In Adam v. Bell, No. 319778, the Court of Appeals held that res judicata does not require a plaintiff to plead uninsured motorists (UM) benefits in the same filing as a claim for personal injury protection (PIP) benefits under the No-Fault Act, MCL 500.3101 et seq. Though the claims are closely related, the motivation, timing and required proofs are not, and the claims do not form a “convenient trial unit.”
Following a car accident, Adam sued State Farm for PIP benefits under the No-Fault Act. That claim was settled in 2012. In 2013, Adam filed a breach of contract claim against State Farm for UM benefits. The trial court granted State Farm’s motion for summary disposition, ruling that the UM claim was barred by res judicata because it could have been brought with the PIP claim. Adam appealed.
Because the PIP claim involved the same parties and was decided on the merits, the only res judicata factor in dispute before the court was whether the two actions arose from the same transaction such that Adam could have raised the two together. The Court of Appeals held that, though the claims arose from the same car crash, PIP and UM claims differ fundamentally in both the nature of the proofs and the motivation and timing of the suits. The court reasoned that injured persons are immediately entitled to PIP benefits, without regard to fault, and must bring the suit within one year. On the other hand, to receive UM benefits, the injured person must prove both fault and that he or she has suffered a threshold injury—which may not be clear within a year after the accident. The court explained that “a UM claim may not yet be ripe for litigation until after a PIP claim must be filed.” The court thus held that a prior PIP claim should not foreclose a later UM claim under res judicata. The court reversed the trial court’s ruling and remanded the case for further proceedings.
