December 12, 2014
In the recent unpublished opinion of Linden v Citizens Insurance Company of America and Thomas, (Docket No. 312702, issued November 13, 2014), the Michigan Court of Appeals affirmed in part and reversed in part the trial court’s ruling. Specifically, the Court of Appeals reversed the trial court’s ruling that MCL 500.3145(1)’s one-year-back rule did not apply to plaintiff because of defendant’s status as an Assigned Claims Carrier. The Court, in turn, affirmed the trial court’s ruling that the minority/insanity tolling provisions of MCL 600.5851(1) do apply to MCL 500.3145(1)’s one-year statute of limitations but not to its one-year notice provision.
In July of 2001, India A. Thomas, a minor, was involved in a motor vehicle accident where she sustained a massive catastrophic brain injury along with other disabling injuries that placed her in a wheelchair. She subsequently needed 24-hour life sustaining medical care. Ms. Thomas’ claim for no-fault benefits was properly submitted to the Michigan Assigned Claims Facility (“MACF”) and Defendant was assigned Ms. Thomas’ claim.
Defendant argued that Ms. Thomas’ claim was time-barred under MCL 500.3145(1). In addition, Defendant argued that the tolling provisions of MCL 500.5851(1) were not applicable to the No-Fault Act at all let alone the provisions contained in MCL 500.3145(1).
The Court of Appeals held that written notice of an injury was given to the MACF within one year of the accident. The Court made it clear that MCL 500.3145(1) contains two separate limitations for filing an action. First, there is a statute of limitations where an action for benefits must be filed within one year of the accident. See Cameron v Auto Club Ins Ass’s, 476 Mich 55, 61, 70; 718 NW2d 784 (2006). Secondly, there is also a notice provision, which is commonly known as the one-year back rule, and it limits a claimant to the benefits that were incurred within one year from the date of filing the action.
An important distinction was made as it relates to possible tolling and the limitations in MCL 500.3145(1). The Court stated that:
MCL 500.3145(1) does not require a claimant to give written notice of injury if an action is commenced within one year of the accident. And if MCL 600.5851(1) tolled the one-year statute of limitation for filing an action for PIP benefits, plaintiff’s deadline to notify the MACF of her claim under MCL 500.3174 would be tolled to the same extent.
The Court then addressed whether the tolling provisions in MCL 600.5851(1) were applicable to the No-Fault Act in general and then whether it tolled the limitations in MCL 500.3145(1). The Court of Appeals held that the tolling provisions applied to the requirement of filing a claim within one year of the accident, but those same provisions did not toll the one-year back rule. The Court reasoned that the trial court erred in its interpretation of the language of the statutes and should have applied the one-year back rule while finding that the claim was not time barred because the right to bring the claim was in fact tolled by disability.
COURT OF APPEALS PUBLISHES ITS DECISION IN BAHRI V IDS PROPERTY CASUALTY INSURANCE COMPANY
By Caryn Ford
In a Law Fax article on October 22, 2014, we advised you of the unpublished Michigan Court of Appeals decision in Bahri v IDS Prop Cas Ins Co, No 316869 (Mich App 2014), wherein the Court held that a general fraud exclusion contained in a no-fault automobile insurance policy is enforceable to bar coverage for a claimant’s entire personal injury protection (“PIP”) benefits claim when the claimant has made fraudulent statements or engaged in fraudulent conduct in connection with any accident or loss for which coverage is sought under the policy.
After the Court issued this unpublished opinion, we requested that the Court of Appeals publish the opinion since it was the first time the Court of Appeals had extended application of a fraud exclusion contained in a PIP policy to bar a claimant’s entire PIP claim. On December 9, 2014, the Court of Appeals approved its opinion for publication which means that this decision is now binding precedent. This matter is now pending before the Michigan Supreme Court on Plaintiff’s Application for Leave to Appeal. We will let you know if the Supreme Court takes any action on Plaintiff’s appeal.