Michigan Court of Appeals; Docket #319778; Published
Judges Hoekstra, Markey, and Donofrio; Unanimous; Per Curiam
Official Michigan Reporter Citation: 311 Mich App 528 (2015); Link to Opinion 
STATUTORY INDEXING:
Personal Protection Insurance (PIP) Benefits Entitlement [§3105]
PIP Benefits Defined; Waiver of Work Loss Benefits [§3107]
TOPICAL INDEXING:
Collateral Estoppel and Res Judicata
Uninsured Motorist Benefits
CASE SUMMARY:
In this unanimous published per curiam Opinion, the Court of Appeals held that the prior settlement of plaintiff’s PIP claim did not bar plaintiff’s subsequent claim for UM benefits under the doctrine of res judicata, because the issues in the PIP claim were different than those implicated in the UM claim.
Plaintiff was injured in an auto accident and filed an action against State Farm for PIP benefits. The PIP claim settled. Plaintiff then brought a third-party negligence suit against the driver of the other car and the car’s owner, as well as a breach-of-contract claim against State Farm, asserting it was obligated to provide UM benefits. State Farm moved for summary disposition. The trial court ruled that res judicata barred plaintiff’s claim against State Farm because plaintiff could have raised it in the first action against State Farm. The trial court entered a $250,000 default judgment in plaintiff’s favor. Plaintiff appealed, arguing res judicata did not bar the breach-of-contract claim against State Farm.
The Court of Appeals held that res judicata did not bar plaintiff’s UM suit against State Farm, finding that plaintiff could not have raised the claim in the first action against State Farm. In this regard, the Court of Appeals said:
“[W]e conclude that although plaintiff’s PIP claim and plaintiff’s tort/UM contract claim both arise from the same automobile accident, the claims also have significant differences in the motivation and in the timing of asserting the claims, and they often do not form a convenient trial unit. Further, applying res judicata to the facts of this case would not promote fairness and would be inconsistent with the Legislature’s intent expressed through the no-fault act. The no-fault act provides for the swift payment of no-fault PIP benefits.”
To reach this determination, the Court of Appeals relied on its recent decision in Miles v State Farm Mutual Auto Ins Co (Docket #311699), which addressed the precise issue in this case. The court adopted the Miles reasoning as its own and said:
“[T]here is a substantial overlap between the facts involved with both claims. But that being said, there are also significant differences between the two types of claims. A person injured in an accident arising from the ownership, operation, or maintenance of a motor vehicle as a motor vehicle is immediately entitled to PIP benefits without the need to prove fault. … In contrast to a claim for PIP benefits, in order to establish his or her right to uninsured motorist benefits, an injured person must — as provided in the insurance agreement — be able to prove fault: he or she must be able to establish that the uninsured motorist caused his or her injuries and would be liable in tort for the resulting damages. … Thus, while an injured person will likely have all the facts necessary to make a meaningful decision to pursue a PIP claim within a relatively short time after an accident, the same cannot be said for the injured person’s ability to pursue a claim for uninsured motorist benefits. Finally, an injured person’s claim for uninsured motorist benefits involves compensation for past and future pain and suffering and other economic and noneconomic losses rather than compensation for immediate expenses related to the injured person’s care and recovery. … Consequently, a claim for PIP benefits differs fundamentally from a claim for uninsured motorist benefits both in the nature of the proofs and the motivation for the claim. … Because [plaintiff’s] claim for uninsured motorist benefits was not one that could have been litigated during the time of his original lawsuit, his failure to bring his claim for uninsured motorist benefits did not implicate the doctrine of res judicata.”
The Court of Appeals further noted that PIP claims generally have a one-year limitations period. In this regard, the court said:
“[W]e must conclude that a UM claim may not yet be ripe for litigation until after a PIP claim must be filed. Consequently, applying res judicata to essentially require mandatory joinder of a mere potential UM claim with a PIP claim would be inconsistent with the very divergent statutory treatment of these two very different types of no-fault claims.”
Based on the foregoing, the Court of Appeals reversed and remanded for further proceedings.
