GALLOWAY v. NORTHWEST AIRLINES, INC. Civ. No. 88-CV-71347-DT.
737 F.Supp. 418 (1989)
Emma GALLOWAY, Personal Representative of the Estate of Eddie L. Galloway, Plaintiff, v. NORTHWEST AIRLINES, INC., and McDonnell Douglas Corporation, Inc., Defendants.
United States District Court, E.D. Michigan, S.D.
October 12, 1989.
Charles Brewer, Phoenix, Ariz., Stanley Chesley, Cincinnati, Ohio, Lee Kreindler, New York City, Gerald Lear and Thomas Meehan, Washington, D.C., and Richard Schaden, Birmingham, Mich., for plaintiffs' Steering Committee.
Carroll E. Dubuc, Laxalt, Washington, Perito and Dubuc, Washington, D.C., for defendant Northwest Airlines.
John J. Hennelly, Bryan, Cave, McPheeters & McRoberts, Los Angeles, Cal., and Donald E. Shely, Dykema Gossett, Detroit, Mich., for defendant McDonnell Douglas.
JULIAN ABELE COOK, Jr., Chief Judge.
On July 17, 1989, the Defendant, Northwest Airlines, Inc. (Northwest), filed a motion to dismiss, contending that the subrogation claims of the Plaintiff-Intervenor State Farm Mutual Insurance Company (State Farm),
In its response on August 2, 1989,
For the following reasons, Northwest's motion to dismiss State Farms' subrogation claims under the Michigan No-Fault Act is granted in part and denied in part.
The facts are not in dispute. On August 16, 1987, the Northwest Flight 255 accident aircraft crashed and struck two vehicles that had been travelling northbound on Middlebelt Road near the Detroit Metropolitan Airport. One of the vehicles was operated by Eddie Galloway. The second vehicle was operated by Sharon Schweitzer. As a result of the collision between the two vehicles and the aircraft, Galloway and Schweitzer died and their respective vehicles were destroyed. State Farm represents that it made payments to the decedents' estates pursuant to the terms of its contract of insurance as follows:
On December 20, 1989, State Farm was permitted to intervene and initiate legal proceedings against Northwest in an attempt to recover the benefits that were paid to or on behalf of the insureds, Galloway and Schweitzer.
The parties agree that the substantive law of Michigan applies to the instant dispute. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Pursuant to the Michigan No-Fault Act, nonmotorist tortfeasors, such as Northwest, are not entitled to invoke the tort immunity provisions of M.C.L.A. § 500.3135(2) (West 1983). See Citizens Insurance Co. v. Tuttle, 411 Mich. 536, 309 N.W.2d 174 (1981); Ryan v. Ford Motor Co., 141 Mich.App. 762, 368 N.W.2d 266 (1985). However, the Michigan No-Fault Act expressly creates limitations on the insurer's right of subrogation or indemnity against a third-party tortfeasor who is not otherwise immune from suit:
M.C.L.A. § 500.3116(2) (West 1983).
The Sixth Circuit Court of Appeals noted in Automobile Club Insurance Ass'n v. LaPointe, 843 F.2d 964, 966 (6th Cir.1988) (citations omitted) (emphasis in original):
In its opposition papers, State Farm does not challenge Northwest's argument that those claims for subrogation which are based on the personal injury benefits paid to its insureds are unauthorized under
A review of the statutory definition of "personal injury protection benefits" supports State Farm's contention that it does not relate to payments made to reimburse an insured for motor vehicle damage:
M.C.L.A. § 500.3105(1), (3) (West 1983).
M.C.L.A. § 500.3107(a)-(b) (West 1983).
Accordingly, this Court agrees with State Farm that personal protection insurance coverage, as defined by the No-Fault Act, does not include the damage that may have been sustained to the insured's motor vehicle. Therefore, the terms of section 500.3116(2), which expressly limits the circumstances under which an insurer may seek reimbursement for personal protection insurance benefits, does not pertain to those claims that were paid pursuant to collision insurance which covered the loss of a motor vehicle.
However, the No-Fault Act also provides the basis for property protection insurance coverage in automobile insurance policies. This property protection insurance coverage is set forth in section 500.3121(1), which provides:
On the other hand, certain types of property are excluded from property protection insurance coverage and are not covered by no-fault insurance. Section 500.3123(1)(a) provides:
M.C.L.A. § 500.3123(1)(a) (West 1983). Under the property protection no-fault scheme, property damage to the insured's own motor vehicle is not covered by property protection benefits.
Upon a review of the No-Fault Act, it is apparent that sections 500.3116 and 500.3127 refer only to those limited circumstances under which an insurer may obtain reimbursement for the payment of "personal protection insurance benefits" and "property protection insurance benefits" respectively. The payment of collision benefits that compensates the insured for damage to a motor vehicle does not constitute "personal protection insurance benefits" or "property protection insurance benefits." Northwest has failed to cite any statutory provision or common law doctrine that would limit or render unenforceable State Farm's contractual subrogation right to the reimbursement of collision benefits paid to its insured.
On the basis of the foregoing, this Court concludes that the terms of the No-Fault Act preclude State Farm from pursuing subrogation for personal injury protection benefits paid to its subrogors. However, with regard to the claims for subrogation arising from the property damage to the insureds' respective motor vehicles, Northwest has not shown that State Farm has failed to state a claim upon which relief can be granted. Therefore, Northwest's motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) is granted in part and denied in part.
IT IS SO ORDERED.
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