July 25, 2013
Plaintiff, James Perkins, a resident of Kentucky, was injured while riding his motorcycle in Michigan when he was involved in an accident with a motor vehicle operated by Sara Kaplan. Plaintiff’s motorcycle was registered in Kentucky and insured by the Progressive Northern Insurance Company. The Progressive Northern Insurance Company had not filed a certification under MCL 500.3163. However, plaintiff also owned motor vehicles registered in Kentucky which were insured by Defendant, State Farm Mutual Automobile Insurance Company. State Farm had filed a certification under MCL 500.3163.
Following the motor vehicle accident, plaintiff sought recovery of Michigan no-fault benefits. After plaintiff’s claim was denied, he filed suit against Progressive Northern, State Farm and Auto-Owners Insurance Company, the insurer of Ms. Kaplan’s motor vehicle. Progressive Northern and State Farm filed Motions for Summary Disposition which were granted by the Court. Cross-Motions for Summary Disposition were then filed by plaintiff and Auto-Owners. The Circuit Court denied Auto-Owners’ Motion for Summary Disposition and granted Plaintiff’s Motion for Summary Disposition holding that Auto-Owners was obligated to pay Michigan no-fault benefits to plaintiff. Auto-Owners then appealed the Circuit Court’s ruling.
In moving for summary disposition and on appeal, Auto-Owners took the position that plaintiff was not entitled to receive Michigan no-fault benefits because the insurer of plaintiff’s motorcycle had not filed a certification in compliance with MCL 500.3163. Therefore, Auto-Owners argued that plaintiff’s claim was barred under MCL 500.3113(c) which provides in relevant part:
A person is not entitled to be paid personal protection insurance benefits for accidental bodily injury if at the time of the accident any of the following circumstances existed:
* * *
(c) The person was not a resident of this state, was an occupant of a motor vehicle or motorcycle not registered in this state, and was not insured by an insurer which has filed a certification in compliance with Section 3163.
The question to be resolved by the Court of Appeals was whether it was necessary for the motorcycle insurer (Progressive Northern) to have filed the 3163 certification in order for plaintiff to be eligible to receive Michigan no-fault benefits because it was the motorcycle, and not plaintiff’s automobile (whose insurer had filed the 3163 certificate), which was involved in the accident.
In affirming the Trial Court’s decision, the Court of Appeals found that in order for plaintiff to be excluded, all three conditions of Section 3113(c) must be met. Although plaintiff was not a resident of Michigan and he was an occupant of a motorcycle not registered in this state, plaintiff was, however, insured by an insurer which had filed a certification in compliance with Section 3163. As noted by the Court of Appeals, nothing in Section 3113(c) requires that the insurer which had filed the 3163 certificate be the insurer who provided insurance for the vehicle involved in the accident. This is consistent with the Court of Appeals’ holding in Farmers Insurance Exchange v Farm Bureau General Insurance Company, 272 Mich App 106, 109 (2006), wherein the Court of Appeals observed that under the Michigan No-Fault Act “persons rather than vehicles are insured against loss.”
In Farmers, a Michigan resident was injured in Michigan while occupying his motorcycle when it was involved in an accident with an uninsured motor vehicle. Although the motor vehicle was uninsured, one of the two owners of the motor vehicle owned a separate motor vehicle which was insured with Farm Bureau. The Court of Appeals, in interpreting the priority section which applies to injured motorcyclists, found that the plain language of MCL 500.3114(5)(a) provides that the insurer need not insure the motor vehicle involved in the accident, but must insure the owner or registrant of the motor vehicle involved in the accident. Therefore, as Farm Bureau insured one of the owners of the uninsured motor vehicle, it was responsible for the payment of the injured motorcyclist’s Michigan no-fault benefits.
Similarly, in this case, the Court of Appeals found that the plain language of MCL 500.3113(c) did not require that the insurer which had filed a certification in compliance with Section 3163 insure the vehicle involved in the accident, but rather, MCL 500.3113(c) only required that the injured person be insured by an insurer which had filed a 3163 Certification. As such, Mr. Perkins, a Kentucky resident, was not precluded from the receipt of Michigan no-fault benefits as he was insured by an insurer which had filed a certification in compliance with Section 3163. Moreover, following the priority scheme for motorcyclists (MCL 500.3114(5)), Mr. Perkins was entitled to those benefits from the insurer of the involved motor vehicle, Auto-Owners.
James Perkins v Auto-Owners Insurance Company, et al, COA No. 310473, published July 18, 2013. If you would like a copy of this case or to discuss a similar claim, please contact Edward Freeland at (248) 641-7600 or Efreeland@garanlucow.com.
NO FAULT RELEASE MAY COVER MORE THAN INCURRED EXPENSES
CONTRIBUTOR – BRYAN VALENTINE
On July 2, 2013, the Michigan Court of Appeals issued an unpublished, Per Curiam opinion in Burkard v Westfield Insurance Company (Docket No. 311611), in which it reversed the trial court’s decision to grant summary disposition for Plaintiff and remanded the case for entry of summary disposition in favor of the Defendant.
This lawsuit arose from a motor vehicle accident that took place on October 29, 2003. Plaintiff sustained several injuries as a result of the accident, including the loss of her right leg. Defendant, Westfield Insurance Company, was Plaintiff’s insurer at the time of the motor vehicle accident.
In January of 2006, Plaintiff filed a complaint against Defendant for no-fault benefits. In answer to interrogatories, Plaintiff stated that her expenses included a “modified accessible van.” In Plaintiff’s Case Evaluation Summary, she asserted that she had made a claim for an accessible van which costs $40,000. Plaintiff also produced a doctor’s prescription for a modified van and cost estimates for its purchase. Plaintiff testified at her deposition that she was seeking money from Defendant to pay for the modified van.
The lawsuit was resolved on July 30, 2007, through a settlement in which Defendant agreed to pay Plaintiff a total of $268,000. Crucially, the settlement contained the following provisions:
[Plaintiff] does hereby forever release and discharge any and all claims, demands, actions, causes of action, and other rights which she may have or conceive herself to have against [defendant] that exist and/or are pending as f the date of the signing of this AGREEMENT, based upon or arising out of [the accident].
This AGREEMENT does not prevent [plaintiff] from pursuing future claims, demands, actions, causes of action and other rights which arise from [the accident] that accrue and become due and/or pending after the signing of this AGREEMENT provided that the future claims, demands, actions, causes of actions and other rights were not part of, demanded in, or contemplated by the PENDING CLAIM.
On December 13, 2007, Plaintiff filed another lawsuit, alleging that the purchase of the van was not contemplated by the settlement agreement. Plaintiff argued that no claim for reimbursement could have been made for the van prior to the settlement agreement because she had not purchased the van until 3 months after the settlement. Citing Proudfoot v State Farm Mut Ins Co, 469 Mich 476 (2003), Plaintiff argued that since the expense had not been incurred at the time of the settlement agreement, it was not a pending demand at the time of the settlement and was, therefore, not part of said settlement. The trial court agreed and granted Plaintiff’s motion for summary disposition.
The Court of Appeals determined that the scope of the settlement agreement was “unambiguous.” The Court explained that the settlement agreement, by its own terms, applies to “all claims, demands, actions, causes of action, and other rights which she may have or conceive herself to have” at the time of the settlement. The Court cited Plaintiff’s several pre-settlement requests for money for the van for the proposition that she clearly had “demanded” the money and, accordingly, “plaintiff’s desire for a van was accounted for by the settlement agreement, and plaintiff waived her right to recover additional funds for a van as part of the settlement agreement.”
The Court explained that Proudfoot stands for the proposition that an insurer has no obligation to pay for an expense until it is, in fact, incurred. The Court, however, opined that an insured’s “claims, demands, actions, causes of action, and other rights” precede the insurer’s obligation to pay. An insurer may make payment for benefits before they are incurred, but it is not obligated to do so. Similarly, when Westfield entered into the settlement agreement in the above-described case, it was not obligated to do so. Plaintiff had made demands for a van (even though Defendant was not obligated to pay for it) prior to the settlement agreement. Thus, the settlement amount which included funds for “all claims, demands, actions, causes of action, and other rights which [plaintiff] may have or conceive herself to have” included the cost of the modified van which Plaintiff had clearly conceived herself to have a right to.
The Court of Appeals reversed the decision of the trial court and held for Defendant.
This Case stands for the proposition that a settlement agreement, when properly worded, does not simply release all claims for incurred expenses, but all claims and demands that Plaintiff had made prior to said agreement regardless of whether the benefit had been incurred.
Basics of Michigan Automobile No Fault Insurance Law Course
Garan Lucow Miller, P.C. will be teaching the Basics of No Fault course on Tuesday evenings from October 1 through November 26, 2013. The classes will be held at the Lexington Hotel (soon to be named Crowne Plaza), 925 S. Creyts Road, Lansing, Michigan 48192 from 6:00 p.m. to 8:00 p.m.
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