Walden v. Auto Owners Ins. Co.

• Decision Date: 21 April 1981
• Docket Number: Docket No. 47157
• Citation: 105 Mich.App. 528,307 N.W.2d 367
• Parties: Matt WALDEN, Plaintiff-Appellant, v. AUTO OWNERS INSURANCE COMPANY, a Michigan corporation, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 367

307 N.W.2d 367

105 Mich.App. 528

Matt WALDEN, Plaintiff-Appellant, v. AUTO OWNERS INSURANCE COMPANY, a Michigan corporation Defendant-Appellee.

Docket No. 47157.

Court of Appeals of Michigan.

April 21, 1981.

Released for Publication July 2, 1981.

Gregory M. Janks, Detroit, for plaintiff-appellant.

Christopher L. Terry, Detroit, for defendant-appellee.

Before V. J. BRENNAN, P. J., and BRONSON and BASHARA, JJ.

V. J. BRENNAN, Presiding Judge.

Plaintiff commenced this action for personal injury protection benefits under a no-fault insurance contract purchased from defendant. Defendant moved for summary judgment pursuant to GCR 1963, 117.2(3) on the ground that plaintiff had failed to comply with the written notice requirement of M.C.L. § 500.3145(1); M.S.A. § 24.13145(1). Plaintiff appeals from the trial court's grant of summary judgment in defendant's favor.

On October 22, 1975, plaintiff was involved in a vehicular collision when the truck he was driving rolled over. Plaintiff was insured through a no-fault policy issued by the defendant. Immediately thereafter, plaintiff went to the office of his insurance agent, Donald Sutton, to report the collision. The Sutton Agency was an independent agency through which plaintiff had been buying his automobile insurance from defendant for over the last twenty years.

Based upon the facts of the accident as related by the plaintiff to Sutton, an "Auto Accident Notice" form was completed by the Sutton Agency on the same day and transmitted to the defendant within the week. This form was that which is supplied by the defendant to its agent. The "Auto Accident Notice" clearly set forth the name and address of the plaintiff and the essential facts of the accident. It also clearly revealed that the plaintiff was in the truck when it rolled over. However, the space for listing injured parties and extent of injury was left blank. Sutton's testimony indicates that this was done because plaintiff, although obviously shaken up and bruised, was unsure at that point in time of the extent of his injury. However, even with this forewarning that plaintiff potentially had been physically injured, the agent did not inform the plaintiff that he should submit written notice within the statutory one-year time limit or forego the personal protection benefits. A few days after the accident, plaintiff began to experience severe back pain. At this point, the material facts become disputed and divergent. According to plaintiff, either he or his wife contacted Sutton on numerous occasions within the year. Plaintiff claims that Sutton misinformed him as to the personal protection benefits of his policy and told him that his recourse would be to sue the other party. Plaintiff also claims that bills were submitted by his physician to Sutton within the prescribed statutory one year but that payment was refused. However, again, Sutton did not advise the plaintiff that this personal injury claim should be given by written notice. Defendant did admit its liability as to the extensive property damage arising from the accident and promptly paid under this portion of the no-fault policy.

Conversely, Sutton contends that he had no knowledge of plaintiff's injury until more than one year after the accident. Sutton also denies ever having received billings for plaintiff's health care within that first year.

Subsequently, defendant denied its liability for personal protection insurance benefits based upon plaintiff's failure to give written notice within one year of the accident. Plaintiff then filed the instant suit. Defendant, in its answer, relied upon § 3145(1) as barring plaintiff's cause of action and eventually sought summary judgment on the same ground.

The issue as framed, argued and decided by the lower court was whether, as a matter of law, oral notice by a claimant to an agent, even if immediately and consequently embodied into written form by the agent and transmitted to the insurer, is legally insufficient to satisfy the statutory requirement that written notice be given to the insurer by the claimant or by someone in his behalf. In short, the defendant requested that the trial court totally ignore the "Auto Accident Notice" as ineffective to give the requisite written notice, not because it was incomplete as to the personal injury section but, rather, because it was completed by the agent and not by the plaintiff. ¹

We disagree. In our opinion this is an unnecessary, overly technical, literal construction and application of the notice provision of § 3145(1). Section 3145(1) provides inter alia that:

"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 * * *. 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." M.C.L. § 500.3145(1); M.S.A. § 24.13145(1). (Emphasis added.)

This single statutory provision has been construed to be both a notice provision and a limitation of action provision. Dozier v. State Farm Mutual Automobile Ins. Co., 95 Mich.App. 121, 128, 290 N.W.2d 408 (1980); Davis v. Farmers Ins. Group, 86 Mich.App. 45, 272 N.W.2d 334 (1978), lv. den. 406 Mich. 868 (1979). The purpose of the statute of limitation is to compel action within a reasonable time so the opposing party has a fair opportunity to defend, to protect against stale claims, and to protect defendants from protracted fear of litigation. The purpose of the notice provision is to provide time for the defendant to investigate and to appropriate funds for settlement. Dozier v. State Farm Ins., supra, 95 Mich.App. 128, 290 N.W.2d 408.

In light of the above objectives, we fail to discern any logical nexus between who literally transcribed the report into written form and the attainment of these objectives. The ultimate goal is that the insurer receives written notice within the year following the accident. The notice requirement is not intended to snare unwary litigants who have in good faith relied upon their agent. We detect neither a violation of the letter nor spirit of the provision by the agent being the "someone in his (claimant's) behalf" who actually prepares the written notice based upon the claimant's oral recital of the facts. To rule that, as a matter of law, the agent is precluded from providing the written notice on behalf of the claimant to the insurer creates unnecessary traps and runs counter to the legislative intent to provide the insured with adequate compensation. Richards v. American Fellowship Mutual Ins. Co., 84 Mich.App. 629, 634, 270 N.W.2d 670 (1978), lv. den. 406 Mich. 862 (1979).

Alternatively, we are not persuaded that, on this record, we can conclude that the Accident Notice was fatally defective to give notice of plaintiff's personal injury because the particular injury section was not completed. In Dozier v. State Farm Ins., supra, this Court found that substantial compliance will suffice for giving the written notice of personal injury. In Dozier, plaintiff's attorney sent defendant insurer a letter which failed to indicate in ordinary language the place and nature of plaintiff's injury. Nevertheless, this Court found that the letter gave substantial compliance with the notice provision. In the instant case, the accident form was even more complete in that it gave the name and address of the claimant, the time and place of the vehicular accident, and specified that plaintiff rolled over while in his truck. However, since the trial court did not rest its grant of summary judgment on the inadequacy of the Auto Accident Notice, this issue of whether there was substantial compliance under § 3145(1) should first be addressed in the lower court.

Further, this record reveals numerous disputed factual issues as to the circumstances surrounding the giving of notice of personal injury. For illustration, the plaintiff contends that he repeatedly notified the agent of his back injury only to be told that his policy did not provide coverage and he should sue the other party. Plaintiff also contends that, within the year, doctor bills were submitted to the agent which arguably could satisfy the written notice of personal injury. The agent denies these allegations. Since the resolution of these controverted facts depends largely upon the credibility of the parties, these issues are more appropriately resolved by the trier of fact than by summary judgment. Northern Plumbing & Heating, Inc. v. Henderson Bros., Inc., 83 Mich.App. 84, 268 N.W.2d 296 (1978), lv. den. 405 Mich. 845 (1979).

Finally, we note that the motion should have been one for accelerated judgment pursuant to GCR 1963, 116.1(5). However, we find no prejudice to defendant resulting from the incorrectly labeled motion and deny reversal on that basis. Birch Run Nursery v. Jemal, 52 Mich.App. 23, 216 N.W.2d 488 (1974), modified 393 Mich. 775, 224 N.W.2d 282 (1974).

Therefore, we conclude that the trial court's grant of summary judgment in favor of defendant should be set aside and plaintiff's cause of action reinstated.

BASHARA, Judge (dissenting).

I respectfully dissent. In my view, the majority misapprehends the issue involved in this...