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Titan Ins. Co. v. State Farm Mut. Auto. Ins. Co. - No. 321112, 2015 Mich. App. LEXIS 1570 (Ct. App. Aug. 11, 2015)

Rule:

The statute of limitations portion of MCL 500.3145(1) commands that an action for first-party PIP benefits "may not be commenced later than 1 year after the date of the accident causing the injury" unless either of two exceptions is established. The first exception is triggered when "written notice of injury as provided herein has been given to the insurer within 1 year after the accident[.]" The second exception comes into play when "the insurer has previously made a payment of [PIP] benefits for the injury." 

Facts:

On June 30, 2010, Matthew Sterling suffered burns on his face and arms while trying to start an uninsured 1968 Camaro owned by Frank Ward. Sterling denied ownership of a policy of no-fault insurance. On August 23, 2010, the Michigan Assigned Claims Plan (MACP) designated plaintiff Titan Insurance Company as Sterling's first-party no-fault benefit provider. Titan paid the University of Michigan $45,664.27 on Sterling's behalf. Meanwhile, Titan launched an investigation into whether a higher priority insurer existed. Titan discovered that defendant State Farm Mutual Automobile Insurance Company insured another vehicle owned by Ward, which elevated State Farm to the front of the priority line. On August 23, 2012, Titan filed suit against State Farm seeking reimbursement, commencing its lawsuit precisely two years after having been assigned Sterling's claim. State Farm filed a third-party complaint against Affirmative, alleging that an Affirmative no-fault policy covered Sterling at the time of the accident, thereby placing Affirmative in higher priority than State Farm. Affirmative asserted that State Farm's claim was time-barred under MCL 500.3145(1), which sets forth both a one-year statute of limitations for subrogation claims between no-fault insurers and a "one-year-back" rule generally limiting recovery for such claims to benefits paid within the year previous to the commencement of the action. The circuit court granted Titan summary disposition and judgment in the amount of $45,664.27 against State Farm and, in turn, granted State Farm summary disposition and judgment in the amount of $45,664.27 against Affirmative. The circuit court ruled that State Farm filed its claim within a timely manner and did not bar State Farm's claim for reimbursement against Affirmative because State Farm only "incurred" an expense related to Sterling's no-fault claim on the day of the hearing, when Titan obtained judgment against State Farm. Affirmative appealed.

Issue:

Did State Farm file its claim within a timely manner?

Answer:

No.

Conclusion:

The court concluded that State Farm failed to provide Affirmative with the requisite notice within one year of the claimant's accident. As such, its claim against Affirmative was time barred. Because neither exception to the statute of limitations applied, State Farm's subrogation claim against Affirmative was barred by MCL 500.3145(1). Hence, the circuit court erred by granting summary disposition to State Farm instead of granting Affirmative's summary disposition against State Farm. Accordingly, it reversed the circuit court and remanded for entry of an order granting Affirmative summary disposition against State Farm.

 

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