Lewis v. Detroit Automobile Inter-Insurance Exchange

Lewis v LEWIS v DETROIT AUTOMOBILEINTER-INSURANCE

EXCHANGE INTER-INSURANCE DIONNE v DETROIT AUTOMOBILE EXCHANGE (Calendar 1, 6, Argued February Nos. 72940. Docket Nos. 2). 17, 1986. September Decided brought Wayne Circuit Court an action in the Jessie Lewis Exchange, against Inter-Insurance seek- the Detroit Automobile when, pedes- injuries ing while a suffered no-fault benefits trian, by by driven the defen- he was struck an automobile court, J., Ryan, judg- Harold M. entered dant’s insured. The plaintiff jury and denied the defen- ment on a verdict for judgment on the basis of the one- motion for accelerated dant’s Wahls, P.J., Appeals, year-back Court of and Bron- rule. The JJ., opin- unpublished Kaufman, alfirmed an son and N. J. per its decision was in conflict ion curiam and certified that 67686). (Docket panel No. The defendant with that of another appeals. Wayne brought in the Circuit Court Lester R. Dionne an action Exchange against the Detroit Automobile Inter-Insurance motorcycle, injuries suffered when his no-fault benefits for defendant, by collided with an automobile. The insured court, Wise, J., granted motion for John M. the defendant’s ground judgment that the failed to accelerated on The Court one of the date of the accident. file suit within JJ., P.J., Gage, Appeals, Gillis, and Gribbs af- J. H. (Docket opinion unpublished No. firmed in an memorandum 64006). plaintiff appeals. The joined Williams, opinion Justices an Chief Justice _In References 2d, seq. 1876 et Am Jur Insurance run on automobile no- of limitations commences to When statute personal injury claim. 36 ALR4th 357. fault insurance against of contract insurer for breach Limitation of action defend. 96 ALR3d 1193. liability precluding pay amount of admitted Insurer’s failure to limitations. 41 ALR3d 1111. reliance on statute of 426 Mich Levin, Cavanagh, Boyle, Archer, Supreme Court held: bringing one-year limit on an action for personal protection date a insurance benefits is tolled from the specific claim for benefits to the date the claimant makes a pursues formally liability, provided the claimant insurer denies diligence. the claim with reasonable act, recovery personal 1. Under the no-fault an action for of protection may insurance benefits not be commenced later than However, tolling year the one after the date of the accident. one-year specific is limitation from the date a claim for benefits denied, liability formally the where the claim- made to date diligence, pre- sought ant has reimbursement with reasonable legislative preventing purpose of stale claims and serves the encouraging prompt permit denials of claims. Failure to require one-year to file suit as the deadline would claim, resulting approached, regardless status litigation. needless Lewis, plaintiff pursued 2. In the record shows that the his addition, diligence. In the trial court did with reasonable permitting plaintiff present not err in witnesses even though required by he had failed to file a witness list as local plaintiff court rule because the witnesses called were list, listed on the defendant’s witness and the defendant does surprise prejudice. Finally, jury’s not claim or award was supported by testimony presented. Dionne, court 3. the case must be remanded to the trial for reconsideration of the motion for accelerated defendant’s judgment.

Lewis, affirmed.

Dionne, reversed and remanded. joined by dissenting, Brickley, Riley, Justice stated Justice plainly unambiguously 3145 of the no-fault act provides person may personal protection that a not recover any portion benefits for of a loss incurred more than one prior ambiguous to the commencement of a suit. Absent lan- guage infirmity, judiciary or constitutional not should Legislature, espe- policy explicit substitute for directives of the when, case, cially provision this is clear and not necessarily inconsistent with other of the sections act. Opinion of the Court Tolling. — — — 1. Insurance No-Fault Limitation of Actions one-year bringing personal limit on an action for Lewis a claimant protection tolled from the date insurance benefits is insurer specific to the date the claim for benefits makes a pursues liability, provided formally the claimant denies 24.13145). (MCL 500.3145; diligence MSA reasonable claim with Dissenting Opinion Brickley, J. — — Limitation of Actions.

2. No-Fault Insurance personal protection brings person recover an action to A who any portion of the loss recover beneñts for bene&ts year prior to the commencement incurred more than one (MCL 24.13145[1]). B00.314S[1];MSA suit Eisenberg Rader, & Feld- J. Franks and David Gordon), plaintiff (by Lewis. man, Merrill P.C. (by Associates, Robert & P.C. Robert A. Canner Canner), Feinberg P. A. and Daniel Dionne. Stanczyk Cooney, Watters, & Rutt,

Plunkett, Mary (by and Kenneth Catherine Rentz Pedersen M. Mattson) in Lewis. for the defendant Brandt, Hanlon, & Lanctot Dickinson, Becker (MacArthur; Schoolmaster); (by Cheat- James H. by Gross, Smith, P.C., G. ham, James Acker & counsel) in Dionne. for the defendant opinion consider the C.J. In this we Williams, question limit on back” whether the "one contained beneñts of no-fault 24.13145(1) 500.3145(1); be MSA should in MCL tolled from claim for benefits specific a the date a claimant makes formally to the date the insurer pursues provided liability, denies diligence. such hold that claim with reasonable We of the no-fault reflects the best statute.

I. FACTS LEWIS pedes- Lewis, 13, 1978, Jessie On November 426 Mich 93 by by trian, was struck an automobile driven Larry Detroit Perkins and insured defendant Exchange. plain- Automobile Inter-Insurance guardian, Shaw, tiff’s Hattie contacted the defen- regarding plaintiffs expenses. dant medical Be- report cause the accident listed Ms. Shaw’s resi- plaintiffs address, dence at 16151 Whitcomb as the defendant told her to contact her insurer own payment.1 10, 1979, March Mr. Lewis’ On attorney notified the defendant that his client making under the no- would be a claim for benefits seq.; act, fault MCL 500.3101 et MSA 24.13101 et seq. noting 15, 1979, defendant, On March plaintiffs Whitcomb, statement of residence on replied by stating, point letter, "At it this does not appear position pip we will be to afford plaintiffs May 5, 1979, benefits to Mr. Lewis.”2 On attorney submitted to defendant an affidavit re- garding his residence at the time of the accident.3 May plaintiff’s 8, 1979, On ney defendant mailed attor- application requested

an and benefits an stating plaintiffs additional affidavit residence at inquired the time of the accident. Defendant also as to the names of other household members apparently given conflicting regarding Mr. Lewis had information address, listing mailing his his sister’s home on his Whitcomb as address, claiming living but to have been with a friend at the time of sister, living the accident. If the had been with his her no- policy injuries. 500.3114; fault would have covered his MCL MSA personally 24.13114. Mr. Lewis was not insured. brief, formally plaintiff’s In its defendant claims to have denied points this letter. Plaintiff out that the statement in the equivocal testimony letter is the trial conflicts with of defendant’s employee, Campbell, Colleen who stated that defendant had never plaintiff’s negotiations regard denied claim. Plaintiff also notes that ing plaintiff’s claim continued after the letter was mailed. We need regarded not decide whether the statement in the letter could be as a denial, formal or the Court of This issue defendant did not because claim before the trial court Appeals formally plaintiff’s that it had denied claim. regarded thus be as waived. testimony, part This affidavit was mentioned in but is not a record. Lewis v employment. 11, 1979, to Mr. Lewis’ On June application attorney returned the for bene-

Lewis’ fits which listed "medical bills to date” $3,186.4 agent telephoned 19, 1979, June defendant’s On plaintiffs attorney, requesting further medical re- ports of automobiles and the name of the insurer September at the address. Octo- Whitcomb responded inquiries ber, from the defendant stating awaiting necessary hospital by it was plaintiffs attorney. Novem- information from On plaintiffs attorney defendant, 14, 1979, ber wrote asking going paid. The if the claim was to be letter plaintiff complied all defen- stated that had with requests going asked, if dant’s defendant was deny benefits, that the denial and the reasons to therefor be writing. 19, 1979, On November stating, responded by letter, "The file defendant has been reviewed possible concerning by my supervisor, requested payment. the name of He has of the autos housed at the Whitcomb the insurers January plaintiff 1980, street address.” On stating that his submitted to defendant an affidavit residence at the time of the accident was Robson. plaintiff February 22, 1980, filed suit. The On Department plain- of Social intervened as Services recoup paid pursuant tiff to to Medicaid. amounts 16.490(16). 400.106; MCL motion MSA The defendant’s judgment on the one-

for accelerated based year-back jury rule denied. The returned a was $27,120.70. verdict for Appeals certified, The Court of affirmed and pursuant 1984-2, that to Administrative No. Order holding its decision this case conflicted with Lenard, Mercy supervisor Mount Carmel Corrine of receivables for hospital Hospital, Mr. total bill was testified at the trial Lewis’ $26,753.20. paid Department Services She stated that of Social $3,186 $106.50, $23,460.70, paid remaining patient was and the outstanding. 93 98 426 Mich op Opinion the Court Meredith, 123 Mich Kransz panel of another (1983). order of June 454; By 322 571 App NW2d 1985, to 422 24, granted appeal. Court leave this Mich 930.

II. FACTS DIONNE 9, on injured July Lester Dionne was Plaintiff 1975, insured defendant motorcycle, when his accident an automobile. The collided with daiie, plaintiff’s employer. premises occurred on the of the Mr. Dionne’s notified defendant attorney 1976, 2, 8, plain- 1976. July July accident on On a number of medical bills attorney tiff’s submitted 16, 1976, in connection with the claim. On October a number of plaintiff’s attorney defendant mailed and returned on Jan- completed forms which were 31, 1977, defendant wrote 1977. On March uary further informa- plaintiff’s attorney requesting to attorney the claim. Plaintiff’s did regarding tion 7, 1978, later, July on respond. Over Court. The Wayne filed suit Circuit to the defen- granted judgment court accelerated dant on the rule. The one-year-back basis affirmed. first held this case Appeals Court We v Carriers Welton decision in abeyance pending Co, (1984). Ins 571; 365 NW2d 170 By 24, 1985, granted of June leave to appeal. order we 422 Mich 929.

III. DISCUSSION Organization, In Tom Thomas Inc v Reliance Ins Co, (1976), 588; 242 396 this Court Mich NW2d provision considered a in an insurance contract on the bringing which limited the time suit after loss or policy discovery twelve months period loss. there that of limitation We held Lewis v DAIIE Opinion op the Court gave was tolled from the time the insured notice of In re loss until formal denial of the claim. Question: Certified Ford Motor Co v Lumbermens Co, Mutual Casualty Mich NW2d 320 (1982), applied we a similar concept provision limitation of a fire statutory policy. in Richards v American Appeals,

The Court of Co, Fellowship Mutual Ins 629; App 84 Mich 270 (1978), (1979), 670 lv 406 862 NW2d den Mich applied the Tom Thomas to rationale the one-year- in back rule contained 3145 of the no-fault act. § Richards The panel one-year held that limita- tion was tolled from the time the insured provided until formal notice loss denial liability. panels Appeals Other of the Court of have de- Richards, resulting conflicting clined to follow in Compare Lansing in authority lines of that Court. Gomez, Hospital General v App 814; 114 Mich 319 Michigan and Joiner v Mutual (1982), NW2d 683 (1984) Co, 137 Ins 464; 357 875 App Mich NW2d Richards) with Aldrich v Auto-Owners (following Co, Ins (1981), 736 App 83; 106 Mich 307 NW2d Co, Allstate Ins Co v Frankenmuth Mutual Ins 111 English (1981), App 617; Mich 314 711 NW2d Co, Home Ins App NW2d Meredith, and Kransz v (1982), supra. Co,

In Welton v Carriers Ins supra, this Court in in- considered a case which the was jured a work-related motor vehicle accident which the defendant insurance was both company and the car- compensation the no-fault workers’ plaintiff urged adopt rier. The this Court to Richards tolling one-year-back analysis Richards question, declined to reach the rule. We however, plaintiffs of our holding because notice to the defendant of his company not sufficient to compensation workers’ was 426 Mich 93 trigger tolling assuming claim, of his no-fault even validity tolling principle. of the Richards opinion tolling that, Welton if stated such were adopted, begin only it would when a claim for specific benefits In a was submitted the insurer. recognized footnote, the Court that Tom Thomas permitted tolling and Ford as of the date of notice. peculiar The Court reasoned that "the nature of statutory provision” justi- no-fault limitation strictly fied a more tailored rule. First, provision the fire insurance limitation operates brought as an absolute bar suits not (or

within discovery inception) one of the rule, loss. Absent the fact that either an promptly insured has loss notified the insurer of the already or the insurer has partially paid the claim would have no effect on that bar. no- With fault, "tolling” permit- statute has a built-in ting later suit given partial once notice is or Thus, payment one-year relief consequences been made. cutoff, corresponding and the need for by tolling given, as of the date notice is more drastic the case of fire insurance actions than with no-fault. Second, specified procedure the for claim and recovery of fire greater insurance benefits includes delays,

built-in shortening already the insured’s sue, limited time to than does the no-fault law. Following loss, a covered fire the insured generally days loss, has 60 to 90 the proof to file of after which days insurer has 60 pay to or settle the claim. delays may Additional arise when the insurer does not promptly proof submit loss forms or promptly "accept” proof the of loss once submit- Thomas, ted. See Tom 396 Mich 592-593. The no- fault simply provides law that payment of a paid is overdue if days within 30 proof after loss is received MSA 500.3142(2); the insurer. MCL 24.13142(2). Accordingly, one-year period in which a fire sue is more substantially curtailed mechanism Lewis v

than ranting period, is the no-fault limitation further war- an earlier date. Finally, Legislature the fact that has al- ready provided tolling provision commencing a action, triggered a no-fault suggests by "notice of injury,” injury both that notice of was intended to greater have no effect and that justifi- there is less cation for this Court to interfere with the statu- [Welton, tory supra, scheme. n 4.] question We now reach the the Welton one-year- Court reserved and conclude that back rule of 3145 is tolled from the date a specific claim for benefits to the date of a formal liability. effectively denial of We believe this result preserves Legislature’s purpose. As Justice Boyle stated Welton: Tolling the statute when the insured submits specific

claim for appear benefits would not policies underlying detract from the one-year limitation on recovery. By submitting a timely and claim, specific the insured serves the interest preventing by allowing stale claims the insurer liability assess its support- while the information ing relatively the claim is A prompt fresh. denial of the claim barely running would affect the period, limitation investigation while a lengthy simply would is "freeze” the situation until the claim eventually effect, denied. In the insured would charged be spent with the reducing time his losses specific to a claim for plus benefits spent time deciding whether to sue after the claim is denied. [Id., 578-579.] persons Most that, are confident in the event of pay loss, their insurer will their claim without necessity litigation. only It is when an liability unequivocally extraordinary insurer denies it impressed upon the insured that the step pursuing relief court must A be taken. 426 Mich 93 prudent require would contrary today result measure a precautionary to file suit as approached, regardless when the deadline one-year requiring the claim. addition of the status of claimants sophistication many a level of need- encourage would possess, approach such an be- reasons litigation. important less One was system of the no-fault hind the enactment Cassidy litigation. accident reduction of automobile McGovern, 415 Mich 483, 501; 330 NW2d (1982). insur- Michigan

In addition to the above-cited cases, precedent there in the case law ance Pipe In American tolling. principle judicial Utah, Co v & Construction 94 S US (1974), States 756; 38 L 2d 713 the United Ct Ed stated: Supreme Court support the conclusion that fully

These cases providing for mere fact that a federal statute limitation liability also sets a time substantive not restrict upon the institution of suit does courts to hold that the statute power of the federal is tolled under certain circumstances of limitations not inconsistent with the

legislative purpose. Bliss, Steele v 593; 132 NW

See also (1911). are Although the facts these cases case, they to those of the instant do dissimilar proposition stand for the limitation statutes inflexible, allowing judicial tolling not entirely are compelling under certain circumstances. Richards,

To the rule enunciated in we add the the insured must seek reimbursement caveat diligence right with reasonable or lose the period. the limitations the benefit of a should alleviate the defendant’s Such a condition Lewis adoption tolling principle fear that will in "open-ended” liability result cases which claimant, having made a specific the benefits, respond thereafter refuses to to the carri- legitimate er’s for more requests information process needed to the claim. OTHER ISSUES LEWIS

IV. in Lewis raises two other Defendant issues for argues that the jury’s our consideration. Daiie plaintiffs verdict must be overturned because of list as required by Wayne failure to file witness 301.3(d). day Circuit Court Rule On the first of trial, the court denied defendant’s motion to bar because of plaintiff presenting testimony the from this rule. The comply the failure with witnesses were all listed on defendant’s by plaintiff called not claim to witness list. Defendant does have or admitted surprised prejudiced by plaintiffs been neglect, perceive and we can no error the trial proceed. court’s decision to allow the argues the the Finally, jury defendant $23,460.70 should reduced its have award because plaintiffs discharged of debt was a Medicaid $18,940. figure of first note that payment We the $18,940 presented was not to the jury. Walter director of reimbursement Mount Stacey, the Mercy Hospital, although Carmel testified that $23,460.70 discharged of Mr. Lewis’ bill was did not through program, Medicaid Medicaid accounts, hospi- individual but reimbursed the pay percentage expenses. tal for a certain of allowable $23,000 Mr. that where was rec- Stacey estimated expense, hospi- ognized as a Medicaid-covered $18,900” from "roughly tal would receive actually 426 Mich Dissenting Opinion Brickley, J. Department stated of Social Services.5 He also presented payment hospital if were with obligation plaintiff’s $26,753.20, it entire keep If, rest. Medicaid and would reimburse jury’s claims, of the entire defendant award plaintiff’s resulted in a windfall for amount of bill6 plaintiff, clearly established at trial. it was not sup- jury’s award was therefore find that We testimony presented. ported by the

CONCLUSION plaintiff Lewis, In the record shows diligence. pursued reasonable We his claim with Ap- of the Court of therefore decision affirm peals. Dionne, of the In we reverse the decision Appeals Court of and remand the case to the Wayne reconsideration of defen- Circuit Court for judgment under the dant’s motion accelerated announced in this case. standard JJ., Boyle, Archer, Levin, Cavanagh, con- and Williams, C.J. curred with (dissenting). plain J. Because the Brickley, unambiguous language 500.3145(1); of MCL MSA 24.13145(1) contrary is to the conclusion of Although majority, respectfully I dissent. the ma- jority may further one of the broad avoiding litigation judicial no-fault amendment of a clear act— —this legislative directive will pernicious long-term have a effect. Unless statu- states, paid by Defendant’s brief in this Court "The exact amount $18,940, by Medicaid is as shown the attached letter of Bernard Rosner, 1, September dated 1982.” Defendant does not further iden event, Rosner, tify may any party Mr. no such is letter attached. Lesinski, 579; enlarge appeal. the record on Dora v (1958). 88 NW2d 592 $27,120.70, jury actually over $367.50 The awarded some hospital this the amount of the bill. Defendant does not contest discrepancy. Lewis v Dissenting Opinion by Brickley, J.

tory language ambiguous or a constitutional revision, compels mandate princi- well-settled ple of this Court explicit is that "the declaration law, legislature is the and the courts must not Bank, Becker v Detroit Savings it.” depart from (1934). Mich 257 NW 853 500.3145; MCL MSA provides: 24.13145 (1) An personal protection action for insurance accidental later causing payable chapter benefits under this bodily injury may not be commenced 1 year than after the date of the accident injury unless written notice of injury provided given herein has been to the insurer within 1 after the accident or unless the insurer sonal If the made, previously has made a payment per- protection notice has been insurance benefits for injury. given payment or a has been may the action any be commenced at time within 1 year after the most recent allowable expense, work loss or survivor’s loss has been However, may not recover incurred. portion beneñts for any of the loss incurred more 1 year than was commenced. before the date on which the action injury required notice of by this given subsection be to the insurer any or agents of its person authorized claiming to be therefor, entitled to benefits or someone his give behalf. The notice shall the name and address of the claimant and ordinary language indicate in person the injured time, name of the place and the and nature of his injury. (2) An action for recovery property protection of insurance benefits shall not commence later than year 1 after the accident. Section 3145 is clear in its directive that a claim- ant cannot recover benefits for losses incurred more than prior one year to the commencement of suit; the not one year plus period the of time between making the claim and the denial of the claim as the majority holds. Mich 93 426 Brickley, J. by Dissenting Opinion by statutory this directive

The amends majority First, employing by three-part response. use of a reading of "practical” favors precedent which on second, decision basing its tolling principles; rather of the act paramount perceived third, and, by question; in the one section than requirement reasonable-diligence providing However, prece- neither reimbursement. pursuing can of the act provisions internal nor dent reasoning. support such fully acknowledged explicitly has The majority have ac- Appeals of the Court panels all of not Amer- in Richards v advanced cepted approach Co, 629; Mutual Ins App 84 Mich Fellowship ican (1979). (1978), 406 Mich 862 lv den 270 NW2d proper Indeed, recognized have panels other role: judicial Richards, therefore, pe- permissible Under runs, from one apparently, riod of only if commencement of the action prior to the giving of notice of hiatus between

there is no liability the denial the insured and loss contrary to us company. This seems the in and results language of the statute plain legislation. We believe impermissible judicial statutory need see no unambiguous language is interpretation. the literal departing from Co, App Ins 106 Mich v Auto-Owners [Aldrich (1981).] 307 NW2d Richards period in Court-imposed tolling 3145(1) is support Section no the statute. finds clear and inter- unambiguous subject and is agreement with We are pretation by the Court. panels this from recent decisions the more rejected the Richards analysis have Court which 3145(1). reading [Kransz of a literal favor Meredith, 454, 458-459; 332 NW2d App 123 Mich (1983).] Co, App Home Ins English v See also Lewis 107 Bbickley, J. Dissenting Opinion Allstate Ins Co v 468; (1982); 316 463 NW2d Co, Frankenmuth Mutual Ins App 617; 111 Mich (1981). And, 314 711 if NW2d even this Court’s Co, recent decision Welton v Carriers Ins in 421 (1984), 571; 365 170 imply Mich NW2d does fact Richards favoring approach, majority suggests, its foundation of the act upon purposes supplant legislation, no matter may explicit "progressive” appear. how the result may I think Welton casts doubt on the Richards approach reading tolling provision into the out, one-year-back points rule. As the majority Welton The Tom distinguished we our decisions Co, Organization, Thomas Inc v Reliance Ins 396 and (1976), 242 re 588; Mich NW2d 396 Certi- Mu- Question: Ford Motor Co v Lumbermens fied Co, tual Casualty 319 NW2d 320 (1982), where we construed a fire insur- statutory tolling provision ance to include a for the policy period of a claim. filing rejection between Ante, 98-99. pp

The second attack on the on statute based policy expectations. and consumer The majority people expect observes that most companies having will their claims without pay begin litigation, and that it is when a claim is only denied that formally litigation necessary. will be The majority thus concludes to follow the require statute as written would to file a suit as a measure” when the one- "precautionary approached. Although majority deadline approach general further of reduc- may policy ing litigation, necessarily the statute is not incon- provisions sistent with other example, impose act. For 3142 and 3148 sanc- §§ Thus, upon payments. tions an insurer for late complementary provi- be as a viewed is not sion which "sanctions” an insured who Mich Brickley, J. Dissenting Opinion Pendergast diligent pursuing See also in a claim. App Fidelity Co, Fire American Ins (1982); Group, 325 86 Mich Davis v Farmers Ins NW2d (1978). App 45; This Court NW2d arguments purposes privy was not presented specific tolling requirements. guage to all of the Legislature it drafted these to the when statutory lan-

When here, it it is outside our is as clear as is second-guess Legislature province to as to regard policy paramount § to 3145. which response by majority §to 3145 is The third requirement pursue to add a reimbursement with "reasonable that a claimant must

diligence.” That open simply keep is, a cannot the claim responding requests to information for necessary necessity the claim. The for resolve this addition demonstrates the fact that this Court engaged judicial legislation. has suggest majority does not 3145 con- any ambiguity Legislature tains or was not in full command of what it intended to do. To Legislature cognizant contrary, the need for some was of a Again, tolling. Welton, as we said supra, pointed majority: and as out Legislature already pro- fact that has [T]he tolling provision commencing

vided for a no-fault action, triggered by suggests injury,” "notice of injury both that notice of greater was intended have no justification effect and that there is less Court to interfere statutory with the scheme. this [Welton, supra, n 4.] ambiguous language Absent or constitutional infirmity, judiciary policy should not substitute explicit Legislature, especially directives of the language when, here, is clear and not necessarily inconsistent with other sections of the act.

Riley, J., J. Brickley, concurred with

Case Details

Case Name: Lewis v. Detroit Automobile Inter-Insurance Exchange

Court Name: Michigan Supreme Court

Date Published: Sep 17, 1986

Citation: 393 N.W.2d 167

Docket Number: Docket Nos. 74127, 72940, (Calendar Nos. 1, 2)

Court Abbreviation: Mich.