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Lee v Auto Owners Insurance Company and Abood, Abood & Rheaume, P.C.; (COA-PUB, 12/29/1994; RB #1759)


Michigan Court of Appeals; Docket No. 175571; Published  
Judges Michael J. Kelly, Marilyn Kelly, and Connor; Unanimous; Opinion by Judge Connor  
Official Michigan Reporter Citation:  218 Mich App 672; Link to Opinion alt   

Not Applicable

Underinsured Motorist Coverage: Underinsured Motorist Coverage in General  
Underinsured Motorist Coverage: Exclusions from Underinsured Motorist Benefits  
Underinsured Motorist Coverage: Arbitration of Underinsured Motorist Claims  
Private Contract (Meaning and Intent)   

In this published Opinion authored by Judge Connor, the Court of Appeals held that an injured party who had settled with and released a tortfeasor was precluded from filing suit against his insurance carrier for underinsured motorist benefits, and further, was barred from compelling arbitration to seek such coverage.  

This case returned to the Court of Appeals on remand from the Supreme Court in lieu of granting leave to appeal. In its first Opinion (Item No. 1638), the Court of Appeals affirmed the trial court's dismissal of plaintiffs claim against the defendant insurance company for underinsured motorist benefits where the plaintiff had eliminated his insurer's subrogation rights against the tortfeasor by entering into a settlement and release with the tortfeasor without the knowledge or consent of his insurance company. The Court of Appeals also held in its first opinion that while plaintiff could not maintain a lawsuit against his insurance company, he was entitled to seek arbitration of the uninsured motorist claim. On remand from the Supreme Court, however, the court reconsidered the issue and held that since plaintiff had failed to abide by the terms of the insurance contract by initiating a lawsuit and settlement with the third-party tortfeasor without the knowledge or approval of the insurance company, he was precluded from enforcing his arbitration rights under the policy. However, in rendering its opinion, the court noted that, "no public policy argument had been urged by the parties . . . .Moreover, at no time did plaintiff assert a right to arbitration."

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