Court Opinion

ID: 4296140
Source: CourtListenerOpinion
Date Created: 2018-07-20 09:07:23.46731+00
Date Added: 2024-06-11T14:40:25.762331
License: Public Domain

STATE OF MICHIGAN

                              COURT OF APPEALS

NEXHMEDIN QAFLESHI,                                                   UNPUBLISHED
                                                                      July 19, 2018
                 Plaintiff-Appellant,

v                                                                     No. 335835
                                                                      Wayne Circuit Court
LINCOLN GENERAL INSURANCE COMPANY                                     LC No. 14-014402-NI
and FARMERS INSURANCE EXCHANGE,

                 Defendants-Appellees.

Before: FORT HOOD, P.J., and SERVITTO and BECKERING, JJ.

PER CURIAM.

        In this appeal, plaintiff Nexhmedin Qafleshi challenges the trial court’s order denying his
motion to amend his complaint to reinstate defendant Farmers Insurance Exchange (Farmers) as
a party to this litigation, after Farmers had obtained an order granting summary disposition in its
favor. For the reasons set forth in this opinion, we affirm.

                                              I. FACTS

       Plaintiff, a truck driver, allegedly sustained injuries in a 2008 motor-vehicle accident near
Ann Arbor, Michigan. Plaintiff’s employer, the owner of the vehicle plaintiff was driving,
insured it with a policy issued by defendant Lincoln General Insurance Company.1 Plaintiff’s
employer was located in Illinois and obtained the policy from Lincoln General in Illinois. As
relevant to this appeal, where plaintiff was uncertain about and had unspecified questions
regarding the appropriate insurer to provide him no-fault benefits, he filed a claim with the
Michigan Assigned Claims Plan (MACP), which assigned Farmers to handle plaintiff’s claim.

        Lincoln General’s apparent failure or refusal to pay no-fault benefits prompted plaintiff to
file two previous lawsuits in 2011 and 2013. In the 2011 suit, plaintiff sued Lincoln General
alleging wrongful refusal to pay no-fault benefits, and the case ended with a monetary settlement
payment by Lincoln General. Plaintiff sued Lincoln General again in 2013, this time suing
Farmers as well. Plaintiff ultimately voluntarily dismissed Farmers from the lawsuit and settled

1
    Lincoln General has not filed an appearance or otherwise participated in this appeal.

                                                  -1-
with Lincoln General. Plaintiff filed the present lawsuit against Lincoln General and Farmers in
2014, apparently out of concern that Lincoln General would become insolvent. Given that
Lincoln General was not in fact insolvent when the lawsuit was filed, Farmers moved for
summary disposition, arguing (1) that it was not a proper insurer, (2) that Farmers was
improperly assigned to be plaintiff’s assigned insurer through the MACP, and (3) that the
Michigan Property and Casualty Guaranty Association (MPCGA) was the proper party to handle
plaintiff’s claim if Lincoln General were in fact insolvent. The record reflects that plaintiff
sought Farmers’s concurrence in amending the complaint to add the MPCGA as a defendant in
April 2015, but for reasons unclear from the record the MPCGA was not added as a defendant.

        At the hearing on Farmers’s motion for summary disposition, counsel for Lincoln
General was present and confirmed that, while Lincoln General was in receivership, it was, at the
time of the hearing, solvent and had sufficient funds to pay plaintiff’s claim. The trial court,
noting that “[i]t [wa]s undisputed that Lincoln General is a solvent company,” granted summary
disposition in favor of Farmers without prejudice.

         Eventually, after Farmers’s dismissal and while this case was still pending, Lincoln
General did become insolvent and moved for dismissal. In its motion, Lincoln General asserted
that plaintiff’s proper remedy would be found by proceeding against Lincoln General’s receiver
through the procedure set forth in MCL 500.8156, by which plaintiff would proceed against
Lincoln General’s estate under the order of liquidation entered in Pennsylvania. Plaintiff did not
respond to that motion or otherwise object, but instead filed a motion seeking leave to amend the
complaint to reinstate Farmers as a defendant. The trial court, noting that Lincoln General’s
insolvency left alternate remedies for plaintiff to pursue, granted Lincoln General’s motion to
dismiss. The trial court subsequently heard plaintiff’s motion seeking leave to amend the
complaint. Noting that the “MACP only assigns an insurer if there is no insurance” and agreeing
with Farmers that the proper procedure upon Lincoln General’s liquidation was for plaintiff to
file a claim with the MPCGA, the trial court denied plaintiff’s motion. Plaintiff now appeals as
of right.

                                 II. STANDARD OF REVIEW

        A trial court’s decision to grant or deny a motion for leave to amend a pleading is
reviewed on appeal for an abuse of discretion. Wormsbacher v Seaver Title Co, 284 Mich App
1, 8; 772 NW2d 827 (2009). In reviewing the trial court’s determination, we accord it significant
deference, and will only reverse the trial court’s decision where it is outside the range of
principled outcomes. Id.

                                        III. ANALYSIS

       The applicable court rule provides that leave to amend a complaint “shall be freely given
when justice so requires.” MCR 2.118(A)(2). However, an exception to this general rule is that
leave may be denied where the proposed amendment would be futile. Miller v Chapman
Contracting, 477 Mich 102, 106; 730 NW2d 462 (2007).

      While this appeal requires us to review the trial court’s decision to deny plaintiff’s
motion seeking leave to amend the complaint, several provisions of the no-fault act, MCL

                                               -2-
500.3101 et seq. are pertinent to our analysis and ultimate decision. We turn first to MCL
500.3172(1), the statutory subsection which determines a claimant’s eligibility for personal
protection insurance (PIP) benefits through the MACP. 2 This statutory subsection provides, as
follows:

       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 obtain personal protection insurance benefits through the
       assigned claims plan if no personal protection insurance is applicable to the
       injury, no personal protection insurance applicable to the injury can be identified,
       the personal protection insurance applicable to the injury cannot be ascertained
       because of a dispute between 2 or more automobile insurers concerning their
       obligation to provide coverage or the equitable distribution of the loss, or the only
       identifiable personal protection insurance applicable to the injury is, because of
       financial inability of 1 or more insurers to fulfill their obligations, inadequate to
       provide benefits up to the maximum prescribed. In that case, unpaid benefits due
       or coming due may be collected under the assigned claims plan and the insurer to
       which the claim is assigned is entitled to reimbursement from the defaulting
       insurers to the extent of their financial responsibility. [Emphasis added.]

        In the trial court, as on appeal, Farmers claims that an amendment of the complaint to
bring Farmers back into this lawsuit would be futile because plaintiff is not qualified to receive
benefits through the MACP where none of the conditions enumerated in § 3172(1) were met
when plaintiff filed an MACP claim. We agree with Farmers’ contention. According to plaintiff
in his brief on appeal, he was aware of the existence of the no-fault policy with Lincoln General
from the outset following the subject motor vehicle accident but appeared to be uncertain
whether he would be able to obtain benefits from it. Since Lincoln General conceded that the
policy applied, and plaintiff admitted knowing about the Lincoln General policy, the first two
conditions set forth in § 3172(1) are not applicable. Similarly, at the time plaintiff made the
MACP claim, there were not two insurers disputing which one had coverage. The only no-fault
policy at issue at that point was the Lincoln General policy. Finally, a review of the record
confirms that while Lincoln General, at the time plaintiff made his MACP claim, may have been
undergoing financial difficulties, Lincoln General was not, because of “financial inability”
unable to “fulfill [its] obligations” to provide no-fault benefits to the maximum amount required.
MCL 500.3172(1).3

2
  This Court will construe statutory language “by considering the plain meaning of the statute . . .
in order to ascertain its meaning. Generally, clear statutory language must be enforced as
written.” Patel v Patel, ___ Mich App ___, ___; ___ NW2d ___ (2018) (Docket No. 339878);
slip op at 4 (citation omitted).
3
  An order of liquidation for Lincoln General was entered in the Commonwealth Court of
Pennsylvania on November 5, 2015.

                                                -3-
        As Farmers points out in its brief on appeal, where Lincoln General subsequently became
insolvent, the onus is now on plaintiff to pursue the appropriate redress to recover payments for
his no-fault benefits. For example, MCL 500.7921(a), part of the Michigan Property and
Casualty Guaranty Association Act, MCL 500.7901 et seq., defines an “[i]nsolvent insurer” in
the following terms:

               “Insolvent insurer” means an insurer which has been a member insurer
       and against whom a final order of liquidation has been entered with a finding of
       insolvency by a court of competent jurisdiction in the insurer’s state of domicile.
       The date on which the order becomes final shall be the date on which all appeals
       of the finding of insolvency are exhausted. If the finding of insolvency in the
       order of liquidation is not appealed, the order of liquidation shall be considered
       final on the date the order was issued.

       MCL 500.7931(1) provides for the circumstances under which the MPCGA “may pay or
discharge covered claims[.]” MCL 500.7931(1). Moreover, MCL 500.7925(1) defines “covered
claims,” in the following manner:

               “Covered claims” means obligations of an insolvent insurer that meet all
       of the following requirements:

               (a) Arise out of the insurance policy contracts of the insolvent insurer
       issued to residents of this state or are payable to residents of this state on behalf of
       insureds of the insolvent insurer.

              (b) Were unpaid by the insolvent insurer.

              (c) Are presented as a claim to the receiver in this state or the association
       on or before the last date fixed for the filing of claims in the domiciliary
       delinquency proceedings.

               (d) Were incurred or existed before, at the time of, or within 30 days after
       the date the receiver was appointed.

              (e) Arise out of policy contracts of the insolvent insurer issued for all
       kinds of insurance except life and disability insurance.

              (f) Arise out of insurance policy contracts issued on or before the last date
       on which the insolvent insurer was a member insurer.4

4
 As this Court observed in Auto Club Ins Ass’n v Meridian Mut Ins Co, 207 Mich App 37, 41;
523 NW2d 821 (1994), when an insured is placed in a position where there is no insurance
company to provide coverage, the insured can pursue coverage through the MPCGA.

                                                 -4-
        MCL 500.8156(1) also provides redress to plaintiff with respect to pursuing a claim
against Lincoln General:

                In a liquidation proceeding in a reciprocal state against an insurer
       domiciled in that state, claimants against the insurer who reside within this state
       may file claims either with the ancillary receiver, if any, in this state or with the
       domiciliary liquidator. Claims must be filed on or before the last dates fixed for
       the filing of claims in the domiciliary liquidation proceeding.

        Plaintiff’s reliance on Spencer v Citizens Ins Co, 239 Mich App 291; 608 NW2d 113
(2000), for the proposition that Farmers is responsible to pay plaintiff’s no-fault benefits is not
persuasive. In Spencer, the defendant became an assigned insurer through the MACP because
the plaintiff did not have any other no-fault insurance and did not live with someone who did.
Id. at 295. This Court, after considering the purposes of the no-fault act, as well as the language
of MCL 500.3172, concluded that the assigned insurer could not unilaterally decide to stop
paying benefits to the plaintiff once the assigned insurer determined that a higher-priority insurer
existed. Spencer, 239 Mich App at 304-305. However, the principle holding of Spencer is not
of assistance to plaintiff in the instant case, where, unlike the plaintiff in Spencer, plaintiff did
not qualify to receive benefits through the MACP. Id. at 302. Specifically, Farmers was named
an assigned insurer even though plaintiff’s insurance with Lincoln General had been ascertained,
and when Lincoln General was still solvent.5 Accordingly, under the circumstances of this case,
where the trial court correctly determined that plaintiff is not qualified to receive benefits
through the MACP pursuant to the plain language of MCL 500.3172(1), we are not persuaded by
plaintiff’s argument that the trial court abused its discretion in denying his motion seeking leave
to amend the complaint.

       Affirmed.

                                                              /s/ Karen M. Fort Hood
                                                              /s/ Deborah A. Servitto
                                                              /s/ Jane M. Beckering

5
  To the extent that plaintiff points to KG v State Farm Mut Auto Ins Co, 674 F Supp 2d 862 (ED
Mich, 2009), as support for the claim that Farmers could not unilaterally decide not to tender no-
fault benefits to plaintiff, we take this opportunity to note that KG is also distinguishable from
the facts in the present appeal, where in that case the plaintiff was qualified to receive benefits
through the MACP.

                                                -5-