Court Opinion

ID: 4017451
Source: CourtListenerOpinion
Date Created: 2016-07-20 15:06:16.090259+00
Date Added: 2024-06-11T14:44:48.859609
License: Public Domain

STATE OF MICHIGAN

                           COURT OF APPEALS

AUTO CLUB INSURANCE ASSOCIATION,                                   UNPUBLISHED
                                                                   July 19, 2016
              Plaintiff-Appellant,

v                                                                  No. 326597
                                                                   Oakland Circuit Court
BRISTOL WEST PREFERRED INSURANCE                                   LC No. 2014-140083-NF
COMPANY,

              Defendant-Appellee.

Before: RIORDAN, P.J., and SAAD and M. J. KELLY, JJ.

PER CURIAM.

        In this action for reimbursement of benefits paid under the no-fault act, see MCL
500.3101 et seq., plaintiff, Auto Club Insurance Association, appeals by right the trial court’s
order granting the motion for summary disposition by defendant, Bristol West Preferred
Insurance Company. Because the trial court erred when it determined that Bristol West was not
liable to reimburse Auto Club, we reverse.

        Aaron Starkey suffered injuries in a motorcycle accident. He claimed that a silver SUV
cut in front of him and caused him to lose control of his motorcycle and crash. Tianna Hunter,
who drove the silver SUV, stated that Starkey attempted to speed past her and lost control of his
motorcycle. She said she never changed lanes. Tianna Hunter’s mother insured the SUV with
Bristol West.

         In September 2012, Starkey sued Hunter, her unidentified insurer, and others for damages
arising from the motorcycle accident. Hunter did not respond because she believed she was
simply a witness and not a party. Because Hunter did not respond, Starkey did not know who
insured Hunter’s vehicle and the Assigned Claims Facility assigned his no-fault claim to Auto
Club. Auto Club participated in the underlying litigation. Hunter and her mother testified at
depositions. After her deposition in September 2013, Hunter’s mother notified Bristol West of
the litigation for the first time.

       In November 2013, Auto Club settled the underlying litigation with Starkey and
Beaumont Hospital, which had intervened to receive payment for services it provided Starkey.
The trial court dismissed the suit after the settlement. Later that same month, Starkey filed
another lawsuit; he sued, Hunter, her mother, and another person. It is undisputed that neither
Hunter nor her mother notified Bristol West of this subsequent lawsuit.
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       In April 2014, Bristol West informed Hunter and her mother that it would not provide
coverage for the accident. The trial court also entered a default against Hunter and the other
defendants in the second suit.

        In April 2014, Auto Club sued Bristol West for reimbursement of the claims that it had
paid on behalf of Bristol West’s insured. Auto Club moved for summary disposition under MCR
2.116(C)(10) on the ground that Bristol West was the insurer with higher priority and clearly had
an obligation to reimburse Auto Club. Bristol West answered and moved for summary
disposition under MCR 2.116(I)(2). Bristol West argued that Starkey was ineligible for benefits
and that it had no obligation to cover Hunter or her mother because they failed to notify it of the
accident and subsequent lawsuits. The trial court agreed with Bristol West and granted Bristol
West’s motion.

       Auto Club then appealed in this Court.

        Auto Club argues that the trial court erred when it denied its motion for summary
disposition and granted Bristol West’s motion. Specifically, it argues that it has an absolute right
to reimbursement under the no-fault act. This Court reviews de novo a trial court’s decision on a
motion for summary disposition. Pransky v Falcon Gp, Inc, 311 Mich App 164, 173; 874 NW2d
367 (2015). This Court also reviews de novo whether the trial court properly selected,
interpreted, and applied the relevant statutory provisions. Id.

        Before the trial court and on appeal, Bristol West argues that it has no obligation to
provide no-fault insurance benefits because its insured failed to provide it with notice of the
accident and underlying litigation, which prejudiced its ability to defend. It relies on the defense
provided by MCL 257.520(f)(6), which is part of the financial responsibility act. See MCL
257.501 et seq. This Court has stated that the Legislature incorporated the requirements of the
financial responsibility act into the no-fault act. See State Farm Mut Auto Ins Co v Roe, 226
Mich App 258, 268; 573 NW2d 628 (1997). However, our Supreme Court has since held that
appellate courts have erred by incorporating the statutory requirements of the financial
responsibility act into the no-fault act because the requirements stated under MCL 257.520(f)
only apply to a “motor vehicle liability policy” and the act defines a “motor vehicle liability
policy” as one certified under MCL 257.518 or MCL 257.519. See Titan Ins Co v Hyten, 491
Mich 547, 559-560; 817 NW2d 562 (2012), quoting, in relevant part, MCL 257.520(a) and MCL
257.520(f). Because Bristol West did not present any evidence that the policy at issue was
certified under the financial responsibility act, the defense stated under MCL 257.520(f)(6) does
not apply.

        Under the no-fault act, an insurer assigned to handle a no-fault claim under the assigned
claims plan is “entitled to reimbursement from the defaulting insurers to the extent of their
financial responsibility.” MCL 500.3172(1). Because the right to obtain reimbursement is
statutory and not part of a subrogation action, the assigned-claims insurer’s right to
reimbursement cannot be defeated by defenses that might apply to the underlying claim for
coverage. See Williams v Enjoi Transp Solutions, 307 Mich App 182, 187-188; 858 NW2d 530
(2014). Thus, even if lack of notice might be a valid ground for denying coverage, it is not a
defense to Auto Club’s right to reimbursement under MCL 500.3172(1). Consequently, the trial
court erred when it determined that—as a matter of law—Bristol West could not be liable to

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reimburse Auto Club under MCL 500.3172(1) on the ground that its insured did not give it
proper notice.

        Reversed and remanded for entry of an order granting Auto Club’s motion for summary
disposition. We do not retain jurisdiction. As the prevailing party, Auto Club may tax its costs.
MCR 7.219(A).

                                                           /s/ Michael J. Riordan
                                                           /s/ Henry William Saad
                                                           /s/ Michael J. Kelly

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