Injured? Contact Sinas Dramis for a free consultation.


Progressive Michigan Ins Co v Citizens Ins Co of America; (COA-UNP, 12/15/2011; RB #3228)


Michigan Court of Appeals; Docket No. 298331; Unpublished
Judges Murphy, Jansen, and Owens, Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion alt 

General Rule of Priority [§3114(1)] 
Exception for Employer Provided Vehicles [§3114(3)]
One-Year Back Rule Limitation [§3145(1)]
Applicability of Limitations Period to Claims by Insurers Against Other Insurers

Interpretation of Insurance Contracts

In this unanimous unpublished per curiam Opinion, the Court of Appeals held in this declaratory action that Progressive (which issued a commercial insurance policy for a “farm truck” used exclusively for commercial purposes) was the priority insurer under the general priority rules set forth in MCL 500.3114(1) because the truck was not involved in the accident, and the policy listed the truck’s owner personally as the “named insured.”  The Court further held that the one-year- back rule set forth in MCL 500.3145 did not bar Defendant Citizens’ counterclaim for reimbursement either because the counterclaim related back to its original answer or because “the issues concerning [reimbursement] . . . were already squarely before the court when Progressive filed suit,” which both occurred within the one-year period.

This case involves a priority dispute that arose after Plaintiff Progressive’s insured, Doug Alt, was injured in a single car rollover accident while driving his Mercedes Benz, which was titled and registered in his name.  The accident occurred on 9/6/2008, and at that time, Alt lived with his parents, who actually insured the vehicle in their name under a policy issued by Defendant Citizens.  Doug Alt was listed as a named driver under that policy, and following the accident, Citizens began paying Alt’s PIP benefits. Importantly, at the time of the accident, Doug Alt also owned a work truck he used in his commercial farming business, “Doug Alt Farms, LLC.”  The work truck was titled in Doug Alt’s name personally and was insured under a commercial policy issued by Progressive, which provided PIP coverage and specifically listed “Doug Alt” as a named insured.  Citizens soon found out about the work truck and the Progressive policy and notified Progressive that it deemed Progressive to be the first-priority insurer. 

Progressive denied coverage and went on to file a declaratory action on 3/11/2009 wherein Progressive sought to have Citizens declared to be the priority insurer and that “Progressive does not owe Citizens reimbursement.”  Eventually, Progressive filed a motion for summary disposition arguing that its policy did not provide coverage because the accident did not involve the commercial vehicle.  Citizens opposed Progressive’s motion and eventually asserted a counterclaim, on 2/01/2010, for reimbursement of the PIP benefits it had paid to Doug Alt,  which Progressive opposed arguing that the one-year-back rule set forth in MCL 500.3145 precluded Citizens’ reimbursement. Citizens then argued that evidence was produced showing that Progressive initially acknowledged coverage; therefore, fraud and/or misrepresentation made the one-year-back rule inapplicable under the circumstances. 

Ultimately, the trial court ruled in favor of Citizens as to both priority and reimbursement but did so without addressing the fraud and/or misrepresentation. This appeal followed, and the Court of Appeals affirmed as to both Progressive’s priority and the inapplicability of the one-year-back rule.

In deciding the issue of priority, the Court looked to MCL 500.3114 and first considered whether subsection (1) or (3) was controlling.  The Court went on to find that because Doug Alt was not an occupant of the commercial vehicle at the time of the accident, subsection (3) did not apply here.  The Court then found that subsection (1) clearly made Progressive the priority insurer under the general rules of priority because “Alt had PIP coverage under his own policy, i.e., the Progressive policy pursuant to which he was the named insured; therefore, Progressive would be the responsible insurer consistent with the language of MCL 500.3114(1).”  In doing so, the Court expressly rejected Progressive’s argument that the commercial policy only insured the “identified motor vehicle, rather than an injured individual.” 

The Court further rejected an argument advanced by Progressive that the parties clearly intended “Doug Alt Farms, LLC” to be the named insured and the policy should therefore be construed accordingly under the Latent Ambiguity Doctrine.   Declining to apply the doctrine, the Court explained:

"We decline to invoke the latent ambiguity doctrine. A latent ambiguity arises when contractual language appears to be clear and intelligible, suggesting only a single meaning, but there is evidence outside the contract itself creating the necessity for interpretation or a choice among two or more potential meanings. Shay v Aldrich, 487 Mich 648, 668; 790 NW2d 629 (2010). The Shay Court recognized that in the context of an insurance contract, outside or parol evidence creating a doubt as to which person was to receive the benefit of an insurance policy can support application of the latent ambiguity doctrine, even though a specific person was clearly named as the beneficiary in the policy. Id. at 669. Here, Progressive claims that Doug Alt Farms, LLC, should be deemed the named insured given the surrounding circumstances and despite the fact that Alt himself was clearly listed as the named insured in the policy. Although Progressive accurately indicates that the farm truck was used solely for purposes of conducting the business and that the policy was labeled a commercial policy, the farm truck, for whatever reason, was nonetheless titled in Alt’s name personally, not the LLC’s, and Progressive never elicited testimony from Alt, or any of its own agents for that matter, that Alt was mistakenly listed as the named insured and that the LLC should have been the named insured. Taking this into consideration in conjunction with the fact that Progressive never expressly raised the latent ambiguity doctrine below, we decline to invoke the doctrine."

Thus, because the Progressive policy listed Doug Alt personally and the accident did not involve the commercial vehicle, Progressive was the priority insurer under the commercial policy pursuant to § 3114(1).

The Court next considered whether the trial court properly determined that the one-year-back rule was inapplicable under the circumstances and went on to find two reasons for not applying the rule here.  First, the Court found that “under MCR 2.118(D), Citizens’ counterclaim related back to the date that its answer was filed, May 5, 2009, which was eight months after the accident occurred, thereby satisfying MCL 500.3145.”  Additionally, the court reasoned that “an action was effectively commenced for purposes of the timelines in MCL 500.3145 when Progressive filed suit,” further explaining that such relief is appropriate in declaratory actions:

“in the prayer for relief, Progressive asked the trial court, in part, to declare that “Progressive does not owe Citizens any reimbursement as a matter of law” and that “Progressive does not owe Citizens any No-fault interest, costs or attorney fees as a matter of law.” The issue of recoupment was necessarily subsumed by the declaratory judgment action. Regardless of the counterclaim, the issues concerning whether Citizens was entitled to recoup PIP payments and the amount of recoupment, as well as questions with respect to costs and attorney fees, were already squarely before the court when Progressive filed suit, which was approximately six months after the accident. “Further necessary or proper relief based on a declaratory judgment may be granted, after reasonable notice and hearing, against a party whose rights have been determined by the declaratory judgment.” MCR 2.605(F). “[U]nder MCR 2.605(F), a court is empowered to grant money damages as are necessary or proper in a declaratory judgment action.” Hofmann v Auto Club Ins Ass’n, 211 Mich App 55, 90; 535 NW2d 529 (1995). Accordingly, given the nature of Progressive’s complaint, the court determinations that would have to be made in resolving the complaint, and considering the associated available relief, we find that MCL 500.3145 did not preclude recovery by Citizens, even though Progressive initiated the suit.”

Michigan auto accident attorney Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit

Copyright © 2023  Sinas Dramis Law Firm, George Sinas, Stephen Sinas.
All Rights Reserved.
Login (Publishers Only)