DeFRAIN v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
491 Mich. 359
Mich.2012Background
- UM coverage policy from State Farm includes a hit-and-run-specific 30-day notice requirement.
- Notice of DeFrain’s hit-and-run claim was not received by State Farm until August 25, 2008, after the 30-day period.
- DeFrain (and later her estate) filed suit for UM benefits on October 8, 2008; DeFrain died November 11, 2008, with plaintiff as personal representative thereafter.
- Trial court denied summary disposition, finding the notice provision ambiguous and lacking prejudice-based justification to void coverage.
- Court of Appeals affirmed, relying on Koski’s prejudice approach and distinguishing Jackson; this Court granted review to resolve controlling authority.
- Court holds the 30-day notice provision is enforceable as written, without a prejudice showing, and reverses Court of Appeals to award summary disposition for State Farm.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a unambiguous 30-day notice provision is enforceable without prejudice | DeFrain argues prejudice must be shown per Koski. | State Farm argues the 30-day provision is a condition precedent enforceable as written. | Enforceable without prejudice showing. |
| Is Jackson controlling precedent over Koski on prejudice requirements | Jackson requires no prejudice showing for the 30-day provision. | Koski remains controlling despite Jackson. | Jackson controls; prejudice not required. |
| Does Rory require enforcement as written for unambiguous provisions | Rory supports enforcing unambiguous provisions regardless of perceived reasonableness. | Koski’s prejudice rule should limit enforcement in certain contexts. | Rory governs; prejudicial argument not applicable to unambiguous 30-day notice here. |
| Whether Koski’s prejudice rule applies to notice within a fixed period (30 days) | Koski should apply broadly to any notice provision requiring prompt action. | Koski is distinguishable because it involved ‘immediately’ or ‘reasonable time’ language. | Koski distinguishable; prejudice rule does not extend to fixed 30-day period. |
Key Cases Cited
- Jackson v State Farm Mut Auto Ins Co, 472 Mich 942 (2005) (order vacating Court of Appeals; prejudice not required for 30-day notice provision)
- Rory v Continental Ins Co, 473 Mich 457 (2005) (enforces unambiguous contract provisions unless law/public policy or traditional defenses apply)
- Koski v Allstate Ins Co, 456 Mich 439 (1998) (prejudice requirement for notice immediately or within reasonable time; distinguishable from fixed 30-day notice)
- Bradley v State Farm Mut Auto Ins Co, 290 Mich App 156 (2010) (prejudice rule applied inconsistently; authority overruled in light of Rory/Koski distinction)