Court Opinion

ID: 9691488
Source: CourtListenerOpinion
Date Created: 2023-08-24 20:35:49.841361+00
Date Added: 2024-06-11T10:14:59.628512
License: Public Domain

Cavanagh, J.
(concurring). I agree with the majority that the insurance contract unambiguously requires that the insured give notice to the insurance company that it is claiming uninsured motorist benefits within three years of the accident. I disagree that it requires the insured to “make a claim” for uninsured motorist benefits; however, for reasons stated below, I concur in the result reached by the majority.
The contract requires that the demand for arbitration be filed within three years of the date of the accident if either the insured or the insurance company disagrees over the insured status of the third party. I agree with the majority that this clause is unambiguous. However, I would find that the clause works an injustice against the insured.
In this case, the insurance company received notice that an accident took place and that injuries were involved. It received notice that the plaintiffs claimed that the third party was insured, and indeed provided *473proof of insurance to the plaintiffs and the police.1 However, the insurance company did not inform the plaintiffs that it disagreed with them over the insured status of the third party until May 1989, approximately one year and six months after the accident. All the while, the contractual limitation period was running against the Morleys solely because the insurance company waited to inform its insureds of the disagreement until one year and six months after the accident.
The policy language states, “If we do not agree with the Insured person(s): that they are legally entitled to recover damages from the owner or the operator of an uninsured motor vehicle . . . either they or we must demand, in writing, that the issues, excluding matters of coverage, be determined by arbitration.” The problem in this case is that the insurance company did not set any limitation period for informing its insureds that it “[did] not agree” with the insured that the third-party vehicle was an uninsured vehicle. This allowed the insurance company to purposefully withhold telling its insureds that it disagreed with them until three years passed, or until the three-year limitation was significantly shortened.
The majority’s interpretation of the contract means that in every accident, an insured must “file a claim,” for uninsured motorist benefits, whether or not the policyholder knows that the vehicle is uninsured. It is obvious that, in this case, the majority would require the plaintiffs to have filed a claim for uninsured motorist benefits even though they had proof of *474insurance that later was found to be faulty. Requiring the insured to “file a claim” for uninsured motorist benefits rather than simply giving the insurance company “notice” it believed the third-party to be insured would be unfair and cumbersome. The plaintiffs in this case did not know the third party was not insured. It would be illogical, then, to require them to file for uninsured motorist benefits.
To settle the problem of the insured not knowing when the insurance company “disagrees,” the majority states that the contract “expressly” requires that an insured actually claim entitlement to these uninsured motorist benefits. However, I can find no language in the contract that expressly states that the insured must “file a claim” for uninsured motorist benefits. I think the majority recognizes this weakness in its argument because it states: “[E]ven if one accepts, arguendo, that this language is not express, it certainly is clear by implication that a claim must be made.” Ante at 466. As proof, the majority claims that “[o]bviously, the insurer could not disagree with the insureds until a request for benefits was made, which in essence is a claim.” Id. I disagree. Why should a person file a claim for uninsured motorist benefits when he believes that the third party is insured and has proof of that insurance? The insurance contract could easily be interpreted to “imply” only that it must give the insured “notice” of an accident with another vehicle that claims to be insured, rather than requiring the insured to “file a claim” for uninsured motorist benefits, despite having proof of insurance from the third-party motorist. If it turns out, as in this case, that the proof of insurance is invalid, the insur*475anee company should give notice to the policyholder that it “disagrees” that the third party is insured.
Once an insurance company receives notice that an insured claims a third party to be insured, it should be required to toll the limitation period until it informs the insured that it “disagrees.” The other alternative for the insurance company, which is expressly contemplated under the contract, is that the insurance company must file for arbitration within three years of the accident, because only the insurance company knows whether it agrees with the policyholder that the third party is insured. Neither scenario occurred in this case.
However, our grant order in this case specifically limited the question presented to “whether the trial court erred when it declared ambiguous the three-year limitation period contained in part IV of the policy of insurance.” 456 Mich 909 (1997). Therefore, affording the plaintiffs equitable relief is not properly before this Court. As a consequence, I am compelled to concur in the result reached by the majority because I do not find the words of the contract to be ambiguous, I merely find them to be unjust. For this reason, I would either resubmit this case or remand it to the Court of Appeals and direct the parties to brief whether equity requires the tolling of the limitation period under these circumstances.
Kelly, J., concurred with Cavanagh, J.

 Unfortunately for the plaintiffs, after the accident, a court determined that the proof of insurance was not in effect at the time of the accident.