United States District Court, Eastern District of Michigan; Case #13-12389
Hon. Thomas L. Ludington
Official Michigan Reporter Citation: Not Applicable; Opinion Not Available 
STATUTORY INDEXING:
Allowable Expenses for Products and Medical Equipment [§3107(1)(a)]
Allowable Expenses for Attendant Care [§3107(1)(a)]
Allowable Expenses for Handicapper Motor Vehicles [§3107(1)(a)]
Allowable Expenses for Medical Treatment [§3107(1)(a)]
Allowable Expenses for Home Accommodations [§3107(1)(a)]
Allowable Expenses for Room and Board [§3107(1)(a)]
Allowable Expenses for Rehabilitation [§3107(1)(a)]
One-Year-Back Rule Limitation [§3145(1)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this written Opinion involving the application of the one-year-back rule in MCL 500.3145(1) to a claim for PIP benefits, Federal Judge Thomas L. Ludington held that equitable estoppel and alleged fraud did not save plaintiff’s claim for benefits from being dismissed under the one-year-back rule because, although those doctrines were legally available to plaintiff, they were not supported by sufficient facts to trigger their application in this case.
Plaintiff, who was injured in an accident, claimed the doctrines of equitable estoppel and fraud were triggered by defendant insurer’s conduct, including not paying for all the care that was provided to plaintiff, not paying for care at a reasonable rate, and not fully explaining the statutory benefits to plaintiff and his family. Defendant argued that plaintiff’s recovery was limited by the one-year-back rule in §3145(1), which kept plaintiff from seeking damages one year back from the date plaintiff filed the complaint in this case. Plaintiff urged the court to ignore the one-year-back rule’s limitation on damage, asserting that defendant either committed fraud or there were other “unusual circumstances” that called for equitable estoppel to apply in this case.
Judge Ludington held that the one-year-back rule limited plaintiff’s claims. He said:
“[A]pplication of the doctrine of equitable estoppel in the insurance context requires the insured to establish ‘that the insurer induced a belief through acts, representations, or silence regarding coverage or lack thereof, the insured justifiably relied on this belief, and the insured was prejudiced as a result of the reliance.’”
According to Judge Ludington, plaintiff did not present any facts to show that defendant accepted an obligation to explain to him or his family the benefits that were provided in his policy. The judge said:
“Nor does he allege that the No-Fault Act obligated State Farm to explain his benefits. … Schwein offers nothing to demonstrate that equitable estoppel should limit application of the one-year-back rule in this case. Simply put, Schwein’s pleadings do not identify any ‘undoubted’ wrong that must be prevented through application of the doctrine of equitable estoppel. … Moreover, even if Schwein had established such an obligation on State Farm’s part, he does not allege that its failure to explain benefits ‘induced a belief’ that he ‘justifiably relied on.’ Accordingly, Schwein’s argument that equitable estoppel should apply here is without merit.”
In addition, Judge Ludington held that plaintiff did not identify with particularity any misrepresentations or fraud committed by defendant that would limit the application of the one-year-back rule. He said:
“Schwein does not indicate when or where State Farm committed fraudulent conduct or material misrepresentations. He does not identify any misrepresentations. His vague allegation that State Farm ‘did not fully explain benefits,’ … is not sufficient to satisfy fraud’s particularity pleading requirement. Thus, at this point, the No-Fault Act’s one-year-back rule cannot be ignored because of fraudulent conduct.”
As a result, Judge Ludington granted in part and denied in part defendant’s motion to dismiss. He also dismissed that part of plaintiff’s complaint seeking no-fault benefits that incurred before April 29, 2012, which was one year back from the date plaintiff filed his complaint in this case.
