Michigan Court of Appeals; Docket #261717; Unpublished
Judges Meter, Murray, and Schuette; unanimous; per curiam
Official Michigan Reporter Citation: Not applicable, Link to Opinion 
STATUTORY INDEXING:
Calculation of PPI Benefits [3121(3)(5)]
TOPICAL INDEXING:
Not applicable
CASE SUMMARY:
In this unanimous unpublished per curiam opinion, The Court of Appeals held that even though it knew the property damage claims arising from a tank-trailer accident that caused physical damage to a highway overpass and adjacent businesses would exceed the $1 million limit contained in §3121(5), the insurer had no duty to pro rate its distribution of the loss payments among multiple claimants.
In January, 2003, a semi-tractor pulling a tank-trailer carrying liquified petroleum left I-69 and crashed onto railroad tracks beneath the expressway. The accident severely damaged the expressway overpass and the railroad tracks and several other businesses. The damages exceeded the $1 million limit for property protection insurance benefits contained in §3121(5) of the No-Fault Act. After the accident, Farmland began paying claims for the property damage resulting from the accident. By the time the Michigan Department of Transportation (MDOT) submitted its claim for property damage resulting from the accident, Farmland had already paid over $341,000 in other claims. Farmland offered to pay MDOT the amount remaining under the policy limit of $1 million which MDOT claimed was insufficient.
The Court of Appeals upheld the trial court determination there was no statutory duty under §3121(5) requiring Farmland to pro rate the amount of benefits where they exceed the $1 million limit. The Court of Appeals held that the case of Babcock v Liedigk, 198 Mich App 354 (1993) was controlling, and that case held the question of whether insurance proceeds which are insufficient to satisfy claims should be pro rated, is a policy question for the Legislature and, consequently, such a rule should not be imposed by the judiciary. The court rejected MDOT’s attempts to distinguish Babcock, by arguing that unlike Babcock, the no-fault statutory provisions of §3145(2) impose a one-year limitation period for asserting claims. The court stated that even if all potential property damage claims are asserted within one year, determination of the validity of such claims could nevertheless take more than one year if the matter was litigated and appealed. Therefore, Babcock controlled and the trial court order of summary disposition in favor of Farmland on this issue was affirmed.
In a second issue in this case, MDOT asserted Farmland, as the insurer of both the tractor and the trailer, was liable for up to $2 million under the property protection provisions of the No-Fault Act, because that Act mandates that statutory owners of motor vehicles provide security in the form of insurance providing up to $1 million per vehicle, per accident for accidental property damage. The Court of Appeals held MDOT had failed to preserve this issue by failing to raise it in the trial court below and, therefore, the issue could not be raised on appeal.
