Girimonte v. Liberty Mut. Ins. Co.

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LISA GIRIMONTE, Plaintiff-Appellant, v. LIBERTY MUTUAL INSURANCE COMPANY, Defendant-Appellee, and ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY, Defendant.

No. 362128

Court of Appeals of Michigan

November 9, 2023

Macomb Circuit Court LC No. 2020-002185-NF

Before: Cavanagh, P.J., and Riordan and Patel, JJ.

RIORDAN, J.

Plaintiff Lisa Girimonte, appeals as of right the trial court's order dismissing her claim for personal protection insurance (PIP) benefits under the no-fault act, MCL 500.3101 et seq. For the reasons set forth, while we agree with the legal reasoning of the trial court, we vacate its order dismissing this case and remand to that court for further proceedings.

I. BACKGROUND FACTS

In October or November 2016, plaintiff was a passenger on a motorcycle being driven in Detroit by Robert Saxman when a collision occurred between the motorcycle and a car. Plaintiff alleges that she sustained serious injuries in the accident. At the time of the accident, Saxman had a no-fault policy issued by Allstate Property and Casualty Insurance Company, while plaintiff had one issued by defendant, Liberty Mutual Insurance Company.^[1]

Defendant began paying plaintiff's medical expenses in 2016. At some point, however, a dispute arose with respect to plaintiff's entitlement to PIP and underinsured-motorist benefits, and whether defendant or Allstate was the insurer primarily responsible for paying such benefits. Plaintiff thus sued defendant and Allstate in 2019.^[2] In that case, defendant filed a motion for summary disposition, asserting that Allstate was the primary insurer, and seeking dismissal on that basis. Plaintiff and defendant were apparently in agreement on that point, and stipulated to dismiss defendant without prejudice in March 2020. The trial court later dismissed the case without prejudice in January 2021.

Plaintiff filed the present lawsuit against Allstate in June 2020. Plaintiff did not initially name defendant as a party, but instead filed a motion with the trial court in the previous case asking it to reinstate the case with respect to defendant; the court denied that motion and plaintiff's motion for reconsideration. Plaintiff, with Allstate's concurrence, successfully moved the trial court to amend her complaint in this case to add defendant as a party. After discovery, Allstate successfully moved for summary disposition.

Defendant moved for partial summary disposition, arguing that, under MCL 500.3145, plaintiff was barred from recovering PIP benefits for expenses incurred more than one year before the filing of her first amended complaint that named defendant as a party.^[3] Defendant contended that because plaintiff filed her amended complaint naming defendant on June 16, 2021, the one-year-back rule barred her claim for PIP benefits for expenses incurred before June 16, 2020. Plaintiff responded by asserting that MCL 500.3145(3), which was added as part of several amendments to the no-fault act in 2019, see 2019 PA 21, provides that the one-year-back rule is tolled beginning on the date a claim for PIP benefits is made and does not resume running until an insurer "formally denies the claim."^[4] Plaintiff further asserted that the one-year-back period remained tolled because there had been no formal denial of her claim, and thus the one-year-back-rule did not bar her claim for PIP benefits in the instant case.

Defendant filed a reply brief in which it asserted that the current version of the statute was not effective until after plaintiff sustained her injuries, and thus that the former version, which did not have the tolling provision, applied instead, rendering plaintiff's claim for any PIP benefits pertaining to expenses incurred before June 16, 2020, untimely.

The trial court granted defendant's motion. The trial court premised its ruling on its conclusion that the amended version of MCL 500.3145 could not be applied retrospectively "since the Legislature did not make clear its intention that the amendment . . . apply retroactively and the amendment affects the parties [sic] substantial rights. Further, retroactive application . . . would impose a new legal obligation on [defendant] that did not exist prior to the amendment . . . ." The trial court reasoned that defendant had "substantive rights" to deny coverage and "to deny claims incurred more than one year before" the filing of a complaint.

Defendant later filed a motion for summary disposition with respect to the remaining issues in the case, on the grounds that discovery established that there were no outstanding claims for benefits, and no expenses incurred after June 16, 2020, the date through which the trial court granted partial summary disposition on the basis of the one-year-back rule. The trial court granted that motion. The trial court later entered a stipulated order that dismissed this case with prejudice.

II. STANDARD OF REVIEW

"This Court reviews de novo a trial court's decision to grant or deny summary disposition under MCR 2.116(C)(10)." Mazzola v Deeplands Dev Co LLC, 329 Mich.App. 216, 223; 942 N.W.2d 107 (2019). "A motion under MCR 2.116(C)(10) . . . tests the factual sufficiency of a claim." El-Khalil v Oakwood Healthcare, Inc, 504 Mich. 152, 160; 934 N.W.2d 665 (2019) (emphasis omitted). "When considering such a motion, a trial court must consider all evidence submitted by the parties in the light most favorable to the party opposing the motion." Id. "A motion under MCR 2.116(C)(10) may only be granted when there is no genuine issue of material fact." Id. "A genuine issue of material fact exists when the record, giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon which reasonable minds might differ." West v Gen Motors Corp, 469 Mich. 177, 183; 665 N.W.2d 468 (2003).

"Issues involving statutory interpretation present questions of law that are reviewed de novo." Le Gassick v Univ of Mich. Regents, 330 Mich.App. 487, 495; 948 N.W.2d 452 (2019).

III. DISCUSSION

The parties agree that the sole issue before this Court is whether the current version of MCL 500.3145, as amended by 2019 PA 21, or the pre-amendment version, applies here. Plaintiff argues that the current version applies because the instant case was commenced after the effective date of the amendment. Defendant argues that the pre-amendment version applies because the accident occurred before the effective date of the amendment, and the amendment does not apply retroactively. For the reasons set forth, we agree with the trial court and defendant that the amendment to MCL 500.3145 does not apply retroactively. However, because that conclusion does not necessarily result in defendant entirely prevailing, we vacate the trial court's order and remand to that court for further proceedings.

Previously, MCL 500.3145(1) provided, in relevant part:

An action for recovery of personal protection insurance benefits payable under this chapter for accidental bodily injury may not be commenced later than 1 year after the date of the accident causing the injury unless written notice of injury as provided herein has been given to the insurer within 1 year after the accident or unless the insurer has previously made a payment of personal protection insurance benefits for the injury. If the notice has been given or a payment has been made, the action may be commenced at any time within 1 year after the most recent allowable expense, work loss or survivor's loss has been incurred. However, the claimant may not recover benefits for any portion of the loss incurred more than 1 year before the date on which the action was commenced. . . .

In Joseph v Auto Club Ins Ass'n, 491 Mich. 200; 815 N.W.2d 412 (2012), our Supreme Court explained that the second and third sentences of MCL 500.3145(1) set forth the "one-year-back rule," which provides that "recovery is limited only to losses that have been incurred during the year before the filing of the action." Id. at 203, 208. Before 2019, the one-year-back rule did not include "a judicial tolling mechanism." See Devillers v Auto Club Ins Ass'n, 473 Mich. 562, 566; 702 N.W.2d 539 (2005).

MCL 500.3145 was amended by 2019 PA 21, effective June 11, 2019, and currently provides, in relevant part:

(2) Subject to subsection (3), if the notice has been given or a payment has been made, the action may be commenced at any time within 1 year after the most recent allowable expense, work loss, or survivor's loss has been incurred. However, the claimant may not recover benefits for any portion of the loss incurred more than 1 year before the date on which the action was commenced.

(3) A period of limitations applicable under subsection (2) to the commencement of an action and the recovery of benefits is tolled from the date of a specific claim for payment of the benefits until the date the insurer formally denies the claim. This subsection does not apply if the person claiming the benefits fails to pursue the claim with reasonable diligence.

In Encompass Healthcare, PLLC v Citizens Ins Co, ___ Mich.App. ___, ___; ___ N.W.2d (2022) (Docket No. 357225); slip op at 6-7, this Court explained that the amendments to MCL 500.3145 "act to supersede our Supreme Court's ruling in Devillers" and thus "impose a tolling exception to the one-year-back rule." "Now, the one-year-back period is tolled until the date of the insurer's formal denial of a claim." Id. at ___; slip op at 1.

Resolving this appeal involves the interplay between Encompass Healthcare and Spine Specialists of Mich, PC v MemberSelect Ins Co, ___ Mich.App. ___; ___ N.W.2d ___ (2023) (Docket No. 358296). In Encompass Healthcare the injured party received medical treatment from June to October 2018, and a lawsuit was filed in November 2019...