Michigan Court of Appeals; Docket No. 174510; Published
Judges Markman, Wahls, and Mester; Unanimous; Opinion by Judge Markman
Official Michigan Reporter Citation: 216 Mich App 217; Link to Opinion 
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Uninsured Motorist Benefits
Revised Judicature Act – Miscellaneous Provisions
CASE SUMMARY:
In this published Opinion authored by Judge Markman, the Court of Appeals held that the plaintiff insurance company was entitled to seek reimbursement of uninsured motorist benefits it paid from the uninsured motorist tortfeasor under the doctrine of equitable subrogation. The court also found the insurer entitled to reimbursement from the uninsured tortfeasor for the amount paid to its insured's estate for a no-fault first-party funeral benefit.
Plaintiffs insured was a minor who, while riding his bicycle, was struck and fatally injured by an uninsured car owned and driven by the defendant. The insurance company brought suit against the uninsured defendant, seeking $100,000, the limits of its uninsured motorist coverage, plus $1,750, representing the funeral benefit paid to the estate. Apparently, the insurance company had not paid the uninsured motorist benefits prior to filing suit, but subsequently entered payment before adjudication of the suit against the uninsured motorist by the trial court.
The insurance company brought suit as subrogee of the decedent's parents. The trial court held that the insurance company was, in essence, bringing a wrongful death action which could only be brought by the decedent's estate, pursuant to the wrongful death statute, MCLA 600.2922. Accordingly, the trial court granted summary disposition in favor of the defendant.
The Court of Appeals reversed. First, it noted that under §3177 of the no-fault act, the insurer has a direct cause of action against an uninsured motorist for personal protection insurance benefits paid, including the no-fault funeral benefit. Therefore, the insurance company had a direct cause of action for the $1,750 funeral benefit it had paid.
Second, the Court of Appeals found that plaintiffs complaint plead facts sufficient to state a cause of action for equitable subrogation as to the amounts it had paid in uninsured motorist coverage. The court described this cause of action as follows:
"The doctrine of equitable subrogation rests upon the principle that 'one who, in order to protect a security held by him is compelled to pay a debt for which another is primarily liable, is entitled to be substituted in the place of and to be vested with the rights of the person to whom such payment is made without agreement to that effect.'"
The court found that an action for equitable subrogation is independent of the wrongful death act and, therefore, is not subject to the requirements of that statute. In dicta, the court noted that the insurer's action for subrogation would not diminish the recovery or right of action that might be brought under the wrongful death statute by the personal representative of the decedent's estate, citing the collateral source rule. However, the court did not address the potential situation that could arise from its ruling where a tortfeasor could be liable to the decedent's estate for the full amount of damages, in addition to the amount of damages paid to the insurer under the doctrine of equitable subrogation.
The defendant claimed that the subrogation action was barred by the statute of limitations, the suit having been brought more than three years after the incident giving rise to the claim. However, the court found that the appropriate statute of limitations was six years under MCLA 600.5807(8), rather than the three year statute of limitations for personal injury claims. The claim for equitable subrogation was also subject to the equitable doctrine of laches, but such can be invoked only where the defendant can demonstrate prejudice resulting from a delay. Here, no prejudice had been claimed or proven by the defendant, and, accordingly, the court held that laches did not bar the action. Finally, defendant claimed that the cause of action for equitable subrogation was premature when the insurer's complaint was filed, because no payment had been made at that time. However, the court found that the claim had ripened when the insurer made payment of the uninsured motorist benefits, which occurred prior to the entry of judgment. The Court of Appeals held that the claim related back to the filing of the complaint and thus could be properly litigated to conclusion in this proceeding.
