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Yaghnam v Doe, et al (COA – UNP 7/15/2021; RB #4293)

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Michigan Court of Appeals; Docket #353547; Unpublished
Judges Riordan, Kelly, and Shapiro; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion


STATUTORY INDEXING:
Not Applicable

TOPICAL INDEXING:
Underinsured Motorist Coverage - Notice and Statute of Limitations for Underinsured Motorist Coverage


SUMMARY:
In this unanimous unpublished per curiam decision, the Court of Appeals affirmed the trial court’s summary disposition order dismissing Plaintiff Elias Yaghnam’s action for uninsured/underinsured benefits against Defendant Michigan Insurance Company (“MIC”). The Court of Appeals held that Yaghnam’s claim for UM/UIM was a standard personal injury action, not a breach of contract action. Therefore, the applicable statute of limitations was three years—pursuant to MCL 600.5805(2)—and not the six-year statute of limitations for breach of contract actions set forth in MCL 600.5807(9). Since Yaghnam waited three years and one day from the date of the crash to file his lawsuit, his claim was barred. The Court of Appeals further held that, despite referencing the possibility of asserting a UM/UIM claim in the future in emails to Michigan Insurance Company, Yaghnam failed to comply with the three-year notice requirement for UM/UIM claims set forth in his policy, and that any amendment to his complaint to include a breach of contract claim would be futile.

Yaghnam was injured in a motor vehicle collision caused by an unknown driver, but waited until three years and one day after the collision to file his third-party lawsuit against the unknown driver, in which he also asserted a claim for UM/UIM benefits against MIC. MIC moved for summary disposition, arguing that Yaghnam’s claim was barred by the three-year statute of limitations for personal injury actions set forth in MCL 500.5805(2). In response, Yaghnam argued that his claim was for breach of contract, and therefore governed by the six-year statute of limitations set forth in MCL 600.5807(9). The trial court granted MIC’s motion, but did so because of the three-year notice requirement for UM/UIM claims contained in Yaghnam’s policy, with which it deemed Yaghnam failed to comply. In Yaghnam’s motion for reconsideration, he argued that he did comply with the three-year notice requirement contained in his policy, evidenced by an email exchange between his lawyer and the lawyer for MIC, and that he should therefore be allowed to amend his complaint to include a claim for breach of contract. In the subject email exchange, which occurred approximately two years after the subject collision, Yaghnam’s lawyer indicated that Yaghnam might have a claim for UM/UIM benefits, and included a “tongue-in-cheek” inquiry into whether MIC’s lawyer would be willing to entertain a settlement. The trial court denied that motion.

The Court of Appeals affirmed the trial court’s summary disposition order in favor of MIC, holding firstly that Yaghnam’s claim was governed by the three-year statute of limitations for personal injury actions set forth in MCL 600.5805(2), not the six-year statute of limitations for breach of contract actions set forth in MCL 600.5807(9). Yaghnam only alleged in his complaint that a contract between him and MIC existed; he did not allege that MIC breached that contract in any way—therefore, his argument that his complaint was actually one for breach of contract was unavailing.

Yaghman argues that the above language states a claim for breach of contract. We disagree. To establish a prima facie case for breach of contract, ‘[a] party asserting a breach of contract must establish by a preponderance of the evidence that (1) there was a contract (2) which the other party breached (3) thereby resulting in damages to the party claiming breach.’ Miller– Davis Co v Ahrens Const, Inc, 495 Mich 161, 178; 848 NW2d 95 (2014). The causation element requires that the party show “a causal link between the asserted breach of contract and the claimed damages.” Gorman v American Honda Motor Co, 302 Mich App 113, 118-119; 839 NW2d 223 (2013). Here, even accepting the factual allegations in Yaghnam’s complaint as true, he has only alleged that there was a contract between Michigan Insurance Company and him. He has not made any allegations that Michigan Insurance Company breached that contract. For example, the complaint is devoid of any indication that he made a timely claim under his automobile insurance policy to recover UM/UIM benefits. Further, even if he had made such a claim, he has not pleaded any facts indicating that Michigan Insurance Company then breached the contract by not paying the owed benefits. Thus, like the trial court, we conclude that Yaghnam did not plead a breach- of-contract claim. As a result, there is no basis to apply the six-year limitations period applicable to breach of contract actions.

The Court of Appeals held secondly that the trial court did not err in refusing to allow Yaghnam to amend his complaint to include a breach of contract claim, because any such amendment would be futile given the fact that Yaghnam also failed to comply with the three-year notice requirement in the policy. The Court determined that Yaghnam’s lawyer’s “tongue-in-cheek” inquiry into whether MIC’s lawyer might be willing to settle any potential UM/UIM claim was not serious enough to satisfy the three-year notice requirement in the policy. The Court’s opinion perhaps even stands for the proposition that, in order for Yaghnam to have satisfied the three-year notice requirement in his policy, he would have had to do more than merely provide notice of a potential UM/UIM claim; he would have had to unequivocally assert such a claim.

Under the plain language of the insurance policy, Yaghnam was required to report his claim for UM/UIM benefits to Michigan Insurance Company ‘within three years of the date of loss.’ In the proceedings below, Yaghnam presented no evidence indicating that he satisfied his contractual obligation to report his UM/UIM claim to Michigan Insurance Company within three years of the date of loss. Instead, his only proof that Michigan Insurance Company was aware of the claim was an e-mail exchange between his lawyer and Michigan Insurance Company’s lawyer. In that exchange, Yaghnam’s lawyer first noted that Yaghnam might have a claim for UM/UIM coverage, so he did not want to sign a release pertaining to the personal protection insurance benefits to also release that potential UM/UIM claim. It is axiomatic that a statement that a claim might exist is insufficient to give notice that such a claim is being made.

Later in the e-mail chain, when asked whether there was an UM ''portion to this claim that was dismissed," Yaghnam’s lawyer stated, "No, I never included a claim for UM benefits in my original complaint or the amended complaint." That response was made at 1:57 p.m. on October 19, 201[8]. Because there was no such claim, Michigan Insurance Company’s lawyer agreed to allow Yaghnam’s lawyer to amend the release to delete language that would preclude a claim for UM benefits. Thereafter, less than twenty minutes after assuring Michigan Insurance Company’s lawyer that he had not made a claim for UM benefits, Yaghnam’s lawyer asked if Michigan Insurance Agency would be "willing to entertain settlement of my client’s UM claim?" The response was "No," with a smiley face. Thus, in context, it is clear that this was not a serious request and was not understood as a serious request. Instead, the entirety of the e-mail chain shows that, as of October 19, 2018, Yaghnam recognized that he might have a claim for UM benefits, so he did not want to sign a release that would bar recovery on that claim. Further, it shows that he had not yet made any claim for such benefits to Michigan Insurance Company, as reflected by his lawyer’s unequivocal and direct statement that such a claim had not been made in either the complaint or the amended complaint. His tongue-in-cheek statement at the end of the e-mail chain does not satisfy the notice-provision in the insurance policy. Because Yaghnam could marshal no additional evidence supporting that he had a viable claim for breach of contract, any amendment to the complaint to state a claim for breach of contract would be futile.

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