Michigan Court of Appeals; Docket #285883; Unpublished
Judges Saad, O’Connell, and Zahra; unanimous; per curiam
Official Michigan Reporter Citaiton: Not applicable, Link to Opinion 
STATUTORY INDEXING:
Procedures applicable to disputes between two ore more insurers [3172(3)]
Rule making regarding operation of the Assigned Claims Facility [3175(1)]
TOPICAL INDEXING:
Not applicable
CASE SUMMARY:
In this unpublished unanimous per curiam opinion, the Court of Appeals determined that the Assigned Claims insurer properly provided the injured person personal injury benefits without first determining whether those benefits should be paid by another insurer. However, the court found that the Assigned Claims insurer was only entitled to loss adjustment costs under Administrative Rule 11.105, but was not entitled to attorney fees.
This case involves injuries sustained by Hassan Sareini which he incurred in an accident while he was a passenger in his father’s vehicle. At the time of the accident, Sareini’s father was not in the vehicle. Before the accident occurred, Sareini’s father attempted to purchase insurance through defendant Great Lakes Casualty Insurance Company, but his check was denied for insufficient funds and Great Lakes voided the policy. Sareini sought benefits from the Michigan Assigned Claims Facility which, in turn, assigned the claim to plaintiff Allstate Insurance Company. After Allstate paid personal injury protection benefits on behalf of Sareini, it filed a declaratory judgment action seeking reimbursement from Great Lakes. The trial court found that Great Lakes was required to reimburse Allstate for the personal injury protection benefits but not for loss adjustment costs or attorney fees.
On appeal, Great Lakes argued that Allstate was not entitled to reimbursement because it should have known that Great Lakes had “acknowledged coverage before the date that Allstate received Sareini’s assigned claim yet Allstate failed to deny the claim.” The court rejected Great Lakes’ assertion, stating that under MCL 500.3175(1), an insurer to whom a claim is assigned must make prompt payment for the loss in accordance with the No-Fault Act. The court noted that the provision is mandatory. It further stated that Great Lakes provided no authority that Allstate could unilaterally overturn the Assigned Claims Facility’s determination that Sareini was “not ‘obviously ineligible’” for personal injury protection benefits. In short, the court stated that there is “no statutory authority allowing Allstate to deny a claim assigned by the ACF.”
On cross-appeal, Allstate argued that it was entitled to reimbursement for loss of adjustment costs and attorney fees under Administrative Rule 11.105, which was promulgated pursuant to MCL 500.3175. Great Lakes argued that because this issue involved a dispute between two insurers, under MCL 500.3171(3)(f) and Spectrum Health v Grahl, 270 Mich App 248; 715 NW2d 357 (2006), such fees are not available. The Court of Appeals agreed with Allstate and reversed in part, noting that R 11.105 “provides a specific right to the servicing insurers . . . allowing recovery of ’appropriate loss adjustment costs.’” However, because the provision did not provide for attorney fees, the court found that Allstate was only entitled to loss adjustment costs. In this regard, the court stated:
“[U]nlike MCL 500.3172(3)(f), R 11.105 does not condition reimbursement on a ‘dispute’ between two insurers. Rather, R 11.105 provides a specific right to the servicing insurers distinct from MCL 500.3172(3)(f) allowing the recovery of ‘appropriate loss adjustment costs.’ Accordingly, Allstate is entitled to reimbursement of loss adjustment costs pursuant to R 11.105. However, because R 11.105 does not address attorneys’ fees, the trial court correctly denied Allstate’s request for attorneys’ fees pursuant to Spectrum.”
