Michigan Court of Appeals; Docket No. 94453; Published
Judges Maher, Murphy, and Burns; Unanimous; Per Curiam
Official Michigan Reporter Citation: 174 Mich App 148; Link to Opinion 
STATUTORY INDEXING:
General Rule of Priority [§3114(1)]
Recoupment Between Equal Priority Insurers [§3115(2)]
TOPICAL INDEXING:
Cancellation of Auto Liability Policies (MCL 500.3204, et seq.)
CASE SUMMARY:
In this unanimous per curiam Opinion, the Court of Appeals upheld a jury verdict in favor of Allstate, holding that defendant Community Service was estopped from denying payment of no-fault benefits to plaintiff by reason of the statements of its agent
The minor child of the Snarskis was struck by a vehicle, and incurred substantial medical expenses. The Snarskis' insurer, Community Service, denied benefits, claiming the Snarskis' policy had terminated for lack of payment of the premium. Allstate, the insurer of the automobile that struck the child, paid the benefits and sought subrogated reimbursement from Community Service.
The renewal premium on the Community Service policy was due on October 1, 1981. On October 7, 1981, a notice of non-payment was sent, and the notice itself extended a 10 day grace period allowing coverage to be reinstated if payment was received within 10 days of the due date. If the 10th day fell on a weekend or holiday, the grace period was extended until the end of the next business day. Thus, pursuant to the terms of the notice, the last day to make this payment was October 12, 1981. The accident occurred on October 8, 1981. The exclusive agent for Community Service was contacted by Mrs. Snarski on October 10, 1981, and informed about the accident Mrs. Snarski again talked to the agent on October 12, 1981, at which time he told her not to worry about getting the premium payment by the end of that day. Accordingly, she delivered the check on October 13, 1981. The agent admitted his statement of October 12, 1981 regarding payment of the premium. On these facts, the Court of Appeals held that the jury could properly conclude that the defendant, Community Service, was estopped to deny its coverage.
In a related issue, the Court held that Allstate had standing to maintain this action for subrogation because it paid the no-fault claim and thus became subrogated to all of the legal rights of the insureds.
Finally, the Court reaffirmed a principal regarding payment of no-fault benefits in cases of priority disputes. The Court stated, "when a priority question arises between two carriers, the preferred method of resolution is for one insurer to pay the insured's claim and then sue the other insurer under a theory of subrogation."
