Title: Esurance Prop. & Casualty Ins. Co. v. Michigan Assigned Claims Plan (Opinion on Application)

State: michigan

Issuer: Michigan Supreme Court

Document:

ESURANCE PROPERTY & CASUALTY INSURANCE COMPANY v MICHIGAN 
ASSIGNED CLAIMS PLAN
 
Docket No. 160592.  Argued on application for leave to appeal April 8, 2021.  Decided 
July 26, 2021. 
 
 
Esurance Property & Casualty Insurance Company filed an action in the Wayne Circuit 
Court against the Michigan Assigned Claims Plan (MACP) and the Michigan Automobile 
Insurance Placement Facility (MAIPF), seeking reimbursement from defendants for the personal 
protection insurance (PIP) benefits Esurance had paid to Roshaun Edwards for the injuries he 
sustained in a motor vehicle crash; there were no other vehicles involved in the crash.  Edwards 
did not have no-fault insurance at the time of the accident, and he did not live with a resident 
relative who had no-fault insurance.  At the time of the accident, the vehicle Edwards was driving 
was registered in Michigan and titled to Anthony Robert White II (Anthony), who also did not 
have no-fault insurance of his own.  The vehicle was insured by Esurance under a Colorado 
automobile insurance policy issued to Anthony’s mother, Luana Edwards White (Luana).  When 
Luana obtained the policy, she falsely represented that she owned the vehicle, that she lived in 
Colorado, and that the vehicle would be garaged in that state.  Edwards sought PIP benefits from 
Esurance, and Esurance began paying those benefits.  Edwards also applied for benefits from the 
MACP (as administered by the MAIPF), but the MAIPF did not assign a servicing insurer to 
Edwards’s claim under MCL 500.3175 because Esurance had already taken responsibility for 
paying PIP benefits to Edwards.  When Esurance eventually discovered that Luana had obtained 
the Colorado policy through her fraudulent misrepresentations, it obtained in the Macomb Circuit 
Court a default judgment against Edwards, Anthony, and Luana that rescinded the policy, 
declaring it void ab initio.  Esurance then filed this equitable-subrogation claim, requesting an 
order requiring defendants to reimburse it for the PIP benefits it had paid to Edwards.  Defendants 
moved for summary disposition under MCR 2.116(C)(8), arguing that there was no legal basis for 
the claim because the no-fault act, MCL 500.3101 et seq., did not contemplate reimbursement and 
indemnification rights in these circumstances.  Esurance argued that it could stand in Edwards’s 
place and pursue a claim against defendants through the doctrine of equitable subrogation because 
Edwards could seek recovery from defendants given that Edwards had timely filed for benefits 
from the MACP and was not covered by a no-fault policy.  The court, David J. Allen, J., granted 
summary disposition for defendants.  Relying on the doctrine expressio unius est exclusio alterius, 
the trial court concluded that equitable subrogation was unavailable to Esurance because while the 
no-fault act contained some provisions that contemplated reimbursement and indemnification, 
 
 
Michigan Supreme Court 
Lansing, Michigan 
Syllabus 
 
Chief Justice: 
Bridget M. McCormack 
 
 
Justices: 
Brian K. Zahra 
David F. Viviano 
Richard H. Bernstein 
Elizabeth T. Clement 
Megan K. Cavanagh 
Elizabeth M. Welch 
This syllabus constitutes no part of the opinion of the Court but has been  
prepared by the Reporter of Decisions for the convenience of the reader. 
Reporter of Decisions: 
Kathryn L. Loomis 
none of those provisions allowed Esurance to seek reimbursement from defendants in these 
circumstances.  Esurance appealed.  In a published opinion, the Court of Appeals (METER, P.J., 
and O’BRIEN and SWARTZLE, JJ.), affirmed the trial court’s dismissal of Esurance’s complaint but 
on different grounds.  The Court concluded that Esurance’s equitable-subrogation claim failed as 
a matter of law for either of two reasons: (1) if the policy existed when Esurance paid the PIP 
benefits, Esurance’s equitable-subrogation claim failed because Edwards could not have pursued 
benefits from defendants under MCL 500.3172(1); and (2) if the policy was void ab initio, then 
Esurance was a volunteer when it paid the benefits and could not recover its payment of them to 
Edwards from defendants.  In so holding, the Court also rejected the trial court’s application of the 
doctrine expressio unius est exclusio alterius, reasoning that the trial court had misapplied the 
canon when analyzing reimbursement provisions in the no-fault act and from there concluding that 
Esurance could not make out a claim for equitable subrogation.  330 Mich App 584 (2019).  
Esurance sought leave to appeal. 
 
 
In an opinion by Justice ZAHRA, joined by Chief Justice MCCORMACK and Justices 
BERNSTEIN, CAVANAGH, and WELCH, the Supreme Court, in lieu of granting leave to appeal, held: 
 
 
When a paying insurer has at least an arguable duty to pay benefits under the no-fault act, 
the insurer is simply protecting its own interests and not acting as a volunteer, and it may invoke 
the doctrine of equitable subrogation to recover any benefits paid erroneously.  The mere existence 
of an insurance policy that ostensibly covers a claimant does not ipso facto render it a policy 
“applicable to the injury” for purposes of MCL 500.3172(1)(a).  Instead, to determine whether 
there is an “applicable” policy, courts must perform an order-of-priority analysis under MCL 
500.3114(1) and (4)(a) through (b).   
 
 
1.  Equitable subrogation is a flexible, elastic doctrine of equity that is analyzed on the 
case-by-case basis characteristic of equity jurisprudence.  Equitable subrogation is the method by 
which equity compels the ultimate payment of a debt by one who in justice, equity, and good 
conscience ought to pay it.  It is a legal fiction through which a person who pays a debt for which 
another is primarily responsible is substituted or subrogated to all the rights and remedies of the 
other.  Under the doctrine, the subrogee acquires no greater rights than those possessed by the 
subrogor, and to recover, the subrogee may not be a mere volunteer.  For purposes of equitable 
subrogation, a “volunteer” is one who intrudes into a matter that does not concern the person, or 
one who pays the debt of another without request when the person is not legally or morally bound 
to do so and has no interest to protect in making the payment.  A person paying the debt is not a 
volunteer when the person has an interest to protect.  In addition, a payment is not voluntary when 
made under compulsion, in ignorance of the real state of facts, or under an erroneous impression 
of one’s legal duty.  To that end, an insurance company is not a volunteer when it pays expenses 
on behalf of its insured pursuant to an insurance contract.  Similarly, when an insurer pays a claim 
that another insurer may be liable for, the paying insurer is protecting its own interests and is not 
acting as a volunteer; under those circumstances, the paying insurer is entitled to invoke the 
doctrine of equitable subrogation because an insurer who has at least an arguable duty to pay is 
not a volunteer.   
 
 
2.  MCL 500.3114(1), as amended by 2002 PA 38, provided that a person who sustains an 
accidental bodily injury in a motor vehicle accident must look first to no-fault insurance policies 
in their own household for PIP benefits—i.e., to the person named in the policy, the person’s 
spouse, and a relative of either domiciled in the same household—before looking to other insurers 
for benefits.  If a person injured in a motor vehicle accident is not covered by a no-fault policy in 
their own household, MCL 500.3114(4)(a) and (b) provided that the injured person may next claim 
PIP benefits from first, the insurer of the owner or registrant of the vehicle occupied and then 
second, from the insurer of the operator of the vehicle occupied.  If the person is unable to collect 
benefits applicable to the injury through that order of priority, MCL 500.3172(1)(a) provides that 
the person may claim PIP benefits through the MACP.  The mere existence of an insurance policy 
that ostensibly covers a claimant does not ipso facto render it a policy “applicable to the injury” 
for purposes of MCL 500.3172(1)(a).  Instead, to determine whether there is an “applicable” 
policy, courts must perform an order-of-priority analysis under MCL 500.3114(1) and (4)(a) 
through (b).   
 
 
3.  MCL 500.3142, MCL 500.3148, and MCL 600.6013 incentivize insurers to pay benefits 
promptly and to sort out priority and reimbursement later by the potential imposition of steep 
penalties if an insurer does not pay promptly.  To achieve that aim, the no-fault act is designed to 
provide sure and speedy recovery of certain economic losses that occur from motor vehicle 
accidents.  Therefore, when there is a dispute between two insurers regarding responsibility to pay, 
it is preferred that one of the insurers pay the claim and sue the other in an action for equitable 
subrogation.  Accordingly, an insurer that pays the claim for which another may be liable has an 
arguable duty to pay.  For that reason, when an insurer does pay under those circumstances, it is 
simply protecting its own interests and not acting as a volunteer, and it may invoke the doctrine of 
equitable subrogation to recover the benefits paid erroneously; to hold otherwise would be contrary 
to the purpose, logic, and incentive structure of Michigan’s no-fault act.   
 
 
4.  In this case, the Esurance policy was declared void ab initio after the accident.  However, 
at the time of the accident, Edwards did not have no-fault insurance, and he was not a resident 
relative of someone who had a no-fault policy.  As a result, Edwards was not covered by the policy 
issued by Esurance under MCL 500.3114(1).  Esurance was also not in the order of priority under 
MCL 500.3114(4)(a) through (b) because the vehicle was owned by another person not insured by 
Esurance and the operator of the vehicle, Edwards, did not have a no-fault policy and did not live 
with a resident relative who had no-fault insurance.  Because there was no policy “applicable to 
the injury” under the order-of priority analysis, the facts as alleged in Esurance’s complaint 
supported that Edwards had a viable claim for PIP benefits against defendants under MCL 
500.3172(1)(a).  Furthermore, although Esurance was not in the order of priority before the policy 
was rescinded, it believed it was because of Luana’s misrepresentations in her insurance 
application.  As a result, Edwards was not a volunteer when it paid the benefits because it did so 
under an erroneous impression of both the facts and its legal duty; to hold otherwise would frustrate 
the purpose, logic, and incentive structure of the no-fault act.  In light of that conclusion, 
Esurance’s equitable-subrogation claim was not precluded as a matter of law.  The Court of 
Appeals erred by concluding that Esurance’s equitable-subrogation claim failed as a matter of law 
because there either was a policy applicable to the injury under MCL 500.3172(1) or because 
Esurance’s payments to Edwards were voluntary.  But the Court of Appeals correctly rejected the 
trial court’s application of the expressio unius est exclusio alterius canon of statutory interpretation 
to the no-fault act’s reimbursement provisions.  Finally, given that the Court of Appeals did not 
address whether defendants could be sued under MCL 500.3174, remand for it to address that issue 
was necessary.   
 
 
Reversed and remanded.   
 
 
Justice CLEMENT, joined by Justice VIVIANO, dissenting, agreed with the majority that the 
lower courts erroneously resolved the issues presented but disagreed that it was necessary to 
resolve more than whether those courts correctly resolved the issues.  The trial court incorrectly 
applied the expressio unius canon to conclude that Esurance could not pursue an equitable-
subrogation claim because it was not one of the listed mechanisms in the no-fault act by which a 
no-fault insurer could recover benefits paid; the reimbursement options in the no-fault act do not 
exclude other theories of reimbursement.  The Court of Appeals should have recognized that 
whether Esurance had a valid claim for equitable subrogation turned on whether Edwards would 
have had a claim against defendants if the policy issued by Esurance to Luana had been rescinded 
before Edwards’s accident.  Further contrary to the Court of Appeals’ conclusion, the fact that the 
insurance policy was rescinded did not turn Esurance into an after-the-fact volunteer such as to 
defeat its subrogation claim.  Justice CLEMENT would have corrected the lower courts’ errors and 
remanded to the trial court to resume its consideration of the case in view of the corrections.   
 
 
 
 
 
 
 
 
FILED  July 26, 2021 
 
 
 
S T A T E  O F  M I C H I G A N 
 
SUPREME COURT 
 
 
ESURANCE PROPERTY & CASUALTY 
INSURANCE COMPANY, 
 
Plaintiff-Appellant, 
 
 
v 
No. 160592 
 
MICHIGAN ASSIGNED CLAIMS PLAN 
and MICHIGAN AUTOMOBILE 
INSURANCE PLACEMENT FACILITY, 
 
 
Defendants-Appellees. 
 
 
 
BEFORE THE ENTIRE BENCH 
 
ZAHRA, J. 
Plaintiff Esurance Property & Casualty Insurance Company (Esurance) paid 
personal injury protection (PIP) benefits1 to the claimant, Roshaun Edwards (Edwards), 
                                              
1 “What are commonly called ‘PIP benefits’ are actually personal protection insurance 
(PPI) benefits by statute.  MCL 500.3142.  However, lawyers and others call these benefits 
 
Michigan Supreme Court 
Lansing, Michigan 
OPINION 
 
Chief Justice: 
Bridget M. McCormack  
 
 
Justices: 
Brian K. Zahra 
David F. Viviano 
Richard H. Bernstein 
Elizabeth T. Clement 
Megan K. Cavanagh 
Elizabeth M. Welch 
 
 
 
 
 
 
2 
pursuant to a no-fault automobile insurance policy, issued to another person, that was later 
declared void ab initio.2  Thereafter, Esurance filed this suit against defendants, the 
Michigan Assigned Claims Plan (MACP) and the Michigan Automobile Insurance 
Placement Facility (MAIPF), seeking reimbursement from them under a theory of 
equitable subrogation for the PIP benefits that Esurance had paid to Edwards under 
Michigan’s no-fault act, MCL 500.3101 et seq., before the policy was rescinded.  We hold 
that an insurer who erroneously pays PIP benefits may be reimbursed under a theory of 
equitable subrogation when the insurer is not in the order of priority and the payments are 
made pursuant to its arguable duty to pay to protect its own interests.  On the facts alleged 
in this case, Esurance can stand in Edwards’s shoes and pursue a claim for equitable 
subrogation because it was not in the order of priority and also was not a “mere volunteer”3 
under Michigan law when it paid Edwards’s PIP benefits.  Accordingly, we reverse the 
decision of the Court of Appeals and remand this case to that court for further proceedings 
consistent with this opinion. 
                                              
PIP benefits to distinguish them from property protection insurance benefits.”  Roberts v 
Farmers Ins Exch, 275 Mich App 58, 66 n 4; 737 NW2d 332 (2007). 
2 “Null from the beginning, as from the first moment when a contract is entered into.”  
Black’s Law Dictionary (11th ed), p 1885.  The circuit court found that the policy was 
obtained through fraud and by default judgment adjudged it void ab initio. 
3 The term “mere volunteer” comes from the law of equitable subrogation.  As will be 
explained more fully later in this opinion, a party cannot seek equitable subrogation for a 
voluntary action, where voluntary means without an interest to protect.  See DAIIE v 
Detroit Mut Auto Ins Co, 337 Mich 50, 53-54; 59 NW2d 80 (1953) (quotation marks and 
citation omitted; emphasis added). 
 
 
 
 
3 
I.  BASIC FACTS AND PROCEDURAL HISTORY 
On January 10, 2016, Edwards was seriously injured when he crashed a red 2015 
Dodge Challenger into a telephone pole in the city of Detroit.  At the time, Edwards did 
not have no-fault insurance of his own, and he did not live with a resident relative who had 
no-fault insurance.  When the accident occurred, the vehicle was registered in Michigan 
and titled to Anthony Robert White II (Anthony).  Anthony likewise did not have no-fault 
insurance of his own; however, his mother, Luana Edwards-White (Luana), had procured 
a Colorado automobile insurance policy from Esurance on the basis of her representations 
that she owned the vehicle, that she lived in Colorado, and that the vehicle would be 
garaged there. 
Esurance began paying PIP benefits in response to Edwards’s claims.4  Edwards 
also applied for benefits from defendants,5 but a servicing insurer was not assigned to his 
claim under MCL 500.3175 because Esurance had already taken responsibility for paying 
Edwards’s PIP benefits. 
Esurance eventually discovered that Luana had obtained the Colorado policy 
through her fraudulent misrepresentations.  In reality, Luana was neither the registrant nor 
owner of the vehicle, which had been garaged in Michigan and not Colorado.  Esurance 
subsequently filed an action in the Macomb Circuit Court to rescind the policy, naming 
Edwards, Luana, and Anthony as defendants.  In a March 20, 2017 order, the circuit court 
entered a default judgment that rescinded the policy, voiding it ab initio. 
                                              
4 At the time Esurance paid these PIP benefits, it believed that it was the highest-priority 
insurer. 
5 Specifically from the MACP, as administered by the MAIPF.  See MCL 500.3171(2). 
 
 
 
 
4 
Esurance subsequently filed the instant suit in the Wayne Circuit Court, asserting a 
claim of equitable subrogation and requesting an order that would require defendants to 
reimburse it for the PIP benefits that it had paid to Edwards.  Defendants moved for 
summary disposition under MCR 2.116(C)(8) (failure to state claim on which relief can be 
granted), arguing that there was no legal basis for an equitable-subrogation claim against 
them.6  Defendants argued that the no-fault act contemplates rights of reimbursement and 
indemnification in a variety of circumstances, but not in this one.  In response, Esurance 
argued that the lack of statutory authority for its claim was not dispositive given that 
Edwards could have sought recovery from defendants because he had timely applied for 
benefits from defendants and had no applicable no-fault policy; moreover, because 
Esurance had paid Edwards’s medical bills, it could pursue, standing in Edwards’s shoes, 
a claim against defendants for reimbursement under the doctrine of equitable subrogation.7  
The circuit court, relying on the statutory canon of interpretation expressio unius est 
exclusio alterius,8 ruled that equitable subrogation was unavailable to Esurance because 
                                              
6 Given that this case comes to us on appeal from a (C)(8) motion, whether the MACP is a 
proper party is not obvious, see Mich Head & Spine Institute, PC v Mich Assigned Claims 
Plan, 331 Mich App 262, 265 n 1; 951 NW2d 731 (2019), but we need not decide this 
question to resolve this case. 
7 See Atlanta Int’l Ins Co v Bell, 438 Mich 512, 521-522; 475 NW2d 294 (1991) 
(“Equitable subrogation has been described as a ‘legal fiction’ that permits one party to 
stand in the shoes of another.”) (opinion by BRICKLEY, J.) (citation omitted). 
8 Dave’s Place, Inc v Liquor Control Comm, 277 Mich 551, 555; 269 NW 594 (1936) 
(describing the canon as the “general principle of interpretation that the mention of one 
thing implies the exclusion of another thing”) (opinion by BUSHNELL, J.) (quotation marks 
and citation omitted). 
 
 
 
 
5 
the no-fault act contains some provisions that explicitly contemplate reimbursement and 
indemnification9 but none that contemplates Esurance’s requested reimbursement from 
defendants in these circumstances. 
Esurance appealed as of right in the Court of Appeals, which affirmed the circuit 
court’s grant of summary disposition to defendants, albeit on the alternate ground that 
Esurance could not make out a claim of equitable subrogation.10  The Court of Appeals 
succinctly summarized its holding: 
                                              
9 See, e.g., MCL 500.3114(8) (allowing a no-fault insurer to receive partial recoupment 
from other no-fault insurers standing in equal priority); MCL 500.3116 (providing rights 
of reimbursement and indemnity to no-fault insurers for cases in which a claimant recovers 
on a tort claim); MCL 500.3146 (setting a limitations period for claims for reimbursement 
or indemnity brought under MCL 500.3116); MCL 500.3175(2) (allowing insurers to 
whom a claim is assigned by the MAIPF to seek reimbursement and indemnity from third 
parties); MCL 500.3177(1) (creating a right for a no-fault insurer to seek reimbursement 
from an owner of an uninsured vehicle involved in an accident). 
10 Esurance Prop & Cas Ins Co v Mich Assigned Claims Plan, 330 Mich App 584, 589; 
950 NW2d 528 (2019) (Esurance).  The Court of Appeals very briefly addressed, and 
disagreed with, the circuit court’s application of the expressio unius est exclusio alterius 
canon of statutory interpretation, holding that it had misapplied the canon to conclude that 
Esurance could not make out a claim for equitable subrogation.  Id. at 590-591.  “The 
maxim ‘has force only when the items expressed are members of an associated group or 
series, justifying the inference that items not mentioned were excluded by deliberate 
choice, not inadvertence.’ ”  Id. at 591, quoting Barnhart v Peabody Coal Co, 537 US 149, 
168; 123 S Ct 748; 154 L Ed 2d 653 (2003).  And because various reimbursement 
provisions are scattered throughout the no-fault act and involve distinct factual scenarios, 
the Court of Appeals reasoned that it could not “presume that those statutes are necessarily 
exclusive of any and all other similar remedies in all factual scenarios.  Doing so would 
presume that the Legislature deliberately chose not to include a right to equitable 
subrogation by a no-fault insurer against defendants, which is unwarranted from the text of 
the [no-fault act].”  Esurance, 330 Mich App at 591.  The Court of Appeals’ analysis on 
that issue was correct.  See Bronner v Detroit, 507 Mich ___, ___; ___ NW2d ___ (2021) 
(Docket No. 160242); slip op at 11-15 (holding that the Court of Appeals misapplied the 
expressio unius canon in construing provisions of the Insurance Code that permit no-fault 
 
 
 
 
6 
 
In the end, there are two ways to look at the problem.  Either the 
equitable-subrogation claim must be analyzed under the circumstances that 
existed when benefits were paid, which was before the policy was rescinded, 
or it must be looked at through the lens that the policy never existed in the 
first place.  If the policy exists, [Esurance’s] claim of equitable subrogation 
fails as a matter of law because Edwards could not have pursued benefits 
from defendants under MCL 500.3172(1).  If the policy never existed, then 
[Esurance] was a mere volunteer when it paid $571,000 in PIP benefits.  In 
either case, [Esurance’s] equitable-subrogation claim fails as a matter of 
law.[11] 
In other words, according to the Court of Appeals, Esurance’s equitable-subrogation claim 
fails regardless of the status of the insurance policy’s existence. 
Esurance sought leave to appeal in this Court, and in lieu of granting leave, we 
ordered oral argument on the application.12 
II.  STANDARD OF REVIEW 
The trial court granted defendants summary disposition under MCR 2.116(C)(8).  
As this Court recently explained: 
 
A motion under MCR 2.116(C)(8) tests the legal sufficiency of a 
claim based on the factual allegations in the complaint.  When considering 
such a motion, a trial court must accept all factual allegations as true, 
deciding the motion on the pleadings alone.  A motion under MCR 
2.116(C)(8) may only be granted when a claim is so clearly unenforceable 
that no factual development could possibly justify recovery.[13] 
                                              
insurers to seek reimbursement for payment of some benefits as implicitly excluding any 
other reimbursement mechanism). 
11 Esurance, 330 Mich App at 595. 
12 Esurance Prop & Cas Ins Co v Mich Assigned Claims Plan, 506 Mich 913 (2020). 
13 El-Khalil v Oakwood Healthcare, Inc, 504 Mich 152, 159-160; 934 NW2d 685 (2019) 
(citations and emphasis omitted). 
 
 
 
 
7 
We review de novo a trial court’s decision on a motion for summary disposition.14  
A question of statutory interpretation is a question of law that this Court also reviews de 
novo.15  “[C]ourts must interpret statutes in a way that gives effect to every word, phrase, 
and clause in a statute and avoid an interpretation that would render any part of the statute 
surplusage or nugatory.”16  “A statute is rendered nugatory when an interpretation fails to 
give it meaning or effect.”17  Finally, this Court reviews de novo the application of a 
remedial, equitable doctrine such as equitable subrogation.18 
III.  ANALYSIS 
Our analysis proceeds in four parts.  First, we state the principles that underpin a 
claim for equitable subrogation.  Second, we lay out the relevant provisions of the no-fault 
act.  Third, we establish that Esurance is not asserting greater rights than Edwards 
possesses; that is, there is a legal basis upon which Esurance can press its claim for 
equitable relief, grounded in an order-of-priority analysis.  Fourth and finally, we analyze 
the interplay among rescission, Esurance’s alleged volunteer status, and its claim for 
                                              
14 Kendzierski v Macomb Co, 503 Mich 296, 302; 931 NW2d 604 (2019). 
15 Wigfall v Detroit, 504 Mich 330, 337; 934 NW2d 760 (2019). 
16 O’Connell v Dir of Elections, 316 Mich App 91, 98; 891 NW2d 240 (2016) (quotation 
marks and citation omitted). 
17 Apsey v Mem Hosp, 477 Mich 120, 131; 730 NW2d 695 (2007). 
18 See Knight v Northpointe Bank, 300 Mich App 109, 113; 832 NW2d 439 (2013) 
(applying this principle to the equitable doctrine of laches). 
 
 
 
 
8 
equitable subrogation—namely, whether rescission of the policy renders Esurance a 
volunteer and prevents Esurance from pursuing its equitable-subrogation claim. 
A.  PRINCIPLES THAT UNDERPIN AN EQUITABLE-SUBROGATION CLAIM 
“Equitable subrogation is a flexible, elastic doctrine of equity.”19  Thus, “[i]ts 
application ‘should and must proceed on the case-by-case analysis characteristic of equity 
jurisprudence.’ ”20  Equitable subrogation is the “mode which equity adopts to compel the 
ultimate payment of a debt by one who in justice, equity, and good conscience ought to 
pay it.”21  Equitable subrogation has been invoked successfully in a variety of 
circumstances,22 but “the mere fact that [it] has not been previously invoked in a particular 
situation is not a prima facie bar to its applicability.”23  This Court has explained that 
equitable subrogation “is a legal fiction through which a person who pays a debt for which 
another is primarily responsible is substituted or subrogated to all the rights and remedies 
                                              
19 Hartford Accident & Indemnity Co v Used Car Factory, Inc, 461 Mich 210, 215; 600 
NW2d 630 (1999), citing Atlanta Int’l Ins Co v Bell, 438 Mich at 521 (opinion by 
BRICKLEY, J.). 
20 Hartford Accident & Indemnity Co, 461 Mich at 215, quoting Atlanta Int’l Ins Co, 438 
Mich at 516 n 1 (opinion by BRICKLEY, J.). 
21 Smith v Sprague, 244 Mich 577, 580; 222 NW 207 (1928) (quotation marks and citations 
omitted). 
22 Esurance, 330 Mich App at 590 (collecting cases). 
23 Hartford, 461 Mich at 216 (quotation marks and citation omitted). 
 
 
 
 
9 
of the other.”24  The doctrine has two prongs: “the subrogee acquires no greater rights than 
those possessed by the subrogor, and . . . the subrogee may not be a ‘mere volunteer.’ ”25 
This Court has defined a “volunteer” as “one who intrudes himself into a matter 
which does not concern him, or one who pays the debt of another without request, when 
he is not legally or morally bound to do so, and when he has no interest to protect in making 
such payment.”26  But “[w]here the person paying the debt has an interest to protect, he is 
not a stranger. . . .  A payment is not voluntary when made under compulsion, . . . in 
ignorance of the real state of facts, or under an erroneous impression of one’s legal 
duty.”27  When an insurer pays expenses on behalf of its insured pursuant to an insurance 
contract, it is not doing so as a volunteer.28  And when an insurer pays a claim that another 
insurer may be liable for, it is “protecting its own interests and not acting as a volunteer,” 
and in that instance, the insurer is “entitled to invoke the doctrine of equitable 
                                              
24 Auto-Owners Ins Co v Amoco Prod Co, 468 Mich 53, 59; 658 NW2d 460 (2003), quoting 
Commercial Union Ins Co v Med Protective Co, 426 Mich 109, 117; 393 NW2d 479 (1986) 
(opinion by WILLIAMS, C.J.).  See also Machined Parts Corp v Schneider, 289 Mich 567, 
574; 286 NW 831 (1939) (“The doctrine of subrogation rests upon the equitable principle 
that one who, in order to protect a security held by him, is compelled to pay a debt for 
which another is primarily liable, is entitled to be substituted in the place of and to be vested 
with the rights of the person to whom such payment is made, without agreement to that 
effect.”) (quotation marks and citations omitted). 
25 Auto-Owners Ins Co, 468 Mich at 59, quoting Commercial Union Ins Co, 426 Mich at 
117 (opinion by WILLIAMS, C.J.). 
26 DAIIE, 337 Mich at 53-54 (quotation marks and citations omitted). 
27 Id. at 54 (quotation marks, citation, and paragraph structure omitted; emphasis added). 
28 Auto-Owners Ins Co, 468 Mich at 59, citing Auto Club Ins Ass’n v New York Life Ins Co, 
440 Mich 126, 132; 485 NW2d 695 (1992).  See also DAIIE, 337 Mich at 54-55. 
 
 
 
 
10 
subrogation.”29  Logically, then, an insurer who has “at least an arguable duty to pay” is 
“clearly not a volunteer.”30 
B.  RELEVANT PROVISIONS OF THE NO-FAULT ACT 
At the time of the accident, MCL 500.3114 provided, in relevant part: 
(1) . . . [A] personal protection insurance policy described in section 
3101(1) applies to accidental bodily injury to the person named in the policy, 
the person’s spouse, and a relative of either domiciled in the same household, 
if the injury arises from a motor vehicle accident. . . . 
*   *   * 
(4) Except as provided in subsections (1) to (3), a person suffering 
accidental bodily injury arising from a motor vehicle accident while an 
occupant of a motor vehicle shall claim personal protection insurance 
benefits from insurers in the following order of priority: 
(a) The insurer of the owner or registrant of the vehicle occupied. 
(b) The insurer of the operator of the vehicle occupied.[31] 
MCL 500.3172(1) provides, in relevant part: 
                                              
29 Auto-Owners Ins Co, 468 Mich at 60; see also Auto Club Ins Ass’n, 440 Mich at 132-
133. 
30 See Maryland Cas Co v Transamerica Ins Corp of America, 199 Mich App 561, 565; 
502 NW2d 749 (1993).  See also Fed Ins Co, an Indiana Corp v Hartford Steam Boiler 
Inspection & Ins Co, 415 F3d 487, 494-495 (CA 6, 2005) (applying Michigan law and 
holding that the plaintiff was “not a volunteer, and its claim for equitable subrogation may 
proceed” because, at the time each payment was made, the plaintiff was “ignorant of the 
‘real state of facts’ ” and “ ‘under an erroneous impression’ that it had a legal duty to 
compensate” another party under an insurance policy provision). 
31 MCL 500.3114(1) and (4)(a) through (b), as amended by 2002 PA 38, effective March 7, 
2002. 
 
 
 
 
11 
 
A person entitled to claim because of accidental bodily injury arising 
out of the ownership, operation, maintenance, or use of a motor vehicle as a 
motor vehicle in this state may claim personal protection insurance benefits 
through the assigned claims plan if any of the following apply: 
(a) No personal protection insurance is applicable to the injury.[32] 
C.  BECAUSE ESURANCE WAS NOT IN THE ORDER OF PRIORITY, IT HAD NO 
ACTUAL DUTY TO PAY PIP BENEFITS 
The Court of Appeals erred when it determined that MCL 500.3172(1)(a) prevents 
Esurance from pursuing an equitable-subrogation claim against defendants.  In an action 
sounding in equitable subrogation, Esurance, as the subrogee, possesses no greater rights 
than those possessed by Edwards, the subrogor.33  Accordingly, we determine whether, on 
the facts alleged, Edwards could have claimed benefits from defendants; if he could have, 
then Esurance has a viable equitable-subrogation claim.  In light of our order-of-priority 
analysis under MCL 500.3114, we conclude that Edwards did have a claim for those 
benefits from defendants, so Esurance’s equitable-subrogation claim does not fail as a 
matter of law. 
                                              
32 MCL 500.3172(1)(a).  The version of this statute in effect at the time of the accident was 
MCL 500.3172(1)(a), as amended by 2012 PA 204, effective September, 1, 2012.  The 
former version of the statute was substantively the same as the current version, and any 
minor differences between the 2012 version and the current version are neither material 
nor relevant to this case.  All references to MCL 500.3172 in this opinion are to the current 
version of the statute.  See 2019 PA 21. 
33 “Equity follows the law.”  See 1 Callaghan’s Michigan Pleading & Practice (2d ed), 
§ 8:35, p 496. 
 
 
 
 
12 
MCL 500.3172(1)(a) provides that a claimant “may claim [PIP] benefits through 
the [MACP] if . . . [n]o personal protection insurance is applicable to the injury.”34  The 
Court of Appeals reasoned that Esurance was claiming greater rights in its action for 
equitable subrogation than Edwards could himself have claimed because “when Edwards 
applied for benefits from the MAIPF, there was an applicable no-fault insurer: 
[Esurance].”35  Thus, “because Edwards had no claim against defendants, there is no claim 
for [Esurance] to enforce against defendants through equitable subrogation.”36  But this 
reasoning is flawed.  The mere existence of an insurance policy that ostensibly covers a 
claimant does not ipso facto render it a policy “applicable to the injury” under MCL 
500.3172(1)(a).  To know if there is such an “applicable” policy, courts must perform an 
order-of-priority analysis under MCL 500.3114(1) and (4)(a) through (b). 
Based on the allegations in its complaint, Esurance’s policy was not “applicable to 
the injury” for purposes of MCL 500.3172(1)(a) because Esurance, whose policy was 
                                              
34 MCL 500.3172(1)(a) (paragraph structure omitted).  Esurance alleged in its complaint 
that “Edwards, at the time of the accident, did not have insurance of his own and did not 
live with a resident relative who had insurance”; that “at the time of the accident, the 2015 
Dodge Challenger was solely owned and registered to [Anthony]”; that “there is no 
applicable automobile insurance for [Edwards’s] bodily injuries as a result of” the car 
accident; and that “[u]pon information and belief, there are no other priority insurers other 
than MACP/MAIPF.”  These assertions—which must be accepted as true for the purposes 
of a motion for summary disposition under MCR 2.116(C)(8)—are sufficient to allege that 
Edwards, and thus Esurance, had a claim against defendants under MCR 500.3172(1)(a). 
35 Esurance, 330 Mich App at 592. 
36 Id. at 593. 
 
 
 
 
13 
declared void ab initio after the accident,37 was not in the order of priority stated in MCL 
500.3114(1) and (4)(a) through (b).  MCL 500.3114(1) establishes a general rule that a 
person who sustains an accidental bodily injury in a motor vehicle accident must look first 
to no-fault insurance policies in his or her own household for no-fault benefits before 
looking to other insurers for benefits.38  Moreover, it is persons who are insured against 
loss, not vehicles; that is, no-fault coverage is tied to persons, not vehicles.39  At the time 
of the accident, Edwards did not have no-fault insurance, and he also was not a resident 
relative of someone who did, which means that he was not covered by the policy issued by 
Esurance under MCL 500.3114(1).  We next turn to MCL 500.3114(4)(a), which provides 
that Edwards could recover from “[t]he insurer of the owner or registrant of the vehicle 
                                              
37 Bazzi v Sentinel Ins Co, 502 Mich 390, 409; 919 NW2d 20 (2018).  See also id. 
(“[R]escission abrogates a contract and restores the parties to the relative positions that 
they would have occupied if the contract had never been made.”), citing Wall v Zynda, 283 
Mich 260, 264-265; 278 NW 66 (1938); and id. at 409 n 10 (“[R]escission abrogates a 
contract completely.  All former contract rights are annulled, and it is as if no contract had 
been made.  Thus, to rescind a contract is not merely to terminate it, but to undo it from the 
beginning, and the effect of rescission is not merely to release the parties from further 
obligation to each other in respect to the subject of the contract, but to annul the contract 
and restore the parties to the relative positions which they would have occupied if no such 
contract had ever been made.  Rescission involves a restoration of the status quo.”), quoting 
5A Michigan Civil Jurisprudence, Contracts, § 215, pp 439-440. 
38 Mich Mut Ins Co v Farm Bureau Ins Group, 183 Mich App 626, 630; 455 NW2d 352 
(1990).  Accord Underhill v Safeco Ins Co, 407 Mich 175, 191; 284 NW2d 463 (1979) (“It 
is our understanding of the legislative purpose that it was intended that injured persons who 
are insured or whose family member is insured for no-fault benefits would have primary 
resort to their own insurer.”). 
39 Lee v DAIIE, 412 Mich 505, 509; 315 NW2d 413 (1982) (“[I]t is the policy of the no-
fault act that persons, not motor vehicles, are insured against loss.”). 
 
 
 
 
14 
occupied” in the accident.40  In this case, the vehicle was in fact owned by Anthony, 
regardless of the policy’s rescission, and Esurance was not his insurer, which means 
Esurance again was not in the order of priority.  Finally, we turn to MCL 500.3114(4)(b), 
which provides that Edwards could recover from “[t]he insurer of the operator of the 
vehicle occupied” in the accident.41  Again, the operator of the vehicle was Edwards, who, 
at the time, did not have no-fault insurance of his own and did not live with a resident 
relative who had no-fault insurance.  Thus, Esurance’s complaint supports the conclusion 
that Edwards had a viable claim against defendants under MCL 500.3172(1)(a) because 
there was no policy “applicable to the injury” under the foregoing order-of-priority 
analysis.  As a result, Esurance’s equitable-subrogation claim, as pled by Esurance, can 
proceed. 
D.  BECAUSE ESURANCE WAS NOT A VOLUNTEER, IT CAN PURSUE A CLAIM 
FOR EQUITABLE SUBROGATION 
The Court of Appeals correctly recognized that when an insurance policy has been 
rescinded, it is void ab initio, which means it is as though the policy never existed; 
consequently, the parties are “restore[d] . . . to the relative positions that they would have 
occupied if the contract had never been made.”42  Based on the allegations in the pleadings, 
Esurance was not in the order of priority before the policy was rescinded, but it believed 
that is was because of Luana’s misrepresentations in her insurance application.  Therefore, 
                                              
40 MCL 500.3114(4)(a) (emphasis added). 
41 MCL 500.3114(4)(b) (emphasis added). 
42 Bazzi, 502 Mich at 409.  See also note 37 of this opinion. 
 
 
 
 
15 
Esurance paid PIP benefits to Edwards “under an erroneous impression of [its] legal 
duty.”43  Accordingly, the issue here is simply whether Esurance’s claim for equitable 
subrogation is precluded as a matter of law given that it promptly, albeit erroneously, paid 
PIP benefits to Edwards as the no-fault act requires.  Esurance is not so precluded; that 
holding would defeat the purpose of equitable subrogation,44 and it would frustrate the no-
fault act’s purpose vis-à-vis the timing of payments for benefits and the expedited handling 
of disputes. 
It is helpful to contextualize this dispute in light of both the purpose of the no-fault 
act and the incentive structure that it puts in place for insurers like Esurance to pay a 
claimant’s PIP benefits in a timely fashion.  The no-fault act is “a comprehensive scheme 
of compensation designed to provide sure and speedy recovery of certain economic losses 
resulting from motor vehicle accidents.”45  For that reason, “whenever a priority question 
                                              
43 DAIIE, 337 Mich at 54; Maryland Cas Co, 199 Mich App at 564-565; Fed Ins Co, an 
Indiana Corp, 415 F3d at 494.  In addition, a similar rule has been stated with approval in 
16 Couch, Insurance, 3d, § 223:27, pp 58-59 (“For purposes of determining insurer’s 
subrogation rights, insurance payment is not voluntary if it is made with reasonable or 
good-faith belief in obligation or personal interest in making that payment.  This standard 
is met when an insurer has acted in good faith to discharge a disputed obligation, even if it 
is ultimately determined that its insurance policy did not apply.”). 
44 Equitable subrogation is the “mode which equity adopts to compel the ultimate payment 
of a debt by one who in justice, equity, and good conscience ought to pay it.”  Smith, 244 
Mich at 580 (quotation marks and citations omitted). 
45 Belcher v Aetna Cas & Surety Co, 409 Mich 231, 240; 293 NW2d 594 (1980).  Accord 
Perez v State Farm Mut Auto Ins Co, 418 Mich 634, 647; 344 NW2d 773 (1984) (LEVIN, 
J., for reversal) (explaining that the no-fault act “provid[es] assured, adequate and prompt 
recovery for certain economic losses arising from motor vehicle accidents”) (quotation 
marks and citation omitted). 
 
 
 
 
16 
arises between two insurers, the preferred method of resolution is for one of the insurers to 
pay the claim and sue the other in an action of [equitable] subrogation.”46  Accordingly, an 
insurer that pays a claim for which another may be liable has “an arguable duty” to pay.47  
Therefore, when an insurer does pay under those circumstances, it is merely “protecting its 
own interests and not acting as a volunteer,” which “entitle[s] [it] to invoke the doctrine of 
equitable subrogation . . . .”48  The notion that an insurer with an arguable duty to pay PIP 
benefits must do so promptly to protect its own interests, and that its doing so does not 
make it a volunteer, stems largely from the operation of three specific statutes, two of which 
are part of the no-fault act.49  These statutes strongly incentivize insurers like Esurance to 
adhere to the no-fault act’s “pay promptly, litigate later” logic. 
MCL 500.314250 specifies that PIP benefits “are payable as loss accrues” and “are 
overdue if not paid within 30 days after an insurer receives reasonable proof of the fact and 
                                              
46 Allstate Ins Co v Citizens Ins Co of America, 118 Mich App 594, 603-604; 325 NW2d 
505 (1982), citing Farmers Ins Group v Progressive Cas Ins Co, 84 Mich App 474, 484; 
269 NW2d 647 (1978). 
47 Maryland Cas Co, 199 Mich App at 564-565. 
48 Auto-Owners Ins Co, 468 Mich at 60; see also Auto Club Ins Ass’n, 440 Mich at 132-
133. 
49 MCL 500.3142 and MCL 500.3148 are part of the no-fault act, and the third, MCL 
600.6013, is part of the Revised Judicature Act, MCL 600.101 et seq. 
50 MCL 500.3142 was amended by 2019 PA 21, effective June 11, 2019.  The amendment 
did not substantively change the relevant subsections, and all references in this opinion to 
MCL 500.3142 are to the current version of the statute. 
 
 
 
 
17 
of the amount of loss sustained.”51  The 30-day window also applies to parts of claims 
supported by reasonable proof, and in addition, an insurer has 30 days to pay PIP benefits 
on “any part of the remainder of the claim that is later supported by reasonable 
proof . . . .”52  “An overdue payment bears simple interest at the rate of 12% per annum.”53  
Further, MCL 600.6013 authorizes levying statutory interest on judgments “rendered on a 
written instrument evidencing indebtedness with a specified interest rate[.]”54  That rate 
“shall not exceed 13% per year compounded annually.”55  Finally, MCL 500.3148 provides 
for the assessment of attorney fees “if the court finds that a no-fault insurer has 
unreasonably delayed in making benefit payments.”56  “[W]hen the only question is which 
of two insurers will pay, it is unreasonable for an insurer to refuse payment of benefits.”57  
“A dispute of priority among insurers will not excuse the delay in making timely 
payment.”58 
                                              
51 MCL 500.3142(1) and (2).  See also Auto Club Ins Ass’n, 440 Mich at 133. 
52 MCL 500.3142(2). 
53 MCL 500.3142(4). 
54 MCL 600.6013(7).  See also Auto Club Ins Ass’n, 440 Mich at 133. 
55 MCL 600.6013(7). 
56 Auto Club Ins Ass’n, 440 Mich at 133; MCL 500.3148(1). 
57 Univ of Mich Regents v State Farm Mut Ins Co, 250 Mich App 719, 737; 650 NW2d 129 
(2002), overruled on other grounds by Covenant Med Ctr, Inc v State Farm Mut Auto Ins 
Co, 500 Mich 191 (2017). 
58 Bloemsma v Auto Club Ins Co, 174 Mich App 692, 697; 436 NW2d 442 (1989). 
 
 
 
 
18 
What emerges from these statutes is an axiom of both no-fault insurance law and 
practice: insurers like Esurance must pay PIP benefits to claimants promptly and sort out 
priority and reimbursement issues later.  That axiom is actualized by the very real 
possibility that steep penalties will be assessed against an insurer that drags its feet in 
paying PIP benefits to claimants.59  Thus, the purpose, logic, and incentive structure of 
Michigan’s no-fault regime all run contrary to the conclusion that Esurance was acting as 
a volunteer when it promptly complied with the no-fault act’s various payment-
incentivizing provisions while at the same time doing so “in ignorance of the real state of 
facts” and while laboring “under an erroneous impression of [its] legal duty.”60  Under 
these circumstances, Esurance had “an arguable duty” to pay Edwards’s claim because 
Luana had represented that she owned the crashed vehicle, which, if true, would have 
rendered Esurance the highest-priority insurer under MCL 500.3114.61  But because 
Esurance was not in the order of priority, and it was operating under a mistaken 
understanding of both the facts and its legal duties, Esurance’s payments to Edwards were 
properly understood to be nonvoluntary, and equitable subrogation is thus available to it as 
a remedy. 
                                              
59 See Univ of Mich Regents, 250 Mich App at 737; Bloemsma, 174 Mich App at 697. 
60 DAIIE, 337 Mich at 54 (quotation marks and citation omitted). 
61 Maryland Cas Co, 199 Mich App at 564-565. 
 
 
 
 
19 
IV.  CONCLUSION 
The Court of Appeals observed that the question of whether defendants can be sued 
under MCL 500.3174 “is not relevant if there is no possible claim to bring against them in 
the first place.”62  And since the Court of Appeals held that Esurance could not pursue its 
equitable-subrogation claim against defendants, it concluded that MCL 500.3174 was 
ultimately not relevant and that it did not need “to address the question of who, exactly, 
may be sued under that statute.”63  But because we have determined that Esurance does 
have a viable claim against defendants, the question of who may be sued under MCL 
500.3174 is relevant. 
Accordingly, we reverse the Court of Appeals, and on remand, the Court of Appeals 
shall consider—in addition to any other issues it deems relevant in light of this opinion—
whether defendants can be sued under MCL 500.3174.  If necessary to the proper resolution 
of this case, the Court of Appeals may remand to the trial court.  We do not retain 
jurisdiction. 
 
 
Brian K. Zahra 
 
Bridget M. McCormack 
 
Richard H. Bernstein 
 
Megan K. Cavanagh 
 
Elizabeth M. Welch 
                                              
62 Esurance, 330 Mich App at 593 n 4. 
63 Id. 
S T A T E  O F  M I C H I G A N 
 
SUPREME COURT 
 
 
ESURANCE PROPERTY & CASUALTY 
INSURANCE COMPANY, 
 
Plaintiff-Appellant, 
 
 
v 
No. 160592 
 
MICHIGAN ASSIGNED CLAIMS PLAN 
and MICHIGAN AUTOMOBILE 
INSURANCE PLACEMENT FACILITY, 
 
 
Defendants-Appellees. 
 
 
 
CLEMENT, J. (dissenting). 
Esurance Property & Casualty Insurance Company issued a no-fault insurance 
policy to Luana Edwards-White.  Later, Roshaun Edwards was injured while operating the 
insured vehicle, and Esurance paid personal protection insurance (PIP) benefits to 
Roshaun.  Eventually, Esurance filed a successful rescission action against Luana, 
rescinding the no-fault policy it had issued to her.  Seeking to recover the PIP benefits it 
had paid, Esurance then sued the Michigan Assigned Claims Plan (MACP), theorizing that 
it was equitably subrogated to the claim Roshaun would have had against the MACP if the 
policy issued to Luana had been rescinded before Roshaun’s accident.  The trial court 
disagreed, and the Court of Appeals affirmed.1  In my view, this Court need not do more 
                                              
1 Esurance Prop & Cas Ins Co v Mich Assigned Claims Plan, 330 Mich App 584; 950 
NW2d 528 (2019). 
 
 
 
 
2 
than resolve whether those courts correctly resolved the issues presented.  I agree with the 
rest of the Court that the lower courts did not correctly resolve the issues presented, but I 
believe the majority reaches issues we need not address.  I would simply hold that the 
rationales the lower courts adopted for dismissing Esurance’s subrogation claim were 
incorrect and remand to the trial court to resume its consideration of the case from the point 
it left off when it (erroneously) granted summary disposition to the MACP. 
The trial court’s rationale for granting summary disposition to the MACP was the 
negative-implication canon expressio unius est exclusio alterius—the expression of one 
thing is the exclusion of another.  The court held that Michigan’s no-fault laws provide 
mechanisms by which a no-fault insurer can recover PIP benefits paid and, by negative 
implication, that these are the exclusive mechanisms for no-fault insurers to recover PIP 
benefits paid.  Because an equitable-subrogation action is not one of the listed mechanisms 
in the no-fault act,2 the trial court concluded that Esurance could not maintain this action.  
The Court of Appeals correctly rejected this argument, stating, “[I]t is a misapplication of 
the expressio unius maxim to conclude that the Legislature must have intended to exclude 
the type of suit brought by plaintiff because such action is not specified in the no-fault act.”  
Esurance Prop & Cas Ins Co v Mich Assigned Claims Plan, 330 Mich App 584, 591; 950 
NW2d 528 (2019).  This Court recently agreed, holding that “we do not believe these 
[reimbursement] options can be construed as ‘an expression of all that shares in the grant’ 
of avenues for reimbursement” allowed by the no-fault law.  Bronner v Detroit, 507 Mich 
___, ___;     NW2d     (2021). 
                                              
2 MCL 500.3101 et seq. 
 
 
 
 
3 
However, the Court of Appeals affirmed the trial court, holding that it had reached 
the right result for the wrong reasons.  The Court of Appeals reasoned that, at the time 
Esurance was paying PIP benefits to Edwards, Edwards had no claim against the MACP, 
precisely because the insurance policy Esurance had issued to Luana existed.  “[W]hen 
Edwards applied for [an assigned claim], there was an applicable no-fault insurer: plaintiff.  
Thus, Edwards had no right to [an assigned claim] because none of the four avenues for 
making a[n assigned claim] under MCL 500.3172 was open to him.”  Esurance, 330 Mich 
App at 592 (emphasis omitted).  On this theory, Edwards had no claim against the MACP 
to which Esurance could be subrogated. 
This reasoning denies the equitable nature of both rescission and subrogation.  As 
the majority notes, subrogation is a “flexible and elastic equitable doctrine” “that permits 
one party to stand in the shoes of another.”  Atlanta Int’l Ins Co v Bell, 438 Mich 512, 521-
522; 475 NW2d 294 (1991) (opinion by BRICKLEY, J.).  But rescission itself is also an 
equitable remedy.  Lenawee Co Bd of Health v Messerly, 417 Mich 17, 31; 331 NW2d 203 
(1982).  It imposes some degree of revisionist history—a legal fiction—in the name of 
fairness: 
To rescind a contract is not merely to terminate it, but to abrogate and 
undo it from the beginning ; that is, not merely to release the parties from 
further obligation to each other in respect to the subject of the contract, but 
to annul the contract and restore the parties to the relative positions which 
they would have occupied if no such contract had ever been made.  
Rescission necessarily involves a repudiation of the contract and a refusal of 
the moving party to be further bound by it.  But this by itself would constitute 
no more than a breach of the contract or a refusal of performance, while the 
idea of rescission involves the additional and distinguishing element of a 
restoration of the status quo.  [Wall v Zynda, 283 Mich 260, 264; 278 NW 
66 (1938) (quotation marks and citation omitted; emphasis added).] 
 
 
 
 
4 
The inquiry does not ask what Roshaun’s options were on the day he filed a claim for PIP 
benefits.  To “restore the parties to the relative positions which they would have occupied 
if no . . . contract had ever been made,” id., we ask what Roshaun’s options should have 
been on the day he filed a claim for PIP benefits—what he could have done if the policy 
Esurance issued to Luana had been rescinded before Roshaun’s accident.  If Roshaun 
should have had a claim against the MACP for PIP benefits had Esurance never issued any 
policy to Luana, then Esurance could potentially be subrogated to that claim.3 
The Court of Appeals held in the alternative that Esurance’s successful rescission 
of the policy it had issued to Luana turned it into a volunteer—precluding subrogation 
relief.  Because Esurance successfully rescinded the policy it had issued to Luana, the PIP 
payments it made to Roshaun as a result of the policy were to be construed, ex post facto, 
as voluntary payments made to someone with whom Esurance had no contractual 
relationship and to whom it owed no legal responsibilities. 
[I]f the claim for equitable subrogation proceeds under the premise that the 
policy never existed, then plaintiff had no obligation to pay PIP benefits on 
[Roshaun’s] behalf.  Without a policy, plaintiff would have paid benefits not 
to its insured, but to an individual with whom it had no relationship.  Without 
any legal or equitable duty to pay PIP benefits, plaintiff is a mere volunteer—
one who accidentally paid nearly $600,000 in PIP benefits.  [Esurance, 330 
Mich App at 595.] 
                                              
3 As noted by the majority, Roshaun “also applied for benefits from defendants,” satisfying 
MCL 500.3174.  If he had not, this analysis might well be different—I do not mean to 
suggest that the equitable nature of rescission can construct, via a legal fiction, notice owed 
to a third party which was not as a matter of historical fact actually provided. 
 
 
 
 
5 
This reasoning once again frustrates the equitable character of both rescission and 
subrogation.  As noted, rescission is revisionist history in the name of fairness—a legal 
fiction.  The fact that Esurance successfully rescinded the policy it issued to Luana does 
not turn it into a volunteer such that subrogation relief is precluded.  To retroactively 
construe Esurance’s PIP payments as “voluntary” because the parties are being treated as 
though the policy never existed would be unjust—at the time the PIP payments were made, 
Esurance did not yet know the policy did not exist and therefore may have made the 
payment under a reasonable but erroneous impression of its legal duty.  “A payment is not 
voluntary when made . . . in ignorance of the real state of facts, or under an erroneous 
impression of one’s legal duty.”  Detroit Auto Inter-Ins Exch v Detroit Mut Auto Ins Co, 
337 Mich 50, 54; 59 NW2d 80 (1953) (quotation marks and citation omitted).4  When “the 
real state of facts” is a legally constructed one—i.e., that the policy is rescinded and thus 
the parties are to be treated as though the policy had never existed—a payment made in 
ignorance of that subsequent rescission cannot be held against the subrogor to turn it into 
a volunteer. 
In short, then, I would hold that: (1) the trial court’s expressio unius holding was 
erroneous, (2) whether Roshaun had a claim against defendants to which Esurance can be 
subrogated turns on whether Roshaun would have had a claim against defendants if the 
policy Esurance issued to Luana had been rescinded before Roshaun’s accident, and (3) 
                                              
4 Of course, neither ignorance of the true facts nor an erroneous impression of one’s legal 
duty is automatic insulation against being a volunteer.  A party who happens to have been 
ignorant of the true facts could, presumably, render itself a volunteer for some other reason, 
and in similar fashion, a party whose erroneous impression of its legal duties is 
unreasonable could still be a volunteer. 
 
 
 
 
6 
rescission of the policy Esurance issued to Luana does not turn Esurance into an after-the-
fact “volunteer” such as to defeat this subrogation action.  Having made these corrections, 
I would remand the case to the trial court for it to resume its consideration of the matter 
from the point the proceedings ended there in light of these corrections. 
 
 
Elizabeth T. Clement 
 
David F. Viviano