motion for summary disposition on the plaintiff's claim for uniform trade practice interest under michigan statute five hundred two zero zero six for the trip to district court iran as erroneous lee granted summary just position first of all based on the conclusion that in the district courts words the cause of action for penalty interest arose quote on the policy end quote that is not the language of the policy and if you'll notice very conspicuously absent in the district court's decision and in defense counsel's brief that the actual quotation of the policy language itself the policy says that a legal action against us meaning scottsdale u nder this coverage part meaning under the commercial property insurance policy is must be filed within to within two years of the date of the loss of the u t p interest claim does not arise under the coverage part of the commercial property insurance policy and really that ends the analysis of the entire case the policy itself scotsdale concedes on page twenty of their brief that absolutely nothing in the policy in any way mentions provides for the recovery of promptly interest so the action to recover penalty interest cannot possibly arise in the policy because there's nothing in without the policy without a by viable claim of the policy there be no interest or i mean let's just say that the underlying coverage claim was kind barred wouldn't you say the interest claim goes with that i would say yes i would say that if the if there if there is a complete bar for whatever reason of the claim of the contract action under the policy the contingency would therefore not arise and that would make it sound like it is on the policy but your honor there's a distinction between a contingency and a duration a can the penalty interest is contingent upon recovery under the policy but it is not a derivation or not it's not a it's not analogous to like a consortium claim or of a curious liability claim where it merely is subsumed as part of the same action it has to be different it cannot arise under the coverage part because there are different elements there is a different source of the princely interest it doesn't arise within the policy it arises from a statute there's a different accrual provision because of action under the contract of the policy arises on the date of a lost cause of action for pettily interest under the statute and i think it's important to quote it says quote the interest must be paid in addition to and at the time of payment of the us end quote and that's that's  or claim a cruise for penalty interest when the payment is made the payment could be made in as in this case more than two years later after the claims filed so if if we accept the promise that it's the same thing that the claim for penalty interest is the same as any action of the policy for getting that an action of the policy is a breach of contract action and has those elements you're saying barred which is what the trial court said the district court said since the loss occurred in february of two thousand and twelve the trial court's ruling was this claim was time barred in february of two thousand and fourteen now there's one enormous problem with that with that holding scott still insurance didn't pay the claim and told him to all odd july until i'm sorry june of two thousand and fifteen june twenty sixth two thousand and fifteen and so that that's sixteen months it's supposed to operate independent of any lawsuit any in any intervention of the court under the law under michigan law the insurance company must pay the claim with in thirty days of receive the proof of loss and we cite these provisions in our brief but i can give them to you if you need them within sixty days of receipt a satisfactory proof of loss and there's no dispute that satisfactory proof loss was provided here interest starts to run the insurer has one hundred elements of your pr standalone penalty interest correct under the michigan law right and the i and i want to emphasize this because scott still raises the argument that if you accept the plaintiff's position you're going to allow taxation of interest at twelve percent forever conceivably for six years that is absolutely untrue it is the insurance company that controls the entire mechanism of the claim they're supposed to pay within thirty days if they don't pay within sixty days interest rates and as soon as they tender payment so the argument by scottsdale that if you allow if you hold that the six year statute limitation governs you're going to allow the plane to recover taxation of twelve percent interest all the way of six years is  interest stopped in shape in june of two thousand and fifty when scott still paid the appraisal work so we have a period running from sixty days from the prom the receipt of a proof of loss until june of two thousand and fifteen when the payment cleanest but what happens about a situation where you bring your claim for loss coverage you bring within and within the two year period but you don't santa thing about interest and you know so there are all the time they're prone they're protesting they're saying we're going to do this we're going to do that it takes five years and you wait till just before year six to bring your claim for interest that allows a lot of interest to run out are welcome but but your honor that presumes that the insurance side is part of the blame for the delay just to make it harder then all of a sudden you spring on them this five here twelve percent claim it sounds like a great investment but under michigan law there you have the responsibility to pay the claim loss as a matter of fact judge edmunds decision at the beginning of the decision says but for the limitation issue they would be liable under the u t p the only issue here is whether the two the policies two year limitation provision w grizz walt in the recent nicholai case they all recognize that there is a claim and there is a cause of action for recovery of penalty interest and the defense all of the defendant's cases either involved  a claim where there was a complete bar to any recovery into the policy or cases that said we know what you although said but we're rejecting it as dicta so what this is a question for both of you because i'm not sure i agree with the either of you on this point i don't i really don't think of interest claims you know we have all these statutes and rules about interest and judgment prejudging post judgment i just don't think of them as causes of action are actually even think of them as having limitations bars i guess that's just not how i think about it whenever there's a so i'm not sure this hurts you actually and i don't mean it that way i'm just trying to figure it out but it's not obvious to me that quote needs to be a private right of action we just have interest statutes and interest statutes have certain triggers i really don't even ever think of them as having time buyers well the first the first response to the question is the look the cruel language in the statute itself  you had the problem it's post judgment obviously the trigger is the judgment i don't know what that i don't know what it means to say the statute refers to a cruel that there's no such thing as an interest that you that doesn't have an accrual date well i disagree i mean judgement  saying hurt you i'm not i guess i'm concerned that you're viewing the u t p interest claim as as somehow lumped in with any other claim for example for judging interest and i think there are there are quite a absurd and a manifestly unjust result and you don't need to reach the second issue which involves the applicability of the insurance code the tolling provision to the surplus lines carrier but i would just point out th the argument in essence is forms over substance the statute that the defendants rely on the defense relies on uses the word forms they can see they don't dispute that that's a term of art under michigan law and it relates because it's the legislature's decision to ensure that insurance companies don't dog the client correctly it is it is a it's contingent on recovery of benefits of the policy but it is a standalone claim that does not arise under the coverage of the policy and if it doesn't arise into the coverage of the policy following the policy language the limitation provision cannot possibly apply they can try to rewrite the policy but they can't ignore it or redacted which is a little bit of what's happened here i know my time is up thank you very much i'll look forward to talking  raised i think judge certainly you are right in the money when you asked the question do we think of interest as a cause of action at all and i personally don't i think is just supplemental action but we need to put that in the proper context but then say independent cause of action is a private cause of action and here is the issue if you look at what the distinction distinction is that if you look at the michigan uniform prate practices act the only statutory agent who can enforce remedies is the machine assurance commissioner that's m c i all five hundred two zero two eight two two or three eight there's not a limitation in this and five hundred two thousand and six in this part of the broader broader quote so when the court said well what about this twelve percent interest what are we going to do it that we go to give some sort of ability to an individual claimant to at least collect the twelve percent interest so the mission court's carved out an exception if you will yes you can pursue that remedy but when i said private cause of action then i think it might statutes of limitations there were just thinking essentially we have all these cases where we have michigan statutes and the court said that's a six years that you have limitations all those cases are standalone causes of action for example the  michigan builders trust fund claim the court specifically pointed out it's clear that a contractor or sub contractor may remain in compliance with the terms of the contract table in terms of my question about it maybe not mattering whether it's a separate cause of action and that's what helps you because i really think of this as just like other interests that shoots prejudgment post judgment you don't think of them i agree with you think i'm a supplemental remedies separate apart from the underlying cause of action but you also don't think of them as having statutes of limitations that that's an odd concept the norm is the trigger for the interest is usually a judgment or a complaint here it's different of course that michigan can do what it wants but it of course makes no sense if you're going to have a statue imitations i'm not even sure why you would think of having a statue limitations because you don't need one if you just don't need one you've put the cards on the table you brought your claim the legislature has said it's the law is out there scottsdale knows the law is twelve percent runs when they bring their claim is up to them if they want to wait a hundred years why not and  your problem because you know the law you're the ones not paying it after you agree they've presented what they need so to me it's it's not very helpful to think of it as a separate cause of actions not very helpful to think of it in terms of statue limitations either so you have to think of both together which is why i'm not sure the point helps you right but but if your honor is correct and someone could walk in here in the year two thousand and seven two thousand to one hundred seventy make a day over two hundred seventy ok and the reason that doesn't trouble me right that if the statue of limitations had run on the underlying coverage claim then there could never be supplemental interest i got it but if as everyone agrees here the coverage claim is a brought within the limitations period th michigan has just told us it's twelve percent from the time of a claim you decide what you want to do but the coverage claim was not brought within the time to time limitation period it was not brought within two years they submitted a calamity november two thousand both in november two thousand and thirteen and again in january two thousand and fourteen that we were reserving our rights on the coverage issues including the state of the your nation's you're not asserting that you're not asserting the statue limitations as to the million you never did we that doesn't mean that we didn't have the right to do that we chose to do on february two thousand and fourteen paid it just we no longer had an obligation to pay if they had sued us in march two thousand and fourteen we would have interest not accruing of statutes of limitations or cause of action the we voluntarily issued payment even though we had no legal obligation we could have refused to go to appraisal we could have even after the appraisal award we could have gone to court and say no we're not going to pay it the cause of action was barred when the cause of action for the contract claim is bart  except for the tolling issued i will talk about separately they could not have come to us and enforce that arbitrary appraisal award the claim was going to claim was gone one and a half years earlier and when there's a why didn't you why wasn't your waiving it because we reserve our rights to deny coverage so your position is on every kline that is presented to your company the company may say i want an appraisal i need a further examination and wait until the two year period if that's the statutory time in your policy the contract time in your policy has run and inside will of course will pay and never have to pay the twelve percent interest that the michigan legislature has specified that's exactly right your own and that's no different than any other statute of limitations case it happens all the time parties are trying to settle the case meanwhile the stack it runs doesn't mean that anyone necessarily intended the state you to run just a good runs to claim is gone if they don't agree to somehow sell the claim there's nothing to be in for you know if you it's the very late joe's if you lose this case you're in a pretty good position to deal with the problem just whenever you make a payment you get the other side to and couple of arguments on that point first of all the very language of nineteen zero four says that it deals with the language not just with the form it says forms used are not subject to the code meaning d and tire code including all the fire insurance provisions but it also says that the policy may not contain the language which misrepresents it to nature the very sta what language is not permitted and surplus lines policies how does that not also imply that you can in the crude any other language that you want and surplus lines policies that's number one number two nineteen zero four two doesn't say forums used by unauthorized insurers should not be subject to quote it could have set not be subject to five in requirements or shall not be subject to five hundred two two three six that was the argument that  fifty six twenty four years earlier and in fact i went back and pulled the one nine hundred seventy nine statutes the one the year before before the circus winds act was enacted and the two to three six is already well rates you can charge anything you want you can charge whatever rates and so if you look at one thousand no for one which we first two rates the rates also have to be filed under twenty four zero eight five hundred surplus lines are totally exam from the michigan insurance code are you sure act i'm not saying that at all we are subject to for example dependent the interest that you would what we're saying is that our policy language is not subject have said ok how can we get insurance companies to come in to insure those buildings well gee if we just required that the typesetting change from an eight font to a seven fund or a nine fund if we just give in to freedom to do that then i will come in and write those buildings no of course not what they said is we need to give surplus lines insurance the freedom to do to write insurance on their own terms that will bring it right so you can charge higher imposes is you cannot have a language that is unfairly or that misrepresents the true nature or to an end at surplus lines insurers can come up with any form they want for very good reason because they have the freedom to come in and write in whatever form they want that's how you attract minds insurers to risks that no one else wants to write and that's why does vacant building actually perfectly fits in category why just was a surplus lines for us so there's no way in my humble opinion that you can construe nine hundred four as anything other than including the whatever language rules of diversity they are binding on this court because the rule that your task is to find out is to follow the law of the highest court or ascertain what that law would be what we already know now in terms of  judge second your question which is a good question is well why do we need a statute of limitations then why do we need one in a situation well we need one i guess because of this case where we have we have an insurer that that paid the claim but paid it more than two years out and then once the claims are paid under the under two zero zero six for the penalty interest claims accrued because we now know the amount of the claim we now know the amount of penalty interest well i mean actually i guess thinking of the defendant that that the general statue limitations should at least provide an outside window of saying ok by six years after a cruel and no later i mean otherwise you know really the at least of the file would have to remain open even though there would be no further taxation of interest and it either statue limitations on other interest provisions whether in the federal federal statute i'm not aware i'm not aware of any  d this issue hasn't been i mean this is an issue first impression as it relates to this this machine statute too so i'm not aware of any statutes on the table as that that specifically relate to interest payments in other contexts and this issue has never been addressed whether the catch all michigan provision should apply to this but if it doesn't apply i mean i i urge you to consider this point i'm sure you have how can you bar explain before  how is that possible and how could so how could plumber park know what the full amount of the twelve percent interest was until scott still paid in in june of two thousand and fifty so how can you bar the claim sixteen months earlier but is what the destr did you know the way it normally works you know going back to post judgement interest for example even prejudgment if you file a complaint and your complaint doesn't ask for interest i think you've got a problem all right so why would you file a complaint within the limitations period keeping the limitations period focused on the cause of action the underlying cause of action is a breach of contract here it's very strange to not ask for interest in the complaint and then once you get a judgment as for interest i don't know i don't know how that works interest and it's twelve percent from the minute we will supply the relevant documents plus the complaint wasn't filed until after they denied the claim the request was made for you t p interest at the end of the present now i'm just saying why why did you do that why not put them on your the one they just told me how important is to put them on notice of interest running forever what will bachus you why shouldn't you rise into the why shouldn't you let them know from the minute it's actually a pretty good idea from your client's perspective to let the insurance company know about the twelve percent rate seems like a rather useful let me ask you this your honor if under michigan law they had the responsibility to pay within thirty days why would that why would the insured immediately demand u t p interest if they promptly paid there's no a claim submitted to an insurance company under the policy which is all we had here until they did night there were close for penalty interest i just want to point out one other thing that in terms of the tolling as i think  this is is you're asking this question if twenty eight thirty three one does not apply then they can put anything they want in the policy even though the nine hundred four is limited to the word forms and i never one rebuttal from defense counsel that form just not as we demonstrated in our brief they can say they can say a one one day provision and i would point out there's a lawyer policy that has just come out saying we're not going to pay any more unless the los