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Transamerica Insurance Corporation v Blue Cross and Blue Shield of Michigan; (COA-UNP, 3/20/1991; RB #1452)


Michigan Court of Appeals; Docket Nos. 119157 and 120497; Unpublished   
Judges MacKenzie, McDonald, and Murphy; Unanimous; Per Curiam  
Official Michigan Reporter Citation:  Not Applicable; 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 unanimous per curiam Opinion, the Court of Appeals affirmed grant of summary disposition in favor of the no-fault insurer on the basis of the statute of limitations contained in §3145(1).  

Susan Swartout sustained severe closed head injuries in a May 26,1984 automobile accident. She was covered under a coordinated no-fault insurance policy issued by Transamerica. She was also covered under a group health insurance policy issued by Blue Cross/Blue Shield to her husband, from whom she had been divorced five days before the accident. Swartout was removed from the Blue Cross/Blue Shield group policy on July 1,1984, due to the divorce. However, after receiving an application for renewed coverage, Blue Cross/Blue Shield notified Swartout (who was in a coma) that an individual health policy would be put into effect as of July 1,1984, upon payment of a premium. After Swartout's father informed Transamerica of the impending lapse of health coverage, Transamerica paid the premium by check on behalf of Swartout and continued to do so for the following two years.  

When no-fault benefits were sought following the accident, Transamerica referred the matter to Blue Cross/Blue Shield pursuant to the coordination of benefits clause. After denial of the health insurance benefits, Transamerica paid Swartout's medical expenses and, in 1988, Transamerica filed this action for reimbursement. Blue Cross/Blue Shield counterclaimed alleging that Transamerica's payment of Swartout's health insurance premiums was contrary to public policy and constituted misrepresentation. Blue Cross/Blue Shield sought to rescind its contract of health insurance with Swartout and sought reimbursement from Transamerica of $384,381 in medical expenses previously paid by iron behalf of Swartout.  

One year after filing of the lawsuit, Blue Cross/Blue Shield moved for summary disposition, arguing that Transamerica's claim was barred by the one year statute of limitations of §3145(1). The trial court granted the motion, and then the case proceeded to trial on the Blue Cross/Blue Shield counterclaim. The counterclaim of misrepresentation was dismissed and the public policy argument was denied.  

In affirming the trial court, the Court of Appeals noted that the decision in Auto Club v New York Life (Item No. 1436) had recently rejected a similar argument and held that when a no-fault insurer seeks to recover from a medical insurer for payments made, the one year statute of limitations controls. Therefore, the Court of Appeals found no error in the trial court's determination that Transamerica's action for reimbursement of medical expenses was time barred.  

With regard to the Blue Cross/Blue Shield claim of misrepresentation, the court relied upon the trial court's assessment of the testimony of the Transamerica adjuster, and based on her testimony, found that Transamerica did not initiate or assist in the application for Swartout's continued health coverage that the premiums were paid with Transamerica checks putting Blue Cross/Blue Shield on notice of the identity of the payor, and accordingly, it could not be said that Transamerica in any manner attempted to conceal or to misrepresent its identity as the payor of Swartout's premiums.  

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

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