Justia Insurance Law Opinion Summaries

Michael Andary, conservator and guardian of Ellen Andary; Ronald Krueger, guardian of Philip Krueger; and Moriah, Inc., doing business as Eisenhower Center, brought an action against USAA Casualty Insurance Company and Citizens Insurance Company of America, seeking a declaratory judgment that the Michigan Legislature’s 2019 amendments of the no-fault act, MCL 500.3101 et seq., that placed new limitations on in-home family-provided attendant care in MCL 500.3157(10) and the non-Medicare fee schedule of MCL 500.3157(7) could not be applied to limit or change plaintiffs’ rights to benefits under the insurance policies defendants had issued to them before the 2019 amendments. Andary and Krueger, suffered traumatic injuries in automobile accidents before 2019, had been provided uncapped lifetime medical care covered by personal protection insurance (PIP) benefits under insurance policies and the no-fault act in effect at the time of their injuries. Plaintiffs argued that the retroactive application of the 2019 amendments to them was improper and would also violate their constitutional rights under the Contracts Clause of Const 1963, art 1, § 10 and their due-process and equal-protection rights. Additionally, plaintiffs all challenged the prospective application of the 2019 amendments on behalf of future motor vehicle accident victims and medical providers. Defendants moved to dismiss the case, and the trial court granted defendants’ motion. Plaintiffs appealed, and the Court of Appeals affirmed in part, reversed in part, and remanded the case to the circuit court. The Michigan Supreme Court found that the 2019 no-fault amendments of MCL 500.3157 did not impact services and care that were already being provided to Andary and Krueger and that had been reimbursable prior to the amendments. Andary’s and Krueger’s rights to the PIP benefits at issue in this case were both contractual and statutory in nature, and the 2019 no-fault amendments did not retroactively modify their vested contractual rights. Plaintiffs’ constitutional challenges to prospective application of the amended statutes were dismissed. View "Andary v. USAA Casualty Insurance Company" on Justia Law

Adora Wilmore-Moody, individually and as next friend of her minor son, brought an action against Mohammed Zakir and Everest National Insurance Company, alleging that Zakir had negligently rear-ended her vehicle, and sought personal protection insurance benefits from Everest for the injuries she and her son incurred as a result of the collision. Everest did not pay the benefits but instead rescinded plaintiff’s policy on the ground that plaintiff had failed to disclose that she had a teenaged granddaughter living with her when she applied for the insurance policy. Everest then brought a counterclaim seeking declaratory relief and moved for summary judgment of plaintiff’s claim against it under MCR 2.116(C)(10), arguing that it was entitled to rescind plaintiff’s policy because she had made a material misrepresentation in her insurance application. The trial court granted Everest’s motion. After this ruling, Zakir also moved for summary judgment, arguing that plaintiff was barred from recovering third-party noneconomic damages from him under the Michigan no-fault act because once Everett rescinded plaintiff’s insurance policy, she did not have the security required by statute at the time the injury occurred. The trial court granted Zakir summary judgment too. The Court of Appeals affirmed the grant of summary judgment to Everest, reversed as to Zakir, and remanded the case for further proceedings. Zakir appealed. The Michigan Supreme Court affirmed the appellate court: an insurer’s decision to rescind a policy post-accident does not trigger the exclusion in MCL 500.3135(2)(c). "Rescission is an equitable remedy in contract, exercised at the discretion of the insurer, and does not alter the reality that, at the time the injury occurred, the injured motorist held the required security. Rescission by the insurer post-accident is not a defense that can be used by a third-party tortfeasor to avoid liability for noneconomic damages." View "Wilmore-Moody v. Zakir" on Justia Law

Willie Griffin filed suit against Trumbull Insurance Company, the Michigan Assigned Claims Plan (the MACP), Allstate Insurance Company, Esurance Property and Casualty Insurance Company, and an unnamed John Doe insurance company, seeking personal protection insurance (PIP) benefits for injuries plaintiff sustained while riding a motorcycle. In May 2016, Griffin was driving a motorcycle when a large truck merged into his lane. Griffin swerved to avoid the truck. While there was no physical collision, Griffin’s motorcycle went down, it was damaged, and he was badly injured. The responding police officer recorded the truck driver’s name, personal telephone number, and residential address in the crash report; however, the officer did not record the license plate number or VIN of the truck, the insurer of the truck, the owner of the truck, or any other identifying information regarding the truck. Days after the accident, Griffin’s attorney sent a letter to the truck driver using the address in the crash report. Trumbull, Griffin's insurer, made numerous unsuccessful attempts to contact the truck driver before closing its investigation in late December 2016. In December 2016, Griffin submitted a separate PIP benefits claim to the MACP through the Michigan Automobile Insurance Placement Facility (the MAIPF). Griffin also submitted claims to Esurance and Allstate, which were both lower-priority insurers. In April 2017, Griffin then filed this lawsuit seeking payment of his PIP benefits. During discovery, the parties learned that the truck had been owned by Pavex Corporation and insured by Harleysville Insurance. Trumbull moved for summary judgment, arguing that it was not liable to pay PIP benefits because Harleysville was the highest-priority insurer. The MACP also moved for summary judgment (Allstate, Esurance, and the John Doe insurance company were dismissed by stipulation), and those orders were not appealed. The trial court granted the two summary judgment motions, holding that Harleysville was the highest-priority insurer and that Griffin had not exercised reasonable diligence in attempting to timely locate Harleysville. The Michigan Supreme Court reversed in part, finding that Griffin properly filed a claim under the no-fault act against all insurers who were identifiable prior to the expiration of the limitations period and that Trumbull’s delaying a decision on payment or denial of Griffin’s claim until after the limitations period expired did not excuse it from liability to pay PIP benefits. The trial court erred by granting Trumbull’s summary-disposition motion, and the Court of Appeals erred by affirming on the basis that a previously unidentifiable higher-priority insurer became identifiable during litigation well after the one-year notice and limitations period in MCL 500.3145 had expired. View "Griffin v. Trumbull Insurance Co." on Justia Law

Meemic Insurance Company filed a subrogation claim against Angela Jones, seeking to recover from Jones money it had paid to CitiMortgage, Inc., the mortgagee of a residential house owned by Jones and insured by Meemic, after fire damaged the property. In September 2015, Jones was living at the house when it was damaged by a fire. Meemic paid her $2,500 in partial payment of the claim for insurance benefits. During Meemic’s ensuing investigation, Jones admitted that at the time she secured the policy in 2014, she did not reside at the house but, instead, rented it to a third party. Meemic claimed that Jones’s failure to disclose in the initial policy that her home was being rented to others constituted a material misrepresentation. On the basis of the misrepresentation, Meemic rescinded and voided the insurance policy from its inception and returned Jones’s policy payments. After rescinding the policy, Meemic paid $53,356.49 to CitiMortgage under the lienholder contract of the policy. Jones filed an action against Meemic, claiming breach of contract and sought to recover under the insurance policy. Meemic moved for summary judgment, arguing that it had properly rescinded the policy given Jones’s misrepresentation in the initial policy. The motion was ultimately granted, and Jones' complaint was dismissed with prejudice. In 2018, Meemic filed the underlying action against Jones seeking to recover the $2,500 advance payment made to Jones and the $53,356.49 it had paid to CitiMortgage under the lienholder contract. Jones moved for summary judgment, arguing that she was relieved from any obligations under the insurance policy because Meemic had rescinded the insurance policy; Meemic opposed the motion and filed a countermotion for summary judgment. The Court of Appeal reversed the trial court's grant of summary judgment in favor of Meemic, and Meemic appealed. The Michigan Supreme Court held: an insurer who rescinds a homeowner’s insurance policy that contains a mortgage clause may seek subrogation from the insured under its rescinded policy for the amount paid to the mortgagee under the lienholder contract. The Court of Appeals judgment was reversed because it erred by concluding that Meemic’s rescission of the risk contract precluded it from denying payment to Jones and then asserting rights under the subrogation provision of the lienholder contract. View "Meemic Insurance Co. v. Jones" on Justia Law

Mecosta County Medical Center, d/b/a Spectrum Health Big Rapids (and others) sued Metropolitan Group Property and Casualty Insurance Company and State Farm Mutual Automobile Insurance Company at the Kent Circuit Court, seeking personal protection insurance (PIP) benefits related to a single-car crash involving Jacob Myers. Myers co-owned the vehicle involved in the crash with his girlfriend; his girlfriend’s grandmother had purchased a no-fault insurance policy on the vehicle through Metropolitan Group. Myers assigned plaintiffs his right to collect PIP benefits in the amount of his treatment bills. After the assignment, Myers sued Metropolitan Group and State Farm at the Wayne Circuit Court for PIP benefits related to other costs arising from the crash. Plaintiffs sued defendants at the Kent Court to recover on the assigned claim. Defendants moved for summary judgment against Myers at the Wayne Court. State Farm argued that because Myers did not live with the State Farm policyholders he was not covered by their policy. Metropolitan Group asserted that Myers was not entitled to coverage because he did not personally maintain coverage on the vehicle. The Wayne Court granted both motions and dismissed Myers’s PIP claim with prejudice. Myers did not appeal. While defendants’ motions were pending with the Wayne Court, Metropolitan Group also moved for summary judgment at the Kent Court on the same basis as its motion in the Wayne Court. However, the Wayne Court granted defendants’ motions before the Kent Court considered Metropolitan Group’s motion. After the Wayne Court granted summary judgment for defendants, defendants filed additional motions for summary judgment at the Kent Court, arguing plaintiffs’ claims were barred under the doctrines of res judicata and collateral estoppel because the Wayne Court had concluded that Myers was ineligible for PIP benefits. The Kent Court granted the motion, holding that plaintiffs’ claims were barred by res judicata and collateral estoppel. Plaintiffs appealed, and the Court of Appeals reversed in a split, unpublished opinion. The appellate majority held that an assignee was not bound by a judgment against an assignor in an action commenced after the assignment occurred. The Michigan Supreme Court affirmed, finding that plaintiffs were not in privity with Myers with respect to the judgment entered subsequently to the assignment, and therefore, plaintiffs could not be bound by that judgment under the doctrines of res judicata and collateral estoppel. View "Mecosta County Medical Center v. Metropolitan Group Property, et al." on Justia Law

Ingham, Jackson, and Calhoun County, Michigan (collectively, the Counties) filed an action alleging that they had a right to receive a decade’s worth of surplus contributions (surplus equity) made to the Michigan County Road Commission Self-Insurance Pool (the Pool). The Counties believed they were the successors in interest to their dissolved road commissions and, as such, were entitled to the surplus equity that the commissions might have received had they not been dissolved and withdrawn from the Pool. Jackson County made one other argument: because its road commission never formally withdrew from the Pool, the county said it had a right to receive surplus equity on the same terms as any current member. The Pool disagreed, contending the Counties had no right to surplus equity because the documents governing the Pool’s operations and its contracts with its various members provided the Pool with discretion in distributing surplus equity. This included, the Pool contended, the power to exclude former members should a distribution be made. The Court of Appeals sided with the Counties, holding that the Counties were the successors in interest to their dissolved road commissions and, as a matter of public policy, the Counties had a right to receive surplus equity for fiscal years in which their road commissions were members of the Pool. The Court of Appeals also determined that the dissolution of the Jackson County Road Commission did not disqualify Jackson County from membership in the Pool, and therefore, the county could receive surplus equity regardless of any public-policy considerations. The Michigan Supreme Court reversed. The Court agreed with the Pool that the Counties did not have a contractual right to receive surplus equity and that such an arrangement was not contrary to public policy. For Jackson County, the Court held that the dissolution of its county road commission did not transfer membership in the Pool from the road commission to the county itself, so the Pool could exclude Jackson County from post-dissolution distributions. View "County Of Ingham v. Michigan County Road Commission Self-Insurance Pool" on Justia Law

Plaintiff Esurance Property & Casualty Insurance Company (Esurance) paid personal injury protection (PIP) benefits to claimant, Roshaun Edwards (Edwards), pursuant to a no-fault automobile insurance policy, issued to another person, that was later declared void ab initio. Thereafter, Esurance filed this suit against defendants, the Michigan Assigned Claims Plan (MACP) and the Michigan Automobile Insurance Placement Facility (MAIPF), seeking reimbursement under a theory of equitable subrogation for the PIP benefits that Esurance had paid to Edwards under Michigan’s no-fault act before the policy was rescinded. The Michigan Supreme Court held that an insurer who erroneously pays PIP benefits could be reimbursed under a theory of equitable subrogation when the insurer was not in the order of priority and the payments were made pursuant to its arguable duty to pay to protect its own interests. On the facts alleged in this case, Esurance could stand in Edwards’s shoes and pursue a claim for equitable subrogation because it was not in the order of priority and also was not a “mere volunteer” under Michigan law when it paid Edwards’s PIP benefits. Accordingly, the Supreme Court reversed the decision of the Court of Appeals and remanded this case to that court for further proceedings. View "Esurance Prop. & Casualty Ins. Co. v. Michigan Assigned Claims Plan" on Justia Law

Wesley Zoo Yang brought an action against Everest National Insurance Company (Everest) and Motorist Mutual Insurance Company (Motorist), seeking to recover personal protection insurance (PIP) benefits under a no-fault insurance policy issued by Everest to Yang and his wife. Everest issued Yang a six-month no-fault insurance policy, the term of which ran from September 26, 2017, through March 26, 2018. On October 9, 2017, Everest mailed Yang a bill for the second monthly payment, stating that if Yang failed to pay the amount due by October 26, 2017, the policy would be canceled, effective October 27, 2017; the policy provided that the cancellation notice did not apply if Yang paid the premium on time. Yang did not pay the premium on time, and Everest sent Yang an offer to reinstate, explaining that the policy was canceled but that Yang could reinstate the policy with a lapse in coverage. On November 15, 2017, plaintiffs were struck by a car when they were walking across a street; Motorist insured the driver of the vehicle that struck plaintiffs. Two days later, on November 17, 2017, Yang sent the monthly premium payment to Everest; the policy was reinstated effective that day, and the notice informed Yang that there had been a lapse in coverage from October 27, 2017, through November 17, 2017. Plaintiffs sued when Everest refused plaintiffs’ request for PIP benefits under the policy. Everest moved for summary judgment, maintaining the policy had been canceled and was not in effect at the time of the accident, and that the policy’s cancellation provision was not inconsistent with MCL 500.3020(1)(b); Motorist disagreed with Everest’s motion and argued that it was entitled to summary disposition under MCR 2.116(I)(2) because it was not the insurer responsible for the payment of PIP benefits. The trial court denied Everest’s motion and granted summary judgment in favor of Motorist, reasoning that Everest’s notice of cancellation was not valid because it was sent before the nonpayment occurred and that Everest was therefore responsible for the payment of PIP benefits; the court thus dismissed Motorist from the action. Everest appealed. The Court of Appeal affirmed the trial court’s order, concluding that the cancellation notice was not valid under MCL 500.3020(1)(b) because Everest sent the notice before the premium was due and that the notice did not satisfy the terms of plaintiffs’ no-fault policy itself. Finding no reversible error, the Michigan Supreme Court affirmed the Court of Appeal. View "Yang v. Everest National Ins. Co." on Justia Law

Keith Bronner sued the City of Detroit seeking no-fault benefits. Bronner was a passenger on a city-operated bus when the bus was involved in an accident with a garbage truck operated by GFL Environmental USA Inc. The city self-insured its buses under the no-fault act, MCL 500.3101 et seq. Under the city’s contract with GFL, GFL agreed to indemnify the city against any liabilities or other expenses incurred by or asserted against the city because of a negligent or tortious act or omission attributable to GFL. The city paid Bronner about $58,000 in benefits before the relationship broke down and Bronner sued the city. Shortly after Bronner sued the city, the city filed a third-party complaint against GFL pursuant to the indemnification agreement in their contract. GFL moved for summary judgment, arguing that the city was attempting to improperly shift its burden under the no-fault act to GFL contrary to public policy. The circuit court denied GFL’s motion and granted summary judgment for the city. GFL appealed as of right, arguing that the indemnification agreement was void because it circumvented the no- fault act. The Court of Appeals agreed with GFL and reversed in an unpublished opinion, citing the comprehensive nature of the no-fault act and concluding that the act outlined the only mechanisms by which a no-fault insurer could recover the cost of benefits paid to beneficiaries. The Michigan Supreme Court reversed, finding that regardless of the differing opportunities for an insurer to reach an indemnification agreement with a vendor, such agreements were enforceable. View "Bronner v. City of Detroit" on Justia Law

Meemic Insurance Company filed suit against Louise and Richard Fortson, individually and as conservator of their son, Justin Fortson, alleging that Richard and Louise had fraudulently obtained payment for attendant-care services they did not provide to Justin. In 2009, Justin was injured when he fell from the hood of a motor vehicle, necessitating constant supervision and long-term care. Richard and Louise opted to provide attendant care to Justin in their home on a full-time basis. Justin received benefits under his parents’ no-fault policy with Meemic, and from 2009 until 2014, Louise submitted payment requests to Meemic for the attendant-care services she and her husband provided, asserting that they provided full-time supervision; Meemic routinely paid the benefits. In 2013, Meemic investigated Richard and Louise’s supervision of Justin, and discovered Justin had been periodically jailed for traffic and drug offenses and had spent time at an inpatient substance-abuse rehabilitation facility at times when Richard and Louise stated they were providing full-time supervision. The underlying policy contained an antifraud provision stating that the policy was void if any insured person intentionally concealed or misrepresented any material fact or circumstance relating to the insurance, the application for it, or any claim made under it. Louise and Richard counterclaimed, arguing that Meemic breached the insurance contract by terminating Justin’s benefits and refusing to pay for attendant-care services. Meemic moved for summary judgment, and the trial court initially denied the motion, reasoning that under the innocent-third-party rule, Meemic could not rescind the policy on the basis of fraud to avoid liability for benefits owed to Justin, an innocent third party. Meemic moved for reconsideration of that decision after the Court of Appeals later concluded in Bazzi v. Sentinel Ins. Co., 315 Mich App 763 (2016), the innocent-third-party rule was no longer good law. On reconsideration, the trial court granted summary judgment in favor of Meemic. Louise and Richard appealed. The Court of Appeals reversed, first reasoning that Bazzi did not apply because the fraud in this case did not occur in the procurement of the policy and did not affect the validity of the contract. The court concluded, however, that the policy’s antifraud provision was invalid because it would enable Meemic to avoid the payment of personal protection insurance (PIP) benefits mandated by MCL 500.3105. The Michigan Supreme Court affirmed, holding that contractual provisions like the one asserted by Meemic, in the context of the mandate of the no-fault act, are valid when based on a defense to mandatory coverage provided in the no-fault act itself or on a common-law defense that has not been abrogated by the act. Because Meemic’s fraud defense was grounded on neither the no-fault act nor the common law, it was invalid and unenforceable. Accordingly, the Court of Appeals was affirmed on different grounds, and the case remanded to the trial court for further proceedings. View "Meemic Ins. Co. v. Fortson" on Justia Law