Michigan Court of Appeals; Docket #354730; Unpublished
Judges Cavanagh, Servitto, and Kelly; 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
SUMMARY:
In this unanimous unpublished per curiam decision, the Court of Appeals affirmed the trial court’s summary disposition order dismissing Defendant Citizens Insurance Company of the Midwest (“Citizens”) from Plaintiff Lena Brown’s first-party action against both Citizens and Defendant Berkshire Hathaway Homestate Insurance Company (“Berkshire”). The Court of Appeals held that the trial court properly dismissed Citizens—the insurer to which Brown’s claim for PIP benefits arising out of the subject motor vehicle collision was assigned under the Michigan Assigned Claims Plan (MACP)—because Berkshire was higher in priority for payment of Brown’s benefits. Furthermore, the Court held that, because Brown failed to exercise due diligence in attempting to identify a higher priority insurer before turning to the MACP, the proper course of action for the trial court was to dismiss Citizens altogether, as opposed to ordering Citizens to continue paying Brown’s benefits and then seeking reimbursement from the higher priority insurer, as was the Court of Appeals’ prescription in a similar, albeit distinguishable, situation in Spencer v Citizens Ins Co, 239 Mich App 291 (2000).
Lena Brown sustained injuries when she was hit by a car owned by Legacy Medical Transportation, LLC (“Legacy”), and driven by Anthony Ayers. Brown contacted Legacy afterward and asked it to provide her with its no-fault insurance information, and was allegedly told by Legacy that it was insured by Ameriprise. After Brown was informed by Ameriprise that it did not insure the vehicle that struck her, Brown filed an application for benefits with the MACP, who assigned her claim to Citizens. Citizens paid Brown’s benefits until Brown filed a first-party action, seeking additional benefits, against Citizens, Ayers, and Legacy, in which Citizens discovered early on that Berkshire insured either Ayers or Legacy and was therefore the insurer of highest priority. Citizens and Berkshire ultimately reached an agreement which would have dismissed Citizens from the case, but Brown did not agree to the language for a stipulated order doing so. The trial court dismissed Citizens from the case, nonetheless, and further ruled that Brown could not seek payment of any unpaid benefits that accrued in the two months immediately following the collision because of the one-year-back rule, meaning that Brown assumed personal responsibility for a $166,000 ERISA lien being enforced against her.
The Court of Appeals affirmed the trial court’s dismissal of Citizens, first rejecting Brown’s argument that the dismissal was improper because, under Spencer, “ ‘an assigned claim insurer that subsequently ascertains a higher priority insurer cannot thereafter simply refuse to pay the assigned-claim insured party further benefits. Rather, Brown argued, under Spencer, the assigned-claim insurer’s remedy is to seek reimbursement from the higher priority insurer.” The Court of Appeals conceded that “Spencer would thus suggest that the trial court was incorrect to dismiss Citizens from the case and that the proper course of action would have been to require Citizens to keep paying benefits but instruct Citizens to seek reimbursement from Berkshire.” However, the Court held that Spencer was not controlling in this case—and that the trial court did not err in dismissing Citizens—because the fact that Brown failed to exercise due diligence in identifying Berkshire, the insurer with priority responsibility for paying her benefits, was the only reason Citizens ended up paying Brown’s claims in the first place.
“Thus, there existed an active policy of no-fault insurance issued by Berkshire that was identifiable at an early date through reasonable diligence. Citizens, in fact, was the one who identified the Berkshire policy through discussions with Ayers’ counsel less than a year after being assigned the claim by the MACP. There is no articulable reason why plaintiff could not have made such a discovery prior to filing her application with MACP or at least within a very short time after filing suit.”
The Court of Appeals further rejected Brown’s argument that dismissal was improper because it would effectively leave her “solely responsible for the unpaid benefits arising before March 7, 2018,” including the aforementioned ERISA lien. The Court of Appeals held that Brown failed to support this argument with any legal reasoning and that, regardless, Brown’s failure to exercise due diligence in identifying Berkshire was also dispositive of this issue.
“Second, even if it were not abandoned, plaintiff’s argument fails in light of the analysis above, which establishes that, because she did not exercise reasonable diligence in attempting to identify insurance for the vehicle, plaintiff was not entitled to benefits through the MACP initially. Therefore, since any benefits to which plaintiff is entitled are recoverable only from Berkshire, plaintiff’s argument has no traction. Addressing the issue of whether she should be responsible for the unpaid medical bills arising before March 7, 2018, would have required plaintiff to make an argument regarding the trial court’s decision on the one-year-back rule, but plaintiff has made no such argument.”
