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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

Michigan Law Firm - Warner Norcross + Judd LLP

An insured may bring a claim for no-fault benefits beyond the statutory one-year limitation period if the insurer makes a payment of insurance benefits prior to the commencement of the action, according to the Michigan Supreme Court in <a href="http://publicdocs.courts.mi.gov:81/OPINIONS/FINAL/SCT/20160321_S150332_55_01_Jesperson-OP.pdf" target="_blank" rel="noreferrer noopener">Jesperson v. Auto Club Insurance Association</a>, No. 150332.  The no-fault act provides that “[a]n 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 the insurer has previously made a payment of personal protection insurance benefits for the injury.”  MCL 500.3145(1).  The court held that “previously” means prior to the commencement of the action, not prior to the one-year limitation period expiring.  The insured’s claim was timely in this case because it was filed within one year of incurring the most recent insured expense.  See id.

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Alan Jesperson, the plaintiff, was involved in a motor vehicle accident on May 12, 2009.&nbsp; The accident was reported to Auto Club Insurance Association (ACIA) more than a year after the accident on June 2, 2010 and ACIA began paying personal protection benefits, or no fault benefits, to the plaintiff on July 23, 2010.&nbsp; ACIA notified the plaintiff that it was terminating payment of his benefits and subsequently, the plaintiff amended his existing lawsuit against the driver of the other vehicle and added ACIA as a defendant. &nbsp;

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The one-year statute of limitations provides a payment exception that allows the filing of an action for no-fault benefits more than one year after the date of the accident if “the insurer has previously made a payment of personal protection insurance benefits for the injury.”&nbsp; ACIA filed a motion for summary disposition arguing the insured’s claim was barred by the one-year statute of limitations under the no-fault act.&nbsp; The trial court agreed with the defendant and granted the summary disposition, and the Court of Appeals affirmed the decision.

The Michigan Supreme Court focused on the meaning of the word “previously” in the no-fault payment exception.&nbsp; The plaintiff asserted that “previously” means prior to the commencement of the action, while the defendant asserted that “previously” means before the expiration of one year after the date of the accident.&nbsp; The court looked at the statutory language and legislative intent of the act and concluded that the payment exception applies to when the insurer makes a payment prior to the commencement of the action for no-fault benefits.&nbsp; Accordingly, the court reversed the Court of Appeals decision.

To read our previous blog post about the Court of Appeals’ opinion, click <a href="https://www.wnj.com/updates/coa-holds-no-fault-statute-of-limitations-protects-insurers-after-one-year" target="_blank" rel="noreferrer noopener">here</a>.

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Gaëtan Gerville-Réache

Labor and Employment

Insurer’s latent payment revived the insured’s expired claim for no-fault benefits, says MSC

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Insurer’s latent payment revived the insured’s expired claim for no-fault benefits, says MSC

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