Madden v. Employers Ins. of Wausau

424 N.W.2d 21, 168 Mich. App. 33

• Court: Michigan Court of Appeals
• Decided: April 18, 1988
• Docket: Docket 96143
• Status: Published

Opinions

J. D. Payant, J.

Employers Insurance of Wausau appeals as of right from an order dismissing its third-party complaint against Lake States Mutual Insurance Company under MCR 2.116(C)(7). The trial court found that Wausau’s third-party complaint was barred by the one-year limitation period contained in MCL 500.3145(1); MSA 24.13145(1). We reverse the order of the circuit court.

On March 6, 1983, plaintiff Michael Madden was injured in a one-car automobile accident while riding as a passenger in a car he did not own. Madden filed an application for personal injury protection benefits with Wausau, the driver’s insurance company. Madden indicated on the application that he did not own an automobile and there were no family members residing in his household who owned an automobile.

Wausau wrote a letter to Madden’s attorney, David A. Nelson, questioning whether Madden did, in fact, have benefits available to him. Nelson responded in a letter that Madden did not have benefits available to him other than through Wausau. Wausau requested an affidavit verifying that Madden had no other available benefits. Nelson provided an affidavit stating that to the best of his information and belief, Madden had no insurance available to him other than through Wausau. Wausau began making personal injury protection payments to Madden totaling in excess of $18,000.

Eventually, a dispute arose over certain claimed benefits. On March 23, 1984, Madden filed suit against Wausau. In December of 1984, Madden revealed during a deposition that at the time of the accident he was living with his brother. Madden’s brother owned a car that was insured at the time of the accident by Lake States. Madden’s brother and sister-in-law were deposed in February, 1985. They indicated that on the day of the accident Madden was living .with them at the address that Madden had .given on his application for benefits that he filed with Wausau. They also indicated that they owned an automobile that was insured by Lake States at the time of the accident.

On February 27, 1985, Wausau gave Lake States notice of a claim against Lake States. On March 7, 1985, an application for benefits was filed with Lake States on plaintiffs behalf. Coverage was denied on March 8, 1985, and March 12, 1985.

On April 4, 1985, Wausau sought leave of the trial court to add Lake States as a third-party defendant. Leave was granted, and a third-party complaint was filed on May . 17, 1985. In addition, Wausau counterclaimed against Madden. Madden then filed an ámended complaint adding Jay F. Trucks; Law Offices of Hughes & Trucks, P.C.; David A. Nelson, individually; and David A. Nelson, P.C., as party defendants. In addition, Madden, as counter-defendant to Wausau’s counterclaim, filed a third-party complaint against Jay F. Trucks; Law Offices of Hughes & Trucks, P.C.; David A. Nelson, individually; and David A. Nelson, P.C.

Both Wausau and Lake States filed summary disposition motions. Wausau’s motion for summary disposition against Madden was denied. The trial court found that there was a genuine issue of fact ás tó whether Madden was domiciled with his brother and sister-in-law at the time of the accident. Lake States’ motion for summary disposition against Wausau was granted on the basis that the action was barred by the statute of limitations contained in MCL 500.3145(1); MSA 24.13145(1). Ultimately, Madden settled his claim for an additional $15,000, which was paid by Wausau while it preserved its right to indemnification or contribution against Lake States. All other claims were dismissed with prejudice.

Under the no-fault act contained in the Insurance Code of 1956, there is a one-year limitation period in which a claimant may file suit against an insurer to recover personal protection insurance benefits. Section 3145 of the code provides as follows:

An action for recovery of personal protection insurance benefits payable under this chapter for accidental bodily injury may not be commenced later that 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. [MCL 500.3145(1); MSA 24.13145(1).]

The issue in the present case is whether the above statute of limitations applies when an insurer is suing another insurer on the basis that it paid benefits by mistake for which the defendant insurer was liable. Therefore, we note initially that the cases cited by Lake States involving individual claimants are inapplicable to resolution of the issue of whether § 3145 applies to suits between insurance companies. .

One of this Court’s first opportunities to review this issue was in Home Ins Co v Rosquin, 90 Mich App 682; 282 NW2d 446 (1979), lv den 408 Mich (1980). In Home Ins Co, an accident occurred in December, 1974. The plaintiff paid benefits to the owner of the insured building and filed suit against the drivers of the automobiles that damaged the building. In April, 1975, the plaintiff learned that the automobiles had insurance coverage that should have provided benefits to the building owner. However, the automobile insurers refused to pay benefits and in May, 1976, the plaintiff amended its previously filed complaint to include the other insurers. This Court held that the one-year statute of limitations period in § 3145 barred the plaintiff’s claim against the insurers of the automobiles. However, in a footnote, this Court said, "If plaintiff did not know who the defendants’ insurers were or could not have discovered, after reasonable effort, who the insurers were, we might have been persuaded to adopt a different result.” Id., p 686, n 3.

The issue next arose in Keller v Losinski, 92 Mich App 468; 285 NW2d 334 (1979), where an injured person filed suit against one no-fault insurer, who in turn made a claim against another no-fault insurer. However, the accident occurred in March, 1975, and the claim by one insurer against the other insurer was not made until April, 1977. Two members of the panel held that the claim between insurers was barred by the one-year statute of limitations period in § 3145. The insurance company claimant argued that § 3145 did not apply because its claim was for indemnification rather than for recovery of personal injury protection benefits. However, that argument was rejected by the majority, which treated the claim as one of subrogation in which the insurer’s rights could not be expanded past the insured’s rights and consequently the insurer’s action was barred by the one-year statute of limitations of § 3145.