Injured child's PIP benefits limited by "one year back" rule; Michigan Court refuses to recognize rule "venerable common-law principle" protecting children from time limitations; PIP benefits denied
Howard Linden, the Conservator appointed by the Court to manage the financial affairs of India Thomas, sued Citizens Insurance Company to collect Thomas's No Fault PIP benefits (medical expenses and up to three years of wages or replacement services). Citizens argued that it owed no benefits because the child, who "sustained massive catastrophic brain damage and other extensive physical injuries" in a car accident, failed to provide it with written notice of her claim within one year. Citizens argued that if it was responsible for any PIP benefits, the child was only those expenses incurred within one year of the filing of the Conservator's lawsuit, pursuant to the "one year back" rule in the No Fault Act.
The trial judge denied Citizens motion for summary disposition, and the insurer appealed. The Court of Appeals ruled that since Citizens was assigned the case through the Assigned Claims plan, the language of that section of the no fault statute applied, and the suit was timely. Nevertheless, the Court limited the medical expenses the insurer was obligated to pay by applying the "one year back" rule. The judges rejected the argument that an insurer should be estopped from enforcing time limitations to wipe out damages owed to a catastrophically brain damaged child.
The trial judge applied the longstanding common law rule of contra non valentem, holding that an insurer (or anyone) is equitably estopped from applying statutes of limitation and notice periods to the detriment of an incompetent person who is unable to act. The Court held that Michigan doesn't recognize this "venerable common law principle," even though it has been discussed in numerous holdings dating back thirty years and more. The Court further held that Michigan's Republican, insurer-friendly, Supreme Court majority had expressly ruled that the one-year back rule may be applied to infants or incompetent persons. The Court concluded that the catastrophically injured child had "not alleged any unusual circumstance" that would provide a basis for the Court to invoke its judicial equitable powers. It ruled the circumstance are "unfortunate"....but someone else's problem.