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Auto Club Insurance Association v New York Life Insurance Company; (MSC-PUB, 6/20/1992; RB #1570)


Michigan Supreme Court; Docket No. 90604; Published 
Opinion by Justice Griffin; Unanimous 
Official Michigan Reporter Citation:  440 Mich 126; Link to Opinion alt  

One-Year Back Rule Limitation [§3145(1)]  
Applicability of Limitations Period to Claims by Insurers Against Other Insurers [§3145]

No-Fault Insurer Claims for Reimbursement    

In this unanimousOpinion by Justice Griffin, the Supreme Court reversed the Court of Appeals in Item No. 1436 and held that the one-year statute of limitations contained in §3145 of the no-fault statute does not apply to a common law subrogation action filed by a coordinated no-fault insurer against a health insurer seeking to recoup certain no-fault benefits the coordinated no-fault insurer paid an injured automobile accident victim that should have been paid by the coordinated health insurer under the Federal Kemper decision. In reversing the Court of Appeals, the Supreme Court held that the one-year statute of limitations contained in §3145, by its terms, applies to "an action for recovery of personal protection insurance benefits payable under this chapter...." The subrogation action of a coordinated no-fault insurer seeking recoupment from a health insurer is not an action for recovery of PIP benefits under the no-fault act. In this regard, the Supreme Court stated, "because a suit brought by an insured against New York Life to enforce its health and accident insurance contract would not be an action for recovery of personal protection insurance benefits payable under the no-fault act, we believe it would distort the meaning and purpose of the statute to apply its brief limitation period to this common law contract action. ACIA, as subrogee, stepped into the shoes of its insured and sued on the same claim that would have been available to its insured; thus, we conclude that the present action falls outside the scope of §3145(1)." In so holding, the Supreme Court held that this subrogation claim would be controlled by the six-year contract statute of limitations.  

The Supreme Court also rejected defendant New York Life's argument that because its insured elected to coordinate health and accident coverage with his no-fault coverage, New York Life became in effect a no-fault insurer and that the benefits available to its insured under its health coverage therefore were converted to no-fault benefits within the meaning of §3145(1). The court noted that an election to coordinate no-fault benefits with health benefits does not have the effect of rendering the health insurer subject to the no-fault act's provisions relating to payment of benefits. For example, the health insurer is not subject to the statutory interest penalties of §3142 and is not required to pay attorney fees under §3148. The court noted, "just as coordination with the no-fault policy does not subject New York Life to these costly requirements of the no-fault act, coordination does not entitle New York Life to invoke the relatively short limitation period of §3145(1)."

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