Insurer must properly calculate PIP wage loss to seek reimbursement of Social Security Disabilty
Auto-Owners paid three years of Personal Injury Protection (PIP) wage loss to Mary Lou Fox after she was hurt in a car accident. She also collected a limited amount of Long Term Disability (LTD) from her employer and was awarded Social Security Disability (SSD) retroactively (after the fact). The PIP insurer was entitled to credit both forms of disability payments against its wage loss payment, and during the three year period it did take a credit for LTD paid. The LTD insurer also claimed a credit for any SSD awarded. When the Social Security Administration retroactively awarded Ms. Fox SSD of $27,000.00, both insurers claimed the right to set-off that entire amount against wage loss already paid. Auto Owners sued Fox to secure a judgment for overpayment of benefits and the judge allowed it a judgment for the full amount of SSD paid, without calculating the amount of SSD that Fox was required to re-pay the LTD insurer. The Court of Appeals overturned this award and sent the case back to the lower court for re-calculation. It noted that while Fox was required to re-pay the "duplication" or "over-payment" of benefits, Auto Owners was also obligated to assure that she received the full amount of wage loss due under the law. To calculate the overpayment correctly, Auto Owners and the court were obligated to take into account the amount of the SSD payment which Fox was required to re-pay the LTD insurer, since ultimately, she did not "receive" that payment.