Court holds "one year back" rule applies to mistakenly paid PIP benefits but insurer wasn't required to raise as affirmative defense
In Button, et al. v. Progressive Michigan, et al., the Defendant was sued by an injured kid, his treaters, and ultimately an insurer, all claiming payment or reimbursement of No Fault PIP benefits. It turns out that the benefits were originally paid by QBE Insurance Corporiation on the mistaken belief that QBE was the priority insurer based upon the injured boy being the step-son of QBE's insured. When it turned out that the injured boy's father had never married QBE's insured, Progressive became the PIP insurer of first-priority and QBE sought repayment of some $240,000.00 in benefits it had mistakenly paid.
Progressive Michigan lost round one in the trial court, when the judge ruled that the "one year back" limitation on No Fault PIP damages did not apply to an insurer seeking reimbursement. The Court of Appeals reversed. It held that while the limitation to "one year back" is an Affirmative Defense, and even though Progressive Michigan had not raised the issue in its first responsive pleading, the rule still applied in this case and precluded QBE from recovering subrogation or reimbursement.