore, we hold that there is no lack of equal protection and that there was due process. We reverse the judgments of the Court of Appeals and the trial court.

Since we have reversed the trial court’s judgment, the plaintiff is not entitled to the interest requested or attorney fees. We remand the case to the trial court for computation of survivors’ loss benefits not inconsistent with this opinion.

I. Facts

Plaintiff’s husband was killed in a motor vehicle accident on August 7, 1975. The decedent had been insured by the defendant at the time of his death. Defendant was prepared to pay plaintiff, as survivor, the $1,000 maximum benefit authorized by MCL 500.3108; MSA 24.131081 as the earnings of plaintiff’s decedent entitled her to that amount. A [5]*5dispute arose between plaintiff and defendant over the proper amount. Plaintiff filed suit in the Jackson Circuit Court, alleging that she was entitled to the maximum amount of benefits adjusted to $1,-111 per month because of increases in the cost-of-living index as computed by the insurance commissioner. At the time of the accident, § 3108 did not contain the proviso which subsequently mandated that survivors’ loss benefits reflect changes for increases in cost of living.2 Plaintiff also alleged that the amount of benefits to be paid under § 3108 did not have to be set off by social security and veterans’ benefits received by the plaintiff.3

[6]*6The trial court ruled that the no-fault set-off provision was unconstitutional, since the Court of Appeals had so held in O’Donnell v State Farm Mutual Automobile Ins Co, 70 Mich App 487; 245 NW2d 801 (1976). It also awarded the plaintiff $1,111 for each 30-day period — the amount her husband would have been entitled to receive under MCL 500.3107(b); MSA 24.13107(b) if he had survived, but was disabled because of a motor vehicle accident. Section 3107(b) has always been adjusted for increases in cost of living.4 In short, the trial [7]*7court agreed with the plaintiff that the distinction between work loss benefits and survivors’ loss benefits violated the principle of equal protection of law and that the cost-of-living increase provided under § 3107(b) should also apply to § 3108.

In O’Donnell v State Farm Mutual Automobile Ins Co, 404 Mich 524; 273 NW2d 829 (1979), this Court overruled the Court of Appeals by holding that the set-off provision of the act was constitutional. In 1978, the Legislature amended § 3108 so as to include cost-of-living increases in survivors’ loss benefits.5

On January 11, 1979, plaintiff filed a motion to enforce its earlier judgment in the trial court, claiming that the defendant had not paid the $1,111 for each 30-day period along with interest and attorney fees as ordered by the court. The trial court granted plaintiff’s motion to enforce the judgment in an opinion dated March 14, 1979. The opinion also indicated that the parties had agreed between themselves as to how to deal with the set-off issue subsequent to this Court’s holding in O’Donnell.

The Court of Appeals granted the defendant’s delayed application for leave to appeal. It affirmed in a per curiam opinion since it found no reasonable relation between the no-fault compensation objectives and the cost-of-living distinction, in § 3108. Davey v DAIIE, 98 Mich App 123; 296 NW2d 12 (1980).

We granted defendant’s application for leave to appeal on May 8, 1981. 411 Mich 900 (1981).

[8]*8II. Equal Protection and Due Process

The basic issue in the instant appeal is whether the legislative classification denying cost-of-living adjustments to recipients of survivors’ loss benefits under MCL 500.3108; MSA 24.13108, while allowing such adjustments to recipients of work loss benefits under MCL 500.3107; MSA 24.13107, constitutes a denial of due process or equal protection of law under the state and federal constitutions. Before identifying and applying the proper test of judicial review in determining the constitutional propriety of this classification, an explication of the arguments of the parties may aid in understanding our discussion.

A. The Contentions of the Parties

The plaintiff contends that the no-fault statutory scheme arbitrarily creates two classes of people. One class is made up of persons suffering non-fatal injuries in motor vehicle accidents — along with the dependents of the injured insured. MCL 500.3107(b); MSA 24.13107(b). The other legislative class of people is the surviving dependents of persons suffering fatal injuries in motor vehicle accidents. MCL 500.3108; MSA 24.13108.

At the time of the adoption of the no-fault act, the maximum amount payable to both groups in any 30-day period was $1,000. Section 3107(b), authorizing the payment of work loss benefits, stated that such benefits should also reflect annual changes in the cost of living. At the time the plaintiff’s decedent was killed in a motor vehicle accident, § 3108, survivors’ loss benefits, had not yet been amended to include such an adjustment.

Plaintiff argues that the compensable loss suf[9]*9fered by survivors of a person killed in an automobile accident is subject to the same inflationary pressures as the compensable loss suffered by an injured person and his dependents in a non-fatal automobile accident. Plaintiff further argues that unless the defendant can demonstrate that survivors are less subject to inflationary pressures as compared to persons receiving work loss benefits, this Court should find no rational basis for that distinction. Moreover, the plaintiff believes that her conclusion is buttressed by the fact that the Legislature, after this claim arose, amended § 3108 to include cost-of-living adjustments.

The defendant contends, however, that there is justification in treating the recipients of survivors’ loss benefits differently from the recipients of work loss benefits. The justification is the greater relative compensation for a family when the insured dies as compared with the compensation when the insured does not die. The defendant argues that the recipients of survivors’ loss benefits receive more spendable compensation than do recipients of work loss benefits because in the case of survivors there is one less person to share the compensation. Under the defendant’s reading of the act, the legislative distinction is reasonably related to the objectives of the no-fault scheme which are to provide adequate and prompt reparation while containing the cost of premiums of no-fault automobile insurance.

B.

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Davey v. Detroit Automobile Inter-Insurance Exchange
322 N.W.2d 541 (Michigan Supreme Court, 1982)

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Bluebook (online)
322 N.W.2d 541, 414 Mich. 1, 1982 Mich. LEXIS 545, Counsel Stack Legal Research, https://law.counselstack.com/opinion/davey-v-detroit-automobile-inter-insurance-exchange-mich-1982.