Michigan Court of Appeals; Docket # 335835; Unpublished
Judges Fort Hood, Servitto Beckering per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
When Claimants Can Receive PIP Benefits Through the Assigned Claims Facility [§3172(1)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals upheld the lower court’s grant of summary disposition denying Plaintiff’s motion to reinstate Farmers Insurance Exchange (“Farmers”) as a party to the case. The Court of Appeals upheld the lower court because Farmers was added improperly to the litigation through the Michigan Assigned Claims Plan (“MACP”) since there was an identifiable no-fault provider for Plaintiff’s injury.
Plaintiff allegedly sustained injuries in a motor vehicle accident in 2008. Plaintiff’s employer owned the vehicle that was involved in the accident. The employer had an auto insurance policy with Lincoln General Insurance Company (“Lincoln”). Plaintiff filed a claim with MACP because he was unsure if Lincoln was the appropriate no-fault provider to provide him benefits. MACP assigned Farmers to handle the claim.
In 2011, Plaintiff sued Lincoln for wrongful refusal to pay no-fault benefits. The case ended in a monetary settlement payment by Lincoln. In 2013, Plaintiff sued both Lincoln and Farmers, but voluntarily dismissed Farmers and settled with Lincoln. Then in 2014 Plaintiff again sued Lincoln and Farmers out of concern that Lincoln would become insolvent. Lincoln was not insolvent at the time of the 2014 action, and Farmers moved for summary disposition. At the hearing for summary disposition Lincoln’s counsel was present and confirmed that it was a solvent company. The court therefore dismissed Farmers. Lincoln subsequently became insolvent while the case was still pending, and Lincoln then asserted that Plaintiff’s proper remedy would be found by proceeding against Lincoln’s estate under an order of liquidation entered in Pennsylvania. Plaintiff did not respond to Lincoln’s motion and instead sought to amend its complaint to bring Farmers back in as a defendant. The trial court, noting that Lincoln’s insolvency left alternate remedies for Plaintiff to pursue and granted Lincoln’s motion to dismiss. The trial court then heard Plaintiff’s motion for leave and to amend the complaint bringing Farmers back into the action. The trial court denied the motion and Plaintiff appealed.
The Court of Appeals first noted that the standard of review for the denial of a motion to amend is abuse of discretion. While the Michigan Court Rules say that the right to amend “should be freely given when justice so requires,” the right may be denied when the amended complaint would be futile.
The Court then turned its attention to MCL 500.3172(1), which determines eligibility for PIP benefits through MACP. Assignment to MACP is appropriate when: “(1) no personal protection insurance is applicable to the injury, (2) no personal protection insurance applicable to the injury can be identified, (3) the personal protection insurance applicable to the injury cannot be ascertained because of a dispute between 2 or more automobile insurers concerning their obligation to provide coverage or the equitable distribution of the loss, or (4) the only identifiable personal protection insurance applicable to the injury is, because of financial inability of 1 or more insurers to fulfill their obligations, inadequate to provide benefits up to the maximum prescribed.” MCL 500.3172(1).
Farmers argued that the amendment should be denied because Plaintiff was only entitled to benefits through MACP if it met one of the conditions for assignment when it filed it filed its initial MACP claim. The Court of Appeals agreed and found that at the time Plaintiff filed its initial MACP claim, Plaintiff did not meet any of the conditions necessary for a claim through MACP. Plaintiff could not meet the first two conditions because Plaintiff knew that Lincoln’s policy applied, and Lincoln conceded that its policy applied. The third condition could not be met because the only policy at issue was Lincoln’s policy. Finally, the fourth condition did not apply because at the time of the MACP application, Lincoln was able to fulfill its financial obligations to Plaintiff.
“We agree with Farmers’ contention. According to plaintiff in his brief on appeal, he was aware of the existence of the no-fault policy with Lincoln General from the outset following the subject motor vehicle accident but appeared to be uncertain whether he would be able to obtain benefits from it. Since Lincoln General conceded that the policy applied, and plaintiff admitted knowing about the Lincoln General policy, the first two conditions set forth in § 3172(1) are not applicable. Similarly, at the time plaintiff made the MACP claim, there were not two insurers disputing which one had coverage. The only no-fault policy at issue at that point was the Lincoln General policy. Finally, a review of the record confirms that while Lincoln General, at the time plaintiff made his MACP claim, may have been undergoing financial difficulties, Lincoln General was not, because of “financial inability” unable to “fulfill [its] obligations” to provide no-fault benefits to the maximum amount required. MCL 500.3172(1).”
The Court also noted that when a no-fault provider is insolvent the proper mechanism for a claimant to go through is the Michigan Property and Casualty Guarantee Association Act (“MPCGAA”). Under the MPCGAA statutory provisions the onus is on the plaintiff to pursue the appropriate redress. Thus, the MACP is the improver mechanism to seek compensation for no-fault benefits from an insolvent provider.
Ultimately, Plaintiff was unable to receive benefits through MACP and so Farmers could not be brought back in as a defendant. Thus, the Court decided that the lower court did not abuse it discretion in denying the motion to amend.
