September 22, 2017
Volume XXIX, No. 21



 By Alexis Shull

In the recently published decision of Wagner v Farm Bureau Mutual Ins Co, the Michigan Court of Appeals ruled that an automobile insurance company can face liability for an uninsured motorist claim even though the claimant failed to provide notice within three years of the accident, as set forth in the policy, because the claimant’s uninsured motorist claim did not accrue, and therefore the timeline for notice did not begin, until the negligent driver was deemed uninsured.

On May 17, 2010, Michelle Wagner was rear-ended by a motor vehicle driven by Conor Lewis, who was working as a pizza delivery driver for Pizza Hut. Conor was insured through Farm Bureau. Wagner was also insured through Farm Bureau. Conor’s father, Greg, reported the accident to Farm Bureau. Michelle and her husband, James Wagner, brought a third-party automobile liability claim against Conor, Greg, and Pizza Hut on May 2, 2013.

Farm Bureau argued that its policy did not cover “operation of a vehicle while it is being used to carry . . . property for a fee” and that it had no duty to defend or indemnify Conor or Greg from the plaintiffs’ claim. On that basis, Farm Bureau then filed a declaratory action seeking a declaration that it owed no duty to defend or indemnify Conor or Greg, and moved for summary disposition. On June 23, 2014, the trial court granted Farm Bureau’s motion for summary disposition declaring that Farm Bureau had no duty to indemnify Conor or Greg. The Court of Appeals affirmed that decision in an unpublished decision entered November 17, 2015. Farm Bureau Mutual Ins Co v Wagner.

Nearly four years after the accident, on May 12, 2014, plaintiffs notified Farm Bureau of their potential uninsured motorist (UM) claim. According to the terms of the policy, Farm Bureau was obligated to pay compensatory damages which plaintiffs would be entitled to recover from the owner or operator of an uninsured automobile. Plaintiffs contended that as a result of their previous lawsuits with Farm Bureau, the trial court had determined that Conor’s vehicle was “uninsured” as defined by Farm Bureau’s policy, and therefore they were entitled to UM benefits. In fact, the policy required that an injured person making a claim provide proof that the vehicle was “uninsured.”

The policy also provided a three-year time limitation for providing notice to Farm Bureau of a UM claim. However, the policy provided that failure to provide notice would not invalidate a claim if it was not “reasonably possible’” to provide notice, and the notice was provided “as soon as reasonably possible.” Farm Bureau argued the notice of the claim was not timely, as more than three years had passed since the motor vehicle accident, and denied the claim. As a result, plaintiffs’ filed the present declaratory action seeking a declaration that their UM claim did not accrue until the trial court’s June 23, 2014 order declaring that Farm Bureau had no duty to defend or indemnify Conor or Greg, and that plaintiffs’ third-party action (and subsequent appeal) tolled the running of the UM notice and filing provisions.

Plaintiffs contended that because they did not learn that Conor was uninsured until more than three years after the accident, they could not have provided notice within the three-year period, and that notice was provided “as soon as reasonably possible” pursuant to the terms of Farm Bureau’s policy. Farm Bureau argued that the policy language unambiguously barred plaintiffs’ claims, and that the UM claim began to accrue on the date of the accident, May 17, 2010. Given that notice was provided nearly four years from that date, and outside of the three-year time limit under the terms of the policy, plaintiffs failed to provide timely notice. The trial court held that Farm Bureau’s policy was ambiguous and that plaintiffs’ claim accrued once Conor’s vehicle became uninsured.

On appeal, the Michigan Court of Appeals held that the policy was ambiguous because “its provisions irreconcilably conflict[ed].” Specifically, the policy provided a three-year time limit for providing notice of a UM claim, but plaintiffs did not have a UM claim within three years of the accident. Thus, the policy would require a party to establish that the driver was uninsured at the time of the accident, even though it was possible for a plaintiff to learn that the driver was uninsured at a later time. Further, the Court found the policy required plaintiffs to provide proof that a vehicle is uninsured, allowed for a vehicle to become insured after the UM notice and filing deadlines, and stated that the failure to perform a duty will not invalidate a claim if it is not reasonably possible to do so and performance occurs as soon as reasonably possible. “Therefore, the policy may toll the UM filing limitation until a vehicle’s insured status is determined.”

Because Farm Bureau’s policy was ambiguous, and plaintiffs’ claim for UM benefits did not accrue until Conor was deemed uninsured on June 23, 2014, the Court of Appeals found that the plaintiffs’ UM claim was timely under the policy and they had a right to move forward with the litigation.

Alexis is an Associate in our Troy Office.

She can be reached at (248) 641-7600 or







Please join us at our Grand Rapids office, the perfect location to enjoy all of the downtown ArtPrize venues, including a new installation this year on our outdoor plaza. Live music will be performed in the lobby by select musicians from the Grand Rapids Symphony. Hors d’oeuvres and refreshments will be provided. Free underground parking for all guests. Families are welcome.

Wednesday, September 27, 2017

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The RIVALRY SEMINAR will take place on Friday, October 6th, at Weber’s Inn, in Ann Arbor.

This is a complimentary seminar for our clients.  Click here for the Agenda.

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The BUCKEYE SEMINAR will take place on Thursday, November 2, at

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Sarah Nadeau, Editor of the Law Fax Publication,

is a Shareholder in our Detroit Office.

Sarah can be reached at 313.446.1530 or