Liptow v. State Farm Mut. Ins. Co.

• Decision Date: 24 October 2006
• Docket Number: Docket No. 260562.
• Citation: Liptow v. State Farm Mut. Ins. Co., 726 N.W.2d 442, 272 Mich. App. 544 (Mich. App. 2006)
• Parties: Rebecca Jane LIPTOW, as Personal Representative of the Estate of Jelinda Joanne Burnette-Liptow, Deceased, Plaintiff-Appellee, and Michigan Department of Community Health, Intervening Plaintiff/Appellee, v. STATE FARM MUTUAL AUTO INSURANCE COMPANY, Defendant-Appellant.
• Court: Court of Appeal of Michigan

726 N.W.2d 442

272 Mich. App. 544

Rebecca Jane LIPTOW, as Personal Representative of the Estate of Jelinda Joanne Burnette-Liptow, Deceased, Plaintiff-Appellee, and Michigan Department of Community Health, Intervening Plaintiff/Appellee, v. STATE FARM MUTUAL AUTO INSURANCE COMPANY, Defendant-Appellant.

Docket No. 260562.

Court of Appeals of Michigan.

Submitted October 4, 2006, at Detroit.

Decided October 24, 2006, at 9:10 a.m.

Released for Publication January 29, 2007.

Dailey & Stearn (by Todd J. Stearn), Farmington Hills, for Rebecca J. Liptow.

Michael A. Cox, Attorney General, Thomas L. Casey, Solicitor General, James P. Delaney, Assistant Attorney General for the Michigan Department of Community Health.

Romain, Kuck & Egerer, P.C. (by Michael P. Daniels), Detroit, for State Farm Mutual Auto Insurance Company.

Before: FITZGERALD, P.J., and MARKEY and TALBOT, JJ.

PER CURIAM.

Defendant appeals by right the judgment entered in plaintiff's favor for personal injury protection (PIP) benefits following a jury determination that plaintiff's decedent was residing in Michigan with a relative whom defendant insured when she was injured in an automobile accident in North Carolina. Defendant argues that the trial court erred by not granting its motion for partial summary disposition limiting plaintiffs' damages under the one-year-back rule of MCL 500.3145(1). Defendant contends that this case is controlled by Cameron v. Auto Club Ins. Ass'n, 476 Mich. 55, 718 N.W.2d 784 (2006). We agree and reverse.

The parties do not dispute the underlying facts. On February 1, 1994, five-year-old Jelinda Burnette-Liptow was severely injured in a pedestrian-automobile accident in North Carolina, after which she was transferred from North Carolina to Michigan. As a result of her injuries, Burnette-Liptow required constant attendant care until her death on January 24, 2002. Intervening plaintiff, the Michigan Department of Community Health (MDCH), paid more than $1.5 million for Burnette-Liptow's care, maintenance, and treatment.

On January 16, 2003, plaintiff filed a complaint alleging that, at the time of the accident, Burnette-Liptow was a resident of Michigan and lived with her grandfather, Maynard Burnette. It is undisputed that Maynard Burnette contracted with defendant for automobile insurance that extended coverage to all of Burnette's resident relatives for PIP benefits pursuant to MCL 500.3101 et seq. Plaintiff sought reimbursement of attendant care expenses, medical expenses, lost wages and services, and survivor's loss benefits.

Defendant answered the complaint, challenging Burnette-Liptow's residency and asserting, as an affirmative defense, that the limitations period and the one-year-back rule of MCL 500.3145(1) either barred or limited plaintiff's recovery. The MDCH, seeking recovery of Medicaid payments that it made on Jelinda's behalf for her care, successfully moved to intervene. Thereafter, defendant moved for partial summary disposition, asserting that the one-year-back rule barred plaintiff from recovering any costs for attendant care incurred more than one year before the filing of the complaint on January 16, 2003. Defendant argued that this Court's then-recent decision in Cameron v. Auto Club Ins. Ass'n, 263 Mich.App. 95, 687 N.W.2d 354 (2004), aff'd in part and vacated in part, 476 Mich. 55, 718 N.W.2d 784 (2006), established that the saving clause provided for minors under MCL 600.5851(1), as amended in 1993, does not apply to MCL 500.3145(1). Consequently, the one-year-back rule unambiguously limits plaintiff's recovery to costs incurred after January 16, 2002.

Plaintiff opposed defendant's motion, arguing that the 1993 amendments of the minority saving provision of MCL 600.5851(1) became effective on April 1, 1994. Plaintiff's cause of action accrued on the date of the accident, February 1, 1994; therefore, the minority saving provision, as it stood before the 1993 amendments, applied to her no-fault act claim. Additionally, plaintiff asserted that this Court in Cameron improperly interpreted MCL 600.5851(1), as amended, to apply only to claims filed under the RJA, and not to claims filed under the no-fault act.

The MDCH also opposed defendant's motion, adopting both plaintiff's factual presentation and legal arguments, and also implicitly assuming that the minority saving provision tolled the one-year-back rule for the recovery of damages. The MDCH further asserted that pursuant to MCL 600.5821(4), the one-year-back rule did not apply to its claim for reimbursement of Medicaid payments on Burnette-Liptow's behalf. The MDCH pointed out that in Univ. of Michigan Regents v. State Farm Mut. Ins. Co., 250 Mich.App. 719, 733, 650 N.W.2d 129 (2002), this Court explained that MCL 600.5821(4) exempts the state and its subdivisions from the limitations period set forth in MCL 500.3145(1). Therefore, the MDCH argued that, irrespective of any amendment of MCL 600.5851, it was entitled to recover all the public funds expended on Burnette-Liptow's behalf.

The trial court ruled in favor of plaintiffs, concluding that the 1993 amendment of MCL 600.5851(1) interpreted by this Court in Cameron, supra, did not take effect until April 1, 1994. Therefore, the trial court concluded that the prior version of the minority/insanity saving provision applied to MCL 500.3145(1).

After the trial court denied defendant's motion, the parties reached an agreement regarding the amount of damages defendant would pay under various legal scenarios. Specifically, the parties stipulated that if Burnette-Liptow were found to be a resident of her grandfather's home at the time of the accident and (1) this Court determines that the one-year-back rule does not apply to plaintiff's claims, then defendant is liable to plaintiff in the amount of $735,000 and to the MDCH in the amount of $800,000; (2) this Court determines that the one-year-back rule does apply to limit plaintiff's claims, then defendant is liable to plaintiff in the amount of $76,000; (3) this Court determines that the one-year-back rule applies, but that MCL 600.5821(4) exempts the MDCH from that rule with respect to costs incurred at state institutions, then defendant is liable to the MDCH in the amount of $300,000; or (4) this Court determines that the one-year-back rule applies, and that MCL 600.5821(4) does not exempt the MDCH from that rule, then defendant is liable to the MDCH in the amount of $9,800.

The case proceeded to a jury trial on the sole issue whether Burnette-Liptow was a resident of her grandfather's home on the date of the accident. The jury concluded that she was. Thereafter, the trial court entered judgment in favor of plaintiff and the MDCH consistent with the parties' agreement regarding damages. Defendant then moved unsuccessfully for judgment notwithstanding the verdict or a new trial on the issue of Burnette-Liptow's residency. Defendant appeals by right.¹

We review de novo both a trial court's grant or denial of a motion for summary disposition and questions of statutory interpretation. Cameron, supra, 476 Mich. at 60, 718 N.W.2d 784.

We hold that MCL 500.3145(1) precludes both plaintiff and the MDCH from recovering any PIP benefits for allowable expenses incurred more than one year before the filing of the instant complaint. Thus, defendant is liable only for allowable expenses incurred after January 16, 2002. We reverse the trial court's decision denying defendant partial summary disposition.

MCL 500.3145(1) provides, in relevant part:

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. [Emphasis added.]

In Cameron, supra, 263 Mich.App. at 100-103, 687 N.W.2d 354, this Court held that the minority saving provision set forth in MCL 600.5851(1), as amended by 1993 PA 78, does not toll the limitations period for any cause of action whose limitations period is not governed by the Revised Judicature Act (RJA), and thus did not apply to no-fault claims, which are "subject to the limitation of MCL 500.3145(1)." Cameron, supra, 263 Mich.App. at 103, 687 N.W.2d 354. We first note that the 1993 amendment this Court interpreted in Cameron did not take effect on April 1, 1994, as the trial court ruled and the parties assume. The Legislature amended § 5851(1) twice in 1993. See Hatcher v. State Farm Mut. Automobile Ins. Co., 269 Mich.App. 596, 602, 712 N.W.2d 744 (2006). The pertinent amendment, 1993 PA 78, in § 3 provides: "This amendatory act shall take effect October 1, 1993." Second, although prior decisions by this Court have applied the tolling provisions of § 5851(1) to the one-year-back rule of § 3145(1), see Geiger v. Detroit Automobile Inter-Ins Exch., 114 Mich.App. 283, 318 N.W.2d 833 (1982), overruled in part Cameron v. Auto Club Ins. Ass'n., 476 Mich. 55, 718 N.W.2d 784 (2006), our Supreme Court's decision in Cameron has rendered the effective date of the 1993 amendments to § 5851(1) immaterial to the resolution of this case.

Our Supreme Court, in affirming in part and vacating in part this Court's decision in Cameron, quoted Devillers v. Auto Club Ins. Ass'n, 473 Mich. 562, 574, 702 N.W.2d 539 (2005), and explained:

MCL 500.3145(1) contains two limitations on the time for commencing an action and one...