June 16, 2017
Volume XXIX, No. 15

 

MCL 500.3175(3) STATUTE OF LIMITATIONS BARRED
INSURER’S CLAIM FOR REIMBURSEMENT

 By Tara Velting

The Michigan Court of Appeals has released for publication, Citizens Ins. Co. of America v. Univ. Physician Group, et. al. (Docket No. 14-4915), a case involving which statute of limitation applies in a claim for reimbursement from an insurer. William Sullivan was injured in a motor vehicle accident on August 2, 2009. The truck he was driving was registered to Leonardo Terriquez-Bernal. Sullivan applied to the Michigan Assigned Claims Facility for no fault insurance benefits, and the claim was assigned to Plaintiff Citizens. During Citizens’ investigation of the claim, Sullivan made unsworn statements in which he denied having any of his own auto insurance and claimed to use the vehicle on occasion with the permission of the owner, Terriquez-Bernal. Plaintiff Citizens determined on November 24, 2009, that Sullivan was entitled to benefits and extended same.

On August 8, 2012, Plaintiff Citizens filed a lawsuit against Terriquez-Bernal for reimbursement. Defendant Terriquez-Bernal submitted an Affidavit from Sullivan dated April 16, 2013, in which he stated, in relevant part: (1) I purchased the 1999 Ford F150 when it was new and was the title owner until July, 2008, when I sold the vehicle to Defendant Leonard Terriquez-Bernal (“Defendant”) for one dollar; (2) essentially, I needed to have the vehicle title in Defendant’s name; (3) from July, 2008, until August 2, 2009, the date of the accident, I used and possessed the 1999 Ford F150 white truck as if I was the owner; (4) at the time of the accident, I did not have no fault insurance on the 1999 Ford F150 white truck.

During his deposition, Terriquez-Bernal testified that he cooperated in the title transfer to his name as a favor to Sullivan, apparently because Sullivan did not have a license and was unable to register the vehicle. The two men were neighbors at the time. Sullivan was, in fact, the actual owner of this uninsured truck which was involved in a motor vehicle accident. As such, as an uninsured owner of the vehicle, Sullivan was never entitled to no fault benefits.

On April 15, 2014, Plaintiff Citizens filed suit against Sullivan and four medical care providers who had treated him, seeking reimbursement for payments made. In response to a motion for summary disposition filed by the defendant medical providers, Plaintiff asserted that the six year statute of limitations set forth in MCL 600.5813 for “[a]ll other personal actions” applied. Defendant medical providers Oakwood and Henry Ford argued that 500.3175(3) was applicable, which provides as follows:

An action to enforce rights to indemnity or reimbursement against a third party shall not be commenced after the later of 2 years after the assignment of the claim to the insurer or 1 year after the date of the last payment to the claimant.

The trial court agreed and granted summary disposition for the medical providers. The Court of Appeals noted that if MCL 500.3175(3) applies, Plaintiff’s claims are time barred, but if MCL 600.5813 applies, Plaintiff filed timely. After looking at both Webster’s New World Dictionary and Black’s Law Dictionary for the definitions of “indemnity” and “reimburse”, the Court looked to the language of Plaintiff’s Complaint, which stated that it was “entitled to reimbursement of the payments made”, and found that the Complaint was filed “to enforce rights to indemnity or reimbursement against a third party.” MCL 500.3175(3). The Court found it notable and worth mentioning that Plaintiff itself used the word “reimbursement” to describe what it demanded from Defendants. The Court found that MCL 500.3175(3) and its statute of limitations applied, which barred Plaintiff’s reimbursement claims.

However, the Court did indicate that it agreed that both fraud and misrepresentation are claims for which the longer 6 year statute of limitations would be applicable. In this case, the claims plead in Plaintiff’s Complaint indicated the claim was really for reimbursement. Had Plaintiff had a more viable claim and appropriately plead fraud and misrepresentation, it might have been able to avail itself of the longer 6 year statute of limitations.

Tara is a Shareholder in our Grand Rapids Office.She can be reached at 616.742.5500 or tvelting@garanlucow.com

 

 

SEMINARS

BASICS OF MICHIGAN AUTOMOBILE
NO-FAULT INSURANCE LAW COURSE

Garan Lucow Miller, P.C. is pleased again to offer this in-depth, educational course to our clients. It will be taught each Tuesday evening, from September 19, 2017 through November 21, 2017, from 6:00 p.m. to 8:00 p.m.

This year the 9 week course will take place at the Crowne Plaza Hotel, 925 South Creyts Road, Lansing, MI 48917

The cost of the 9 week course is $350.00 per person, with a discount of $50.00 per person for more than 2 registrants from the same company.

Please contact Eileen Carty to register at ecarty@garanlucow.com or (248) 641-7600.

For inquires, upcoming seminars, or in-house seminar requests please contact Eileen Carty at ecarty@garanlucow.com

Sarah Nadeau, Editor of the Law Fax Publication,

is a Shareholder in our Detroit Office.

Sarah can be reached at 313.446.1530 or snadeau@garanlucow.com

 

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