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A Better Partnership
March 24, 2009

COA Opinion: Out-of-state insurer liable for PIP benefits to persons other than its insured

On Friday, the Michigan Court of Appeals issued a published per curiam opinion in which it clarified Michigan law on “first priority insurer” status in a dispute between two insurance companies related to “personal injury protection” (PIP) under Michigan’s no-fault insurance law. Tevis v. Amex Assurance Co. (Case No. 282412). Plaintiff incurred serious injuries as he was driving his motorcycle. The automobile involved in the accident was insured by Amex through a policy issued in the state of Washington. Amex, though it had registered in Michigan under MCL ' 500.3163, did not provide no-fault coverage to the automobile driver. However, the automobile driver’s parents did have a no-fault policy issued through Geico Indemnity Co. When both insurers declined to play plaintiff PIP benefits, plaintiff filed suit.

Both insurers filed cross-motions for summary disposition, arguing that the other was the first priority insurer for PIP benefits. The circuit court concluded that Amex was the first priority insurer and a judgment of over $325,000 was entered against it.

Though the court of appeals affirmed the judgment against Amex, it noted that the facts in this case were unusual under the existing caselaw:

Michigan cases addressing the application of MCL 500.3163 generally involve situations where a non-resident, insured by an out-of state insurer who has filed the certification set forth in MCL 500.3163(1), is seeking benefits from that out-of-state insurer for injuries that occurred in a Michigan automobile accident. These cases initially appear to support an argument that the statute imposes liability for benefits on an out-of-state insurer only where its own insured suffers injuries.

Nevertheless, the court of appeals concluded that section 3163 explicitly holds Amex responsible for PIP benefits, even though the benefits accrue to someone other than its insured.

Additionally, the court of appeals concluded that plaintiff was due case evaluation sanctions under MCR 2.403(O). However, given the unsettled question presented in this case, the court of appeals concluded that Amex was not unreasonable in refusing to pay PIP benefits, and thus the circuit court reasonably refused to award plaintiff attorney fees under MCL ' 500.3148.

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