Opinion
Docket No. 15943.
Decided April 29, 1974.
Appeal from Kent, John H. VanderWal, J. Submitted Division 3 February 8, 1974, at Grand Rapids. (Docket No. 15943.) Decided April 29, 1974.
Complaint by Clarence Hoogeboom for himself and as next friend of Elaine Hoogeboom against Larry Carter and James Carter for negligence. Judgment for plaintiffs, the Motor Vehicle Accident Claims Fund being held liable for payment of the difference between the damages awarded and the plaintiffs' settlement with their insurer. The Secretary of State appeals. Reversed and remanded.
Cholette, Perkins Buchanan (by Kenneth L. Block), for plaintiffs.
Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and Joseph B. Bilitzke and Carl K. Carlsen, Assistants Attorney General, for defendants.
Plaintiff Elaine Hoogeboom, a minor, sustained injuries when struck by an automobile driven by defendant Larry Carter, an uninsured motorist. Plaintiffs' insurance policy provided coverage against uninsured motorists for injuries up to $10,000. Through her guardian, Elaine voluntarily settled her claim with the insurance company for $6,000. The settlement was approved by the probate court. The Motor Vehicle Accident Claims Fund (hereinafter referred to as Fund) did not participate in either the settlement or its approval by the probate court.
Plaintiffs sued the defendants, and the Fund defended on their behalf. A judgment of $16,000 was entered against them. The trial judge held the Fund liable for the difference between the judgment and the settlement figure. The Fund appeals claiming that, under the circumstances of this case, it should only be liable for the difference between the judgment and the $10,000 limit on plaintiffs' uninsured motorist coverage.
Michigan statutes MCLA 257.1122; MSA 9.2822 and MCLA 257.1123; MSA 9.2823 state that the Fund is to pay up to $10,000 on judgments arising from injuries caused by uninsured motorists. But the amount owed is to be reduced by the sum paid or payable by an insurer for the same claim.
The proper determination of the amount by which plaintiffs' judgment is to be reduced depends upon the interpretation of two cases, Green v Blicharski, 32 Mich. App. 15; 188 N.W.2d 113 (1971), and Brunner v Secretary of State, 48 Mich. App. 535; 210 N.W.2d 786 (1973). Green involved a case essentially the same as this one except that Green did not reach a voluntary settlement with his insurer. Instead, his dispute with the insurer was submitted to binding arbitration pursuant to his insurance contract. The arbitrator awarded Green $7,250. He recovered the full difference between the arbitration award and the sum awarded him in a subsequent court action. Brunner, supra, involved a voluntary settlement with the plaintiff's insurer in which the Fund took no part. Brunner was allowed to recover only the difference between the maximum amount of coverage available to him under his policy (regardless of the sum for which he settled) and the judgment in his subsequent court action. The Brunner Court distinguished Green, supra, reasoning:
"This Court in Green ruled only upon the effect of an arbitration award pursuant to terms of the insurance policy, and did not consider a voluntary settlement such as that existing in the instant case. Although there is no indication in the case at bar of fraud or collusion between plaintiff and his insurer, extension of the Green holding to the present facts would place the fund at the mercy of future private settlements which are negotiated in the absence of the Secretary of State, over which he has no power of approval, and which — unlike Green — are not concluded by an independent, impartial arbitrator whose presence would preclude any inference of impropriety." 48 Mich. App. 535, 541-542, 210 N.W.2d 786. (Emphasis in original.)
Plaintiffs contend that the approval by the probate court in this case is sufficient to place this case within the holding of Green. We disagree. We believe that the reasoning of Brunner applies just as forcefully to this case. The approval of the probate court judge is not the equivalent of the arbiter's. An arbiter decides issues after witnessing a partisan contest; the judge is asked to approve an accomplished fact by both parties. Therefore, this case is controlled by Brunner, supra.
Reversed and remanded for further proceedings in accord with our decision. Costs to defendants.
ALLEN, J., concurred.
I disagree with the Brunner panel that "extension of the Green holding * * * would place the fund at the mercy of future private settlements".
Brunner v Secretary of State, 48 Mich. App. 535, 541; 210 N.W.2d 786, 790 (1973).
Green v Blicharski, 32 Mich. App. 15; 188 N.W.2d 113 (1971).
The Motor Vehicle Accident Claims Fund.
Conceding arguendo that the foregoing is true, the converse is that the injured party and his counsel are deprived of any right to negotiate. The holding in Brunner ordains that they must either submit to arbitration or insist upon a payment of the full policy limits.
My view is that it is the burden of the fund to attack and vitiate any settlement figure by affirmatively showing collusion or some other species of fraud.
I would affirm the judgment entered by the lower court.