Michigan Court of Appeals; Docket No. 165231; Published
Judges Corrigan, Hoekstra, and Deegan; Unanimous; Opinion by Judge Corrigan
Official Michigan Reporter Citation: 215 Mich App 415; Link to Opinion
Uninsured Motorist Benefits
Canadian Accidents and Citizens
Private Contract (Meaning and Intent)
Revised Judicature Act – Arbitration (MCL 600.5001, et seq.)
In this published Opinion authored by Judge Corrigan, the Court of Appeals examined the application of Ontario law requiring uninsured motorist coverage in the amount of $200,000, with respect to a policy of Michigan no-fault insurance. Plaintiff Auto Club initiated this action against its insured, George Lozanis, a Macomb County resident, who was injured while driving his vehicle insured by plaintiff while traveling in Ontario, Canada. The ACIA policy provided uninsured motorist coverage with limits in the amount of $20,000. However, Ontario law requires insurance carriers to provide at least $200,000 of coverage for uninsured motorist benefits. Lozanis claimed that Auto Club was obligated to provide $200,000 in coverage because the accident occurred in Ontario.
ACIA refused to pay defendant more than the $20,000 policy limits. Lozanis then filed suit in Ontario, although the policy contained a clause providing for disputes over uninsured motorist coverage to be resolved through arbitration. Based upon this provision, ACIA filed suit in Macomb County seeking to enjoin defendant's Ontario suit. The trial court in this suit held that the insured was obligated to arbitrate his claim before filing suit in Ontario. The insured appealed.
The Court of Appeals began its analysis by noting that since the defendant contracted with the insurer in Michigan, Michigan law governs the interpretation of the insurance agreement. As the policy provides for the arbitration of disputes over uninsured motorist coverage, defendant should have initiated arbitration against ACIA before filing a suit in Ontario. Therefore, the Court of Appeals held that the circuit court properly ordered arbitration and enjoined defendant from pursuing the Ontario case.
The Court of Appeals next addressed the amount of uninsured motorist coverage available, and since the policy provided that the amount of uninsured motorist coverage was not arbitrable, it was proper for the circuit court to make this determination. The trial court received into evidence a document entitled "Power of Attorney and Undertaking" which had been filed by ACIA with the Canadian government. This document provided that the amount of coverage on ACIA insured vehicles utilized in Canada would not be less than the amounts required by Canadian law, which, in Ontario, was $200,000 for uninsured motorist coverage. Based upon this document, the court found that $200,000 in uninsured motorist coverage was available to the defendant insured for the accident.
On cross-appeal, the defendant argued that ACI A waived the right to arbitration by participating in the Ontario suit for two years. However, one of the defenses raised by the insurer in the Ontario suit was that the case was barred by defendant's failure to initiate arbitration. As ACIA's conduct in the Ontario suit was consistent with its right to arbitration, it did not operate as a waiver of the right to demand arbitration.