Michigan Court of Appeals; Docket No. 289467; Published
Judges Saad, Hoekstra, and Murray; unanimous
Official Michigan Reporter Citation: 288 Mich. App. 310, Link to Opinion 
STATUTORY INDEXING:
Not applicable
TOPICAL INDEXING:
Uninsured Motorist Coverage: Notice and Statute of Limitations for Uninsured Motorist Benefits
CASE SUMMARY:
In this published unanimous opinion by Judge Saad, the Court of Appeals held that a one-year limitation on uninsured motorist claims, that was in effect prior to the enactment of the Financial and Insurance Services’ Notice and Order of Prohibition pursuant to MCL 500.2236(5), Order No. 05-060-M, which disapproved no-fault insurance forms that provided for contractual limitations for less than three years and was renewed without change afterward, was grandfathered in and was therefore enforceable.
In this case, the plaintiff was injured in a motor vehicle accident that occurred after the effective date of the Financial and Insurance Services’ Notice and Order of Prohibition pursuant to MCL 500.2236(5), Order No. 05-060-M. Plaintiff sought uninsured motorist benefits from defendant after the one-year period had expired. Defendant denied plaintiff’s request for UIM benefits because she failed to file suit within one year after the accident as provided by its UIM benefit provision. The plaintiff sued, arguing that the provision was void pursuant to the Order. The trial court agreed and granted plaintiff’s motion for summary disposition.
On appeal, defendant argued that because its policy was in effect before the Order’s effective date and because it did not change the policy when it was renewed after the Order was enacted, the one-year policy provision was enforceable. The Court of Appeals agreed, noting that although the Order prohibits policies or riders that limit the time to file suit for UIM benefits to less than three years, the Order provides an exception where the insurer was using the same policy prior to the date of the Order. The court further noted that although the Order prohibits modification of such forms, it does not prohibit their renewal or reissuance. Moreover, the Order specifically provided that the Commissioner was not taking any action in regard to the grandfathered policies or riders. Therefore, the court determined that the trial court improperly found that the one-year contractual limitation policy was unenforceable. In this regard, the court stated:
“Although McDonald, 480 Mich 191, and McGraw, 274 Mich 298, are instructive, they do not address the precise question presented here of whether Order No. 05-060-M prohibits the renewal of grandfathered policies after December 16, 2005. In both McDonald and McGraw, the insured’s claims arose before the Commissioner’s orders were issued. Plaintiff contends that under the automatic renewal process for her own policy, once the policy period expires and the policy is renewed, the renewed policy becomes subject to the requirements of Order No. 05-060-M. This is a misreading of Order No. 05-060-M.
Order No. 05-060-M prohibits the issuance, advertisement, or delivery of policies or riders that limit the time to file a claim or commence suit for uninsured motorist benefits to less than three years, but it unambiguously provides an exception where the insurer ‘was legally using that policy or rider form in Michigan prior to the date of this notice and order of prohibition.’ The order prohibits the modification of such forms, but it does not prohibit their renewal or re-issuance. Indeed, the language of the order further states that an insurer is not prohibited ‘from continuing to use any policy or form or rider that it may have been legally using in Michigan prior to the date of this notice . . . so long as such policy or rider was not revised in any respect.’ Moreover, the order indicates that the Commissioner was ‘currently considering what action is appropriate with regard to those policies or riders in use before the date of this notice and order’ and commented that it ‘may withdraw approval of those forms as provided in section 2265(5) at a future time.’ The order contains no sunset provision or expiration date for forms currently in use, nor does it prescribe any prohibition on renewal. Plaintiff’s argument is based on an attempt to read terms into the order that are not expressed, or even implied, by its plain language.
And, importantly, the order specifically states that the commissioner was not, at that time, taking any action with respect to the grandfathered policies and riders. The order further provides that future action, including withdrawal of approval, was under consideration. These provisions are clearly inconsistent with plaintiff’s preferred interpretation of the order. The trial court clearly erred in ruling that defendant’s one-year contractual limitations period was unenforceable.”
(emphasis in original)
