In Childers v Progressive Marathon Insurance Company (2024), the Michigan Supreme Court ruled that the Michigan Property and Casualty Guaranty Association Act does not establish a separate legal basis for PIP benefits claims beyond the no-fault act. This led to Childers’ and the MPCGA’s claims against Progressive being barred by the one-year statute of limitations under MCL 500.3145(1).
Justin Childers was injured in a motor vehicle accident in 2011. MCL 500.3114(1) placed Childers’ mother’s no-fault insurer, American Fellowship, first in priority to pay Childers’ PIP benefits. American Fellowship initially paid Childers’ PIP benefits. However, American Fellowship became insolvent in 2013. All insurers transacting business in Michigan (other than life and disability insurers) are statutorily required to be members of the Michigan Property and Casualty Guaranty Association (the “MPCGA”). The MPCGA levies assessments against its member insurers. It then uses the money collected from those assessments to pay the obligations of insurers that become insolvent. Thus, when American Fellowship became insolvent the MPCGA began paying Childers’ PIP benefits.
After assuming payment of Childers’ PIP benefits the MPCGA determined that the version of MCL 500.3114 in effect at the time of Childers’ accident placed Progressive next in priority after American Fellowship to pay Childers’ PIP benefits. Thus, Childers filed a lawsuit seeking PIP benefits from Progressive. The MPCGA intervened in Childers’ lawsuit. They sought to recoup the PIP benefits it had paid to or for the benefit of Childers.
Progressive argued that the one-year statute of limitation set forth in MCL 500.3145(1) of the no-fault act barred both Childers’ and the MPCGA’s claims. Neither Childers nor the MPCGA had either filed their lawsuit nor provided Progressive with written notice of Childers’ injury within one year of Childers’ motor vehicle accident.
The Court of Appeals disagreed. It held that Michigan’s Property and Casualty Guaranty Association Act (the “MPCGA Act”) provides both Childers and the MPCGA with statutory causes of action independent of the no-fault act. The Court of Appeals then held that the six-year statute of limitations set forth in MCL 600.5813 governs such statutory cause of action, rather than the one-year statute of limitations set forth in MCL 500.3145(1) of the no-fault act. The six-year period starts on the date that American Fellowship became insolvent rather than on the date of Childers’ accident.
But the Michigan Supreme Court reversed the Court of Appeals in Childers v Progressive Marathon Insurance Company (2024). The Supreme Court held that the MPCGA Act does not create a statutory cause of action on behalf of either Childers or the MPCGA that is separate and distinct from the no-fault act. Instead, the MPCGA Act merely obligates Childers to pursue whatever right Childers has under the no-fault act against Progressive. Similarly, the MPCGA Act merely assigns to the MPCGA any rights that Childers may have had against Progressive. The Supreme Court thus held that both Childers’ and the MPCGA’s rights of recovery against Progressive are governed by the no-fault act. Therefore, they are barred by the one-year statute of limitation contained in MCL 500.3145(1).
Garan Lucow Miller appellate attorney, and head of our Appellate Department, Daniel Saylor, handled the appeals on behalf of Progressive.
Check out our News & Events page to see what’s happening at GLM and find out about our upcoming seminars.
