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Mt. Carmel Mercy Hospital v Allstate Insurance Company and State Farm Mutual Automobile Insurance Company and Nafso; (COA-PUB, 7/6/1992; RB #1551)


Michigan Court of Appeals; Docket No. 119978; Published  
Judges M. J. Kelly, Jansen, and Lesinski; 2-1 (with Judge Jansen, Dissenting) 
Official Michigan Reporter Citation:  194 Mich App 580; Link to Opinion alt   

One-Year Back Rule Limitation [§3145(1)] 
Tolling of Limitations Upon Submission of Claim [§3145] 
General Rule of Priority [§3114(1)]  
Resident Relatives [§3114(1)]

Equitable Estoppel 
Legislative Purpose and Intent    

In this 2-1 published Opinion by Judge T. John Lesinski, the Court of Appeals reversed summary disposition which had been granted by the trial court in favor of Allstate, based upon the one year statute of limitations contained in §3145(1) of the no-fault act. The basis of the Court of Appeals' reversal of summary disposition, however, was because the court felt that there was a disputed question of fact with regard to the plaintiff’s claim of "promissory estoppel," which claim would be governed by a six year statute of limitations.  

Naima Nafso received injuries in a motor vehicle accident while a passenger in a vehicle driven by her son, Hanne Nafso. Naima filed an application for no-fault benefits with Hanne's insurance company, Allstate. A claims adjuster for Allstate determined that there was a person residing in Naima's household (another son of Naima), who was insured by State Farm. Under the priority provisions of §3114(1), a person injured in an automobile accident is entitled to PIP benefits from his or her own policy if one exists, or from the policy of a spouse, or a relative domiciled in the same household. Based upon the discovery that there was a relative domiciled in the same household with insurance through State Farm, Allstate sent a letter to Naima on February 24,1987, in which he advised Naima of the priority provisions of the no-fault law requiring application to State Farm. Naima assigned her claim for medical expense benefits from Allstate to the provider of those benefits, Mt Carmel Mercy Hospital. Mt Carmel then assigned its claim against Allstate to World Credit, Inc. On November 16,1987, Allstate's adjuster wrote a letter to World Credit stating that Allstate had already informed the attorney for Naima, that Naima's bills must be forwarded to State Farm for payment under that policy. The trial court granted Allstate's motion for summary disposition on the basis of the one year statute of limitations contained in §3145(1) of the no-fault act, requiring that claims for benefits be commenced within one year of the loss incurred. The claim in this case was not filed until August 24,1988. Mt Carmel and the Nafso claimants contended that they were never formally denied benefits by Allstate. They contended that the letter from Allstate dated February 24,1987 was not a formal denial of benefits. Further, they contended that Allstate should be estopped from denying coverage because it had acknowledged that it would process the claim before the statute of limitations period ran out.  

The Court of Appeals found that the letter of February 24,1987 advising that a PIP claim must be filed with State Farm was a formal denial. Consequently, the provisions of §3145(1) were not satisfied. 

However, the court further held that the claim against Allstate based upon a theory of promissory estoppel was not appropriately dismissed under the summary disposition rule. The plaintiff alleged that Allstate, by its conduct and its representations that it was still considering the claim, satisfied the requirements of "promissory or equitable estoppel," and therefore, summary disposition was not appropriate, since that claim would be governed by a six year statute of limitations. Since there was an issue of credibility as to the elements of the claim of promissory estoppel, the Court of Appeals held that summary disposition was inappropriate.  

In her dissent, Judge Jansen would hold that the February 24,1987 letter was, at best ambiguous, and that a question of fact existed regarding the meaning of that letter and whether it was a formal denial of benefits. She, therefore, would reverse the order of the trial court on the basis of the provisions of §3145(1) and case law requiring that until formal denial occurs, that statute of limitations is tolled.  

Lansing car accident lawyer 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

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