July 16, 2015
In a recent, unpublished decision, Levander v Home Owners Insurance Company, et al (Docket No. 320101, 06/18/15), the Michigan Court of Appeals examined the “involvement” of a motor vehicle as well as issues of priority, estoppel, and waiver where the Plaintiff sustained injuries in a motorcycle accident. Plaintiff, drove his motorcycle into a median to avoid a vehicle that entered the lane behind him. Plaintiff was adamant that had he stayed in the lane, a collision would have occurred. The driver of the ‘offending’ vehicle, Camille Sumpter, testified that she was one car length behind Plaintiff and did not believe she would have collided with Plaintiff’s motorcycle. She further testified that Plaintiff did not have sufficient space to stop before colliding with the vehicles ahead of him. The resulting police report indicated that Plaintiff exited the highway going too fast, lost control, struck the curb, and crashed. The report identified Sumpter as a witness, but did not indicate she was driving a vehicle at the time of the accident. In the emergency room records, hospital staff noted that Plaintiff stated he looked behind him and missed a turn, causing the accident.
Defendant Home Owners was Plaintiff’s motor vehicle insurer. Progressive was Sumpter’s motor vehicle insurer. Plaintiff sought to recover PIP benefits from Home Owners which denied his claim on the basis that the accident did not involve a motor vehicle. Home Owners had contacted Sumpter regarding the accident and determined her vehicle was not involved. Based upon Home Owners’ denial, Plaintiff’s counsel also contacted Sumpter who did not mention her vehicle was closely following Plaintiff. Plaintiff then filed suit against Home Owners only. Well after the one year statute of limitations had expired, Plaintiff amended his Complaint to add a claim for PIP benefits against Progressive.
Progressive moved for summary disposition which was granted because Plaintiff failed to provide notice to Progressive, or file a claim for PIP benefits with Progressive, within one year of the accident. Home Owners also moved for summary disposition arguing: (1) under MCL 500.3105(1), a motor vehicle was not sufficiently involved in the accident to trigger entitlement to PIP benefits; and (2) if a motor vehicle was involved it was Sumpter’s vehicle and thus Progressive was the insurer of highest priority under MCL 500.3114(5). In response, Plaintiff argued a genuine issue of material fact existed as to whether Sumpter’s vehicle was involved, and if it was involved, it was not identifiable prior to the expiration of the one year statute of limitations. Plaintiff also argued Home Owners was equitably estopped from relying on priority provisions because it had information that Sumpter’s vehicle followed closely behind Plaintiff but did not share that information with Plaintiff, and because it denied Plaintiff’s claim based solely on a lack of involvement by a motor vehicle, not priority.
The trial court acknowledged that a question of fact existed as to whether a motor vehicle was involved in the accident at issue, but nevertheless granted summary disposition in favor of Home Owners finding that Plaintiff’s failure to timely file a claim against Progressive did not allow plaintiff to seek damages against the next insurer in priority, Home Owners. The trial court failed to address Plaintiff’s arguments regarding equitable estoppel, the “mend the hold” doctrine, or whether Sumpter’s vehicle was identifiable prior to the expiration of the one year statute of limitations.
On appeal, the Court of Appeals found a genuine issue of material fact with respect to whether the motorcycle accident and Plaintiff’s injuries involved or arose out of the operation or use of Sumpter’s motor vehicle. The Court noted that pursuant to MCL 500.3114(5), Plaintiff was required to file a claim for PIP benefits from any and all insurers of involved vehicles. Where Plaintiff alleged a motor vehicle caused the accident, the Court noted he should have filed a claim for PIP benefits with all known insurers of motor vehicles involved in the accident. Plaintiff claimed, however, Sumpter and her insurer were not identifiable. As result, the Court of Appeals held that if Plaintiff could not identify Sumpter’s vehicle under the circumstances presented, and thus could not identify Progressive as the purported higher priority insurer before expiration of the one year statute of limitations, then Home Owners could be liable to pay PIP benefits. The Court of Appeals reversed the trial court’s granting of summary disposition in favor of Home Owners, and remanded the matter back to the trial court for a factual determination as to whether Plaintiff could have identified Sumpter, and Progressive, within one year of the accident.
The Court of Appeals went a step further and ordered that, if the trial court found in favor of Home Owners on that issue – if the trial court found Plaintiff could have identified Sumpter and Progressive – the trial court must then determine whether Plaintiff’s equitable estoppel and waiver arguments had merit. If the trial court determined that Sumpter and Progressive were not identifiable, or that Plaintiff’s equitable estoppel/waiver argument is sound and applicable, then the case must proceed to trial on the question whether Sumpter’s vehicle was involved in the accident.
While the Michigan Court of Appeals did not fully address the question of equitable estoppel and the “mend the hold” doctrine, the attention it draws to that doctrine should put insurers on alert regarding the defenses used to deny a claim for PIP benefits. The Court of Appeals’ decision here should encourage insurers to apprise their insureds of all the defenses upon which they intend to rely or risk waiving those defenses.
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