AUTO-OWNERS INS CO V HARRY EVERSMAN
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STATE OF MICHIGAN
COURT OF APPEALS
AUTO-OWNERS INSURANCE COMPANY,
UNPUBLISHED
July 30, 1996
Plaintiff-Appellant,
v
No. 181214
LC No. 94-16904-CK
HARRY EVERSMAN, BONNIE EVERSMAN and
CHRISTINA EVERSMAN, a minor, by her next
friend BONNIE EVERSMAN,
Defendants-Appellees.
Before: Doctoroff, CJ., and Hood and Gribbs. JJ.
PER CURIAM.
Plaintiff Auto-Owners Insurance Company appeals the circuit court order denying plaintiff’s
motion for summary disposition and granting defendants motion for summary disposition. We reverse
and remand.
At issue in this case is the effect of plaintiff’s reservation of the right to seek reimbursement of
$38,334.40 in social security disability benefits that plaintiff did not set off against no-fault wage loss
benefits paid to defendant Harry Eversman following his injury and subsequent disability after he was
struck by a car. Although reimbursement would be proper under Profit v Citizens Ins Co of
America, 444 Mich 281; 506 NW2d 514 (1993) ( Profit II), the circuit court determined that Profit
II created a new rule of law that was to be treated prospectively only. The circuit court erred in its
decision.
A rule of law is ‘new’ “either when an established precedent is overruled or when an issue of
first impression is decided which was not adumbrated by any earlier appellate decision.” People v
Phillips, 416 Mich 63, 68; 330 NW2d 366 (1982). The issue of whether social security disability
benefits were subject to mandatory subtraction from wage loss benefits was not an issue of first
impression. See Thompson v Detroit Automobile Inter-Insurance Exchange, 418 Mich 610; 344
NW2d 764 (1984). Moreover, our Supreme Court in Profit II, supra, made clear that it was
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following past precedent in ruling that the benefits are subject to mandatory set off. Profit II, supra at
288. Because Profit II did not decide an issue of first impression or overrule clear precedent, it did not
announce a new rule of law. Accordingly, the trial court erred in applying Profit II prospectively only.
Phillips, supra.
There is no evidence that plaintiff did not proceed in good faith, by reserving its rights for later
enforcement, and paying the benefits without setoff as required by the then-controlling decision in Profit
v Citizens Ins Co, 187 Mich App 55; 466 NW2d 354 (1991), rev’d 444 Mich 281 (1993) (Profit I).
Accordingly, we remand to the trial court for entry of summary disposition in favor of plaintiff.
However, as suggested by plaintiff’s counsel during argument below on the motion for summary
disposition, we limit plaintiff’s recovery of the $38,334.40 to the lump-sum retroactive workers’
compensation award that defendants expect to receive.
Reversed and remanded for proceedings consistent with this opinion. We do not retain
jurisdiction.
/s/ Martin M. Doctoroff
/s/ Harold Hood
/s/ Roman S. Gribbs
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