Court Opinion

ID: 9654464
Source: CourtListenerOpinion
Date Created: 2023-08-23 18:22:26.685692+00
Date Added: 2024-06-11T18:13:09.681974
License: Public Domain

*653Neff, J.
(dissenting). I respectfully dissent. I would hold that the operative date for purposes of the tolling provision of the contractual period of limitation is December 19, 1994, the date plaintiff received notice of the denial of his claim. Therefore, the filing of the complaint on December 18, 1995, was timely, assuming that notice of the loss was given on May 12, 1994, as plaintiff alleges. Because there is a dispute over the date plaintiff notified defendant of the loss and the trial court did not resolve the dispute, this case should be remanded to the trial court for a determination of the date on which notice was given.1
As the majority opinion notes, the question for decision is whether the tolling period ends when the insurer mails the notice of denial or when the insured receives it. This case is a good vehicle to decide this question because there appears to be no dispute that the denial notice was mailed on December 16, 1994, and received on December 19, 1994.
In the context of a contractual period of limitation, as here, the date of loss starts the period running, but it is tolled from the time of notice of loss to the insurer until the latter “formally'denies liability.” Tom Thomas Organization, Inc v Reliance Ins Co, 396 *654Mich 588, 593-594; 242 NW2d 396 (1976); see also In re Certified Question, Ford Motor Co v Lumbermens Mut Casualty Co, 413 Mich 22; 319 NW2d 320 (1982). The question is whether liability is formally denied on the date the notice is mailed or when it is received. It is akin to asking whether a tree falling in the forest makes a sound if there is no one present to hear it.
The answer can be found in the purpose of the judicially created tolling provision; it is for the protection of policyholders and to allow a full year to bring suit. Hamdi v Michigan Basic Property Ins Ass’n, 190 Mich App 333, 336; 475 NW2d 467 (1991). By providing that the tolling period ends when the notice is mailed, the insured is deprived of the full period in the contract to bring suit and is compelled to attempt to anticipate action by the insurer with no real opportunity to do so. The insured cannot be aware of the denial until receipt of the notice. Therefore, if the tolling of the contractual period of limitation ends before receipt, i.e., on the date the denial is mailed, the insured is deprived of the full, one-year period in which to file suit. Here the insured had only 362 days to file suit, not 365, and the rule created by the majority is inconsistent with the purpose of tolling.
An additional factor should be considered. The rule created by the majority will, in some instances, result in unnecessary litigation in those cases in which the insured, fearing denial of the claim and desiring to preserve the right to proceed under the policy, files suit before receipt of notice only to find out that the insurer has decided to pay the claim. While this might be seen as a minor inconvenience because the litigation can be easily dismissed, it nevertheless creates *655an additional burden on the insured and the justice system.
I agree with the majority that insurers can easily guarantee that the date of receipt is capable of exact determination by sending denial notices via some form of restricted mail, a common practice in the insurance industry in other contexts. The inconvenience of such a practice would be minimal and would serve the purposes of protecting policy holders and the judicially created tolling concept as well as the broader purpose of discouraging unnecessary litigation.
I would reverse and remand.

 As pointed out in both the trial court opinion and the majority opinion here, if the tolling period ends when the denial notice is mailed, it does not matter in this case when plaintiff gave notice of the loss because .he filed suit more than a year after tolling of the period of limitation ended and, by definition, after the period of limitation ran. However, if the tolling period ended when plaintiff received the denial notice, then the date of notice of loss becomes crucial. If notice was given on May 12, 1994, the period of limitation was tolled until December 19, 1994, and because suit was filed on December 18,1995, it was timely. On the other hand, if notice was given on May 26, 1994, the period of limitation ran for two weeks before it was tolled. Receipt of the denial notice on December 19, 1994, would mean that the period of limitation would run December 5, 1995, and plaintiff’s complaint filed on December 18 would be untimely.