Insurer not bound by arbitration result; allowed to sue to claim lien on wage loss payment

Yvonne Thomas had to fight with her No Fault insurer, GEICO, to secure the payment of $70,000.00 in wage loss and medical expense.  The parties eventually agreed to take the dispute to binding arbitration, but in the interim, Auto Owners demanded repayment, out of any proceeds, of the disability payments it had made.  When the arbitrator awarded Thomas $30,000.00 in wage loss, the arbitrator also ruled that Auto Owners--which was not party to the arbitration--was not entitled to claim a lien.

Thomas was forced to file a circuit court action to compel payment of the arbitration award, and an attorney for Auto Owners attended, demanding recognition of Auto Owners' lien.  When she was unable to provide the amount of the lien, however, the Court ruled that Auto Owners had no valid lien.  The Court then dismissed Auto Owners separate lawsuit, ruling that it had already concluded that no lien existed.

Auto Owners appealed and the Court of Appeals reversed the Oakland County Circuit Court.  The judges ruled that Auto Owners' was never a party to any action where a binding decision was reached.  Therefore, it could bring a separate action to enforce its lien.