Badger State Mut. Cas. Ins. Co. v. Auto-Owners Ins. Co.

• Decision Date: 16 August 1983
• Docket Number: Docket No. 63268,AUTO-OWNERS
• Parties: BADGER STATE MUTUAL CASUALTY INSURANCE COMPANY, Plaintiff-Appellant, v.INSURANCE COMPANY, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 713

339 N.W.2d 713

128 Mich.App. 120

BADGER STATE MUTUAL CASUALTY INSURANCE COMPANY, Plaintiff-Appellant, v. AUTO-OWNERS INSURANCE COMPANY, Defendant-Appellee.

Docket No. 63268.

Court of Appeals of Michigan.

Submitted Feb. 7, 1983.

Decided Aug. 16, 1983.

Foster, Swift, Collins & Coey, P.C. by Michael J. Schmedlen, Lansing, for plaintiff-appellant.

Nunneley, Hirt, Rinehart & Cermak, P.C. by Thomas D. Rinehart, Mount Clemens, for defendant-appellee.

Before DANHOF, C.J., and V.J. BRENNAN and BAGULEY, ^* JJ.

V.J. BRENNAN, Judge.

Plaintiff appeals as of right from the trial court's order granting accelerated judgment in favor of the defendant.

Dwain Read was seriously injured on July 10, 1978, when the motorcycle he was riding collided with an unidentified automobile. At the time of the accident, Read was insured under a no-fault automobile insurance policy issued by plaintiff. Plaintiff voluntarily paid no-fault benefits to Read from July 10, 1978, to September 3, 1979.

In the meantime, on August 11, 1978, Read filed a claim for workers' compensation benefits. Defendant, Read's employer's workers' compensation insurance carrier, initially denied liability on Read's compensation claim. However, in September, 1979, defendant conceded that Read was injured in the course of his employment and commenced paying compensation benefits to Read. Defendant also reimbursed plaintiff for the work loss benefits which plaintiff paid to Read from July 10, 1978, to September 3, 1979. Plaintiff and defendant disagreed, however, as to whether defendant was liable to Read for certain expenses incurred in purchasing appliances and in remodeling the Read household in order to accommodate Read, who was paralyzed as a result of the accident. Plaintiff had compensated Read for these expenses and took the position that defendant was responsible for these expenses and, therefore, plaintiff was entitled to reimbursement from defendant for these expenses. Defendant denied liability for the expenses and suggested that plaintiff and defendant resolve the question in circuit court. Plaintiff believed that the Bureau of Workers' Disability Compensation (Bureau) had primary jurisdiction over the question. In view of this belief and since Dwain Read's claim for compensation benefits covering such expenses was still pending before the Bureau, plaintiff suggested that the parties forego the circuit court action and await resolution of Read's compensation claim before settling the reimbursement issue.

Plaintiff now contends that defendant agreed that the amount which defendant would reimburse plaintiff for medical expenses and other expenses paid would be either voluntarily agreed upon or determined by the result of Read's compensation claim against defendant. Defendant, however, has consistently denied this allegation. While the substance of any agreement between plaintiff and defendant as to the reimbursement issue is speculative, it is clear that defendant acknowledged that plaintiff was entitled to reimbursement for no-fault benefits paid to Read as compensation for his medical expenses and that defendant refused to reimburse plaintiff for the medical expenses until the question of whether it was liable for the appliances and remodeling costs was settled.

In any case, Dwain Read apparently withdrew his compensation claim during the first week of July, 1981, and on July 9, 1981, plaintiff commenced the present action, seeking reimbursement for the no-fault benefits which it paid to Read as compensation for his medical expenses and for the disputed expenses. On October 15, 1981, defendant moved for accelerated judgment based upon the no-fault act's one-year period of limitations. M.C.L. § 500.3145; M.S.A. § 24.13145. The trial court granted defendant's motion for accelerated judgment finding that §§ 3145 and 3146 of the no-fault act barred plaintiff's reimbursement action because the action was not timely.

Plaintiff's sole claim on appeal is that the trial court erred in granting the defendant's motion for accelerated judgment. Plaintiff contends that the one-year period of limitations provision set forth in the no-fault act, M.C.L. § 500.3145; M.S.A. § 24.13145, is not applicable to the present case. Alternatively, plaintiff claims that, if the one-year period of limitations applies in this case, then it was tolled under these circumstances so that plaintiff's action was timely filed.

Section 3145(1) of the no-fault act, upon which the trial court relied, provides:

"An action for recovery of personal protection insurance benefits payable under this chapter for accidental bodily injury may not be commenced later than 1 year after the date of the accident causing the injury unless written notice of injury as provided herein has been given to the insurer within 1 year after the accident or unless the insurer has previously made a payment of personal protection benefits for the injury. If the notice has been given or a payment has been made, the action may be commenced at any time within 1 year after the most recent allowable expense, work loss or survivor's loss has been incurred. However, the claimant may not recover benefits for any portion of the loss incurred more than 1 year before the date on which the action was commenced. The notice of injury required by this subsection may be given to the insurer or any of its authorized agents by a person claiming to be entitled to benefits therefor, or by someone in his behalf. The notice shall give the name and address of the claimant and indicate in ordinary language the name of the person injured and the time, place and nature of his injury."

Plaintiff argues that § 3145 does not apply because the cases relied upon by defendant and the trial judge are inapplicable to the present situation. The trial court discussed this Court's opinion in Home Ins. Co. v. Rosquin, 90 Mich.App. 682, 282 N.W.2d 446 (1979), lv. den. 408 Mich. 855 (1980), and Federal Kemper Ins. Co. v. The Western Ins. Co., 97 Mich.App. 204, 293 N.W.2d 765 (1973). In Home Ins. Co. v. Rosquin, supra, the Home Insurance Company paid casualty insurance benefits to a fur shop for property damage which resulted from an automobile accident involving several motor vehicles. Thereafter, the Home Insurance Company, as subrogee of the fur shop, filed suit against the drivers of the vehicles seeking recovery of the casualty benefits paid. Subsequently, the Home Insurance Company amended its complaint to add the drivers' insurers. Two of the defendant insurers moved for dismissal based upon § 3145(2) which provides that an action for recovery of property protection insurance benefits shall not be commenced later than one year after the accident. The trial court rejected the defendants' argument. On appeal, this Court reversed, holding that the suit was for recovery of no-fault benefits and, therefore, § 3145(2) barred the plaintiff's action. Home Ins. Co. v. Rosquin, supra, p. 685, 282 N.W.2d 446.

In Federal Kemper, supra, the plaintiff's no-fault insurer brought an action in quasi-contract against the defendant, another no-fault insurer, to recover the amount of no-fault benefits the plaintiff had paid for injuries suffered by a person to whom the defendant was primarily liable for no-fault benefits. The trial court granted the defendant's motion for accelerated judgment based upon § 3145(1). On appeal, this Court found that, despite plaintiff's characterization of its action as quasi-contractual, the action was, in effect, one in equity for subrogation. Relying upon the principle that a subrogee acquires no greater rights than his subrogor, the Court held that, since an action against the defendant by the insured would be barred by § 3145(1), the subrogation action was also barred.

In addition to Home Ins. Co. v. Rosquin and Federal Kemper, defendant relies upon this Court's opinions in Michigan Mutual Ins. Co. v. Home Mutual Ins. Co., 108 Mich.App. 274, 310 N.W.2d 362 (1981), and Keller v. Losinski, 92 Mich.App. 468, 285 N.W.2d 334 (1979). In Michigan Mutual, as in Federal Kemper, a no-fault insurer which had paid an injured person no-fault benefits, sued another no-fault insurer for reimbursement of the benefits paid, arguing that the defendant insurer was primarily liable for the benefits. The court granted defendant accelerated judgment based upon § 3145(1), and this Court affirmed based upon this Court's decisions in Home Ins. Co. v. Rosquin and Federal Kemper, stating that the case sub judice was no less a subrogation action than Federal Kemper. Because the action was one for subrogation, § 3145(1) was properly applied to bar plaintiff's claim for reimbursement.

In Keller v. Losinski, supra, a no-fault insurer sought reimbursement for no-fault benefits paid to a motorcyclist. On appeal, this Court ruled that the trial court erred in denying the defendant's motion for accelerated judgment based upon § 3145(1). The Court in Keller stated:

"Finally, Michigan Mutual cannot avoid the statute of limitations by classifying its action as one for indemnification rather than one for recovery on personal injuries. In its indemnification action, Michigan Mutual is subrogated to plaintiff's rights and cannot recover where plaintiff would be barred from bringing his own action." 92 Mich.App. 473, 285 N.W.2d 334.

The plaintiff in the case at bar argues that the cases discussed above are distinguishable because they involve suits by no-fault insurers against other no-fault insurers, while the present case involves a suit against a workers' compensation carrier based upon § 3109 of the no-fault act. According to plaintiff, in each of the cases relied upon by defendant, the no-fault carrier seeking reimbursement had inadequately investigated the insured's claim and improperly paid no-fault benefits. Thus, plaintiff maintains it was not harsh to apply the one-year statute of limitations to those reimbursement claims. Further, ...