English v. Home Ins. Co., Docket No. 53580

• Decision Date: 08 March 1982
• Docket Number: Docket No. 53580
• Citation: 112 Mich.App. 468,316 N.W.2d 463
• Parties: Wolf ENGLISH, Plaintiff-Appellee, Cross-Appellant, v. The HOME INSURANCE COMPANY, Defendant-Appellant, Cross-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 463

316 N.W.2d 463

112 Mich.App. 468

Wolf ENGLISH, Plaintiff-Appellee, Cross-Appellant, v. The HOME INSURANCE COMPANY, Defendant-Appellant, Cross-Appellee.

Docket No. 53580.

Court of Appeals of Michigan.

Submitted Dec. 2, 1981.

Decided Jan. 19, 1982.

Released for Publication March 8, 1982.

Gottlieb & Goren, P.C., Detroit, for plaintiff-appellee, cross-appellant.

Young & Heckman, Troy, for defendant-appellant, cross-appellee.

Before DANHOF, C.J., and J. H. GILLIS and BRONSON, JJ.

DANHOF, Chief Judge.

Defendant appeals, as of right, from a judgment in favor of the plaintiff for no-fault wage and medical benefits. Plaintiff cross-appeals from the same decision.

On November 29, 1973, plaintiff suffered injuries in an automobile accident. Defendant paid no-fault insurance benefits through May 13, 1974. Plaintiff returned to work in July of 1974 and worked until September 27, 1975. Some time after September of 1975, plaintiff requested additional no-fault benefits. At defendant's request, plaintiff submitted to an independent medical examination. On March 25, 1976, defendant notified plaintiff, in writing, that the medical examination revealed no disability related to the November, 1973, accident. This March 25, 1976, letter went on to state that defendant would not provide any further no-fault benefits and informed plaintiff that if he had any questions he should contact defendant's claims representative. After receipt of this letter, plaintiff retained counsel. On April 7, 1976, plaintiff's counsel informed defendant that he had been retained and requested records of any medical reports that the defendant might have. Plaintiff's counsel and defendant continued to correspond until November 7, 1977. During this time defendant requested, among other things, various records and medical authorizations from plaintiff. On November 7, 1977, defendant sent plaintiff's attorney a letter which contained a settlement offer of $2,000. This offer provided that if it was not accepted within ten days it would be withdrawn. The settlement offer was not accepted.

On January 12, 1978, plaintiff commenced the instant action. Defendant moved for accelerated judgment based on the limitations period set forth at M.C.L. § 500.3145; M.S.A. § 24.13145. Defendant's motion was denied. ¹ At the conclusion of a bench trial, plaintiff was awarded $18,347.

I

We will first address those issues raised by the defendant.

In moving for accelerated judgment, defendant relied on Richards v. American Fellowship Mutual Ins. Co., 84 Mich.App. 629, 270 N.W.2d 670 (1978), lv. den. 406 Mich. 862 (1979). Defendant argued, in part, that it formally rejected plaintiff's claim on March 25, 1976, and that, since plaintiff did not commence this action until January of 1978, plaintiff's action was barred by the statute of limitations. Defendant also argued that, even if plaintiff's action were not entirely barred, § 3145(1) limits plaintiff's recovery to losses incurred within one year of commencement of this action.

In responding to defendant's motion, plaintiff also relied on Richards. However, plaintiff argued that defendant did not reject plaintiff's claim until November of 1977, and that, under Richards, the statute of limitations found in § 3145(1) was tolled until then. Alternatively, plaintiff argued that defendant was estopped from raising the statute of limitations defense in that defendant deliberately induced plaintiff not to file his action until after the limitations period had run.

The lower court found that defendant did not formally deny plaintiff's claim until November of 1977. ²

Relying on Richards, the lower court went on to find that the limitations period set forth in § 3145(1) was tolled until November of 1977. Since plaintiff's action was commenced within one year of November 1977, the lower court ruled that plaintiff's claim was not barred.

We must determine whether the lower court correctly interpreted § 3145(1) and correctly applied that statute to the facts of the instant case.

M.C.L. § 500.3145(1); M.S.A. § 24.13145(1), in pertinent part, provides:

"(1) 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 insurance 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."

Under facts somewhat similar to those presented in the instant case, Richards held that the running of the one year statute of limitations found in § 3145(1) was tolled from the time the insured gave notice of loss until liability was formally denied by the insurer. Thus, under Richards where the insurer does not promptly deny liability the insured may recover benefits for losses incurred more than one year before the date on which the insured's action is commenced.

We disagree with the analysis of § 3145(1) found in Richards and hold that the running of the limitations period is not automatically tolled between the time the insured gives notice of its claim and the insurer denies liability. We find that the correct construction of § 3145(1) is to be found in Aldrich v. Auto-Owners Ins. Co., 106 Mich.App. 83, 307 N.W.2d 736 (1981), and in Allstate Ins. Co. v. Frankenmuth Mutual Ins. Co., 111 Mich.App. ---, 314 N.W.2d 711 (1981).

In Aldrich, a panel of this Court held that the plain language of § 3145 limits recovery to expenses incurred within one year prior to the date the insured's action is commenced. In rejecting Richards, the Aldrich panel stated:

"Following the Richards analysis to its logical conclusion could produce a result directly contrary to the intent of the instant statute, 'to encourage claimants * * * to bring their claims to court while those claims are still fresh'. Burns v. Auto-Owners Ins. Co., 88 Mich.App. 663, 666, 279 N.W.2d 43 (1979). It is not unlikely that permitting the limitations period to be tolled would lead to months and years of delay on some claims, a result not envisioned or intended by the Legislature." Aldrich, 106 Mich.App. at 89, 307 N.W.2d 736.

In Allstate, another panel of this Court construed § 3145(1) as a statute of limitations and as a recovery limitations provision. The Allstate panel held that § 3145(1) allows an action to be commenced any time within one year of the most recent allowable expense; however, it also held that recovery is limited to only those expenses incurred within one year prior to commencement of the action.

Application of Aldrich and Allstate to the instant case requires a finding that, since some payments had already been made to plaintiff by defendant, plaintiff had the right to commence an action any time within one year after the most recent allowable expense was incurred. ³ However, plaintiff's recovery should have been limited to only those losses incurred within one year prior to the date on which his action was commenced. Under Aldrich and Allstate, the lower court should have granted defendant's motion for accelerated judgment as to any losses incurred more than one year prior to commencement of plaintiff's action.

However, this conclusion does not end our inquiry on this issue. As noted above, in response to defendant's motion for accelerated judgment, plaintiff asserted that defendant deliberately induced plaintiff not to commence his action until after the limitations period had run. Because of this, plaintiff argues that defendant was estopped from raising the statute of limitations as a defense. ⁴ Since the trial court relied on Richards, it did not address...