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Blogs | October 23, 2015
3 minute read

COA holds that a recent amendment to MCPA does not apply to conduct that occurred before March 28, 2001

In Dell v. Citizens Insurance Company of America, No. 322654, the Court of Appeals affirmed the trial court's order denying Citizens motion for summary disposition because Dell’s complaint properly alleged violations under the Michigan Consumer Protection Act (MCPA), the conduct at issue occurred prior to March 28, 2001, and the complaint was filed on or before June 5, 2014.  Additionally, the Court of Appeals reversed the trial court’s entry of JNOV because it relied on Citizens’ statute of limitations defense which was waived because Citizens failed to mention it as an affirmative defense.

Dell, a pedestrian, was struck by a motorcycle and suffered injuries that significantly impaired her ability to walk.  Since the accident, Dell received approximately $1 million in no-fault benefits from Citizens under a policy issued to her parents.  Citizens failed to pay attendant care benefits to Dell from 1984, the time of her accident, through 2011.   Through her attorney, Dell submitted a written claim for attendant care benefits in 2011 and at that point Citizens began paying attendant care benefits and reimbursement costs for attendant care provided since 2010.  On July 28, 2011, Dell filed suit for unpaid no-fault benefits.

On a motion for partial summary disposition, the trial court ruled that Dell’s claim was limited to benefits incurred no more than a year prior to the filing of her complaint, pursuant to MCL 500.3145(1).   Dell sought to amend her complaint to add a claim under MCPA and Citizens contested the amendment arguing that it was time-barred by MCL 445.911(7).  The trial court granted leave to amend, which Dell filed, and a default judgment was entered because Citizens failed to timely file an answer.  Citizens filed a motion for reconsideration and a motion for summary disposition arguing that Dell’s claim under MCPA was limited pursuant to MCL 500.3145(1).  Ultimately, the trial court denied Citizens’ motion and the matter proceeded to trial.

At trial, the jury found that Dell had not incurred any allowable expenses under no-fault from one year before the filing of the complaint to the present. The jury also concluded that Citizens violated the MCPA and awarded Dell $1.7 million in unpaid benefits and $300,000 in mental anguish damages.  Citizens moved for JNOV arguing that the jury’s verdict for the first count was time-barred under MCL 445.911(7), and the trial court granted the motion.

Dell appealed, contesting the trial court’s grant of JNOV that was based entirely on the statute of limitations found in MCL 445.911(7).  The statute provides that a claim under MCPA must be brought within six years of the occurrence of the “method, act, or practice” that violates the MCPA, or within one year after the last payment in a transaction involving the method, act, or practice.  Citizens did not mention MCL 445.911(7) as an affirmative defense in its answer to Dell’s amended complaint nor did it raise the defense in the motion for summary deposition filed before its answer.  Consequently, Citizens waived statute of limitations as a defense. Therefore, the Court of Appeals reversed the trial court’s entry of JNOV and remanded the matter for reinstatement of the jury’s verdict.

Citizens cross-appealed.  Dell’s amended complaint alleged MCPA violations that all occurred in the claims handling and adjustment process and Citizens argued that the MCPA did not apply to misconduct in the claims handling and adjustment process.  The Court of Appeals examined the applicable statutes that disqualified claims under MCPA. Claims were restricted from being brought under MCPA if the harm resulted from an “unfair, unconscionable, or deceptive method, act, or practice” and was “made unlawful by chapter 20 of the insurance code.”  However, that restriction did not apply if the “method, act, or practice” at issue occurred prior to March 28, 2001, and a complaint was filed on or before June 5, 2014.  The unlawful acts and Dell’s complaint satisfied that exception.  Therefore, the Court of Appeals held the restriction did not apply to the conduct in Dell’s claim and Citizens motion for summary disposition was properly denied.