So far this year, the Supreme Court has decided three new no-fault cases. The first of these three cases is the case of Turner, et al v Farmers Ins Exch, et al (MSC – PUB; 1/29/2021; Docket Nos. 150660 & 150661). In Turner, the Supreme Court held that Enterprise Rental Car was not the insurer of highest priority under the no-fault act’s then-applicable priority rules (which have since been changed pursuant to the 2019 amendments). In doing so, the Court interpreted the phrase “owner or registrant of the vehicle occupied” in the former MCL 500.3114(4) to mean “owner or registrant of a motor vehicle required to be registered in this state.”
The second case is the case of Bronner v City of Detroit (MSC – PUB; 05/27/2021; Docket No. 160242). In Bronner, the Court held that the City of Detroit could enforce an indemnity clause requiring one of its garbage vendors to pay back no-fault PIP benefits that the city had to pay to an injured person as a result of the garbage vendor’s negligence.
The third case is the case of Yang v Everest National Ins Co (MSC-PUB; 06/10/2021; Dock No. 160578). In Yang, the Court held that a cancelation letter by Everest was ineffective as a matter of law because, under the terms of the letter, “cancelation was conditioned” on a failure to pay insurance premiums.
Presently, there are two cases that remain pending before the Supreme Court. Those cases are Esurance Property & Cas Ins Co v Mich Assigned Claims Plan, et al (Docket No. 160592) (deciding whether “a finding that an insurance policy was void ab initio because it was procured by fraud bars a subsequent claim for equitable subrogation for benefits that were paid pursuant to that policy before it was found to be void.”); and Griffin v Trumbull Ins Co, et al (Docket No. 162419) (deciding several issues related to the priority rules for payment).
Additional information about these cases is provided below, along with other associated relevant links.
No-Fault Cases Recently Decided by the Michigan Supreme Court
Zang v Everest National Ins Co
In this unanimous opinion, the Supreme Court held that “under MCL 500.3020(1)(b), a cancellation notice is effective only if it is peremptory, explicit, and unconditional.” The court then concluded that a cancellation letter by Everest was ineffective as a notice of cancellation “because Everest’s letter provided that cancellation was conditioned on Yang’s failure to pay his insurance premiums.”
Case Summary is Forthcoming
Bronner v City of Detroit
In this 7-0 decision (Viviano concurring), the Michigan Supreme Court upheld an indemnification provision in a contract between Defendant City of Detroit (“City of Detroit” or “the City”) and Defendant GFL Environmental USA Inc. (“GFL”). At issue in this case was an indemnification agreement between the City of Detroit and GFL, whereby GFL agreed to indemnify the City against any liabilities it incurred as a result of GFL or its employees’ negligence. After a GFL garbage truck driver struck a City of Detroit bus and forced the City to have to pay PIP benefits to its passenger who was injured as a result of the collision, the City sought reimbursement from GFL pursuant to the indemnification agreement. The Supreme Court held that the indemnification agreement was valid after examining the various appellate cases which address the enforceability of provisions in no-fault insurance contracts pertaining to matters not specifically covered in the no-fault act. Based on the reasoning of those cases, the Supreme Court held that the subject indemnification provision was enforceable because it did not conflict with any of the no-fault act’s statutory sections or with the legislative purpose of the no-fault act, which the Court characterized as “to ensure that there is applicable insurance for accidents and that benefits get paid.” Justice Viviano agreed with the result reached by the majority but argued that the indemnification agreement at issue was enforceable because it did not conflict with any of the statutory sections of the no-fault act and that the majority should not have focused on the legislative goals and purpose of the no-fault act.
Turner, et al v Farmers Ins Exch, et al
In this 4-2 decision (Clement concurring; Cavanagh and Viviano dissenting) featuring two priority disputes between Defendants Enterprise Leasing Corporation of Detroit, LLC (“Enterprise”), and Farmers Insurance Exchange (“Farmers”), the Michigan Supreme Court ruled that Enterprise was not the insurer of highest priority under the no-fault act’s then-applicable priority rules (which were subsequently changed pursuant to the 2019 amendments). Relying on its decision in Parks v Detroit Auto Inter-InsExch, 426 Mich 191 (1986), the Court read the phrase “owner or registrant of the vehicle occupied” in the former MCL 500.3114(4) to really mean “owner or registrant of a motor vehicle required to be registered in this state.” Therefore, even though Enterprise was an authorized self-insured entity under the no-fault act and the owner and registrant of the two vehicles in question, it was not a priority insurer under the former MCL 500.3114(4)(a) because the two vehicles were neither registered in Michigan not required to be registered in Michigan.
No-Fault Cases Currently Pending Before the Michigan Supreme Court
Griffin v Trumbull Ins Co, et al
On May 19, 2021, the Supreme Court directed the Clerk to schedule “argument on the application” in this case and instructed the parties to file supplemental briefing addressing: “(1) whether a lower-priority insurer, who was provided timely notice under MCL 500.3145(1), can be held liable for personal protection insurance benefits under the no-fault act if the higher-priority insurer was not identified until after the one-year statutory notice period under MCL 500.3145(1) expired; if so, (2) whether the insured must prove that he or she exercised reasonable, due, or some other degree of, diligence in searching for the higher-priority insurer; and, if so, (3) whether the appellant exercised the requisite degree of diligence in searching for the higher-priority insurer.”
Esurance Prop & Cas Ins Co v Mich Assigned Claims Plan
On September 23, 2020, the Supreme Court directed the Clerk to schedule “argument on the application” and instructed the parties to brief the issue of “whether a finding that an insurance policy was void ab initio because it was procured by fraud bars a subsequent claim for equitable subrogation for benefits that were paid pursuant to that policy before it was found to be void.”