Michigan Court of Appeals; Docket #246255; Unpublished
Judges Zahra, Murphy and Cavanagh; unanimous; per curiam
Official Michigan Reporter Citation: Not applicable, Link to Opinion 
STATUTORY INDEXING:
Not applicable
TOPICAL INDEXING:
Underinsured Motorist Benefits: Notice and Statute of Limitations for Underinsured Motorist Coverage
CASE SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals affirmed summary disposition for defendant no-fault insurance company on plaintiff’s claim for underinsured benefits based on lack of proper and timely notice. The plaintiff in this case settled with the driver who hit her for $20,000 without first notifying defendant, her insurance carrier. Defendant then denied her claim for underinsured benefits, citing the notice provision in the no-fault insurance policy. The Court of Appeals found that the policy language clearly and unambiguously required that notice of tentative settlements related to body injury liability policies be given. In this regard, it stated:
“The first paragraph requires that the insured pursue, and be legally entitled to, the limits of any applicable bodily injury liability bonds or policies before coverage is available. The second paragraph clearly obligates the insured to notify defendant of any tentative settlement – meaning before the settlement is agreed to and finalized – and to allow defendant thirty days to pay the settlement and preserve its right to subrogation. The first provision is not contradictory to this obligation because, by stating that defendant ‘will pay under this coverage only if 1. or 2. below applies,’ that provision merely establishes that the insured will not be able to recover unless either of the two scenarios are met. . . . However, even if this provision was confusing, the notice requirement was made clear in another provision in the contract, entitled ADDITIONAL DUTIES,’ which states:
‘A person seeking coverage under this endorsement must also promptly:
1. Send us copies of the legal papers if a suit is brought; and
2. Notify us in writing of a tentative settlement between the ‘insured’ and the insurer of the ‘underinsured motor vehicle’ and allow us 30 days to advance payment to that ‘insured’ in an amount equal to the tentative settlement to preserve our rights against the insurer, owner, or operator of such ‘underinsured motor vehicle.’”
(Emphasis in original)
The court then found plaintiff did indeed fail to provide proper notice where plaintiff provided the notice after she had already entered into the release. In this regard, the court stated:
“Defendant does not dispute that on September 9, 1999, it received a letter dated September 1, 1999, notifying it of plaintiff’s intent to claim underinsured benefits. But this ‘notice’ was ineffective because, at that point, plaintiff had already released Hogains from liability without defendant’s consent or knowledge, thereby destroying defendant’s right to subrogation. Because plaintiff’s claim was officially settled on August 16, 1999, plaintiff had an obligation to notify defendant of the tentative settlement thirty days before that, or on July 16, 1999. Without concluding whether it constituted valid notice, we note that the earliest evidence of any type of prior notice was the July 20, 1999 letter from Hogains’ attorney to plaintiff’s counsel indicating that defendant’s counsel has knowledge of the release. Accordingly, the trial court properly granted defendant summary disposition because there is no question of material fact that plaintiff breached the unambiguous notice requirement of her insurance policy when she released Hogains, and, thereby, forfeited her right to claim underinsured motorist benefits.”
