Johnson v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 01 June 1990
• Docket Number: 115469,Docket Nos. 114112
• Citation: 455 N.W.2d 420,183 Mich.App. 752
• Parties: Alma H. JOHNSON, Individually and as Personal Representative of the Estate of Bill Johnson, Jr., Deceased, Plaintiff-Appellee, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 420

455 N.W.2d 420

183 Mich.App. 752

Alma H. JOHNSON, Individually and as Personal Representative of the Estate of Bill Johnson, Jr., Deceased Plaintiff-Appellee, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellant.

Docket Nos. 114112, 115469.

Court of Appeals of Michigan.

Submitted Jan. 3, 1990.

Decided May 21, 1990.

Released for Publication June 1, 1990.

Kohl, Secrest, Wardle, Lynch, Clark & Hampton by Konrad D. Kohl, Janet G. Callahan and John Mitchell, Farmington, for plaintiff-appellee.

Romain, Donofrio, Kuck & Egerer, P.C. by Ernst W. Kuck, Southfield, for defendant-appellant.

Before CAVANAGH, P.J., and SAWYER and KAVANAGH, ^* JJ.

SAWYER, Judge.

In Docket No. 114112, the trial court entered an order granting summary disposition to plaintiff in the amount of $82,072, plus interest and costs, after the matter was submitted to it on stipulated facts. In Docket No. 115469, the trial court entered an order granting plaintiff mediation sanctions in addition to taxable costs in light of its order granting judgment in favor of plaintiff. Defendant now appeals and we affirm.

The matter was submitted to the trial court on stipulated facts. According to the stipulation, plaintiff's husband was killed in an automobile accident while driving his motorcycle on September 2, 1984. The decedent was insured under a motorcycle policy issued by defendant, which had also issued an automobile policy to decedent for a 1982 Buick. Both policies had been written by the same agent, with whom plaintiff and decedent had been dealing for more than twenty years. Plaintiff informed the agent of the accident within twenty-four hours. By December 3, 1984, it was discovered that both the driver of the other vehicle involved in the accident and the vehicle itself were uninsured. State Farm was informed of this fact. Although plaintiff had requested coverage under the motorcycle policy, she did not specifically demand the payment of benefits under the automobile policy until shortly before this action was commenced on January 21, 1987. It is plaintiff's entitlement to benefits under the automobile policy which is the subject of this appeal.

On appeal, defendant first argues that the trial court erred in concluding that plaintiff's notice of injury with respect to the uninsured motorist claim under the motorcycle policy constituted sufficient notice of a claim for personal protection insurance benefits under the automobile policy and, therefore, erred in concluding that the period of limitations had not run. We disagree.

M.C.L. § 500.3145(1); M.S.A. § 24.13145(1) provides that an action to recover personal protection insurance benefits must be commenced not later than one year after the date of the accident, unless the insured gave written notice of injury to the insurer within one year after the accident or unless the insurer has previously paid personal protection insurance benefits for the injury. Here, plaintiff gave notice to defendant, through its agent, of her loss (the death of her husband in the accident) shortly after the accident, though in the context of a claim under the motorcycle policy. Plaintiff did not specifically provide a notice of injury under the automobile policy. Defendant's position is, essentially, that, although plaintiff would otherwise be entitled to receive benefits under the automobile policy, the notice of injury under the motorcycle policy is insufficient to constitute a notice of injury under the automobile policy and, because the current action was not commenced within one year of the accident, plaintiff is precluded from receiving those benefits to which she is otherwise entitled. Defendant maintains this position despite the fact that it is the insurance carrier for both the motorcycle and the automobile policy and, in fact, it was the same agent who wrote both policies. We find defendant's position to be untenable.

The case at bar is on all fours with this Court's decision in State Farm Mutual Automobile Ins. Co. v. Ins. Co. of North America, 166 Mich.App. 133, 420 N.W.2d 120 (1988). Oddly enough, defendant in the instant action was able to prevail in the State Farm case by taking a position 180 degrees opposite from the position it takes in the instant case. ¹

In State Farm, the insured was injured in a motor vehicle accident during the course of his employment. The insured at the time of the accident was insured for personal protection insurance benefits under a no-fault automobile policy issued by State Farm. The insured's employer was insured for both automobile no-fault and workers' compensation liabilities by a policy issued jointly by the Insurance Company of North America and Aetna Insurance Company. Following the accident, the insured applied for and received workers' compensation benefits from INA/Aetna. Also, an "Employer's Basic Report of Injury" was made. In addition, the insured applied for and received no-fault benefits from State Farm, which were coordinated with the workers' compensation benefits paid by INA/Aetna.

State Farm, however, thereafter terminated no-fault benefits, resulting in the insured suing State Farm. State Farm raised the affirmative defense that the insured's employer's no-fault carrier had the greater priority in providing no-fault benefits. State Farm counterclaimed against the insured to recover the benefits it had already paid him. The insured then added INA and Aetna as defendants to the action, claiming that they had notice of his injury through the notice of injury provided pursuant to the workers' compensation claim. INA/Aetna raised the defense of the statute of limitations and one-year-back rule contained in M.C.L. § 500.3145(1); M.S.A. § 24.13145(1). Thereafter, State Farm and the insured settled their dispute and the insured assigned his claim against INA/Aetna to State Farm.

On appeal, State Farm took the position that the notice of injury provided to INA/Aetna under the workers' compensation claim was sufficient to constitute a notice of injury under the no-fault policy issued by the same carriers, thus coming within the statutory exception to the one-year period of limitations contained in § 3145. This Court agreed, concluding that the statutory requirement for a notice of injury was met by the notice provided to the same carriers under the workers' compensation claim. State Farm, supra at 140-141, 420 N.W.2d 120. The Court specifically noted that the statute does not require that the notice of injury be addressed to a particular department of the insurer and that the notice provided under the workers' compensation claim satisfied the statutory requirements for a notice of injury under a no-fault claim. Id.

We believe that the reasoning in State Farm, supra, is sound. Section 3145 specifically states what must be contained in a notice of injury: namely, the name and address of the claimant, plus a description in ordinary language of the name of the person injured and the time, place and nature of the injury. As noted by the State Farm Court, the statute does not direct that the notice must be sent to any particular department within the insurance company nor, for that matter, does the statute provide that the notice of injury must specifically identify under which insurance policies the claimant is claiming benefits. To accept defendant's theory, we would have to conclude that plaintiff was obligated to tell her insurance agent about her loss twice: once for the motorcycle policy and once for the automobile policy. Such a requirement is absurd.

The statutory requirement of a notice of injury serves to put the insurance company on notice that a loss has occurred and to provide the company with basic information concerning the loss: namely, the name of the person who suffered the loss and the time, place and nature of the injury. Defendant received that information in the case at bar within a reasonably short time after the accident occurred. It is, in our opinion, irrelevant whether plaintiff provided that information for purposes of recovering benefits under the motorcycle policy or for recovering benefits under the automobile policy. The fact remains that defendant received the notice of injury. Indeed, plaintiff's position in the case at bar is even stronger than was State Farm's position in State Farm, supra, since two entirely different kinds of insurance were involved in that case, no-fault automobile coverage and workers' compensation coverage, while in the case at bar there are two closely related forms of insurance, automobile and motorcycle, involved. Indeed, the person to whom plaintiff provided the notice of injury under the motorcycle policy, her insurance agent, was the same individual to whom she would provide the second notice of injury under the automobile policy, which defendant would have us conclude was necessary.

For the above reasons, we conclude that State Farm, supra, is applicable to the case at bar and we hold that plaintiff was required only to give one notice of injury to defendant and that that notice of injury was sufficient to provide defendant with notice with respect to all policies issued by defendant to plaintiff or plaintiff's decedent. We should, however, briefly acknowledge that defendant does cite some contrary precedent which held that notice to an insurer of a workers' compensation claim does not serve as notice of injury for a no-fault claim. These cases were discussed in State Farm, supra, and disapproved of. Id. at 139-140, 420 N.W.2d 120. We agree with the State Farm Court's analysis and conclude that there is no need to discuss those contrary cases in detail.

Having concluded that plaintiff filed a sufficient notice of injury with defendant to toll the period of limitations set forth in § 3145(1), it is now necessary to determine whether the so-called "one-year-back rule" contained in § 3145(1) is also tolled. Under the one-year-back rule, even where...