ATKINS v SUBURBAN MOBILITY AUTHORITY FOR REGIONAL TRANSPORTATION
Docket No. 140401
Michigan Supreme Court
Argued March 7, 2012. Decided August 20, 2012.
Rehearing denied, 493 Mich 877.
492 Mich 707
Vivian Atkins brought an action in the Wayne Circuit Court against the Suburban Mobility Authority for Regional Transportation (SMART), seeking damages in tort for injuries she suffered while riding on a bus operated by SMART that was involved in an accident. Plaintiff had filed an application for no-fault benefits with defendant‘s insurer 10 days after the accident, but waited more than 7 months to notify defendant that she might pursue a tort action. The court, Kathleen Macdonald, J., granted defendant‘s motion for partial summary disposition, concluding that plaintiff had given notice of her injury but had failed to give defendant notice of her tort claims within 60 days of the accident as required by the notice provision of the Metropolitan Transportation Authorities Act,
In an opinion by Chief Justice YOUNG, joined by Justices MARKMAN, MARY BETH KELLY, and ZAHRA, the Supreme Court held:
Notice of a plaintiff‘s application for first-party no-fault benefits does not constitute written notice of a third-party tort claim sufficient to comply with
1. Under
2. Written notice of an ordinary claim involving injury to persons or property must be served on the authority within 60 days of the occurrence through which the injury occurred. The term “ordinary claims” includes traditional tort claims arising out of occurrences involving a common carrier through which injury is sustained. A claim for no-fault benefits is not an ordinary claim for purposes of
3. The Court of Appeals erred by holding that plaintiff‘s no-fault application, coupled with her communications with defendant or its insurer concerning her medical condition, sufficed to satisfy the 60-day notice requirement of
Reversed and remanded for reentry of the circuit court‘s order granting defendant partial summary disposition.
Justice MARILYN KELLY, joined by Justices CAVANAGH and HATHAWAY, dissenting, would have affirmed the Court of Appeals’ judgment and remanded the case to the circuit court for further proceedings. Statutory notice requirements should be enforceable only to the extent that a defendant is prejudiced by a plaintiff‘s noncompliance. Preventing actual prejudice to a defendant because of lack of notice is the primary legitimate purpose of notice provisions. Justice KELLY would have held that partial summary disposition on the basis of failure to comply with the 60-day notice requirement was inappropriate because defendant had notice of the factual basis of plaintiff‘s tort claims when she filed a claim for no-fault benefits with defendant‘s insurance carrier and defendant, through its carrier, received plaintiff‘s medical records as well as other reports regarding her condition. Thus, plaintiff substantially complied with
GOVERNMENTAL IMMUNITY — COMMON CARRIER — NOTICE OF TORT CLAIMS — NO-FAULT CLAIMS.
Under
Zausmer, Kaufman, August, Caldwell & Tayler, P.C. (by Mark J. Zausmer and Carson J. Tucker), for the Suburban Mobility Authority for Regional Transportation.
Amici Curiae:
Vandeveer Garzia, P.C. (by Hal O. Carroll), for Michigan Defense Trial Counsel, Inc.
Mellon Pries, P.C. (by James T. Mellon and David Kowalski), for the Michigan Municipal Risk Management Authority.
Heather A. Glazer for the Michigan Association for Justice.
YOUNG, C.J. Plaintiff was a passenger on a bus operated by the Suburban Mobility Authority for Regional Transportation (SMART) when the bus was involved in an accident. Plaintiff filed an application for no-fault benefits with SMART‘s insurer soon thereafter, but waited more than seven months to notify SMART that she might pursue liability in tort. SMART moved for partial summary disposition, arguing that the notice provision of the Metropolitan Transportation Authorities Act,
The judgment of the Court of Appeals is reversed.
I. FACTS AND PROCEDURAL HISTORY
On September 15, 2006, plaintiff, Vivian Atkins, was a passenger on a SMART bus when it collided with another SMART bus. SMART immediately investigated the accident at the scene, but plaintiff did not believe that she had sustained any serious injuries and did not stay for the investigation. However, approximately 10 days after the accident, plaintiff contacted ASU Group, SMART‘s no-fault claims representative,
SMART, through its insurer, began paying plaintiff first-party, no-fault benefits. While paying benefits, SMART received updates on plaintiff‘s condition, including a physician‘s report. SMART also became aware that plaintiff was on a short leave of absence from work beginning on October 30, 2006, and that plaintiff‘s mother and daughter were performing some household services for plaintiff. Unfortunately, plaintiff‘s condition continued to worsen, and an MRI revealed disk herniations and degenerative changes in her spine. Through her attorney, plaintiff sent a letter to SMART on May 4, 2007, notifying that entity of her intent to pursue tort claims arising out of the accident.
On August 7, 2007, plaintiff filed a complaint against SMART, alleging third-party claims for negligence resulting in a serious impairment of body function, negligent entrustment, and respondeat superior, as well as a claim for first-party no-fault benefits. SMART moved for summary disposition with respect to the tort claims, alleging that plaintiff had failed to give notice of her tort claims as prescribed by
All claims that may arise in connection with the transportation authority shall be presented as ordinary claims against a common carrier of passengers for hire: Provided, That written notice of any claim based upon injury to persons or property shall be served upon the authority no later than 60 days from the occurrence through which such injury is sustained . . . .
The Wayne Circuit Court held that plaintiff had given notice of injury, but had failed to give notice of her tort claims within 60 days as required by the statute. The court thus granted summary disposition to SMART on the tort claims.
The Court of Appeals reversed, reasoning that SMART‘s knowledge of plaintiff‘s no-fault claim and the aggregate information that plaintiff had provided to SMART and its insurer were sufficient to give SMART written notice of a third-party tort claim.1 The Court observed that
what information must be included.4 On the basis of this analysis, the Court concluded that SMART had sufficient notice of plaintiff‘s tort claim within the 60-day period:
Defendant . . . had timely notice that plaintiff was injured, and it knew that, 60 days after the accident, she continued to require medical treatment, provision of household services, and restriction from work. While plaintiff had no proof that she had suffered permanent disfigurement
or serious impairment of body function, by the expiration of the 60-day period, defendant had notice of the operative facts needed to anticipate plaintiff‘s tort claim, and plaintiff had demanded payment for her injuries. The statute does not require a defendant to know what legal theory a plaintiff will pursue, only that it have notice of facts giving rise to a right to seek damages or payment. Therefore, we hold that the information defendant had before the expiration of the 60-day period was sufficient to provide written notice of plaintiff‘s third-party claim.5
Finally, the Court of Appeals qualified its conclusion, noting that not all no-fault claims would constitute notice of a tort claim:
For example, if the plaintiff‘s injury was something that apparently would be quickly resolved (like an abrasion or bruise), or if the circumstances of the accident were such that there was no apparent negligence by the defendant (such as a hit-and-run driver running into the defendant‘s vehicle), a defendant would not necessarily have notice that a tort claim would follow. For this reason, defendant is correct in its argument that merely having notice of the accident is insufficient. But here, defendant had notice of all the facts that would support plaintiff‘s third-party claim.6
SMART applied for leave to appeal in this Court. We ordered arguments on SMART‘s application, directing the parties to consider “whether written notice of the plaintiff‘s no-fault claim, together with SMART‘s knowledge of facts that could give rise to a tort claim by the plaintiff, constituted written notice of her tort claim sufficient to comply with
II. STANDARD OF REVIEW
This Court reviews de novo the grant or denial of summary disposition motions.8 This case calls on us to consider the statutory notice provision of
III. ANALYSIS
Generally, governmental agencies in Michigan are statutorily immune from tort liability.10 However, because the government may voluntarily subject itself to liability, it may also place conditions or limitations on the liability imposed.11 Statutory notice provisions are a common means by which the government regulates the conditions under which a person may sue governmental entities. It is well established that statutory notice requirements must be interpreted and enforced as
plainly written and that no judicially created saving construction is permitted to avoid a clear statutory mandate.12
All claims that may arise in connection with the transportation authority shall be presented as ordinary claims against a common carrier of passengers for hire: Provided, That written notice of any claim based upon injury to persons or property shall be served upon the authority no later than 60 days from the occurrence through which such injury is sustained and the disposition thereof shall rest in the discretion of the authority and all claims that may be allowed and final judgment obtained shall be liquidated from funds of the authority: Provided, further, That only the courts situated in the counties in which the authority principally carries on its function are the proper counties in which to commence and try action against the authority.13
restricts jurisdiction to courts in the counties where the authority carries on its function.
At issue in this case is whether an application for no-fault benefits can suffice as the notice of a separate tort claim that
The Court of Appeals held that plaintiff‘s no-fault application and her communications with SMART or its insurer provided SMART with sufficient knowledge to anticipate plaintiff‘s tort claim, and thus sufficed as the notice required to satisfy the statute. We disagree.
The text of
read specific statutory provisions in the context of that which surrounds them.16 The prefatory clause of
While the term “ordinary claims” is undefined by statute, it may reasonably be understood to include traditional tort claims arising out of occurrences involving a common carrier through which such injury is sustained.17 This understanding corresponds with the purpose of the statute: to set forth the requirements by which a person may recover against a common carrier for its liabilities, which includes tort liabilities involving injury to persons or property. We also discern from the statutory text that these ordinary claims are to be paid from funds of the authority.
Contrary to this framework, an application for no-fault benefits is not an ordinary claim as contemplated by
ery in most situations. Moreover, claims for no-fault benefits are not paid from funds of the authority, as traditional tort claims are, but are paid by a carrier‘s no-fault insurer. The legislatively chosen language thus indicates that ordinary tort claims like those pursued by plaintiff here and to which
Apart from the textual indications supporting this analysis, we recognize that claims for first-party no-fault benefits and third-party tort benefits are qualitatively distinct in nature, such that notice of one does not serve as notice of the other. Most notably, an application for first-party insurance benefits recoverable without regard to fault cannot be equated with a claim for at-fault tort liability. First-party benefits under the no-fault act are creations of, and thus only available pursuant to, statutory law. And SMART‘s insurer is required to pay no-fault personal protection insurance benefits to individuals injured in accidents involving their buses.18 A person who proves his entitlement to first-party benefits has proved none of the elements that would entitle him to tort damages. A third-party tort claim is distinct from a claim for first-party benefits because a third-party tort claim involves an adversarial process in which the plaintiff must prove fault in order to recover. Therefore, notice of a claim for first-party benefits is not the equivalent of notice of a third-party tort claim.19
a claimant seeking first-party no-fault benefits was required to meet the 60-day notice requirement of
Trent appropriately held that the 60-day window to file notice of an ordinary claim in
here, a request for no-fault benefits does not apprise the defendant of the desire to pursue liability in tort.
The Court of Appeals erred to the extent that it held that plaintiff‘s no-fault claim and SMART‘s institutional knowledge essentially put SMART on notice of a likely at-fault claim. Ultimately, plaintiff‘s application for no-fault benefits in this case only asserted her right to, and demanded payment for, no-fault benefits. Plaintiff did not assert any right to recovery in tort or make a demand for tort damages within 60 days. The claim asserted in plaintiff‘s application for no-fault benefits was qualitatively different from a claim for recovery in tort and could not reasonably apprise SMART that plaintiff would pursue a tort action. Plaintiff‘s interpretation, and that of the Court of Appeals, essentially rewrites the statutory text to provide that notice of any one claim — however distinct — suffices as notice of any other claim that plaintiff may pursue even when the statute plainly requires “written notice of any claim.”
Further, the Court of Appeals compounded this error by importing concepts of substantial compliance and SMART‘s institutional knowledge of the accident gleaned from other sources as sufficient to provide the notice required by
equivalent to written notice of a claim. Similarly, aggregate knowledge of an event such as an accident cannot be served on a defendant. Instead, the requirement that “written notice of any claim . . . shall be served upon the authority” indicates that a formal delivery of notice of the claim is intended by the statutory language.24
By providing that the accumulated information obtained by SMART from other sources, in addition to a no-fault application, substantially met the requirement that plaintiff provide written notice of her tort claims, the Court of Appeals replaced a simple and clear statutory test with a test based on apparent or imputed knowledge. The Court of Appeals’ holding would require SMART and its counterparts to anticipate when a tort claim is likely to be filed on the basis of the underlying facts. In short, it would require a governmental agency to divine the intentions of an injured or potentially injured person and then notify itself that the person may file a suit in tort. This approach entirely subverts the notice process instituted by the Legislature. And the legislative purpose behind this process is clear: it requires specific statutory notice of any claim so that a common carrier defendant does not have to anticipate or guess whether a claim will be filed at some point in the future. Instead, the common carrier must simply be told of the claim within 60 days and through service of a notice. For these reasons, the decision of the Court of Appeals contravenes the clear language of
IV. CONCLUSION
Statutory notice requirements like the one at issue in this case must be interpreted and enforced as plainly written. The Legislature has determined that it will waive governmental immunity in cases of
Because plaintiff did not comply with the notice requirement provided in
of the circuit court‘s order granting partial summary disposition in favor of SMART.
MARKMAN, MARY BETH KELLY, and ZAHRA, JJ., concurred with YOUNG, C.J.
MARILYN KELLY, J. (dissenting). The issue presented in this case — whether plaintiff‘s failure to strictly comply with
ANALYSIS
The proper interpretation and application of statutory notice provisions like
occupied our courts. While early decisions of our Court strictly construed notice provisions and allowed dismissal for failure to comply,2 the Court changed course in 1970 in Grubaugh v City of St Johns.3 In Grubaugh, the Court dealt with a statutory provision that required a plaintiff to give a governmental defendant notice of a claim within 60 days of the incident underlying the lawsuit. The Court held that the provision violated the Due Process Clause of the state constitution.4
The next year, in Carver v McKernan,7 the Court considered the application of a six-month notice provision in the Motor Vehicle Accident Claims Act.8 The Court somewhat retreated from Grubaugh‘s and Reich‘s holdings that statutory notice provisions are per se unconstitutional. Carver held that the notice provision in that case was constitutional, and thus enforceable,
but only if the plaintiff‘s failure to give notice prejudiced the party not receiving the notice.9 The Court opined that while some notice provisions may be constitutionally permitted, others may not be, depending on the purpose served by the notice requirement.10 The Court explained that if the notice provision served some purpose other than to prevent prejudice, it could be considered an unconstitutional legislative requirement.11
Three years later in Hobbs v Department of State Highways,12 the Court reaffirmed the reasoning of Carver. Considering a 120-day notice requirement in the governmental tort liability act,13 the Court held:
The rationale of Carver is equally applicable to cases brought under the governmental liability act. Because actual prejudice to the state due to lack of notice within 120 days is the only legitimate purpose we can posit for this notice provision, absent a showing of such prejudice the notice provision contained in [
MCL 691.1404 ] is not a bar to claims filed [under the act].14
Thus, Hobbs continued to employ a prejudice standard when construing statutory notice provisions.
Twenty years later in Brown v Manistee County Road Commission,15 the Court reconsidered the propriety of Hobbs. We concluded that the statute at issue in that case was unconstitutional, reasoning that we were “unable to perceive a rational basis for the county road
commission statute to mandate notice of a claim within sixty days.”16 We further reasoned that there was no legitimate reason to subject some claimants to a 60-day notice period and others to a 120-day notice period.
Nonetheless, in 2007, four justices of the Court issued Rowland v Washtenaw County Road Commission and upended Hobbs, Brown, and their progeny as wrongly decided.17 Those justices concluded
Even if it were proper to reach the 120-day notice requirement in this case, it would not be appropriate to overturn Hobbs and Brown. Together, these cases represent 30 years of precedent on the proper meaning and application of
MCL 691.1404 . Such a considerable history cannot be lightly ignored. And the Legislature‘s failure to amend the statute during this time strongly indicates that Hobbs and Brown properly effectuated its intent when enactingMCL 691.1404(1) .The primary goal of statutory interpretation is to give effect to legislative intent. In both Hobbs and Brown, the Court identified the intent behind the notice provision as being to prevent prejudice to a governmental agency. [In Hobbs, the Court held that] [a]ctual prejudice to the state due to lack of notice within 120 days is the only legitimate purpose we can posit for this notice provision . . . . For 20 years, the Legislature knew of this interpretation but took
no action to amend the statute or to state some other purpose behind
MCL 691.1404(1) . The Court then readdressed the statute in Brown and came to the same conclusion regarding the purpose behindMCL 691.1404(1) .Another ten years have passed, but still the Legislature has taken no action to alter the Court‘s interpretation of the intent behind the statute. This lack of legislative correction points tellingly to the conclusion that this Court properly determined and effectuated the intent behind
MCL 691.1404(1) . If the proper intent is effectuated, the primary goal of statutory interpretation is achieved.18
I continue to stand by my dissenting opinion in Rowland and believe that in toppling decades of settled caselaw, the Court acted improperly. I would hold, consistently with Hobbs and Brown, that preventing actual prejudice to a defendant because of lack of notice is the primary legitimate purpose of notice provisions.19 Consequently, a suit may be dismissed for lack of notice only when a defendant has been prejudiced.
In this case, plaintiff failed to provide the notice of intent to bring a tort claim within the 60-day period required by
First, following the bus collision underlying plaintiff‘s claim, defendant immediately investigated the accident on its own accord. It did not believe that plaintiff had sustained any serious injuries, but was
nonetheless aware of the incident and of plaintiff‘s involvement. Defendant also obtained a statement from one of the bus
Second, within 10 days of the accident, plaintiff advised defendant‘s insurer, ASU Group, that she had been injured in the collision. ASU Group provided her with an application for no-fault benefits, which she completed and returned. In her application, plaintiff explicitly noted her injuries that resulted from the accident as well as her health insurance information. She noted that her doctors had prescribed medication for her. She also provided a list of the physicians treating her and their contact information.
ASU Group contacted each of plaintiff‘s physicians and obtained her medical records related to the accident. ASU Group‘s notes on plaintiff‘s case indicate that it was aware that during plaintiff‘s convalescence, her mother and daughter performed household services for her. Its notes further reflect that with plaintiff‘s anticipated wage loss, treatment, and household services, she would not be able to cover her expected medical costs. Finally, defendant was aware that plaintiff‘s condition continued to worsen several weeks after the accident and that magnetic resonance imaging depicted disk herniations and degenerative changes in her spine. Thus, defendant was acutely aware of plaintiff‘s injuries and the factual basis for her tort claims.
This information that plaintiff provided to defendant and its insurer put defendant on notice of plaintiff‘s tort claims against it. This is not a case of a failure to
substantially comply with a notice requirement. Indeed, plaintiff substantially complied with
CONCLUSION
I would affirm the judgment of the Court of Appeals. I would hold that plaintiff‘s failure to provide notice within 60 days of the incident does not mandate partial summary disposition in favor of defendant. Rather, because defendant was not prejudiced by plaintiff‘s failure to file notice, this Court should remand her case to the trial court for further proceedings. Accordingly, I respectfully dissent.
CAVANAGH and HATHAWAY, JJ., concurred with MARILYN KELLY, J.
Notes
All claims that may arise in connection with the transportation authority shall be presented as ordinary claims against a common carrier of passengers for hire: Provided, That written notice of any claim based upon injury to persons or property shall be served upon the authority no later than 60 days from the occurrence through which such injury is sustained . . . .I agree with the majority‘s conclusion that this provision requires potential claimants to notify the defendant of “any claim.” Considering the language of the statute, an application for no-fault benefits is not the same as written notice of an impending tort action. However, as discussed later, I believe that notice of a request for no-fault benefits arising out of the same underlying facts may be sufficient notice of an impending tort