March 21, 2014
The Court of Appeals recently determined that a plaintiff cannot proceed on a theory of equitable estoppel in an attempt to prevent application of the one year back rule where the plaintiff, by asserting the attorney-client privilege, prevented the defendant from obtaining information regarding whether the plaintiff had knowledge of certain no-fault benefits available. Odeh v Auto Club Ins Co, No 309647 (Mich App March 13, 2014).
In Odeh, the Plaintiff filed a lawsuit against Auto Club in May 2009, claiming he was entitled to payment for family attendant care services and case management services dating back to injuries sustained in a 1998 car accident. The Plaintiff argued that because the Defendant undertook the duty of explaining benefits, but did so in an incomplete fashion, the Defendant was equitably estopped from asserting the application of the one-year-back rule for his claim. The Defendant sought discovery to determine whether the Plaintiff’s attorneys informed him about the attendant care benefits, but Plaintiff refused to waive the attorney client privilege. The Defendant moved for partial summary disposition under the one-year-back rule arguing that it would be unfair to allow the Plaintiff to assert lack of knowledge under an equitable estoppel theory while he was preventing the Defendant from discovering if indeed the Plaintiff had gained such knowledge. The trial court agreed and granted summary disposition in favor of Auto Club.
On appeal, the Plaintiff argued that the trial court erred in granting the Defendant’s motion for partial summary disposition on the one-year-back rule because genuine issues of material fact existed regarding equitable estoppel. The Court of Appeals disagreed with Plaintiff. In reaching its decision, the Court of Appeals recognized that the one year back rule, MCL 500.3145(1), restricts a plaintiff’s recovery “only to losses that have been incurred during the year before the filing of the action.” The Court recognized that equitable estoppel can be used to prevent application of the one year back rule but that a court should be reluctant to apply equitable estoppel “absent intentional or negligent conduct” designed to induce a plaintiff from bringing a timely action.
Since the Plaintiff refused to waive the attorney-client privilege with respect to the Defendant’s attempt to obtain testimony from different attorneys that represented the Plaintiff since the 1998 accident, the Defendant was unable to obtain testimony regarding whether the Plaintiff was counseled on attendant care and case management services or the type of benefits he was entitled to under the No-Fault Act. Recognizing that this line of questioning solicited privilege information, the Court of Appeals held, nonetheless, that the Plaintiff was the one to place his knowledge of benefits at issue when he asserted equitable estoppel in an attempt to subvert the one-year-back rule. “To prevent defendant from exploring the sources who may have informed plaintiff of his benefits is hardly equitable.”
Ultimately, the Court determined that the Plaintiff could not proceed on a theory of equitable estoppel where the Plaintiff asserted privilege and prevented the Defendant from obtaining information that could have precluded equity favoring the Plaintiff.
GARAN LUCOW MILLER
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