Background
Joseph Canty alleged that he was injured in a February 2021 automobile crash caused by Michael Mason. Although Canty had no-fault insurance, he had opted out of personal protection insurance coverage because he had qualified health coverage through Medicare Parts A and B. He therefore sued Mason in tort under MCL 500.3135(3)(c) to recover allowable medical expenses.
Mason sought partial summary disposition, asserting that several treating providers participated in Medicare but neither billed Medicare nor charged Medicare rates. He argued that Canty failed to mitigate his damages by using Medicare and that Michigan’s no-fault reimbursement limitations in MCL 500.3157 capped any recovery. The trial court rejected both arguments. A divided Court of Appeals reversed, holding that Canty had a duty to mitigate and that the statutory reimbursement limitations applied.
The Court’s Holding
The Michigan Supreme Court held that the common-law mitigation-of-damages doctrine applies to tort claims under MCL 500.3135(3)(c). The statute’s authorization of recovery “without limit” does not eliminate the requirement that allowable expenses be reasonable charges for reasonably necessary services. Accordingly, a Medicare-covered plaintiff must make reasonable efforts to seek Medicare payment for treatment received from Medicare-participating providers. The defendant bears the burden of proving failure to mitigate, and the reasonableness of the plaintiff’s efforts is for the factfinder.
The Court also held that the reimbursement limitations in MCL 500.3157 do not apply to these tort claims. MCL 500.3135(3)(c) specifically draws its definitions from MCL 500.3107 through MCL 500.3110, while MCL 500.3157 governs reimbursement for treatment covered by PIP insurance. Reading MCL 500.3107’s prefatory language to import the entire no-fault act would render portions of MCL 500.3135(3)(c) superfluous. The Court therefore affirmed the Court of Appeals on mitigation, reversed it on the reimbursement caps, and remanded for further proceedings.
Key Takeaways
- A Medicare beneficiary who opted out of PIP coverage must reasonably seek Medicare payment for care furnished by Medicare-participating providers before claiming those expenses from an alleged tortfeasor.
- The phrase “without limit” in MCL 500.3135(3)(c) does not dispense with the statutory requirement that allowable medical charges be reasonable and the services reasonably necessary.
- The no-fault reimbursement limits in MCL 500.3157 apply to PIP benefits, not tort damages pursued under MCL 500.3135(3)(c).
Why It Matters
The decision establishes separate rules for mitigation and reimbursement caps in post-2019 Michigan no-fault litigation. Medicare-covered plaintiffs who opt out of PIP cannot ignore available Medicare coverage and seek the full billed amount without regard to mitigation, but their tort recoveries are not automatically capped by MCL 500.3157.
The ruling leaves trial courts and factfinders to assess reasonable mitigation and damages using Medicare payments and other relevant evidence rather than mechanically applying the no-fault fee schedule. A concurrence urged the Legislature to consider whether that result is consistent with the cost-control goals of the 2019 reforms.