Volume XXII, No. 33

December 17, 2010

LAW FAX

MICHIGAN LAW – BLUE | INDIANA LAW – RED www.garanlucow.com Garan Lucow Miller, P.C. 1111 West Long Lake Road, Suite 300 Troy, Michigan 48098 248.641.7600 From the Co-Editors

James L. Borin & Simeon R. Orlowski

REVISITING UNIVERSITY OF MICHIGAN V TITAN, 487 Mich 289 (2010) CONTRIBUTOR – SIMEON R. ORLOWSKI

We have been asked to reconsider the import of certain advice we gave with respect to the Supreme Court’s decision in Regents of the University of Michigan v Titan Insurance Company, 487 Mich 289 (2010). In this landmark case, the Supreme Court over ruled Cameron v ACIA, 476 Mich 55 (2006) and Liptow v State Farm, 272 Mich App 544 (2006) and reinstated tolling for minors and mental incompetents with respect to the one year back limitation imposed in MCLA 500.3145(1). We make no change to the advice previously given in Law Fax and at our Breakfast Seminar held on September 23, 2010, with respect to the effect of U of M v Titan as to claims made by minors and mental incompetents.

This article addresses only advice given with respect to claims made by Michigan governmental agencies. In the Law Fax article which discussed the U of M v Titan case, Vol. XXII No. 21, published on August 3, 2010, we said on page 2:

2. The State of Michigan Department of Medicaid is not subject to either the one year notice or one year back provisions of MCL 500.3145(1). In the 2010 Troy Breakfast Seminar hand-out, we said:

(1) The State of Michigan and its political subdivisions (e.g. University of Michigan Hospital, Medicaid) are not subject to either the one year notice or one year back provisions of 3145(1).

MCLA 600.5821(4) exempts the State and its political subdivisions from the operation of statutes of limitations when seeking to recover costs expended for maintenance, care and treatment of persons in state institutions. A close reading of University of Michigan v Titan reveals the following holdings:

We hold that MCL 600.5821(4) exempts the state entities it lists from the one year back rule. 487 Mich 289, 292 – 293.

Entities listed in MCL 600.5821(4) may bring an action and recover costs notwithstanding the limiting provisions of MCL 500.3145(1), including the one year back rule. 487 Mich 289, 308.

At this point, a review of MCL 600.5821(4) is in order. Actions brought in the name of the state of Michigan, the people of the state of Michigan, or any political subdivision of the state of Michigan, or in the name of any officer or otherwise for the benefit of the state of Michigan for the recovery of the cost of maintenance, care, and treatment of persons in hospitals, homes, schools and other state institutions are not subject to the statute of limitations and may be brought at any time without limitations, the provisions of any statute notwithstanding.

[Emphasis added] The statute itself says that the statute of limitations will not apply to any claim brought by Michigan governmental agencies for the cost of care for persons in state hospitals, state homes, state schools and other state institutions.

We then went back and looked at Liptow v State Farm, 272 Mich App 544 (2006). There, on page 544, we found the following paragraph:

Defendant first asserts that by its plain language, MCL 600.5821(4) applies only to actions to recover costs incurred in state institutions; it does not apply to costs of privately provided care, maintenance, or treatment. We note that the MDCH concedes that § 5821(4) does not apply to costs incurred in private institutions. We concur with the parties’

interpretation of § 5821(4) because it comports with the clear language of the statute. [Emphasis added]

In conclusion, in light of U of M v Titan and its impact on claims brought by the State of Michigan and its political subdivisions, including and especially Medicaid, our advice is as follows: 1. The one year notice and the one year back provisions of 3145(1) do not apply to any claims brought by the University of Michigan Hospital because all such claims would involve the recovery of costs of maintenance, care and treatment of persons in a state hospital.

2. The one year notice and one year back provisions of 3145(1) do not apply to any Medicaid claims only when Medicaid is seeking the recovery of the costs of maintenance, care and treatment of persons in state hospitals, state homes, state schools and other state institutions.

3. The one year notice and one year back provisions of 3145(1) DO APPLY when Medicaid seeks to recover the cost of maintenance, care and treatment of persons in private institutions.

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REVISITING MCLA 500.3114(2)(b) CONTRIBUTOR – SIMEON R. ORLOWSKI

MCLA 500.3114(2), the vehicle for hire statute, is one of the three exceptions to the basic priority provisions established by MCLA 500.3114(1). 3114(2) provides that a person suffering an injury while an operator or passenger of a motor vehicle operated in the business of transporting passengers shall receive his PIP benefits from the insurer of that motor vehicle. However, the statute then goes on to set forth six exceptions to the basic exception established by 3114(2). The statute provides that the basic exception set forth in 3114(2) shall not apply to a passenger in the six exceptions set forth in 3114(2)(a through f), unless that passenger is not entitled to PIP benefits under any other policy. This article addresses the exception to the exception set forth in 3114(2)(b).

The Automobile No-Fault Manual published in 2010 contains the following language on page 75 for 3114(2)(b):

A bus operated by a common carrier of passengers certified by the public service commission.

It has come to our attention that this statute has been amended by the legislature. 3114(2)(b) now reads as follows:

A bus operated by a common carrier of passengers certified by the department of transportation.

We regard this as a significant change. We believe that this change in language also serves to change and significantly expand the class and number of vehicles which fall under the definition contained in 3114(2)(b). Under the language of the former statute (a bus operated by a common carrier of passengers certified by the public service commission, most experts regarded 3114(2)(b) as a very narrow exception applying to buses operated by entities such as the old DOT in Detroit and SMART which operated buses in the metropolitan Detroit area. Under the language of the former statute, a passenger on a SMART bus, for example, who was injured in an accident would look to 3114(1) for his no-fault benefits and not to the insurer of the SMART bus. Under the language of the former statute, most experts felt that a passenger on a bus operated by a for-profit business (e.g. private limousine companies) who was injured in a motor vehicle accident would get his no-fault benefits from the insurer of that bus. That long- held view has been changed by this change in language in 3114(2)(b).

The amended 3114(2)(b) provides that the vehicle for hire exception set forth in 3114(2) will not apply to a passenger in a bus operated by a common carrier of passengers certified by the Department of Transportation unless that passenger is not entitled to PIP benefits under any other policy. It is possible to determine with certainty whether the bus in question falls within the language of 3114(2)(b). Go to www.michigan.gov/mdot . Under Favorite Links, highlight: Bus and Limo Licensing. Under Bus and Limo Licensing, highlight the last link under the Commercial Buses heading, Current List of Carriers. There you will find a list of 219 current authorized bus carriers. If you scroll down that list of carriers, you will see that there are many private limousine companies listed there.

MCLA 257.4b defines a bus as a vehicle holding at least 16 passengers, including the driver. To summarize the application of 3114(2)(b), a passenger on a bus operated by one of the carriers granted a Certificate of Authority from MDOT who is injured in a motor vehicle accident will get his no-fault benefits from his own no-fault policy, the policy of his spouse or resident relative pursuant to 3114(1). Only if the passenger is not entitled to receive benefits from a 3114(1) carrier will he be entitled to receive benefits from the insurer of the bus that he was occupying at the time of the accident.

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The Firm’s Estates, Probate and Elder Law practice group has published a weblog called the Michigan Probate and Estate Journal, found at http://www.michiganestatejournal.com. Articles are posted on a regular basis by members of the practice group. We encourage you to visit, read, and comment on the postings.