Background
Joseph Canty alleged that he was injured in a February 2021 automobile crash caused by Michael Chester Mason. Canty carried no-fault insurance but, because he had Medicare Parts A and B, had elected under Michigan law not to maintain personal protection insurance coverage. 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. Mason argued that Canty failed to mitigate his damages by using Medicare and that any recovery was limited by the reimbursement provisions in MCL 500.3157. The trial court rejected both arguments, but a divided Court of Appeals held that Canty had a duty to mitigate and that the statutory reimbursement limits applied.
The Court’s Holding
The Michigan Supreme Court affirmed in part and reversed in part. It held that the common-law mitigation-of-damages doctrine applies to a tort claim under MCL 500.3135(3)(c). Canty therefore had to make reasonable efforts to obtain 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 a question for the factfinder.
The Court separately held that MCL 500.3157’s reimbursement limits do not apply to tort damages sought under MCL 500.3135(3)(c). The latter statute incorporates the definitions in MCL 500.3107 through MCL 500.3110, not the reimbursement limits in MCL 500.3157, which govern treatment for injuries covered by PIP insurance. The Court remanded the case to the trial court for further proceedings.
Key Takeaways
- A Medicare-covered plaintiff pursuing automobile-related tort damages under MCL 500.3135(3)(c) must reasonably seek Medicare payment from participating providers to mitigate damages.
- The phrase “without limit” does not eliminate the requirement that allowable expenses be reasonable charges incurred for reasonably necessary care.
- MCL 500.3157’s Medicare-based reimbursement caps govern PIP claims and do not cap damages in a third-party tort action under MCL 500.3135(3)(c).
Why It Matters
The decision separates two important constraints on medical-expense recovery after Michigan’s 2019 no-fault reforms. Medicare-eligible plaintiffs who opted out of PIP coverage cannot disregard available Medicare payment mechanisms, but defendants also cannot automatically impose the no-fault act’s PIP reimbursement caps on those plaintiffs’ tort claims.
The ruling leaves the amount of recoverable damages dependent on evidence concerning mitigation, the reasonableness and necessity of the charges, and other relevant damages considerations rather than mechanically limiting recovery under MCL 500.3157.