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May 21, 2019
On May 16, 2019, the Michigan Court of Appeals issued an unpublished opinion holding that the plaintiff was not entitled to uninsured motorists (UM) benefits where the at-fault vehicle did in fact have coverage on the date of the accident, but its insurance carrier was no longer liable for the loss. Additionally, the Court also held that equitable estoppel could not be used to compel an insurance carrier to provide benefits that were not covered by the insurance policy.
In Blood v Safeco Insurance Company of America, unpublished opinion per curiam of the Michigan Court of Appeals, decided May 16, 2019 (Docket No 341150), the Plaintiff was injured when a vehicle failed to yield at an intersection and struck Plaintiff’s vehicle. Plaintiff’s vehicle was insured by Safeco. The at-fault vehicle had no-fault insurance through AAA, but this was unknown to Plaintiff and Safeco until the filing of the lawsuit. By the time this information was discovered, the statute of limitations for Plaintiff’s third-party claims against the driver and owner of the at-fault vehicle had expired. Therefore, the driver and owner moved for, and were granted, summary disposition based on the expiration of the statute of limitations. The court also dismissed Plaintiff’s UM claim against Safeco, holding that such claim was not viable because the at-fault vehicle was not uninsured at the time of the accident.
Plaintiff appealed the trial court’s order dismissing the UM claims against Safeco arguing that Plaintiff was entitled to benefits under his UM policy because AAA denied coverage. Plaintiff’s policy with Safeco included an uninsured motorists provision which defined “uninsured motor vehicle” to include a vehicle “to which a bodily injury liability bond or policy applies at the time of the accident but the bonding or insurance company . . . denies coverage.” The Court of Appeals, however, affirmed the trial court’s ruling because the at-fault vehicle had insurance with AAA on the date of the loss, and AAA did not deny coverage. Rather, AAA was simply no longer liable to Plaintiff as a result of this accident because of the statute of limitations. The Court noted the “successful defense and plaintiff’s failure to establish liability did not translate into a denial of coverage by AAA.”
Plaintiff also argued that Safeco’s failure to discover the existence of the AAA policy equitably estopped Safeco from denying coverage for UM benefits. The Court of Appeals disagreed, noting that the doctrine of estoppel cannot expand a policy’s coverage to make the insurer liable for a loss that it did not assume. Moreover, the Court noted there was no indication of negligence or intentional misconduct on the part of Safeco, which is needed to invoke equitable estoppel. And, the policy dictated that it was Plaintiff’s responsibility to prove that an uninsured motor vehicle was involved, and that Plaintiff never submitted any information to Safeco establishing that the vehicle was uninsured.
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