2019 amendments to the No-Fault Act (NFA); Tort action under MCL 500.3135(3)(c); Allowable medical expenses available when the injured party has Medicare coverage; Common-law duty to mitigate damages; Applicability of MCL 500.3157’s limits on medical expenses reimbursement

The court held that in tort actions under MCL 500.3135(3)(c), plaintiffs with Medicare coverage must mitigate their damages by seeking payment from Medicare. It also held that MCL 500.3157’s limits on medical expenses reimbursement do not apply. Plaintiff pursued a tort action against defendant, asserting he was injured in an auto accident. The trial court ruled that he “did not have a common-law duty to mitigate his damages and that the reimbursement limitations set forth in MCL 500.3157 did not apply to plaintiff’s third-party negligence claim.” The Court of Appeals, on interlocutory review, “issued a split, published opinion holding that plaintiff had a duty to mitigate damages and that” MCL 500.3157’s reimbursement limitations did apply. The case required the court to interpret 2019 amendments to the NFA. It first concluded that the NFA “did not abrogate the common-law duty to mitigate damages[.]” It determined that the “without limit” language used in MCL 500.3135(3)(c) “does not broadly eliminate the incorporated references to MCL 500.3107(1)(a), which requires allowable expenses to be reasonable and necessary.” The court agreed with the Court of Appeals that the phrase, “‘read in context, simply means that the recovery of allowable expenses does not solely encompass amounts in excess of the statutory limitations . . . .’” That court correctly ruled “that plaintiff was required to mitigate his damages by making reasonable efforts to minimize his economic harm. Here, such reasonable efforts would involve seeking Medicare coverage for the treatment he received from Medicare-participating providers.” But as to the second issue on appeal, the court held “that a plain-language reading of MCL 500.3135(3)(c) does not contemplate adoption of the reimbursement limitations set forth in MCL 500.3157.” Thus, it affirmed the Court of Appeals’ judgment as to the applicability of the mitigation-of-damages doctrine, reversed as to the applicability of the reimbursement limitations in MCL 500.3157 to a tort claim under MCL 500.3135(3)(c), and remanded the case to the trial court.

Concurring, Justice Welch agreed fully with the majority as to the mitigation of damages issue and also agreed that, “as currently written, MCL 500.3135(3)(c) does not incorporate” MCL 500.3157’s reimbursement limitations. She wrote “separately to highlight for the Legislature a possible inconsistency between this conclusion and the overall purpose and design of the 2019 no-fault reforms.”

Concurring in part and dissenting in part, Justice Zahra also agreed with the majority on the mitigation of damages issue and that MCL 500.3157’s fee schedules do not apply. His disagreement stemmed “from its implied holding that there are no applicable fee schedules for this action.” Rather, he concluded the Medicare fee schedules plainly applied. He would hold that plaintiff was “entitled to reimbursement for ‘allowable expenses’ under” these schedules.