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Hahn v GEICO Indemnity Co (COA – UNP 6/12/2018; RB #3760) 


Michigan Court of Appeals; Docket #336583; Unpublished
Judges Sawyer, Cavanagh, and Fort Hood per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 

$500,000 Cap for Certain Nonresident Claims [§3163(4)]
Obligations of Admitted Insurers to Pay PIP Benefits on Behalf of Nonresidents Injured in Michigan [§3163(1)]
General / Miscellaneous

Mend the Hold

In this unanimous unpublished per curiam opinion, the Court of Appeals upheld the trial court denial of summary disposition regarding the application of MCL 500.3012 and reversing the trial court’s denial of summary disposition regarding the application of the “mend-the-hold” doctrine to MCL 500.3163. The Court upheld the denial of summary disposition regarding MCL 500.3012 because there was evidence that Defendant GEICO indemnity Insurance Company (“GEICO”) knew or should have known that Plaintiff Kaitlin Hanhn (“Hahn”) was a Michigan resident. The Court reversed the denial of summary disposition regarding the “mend-the-hold” doctrine to MCL 500.3163 because it found that applying the doctrine would directly contravene the language of the statute, and equitable relief cannot directly contradict a statute.

Hahn grew up in Michigan where she met her future husband Zachary Waller (“Waller”). Waller joined the Marines and was stationed in North Carolina. In April 2015, Hahn went to North Carolina and married Waller. The two bought a townhouse in North Carolina but intended to move back to Michigan. In July of 2015, the couple were driving back to Michigan from North Carolina when Waller fell asleep while driving and crashed the vehicle. Hahn was rendered a quadriplegic as a result of the accident. Hahn filed a claim with GEICO, who insured Waller’s truck under a policy issued in North Carolina. GEICO responded that it would only pay $500,000 in benefits pursuant to MCL 500.3163. Hahn’s father had an auto insurance policy with Auto Club Insurance Company (“ACIA”). Hahn brought an action against both GEICO and ACIA  seeking additional benefits beyond $500,000.

Discovery was granted on the issue of Hahn’s residency. ACIA sought summary disposition arguing that Hahn was not domiciled with her father. ACIA also asserted that GEICO’s policy should be reformed into one providing Michigan no-fault benefits under MCL 500.3012. GEICO continued to argue that MCL 500.3163 was inapplicable, and even if it did the company had already met its obligations under MCL 500.3163. In regard to ACIA’s MCL 500.3012 argument GEICO argued it was inapplicable under the facts of the case. Hahn argued that the language of MCL 500.3163 should not limit her to benefits beyond $500,000 and GEICO should be estopped from arguing a different position in the present action than it had in a previous letter to Hahn informing her that it would only pay $500,000.[1] The trial court issued a written opinion finding that (1) Hahn and Waller were domiciled in Michigan, (2) Hahn was not domiciled with her father, (3) and factual disputes remained regarding the application of the mend-the-hold doctrine and MCL 500.3012.[2] GEICO appealed the order.

The Court first found that there was a genuine issue of fact regarding the application of MCL 500.3012 to reform the GEICO policy. MCL 500.3012 allows a court to alter an auto insurance policy to purport with the Michigan No-Fault Act for Michigan residents, even if the written terms of the policy are inconsistent with Michigan law. In Farm Bureau Ins Co v Allstate Ins Co, 233 Mich App 38; 592 NW2d 395 (1998) the Court of Appeals found that MCL 500.3012 could be used to force an insurer to provide unlimited benefits for an out-of-state policy when the insured was “not a nonresident” and there was evidence that the insurance company knew the individual was domiciled in Michigan. Here, the Court explained that there was a factual matter that mirrored Farm Bureau Ins. The trial court made a factual finding that Hahn was domiciled in Michigan. Further, Waller’s Michigan address was the one on the GEICO policy. Thus, the Court found that there was a genuine issue of material fact regarding if Hahn was a Michigan resident and GEICO knew or should have known that she was a Michigan resident when it issued the policy.

“There is record evidence indicating that Geico knew, or at a minimum, had reason to know, that Waller was a Michigan resident when he obtained the policy. Waller’s address is listed as a Michigan address on the face of the policy. Waller also had a Michigan driver’s license. Further, the declarations page noted that the vehicles would be garaged in North Carolina, but at a military base. This Court has found that an individual’s temporary military address has little or no effect on one’s place of domicile for purposes of the no-fault act. Salinger v Hertz Corp, 211 Mich App 163, 166-167; 535 NW2d 204 (1995).”

The Court then reversed the trial court and found summary disposition was appropriate for MCL 500.3161. The Court explained that equitable remedies cannot directly contradict the language of a statute. The Court then explained that the doctrine of mend-the-hold is an equitable remedy that prohibits an insurer from bringing forward a defense. However, in this case Hahn was attempting to utilize the mend-the-hold doctrine to get benefits beyond the statutory cap under MCL 500.3163. Because the language of the section was clear, it could not be overcome with an equitable remedy. The Court refused to apply the doctrine and found that GEICO had met its obligation under MCL 500.3163 by paying up to $500,000. Thus, the Court reversed the trial court’s denial of summary disposition.

“Plaintiff has no basis to invoke the rule in this case. First and foremost, what plaintiff is attempting to do is to have the trial court, under the guise of an equitable remedy, ignore the plain language of MCL 500.3163(4). To do so would be wholly improper. . . . Even setting that problem aside, the circumstances of this case do not warrant application of the doctrine. Geico informed plaintiff that she was entitled to up to $500,000 in benefits under MCL 500.3163. While Geico later repudiated that position in this suit, Geico nonetheless paid plaintiff exactly what it said it would.”

Thus, the Court upheld the trial court’s denial of summary disposition regarding MCL 500.3012 and reversed the trial court’s denial of summary disposition regarding MCL 500.3163.

[1] Initially, the Court noted that the Plaintiff’s argument was “[i]in contravention to the plain language of MCL 500.3163” and the logic of the argument “was not exactly clear.”

[2] Finding that Hahn was not domiciled with her father, the trial court granted summary disposition in favor of ACIA.

Michigan auto accident attorney Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit

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