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Esurance Property & Cas. Ins. Co. v. Mich. Assigned Claims Plan, et al. (COA – UNP 10/17/2019; RB #3988)

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Michigan Court of Appeals; Docket #344715; Published
Judges Meter, O’Brien, and Swartzle; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion


STATUTORY INDEXING:
When Claimants Can Receive PIP Benefits Through the Assigned Claims Facility (§3172(1))

TOPICAL INDEXING:
Not Applicable


SUMMARY:
In this unanimous published per curiam decision, the Court of Appeals affirmed the trial court’s summary disposition order dismissing the plaintiff’s action seeking reimbursement from the defendants, the Michigan Assigned Claims Plan and the Michigan Automobile Insurance Placement Facility, for no-fault PIP benefits to an individual, Roshaun Edwards, who was injured in the subject motor vehicle collision.  The Court of Appeals held that although the Esurance policy Edwards had been collecting benefits under for a time was later declared void ab initio, Esurance was still not entitled to equitable subrogation from the MACP and the MAIPF for the benefits it already paid.

The motor vehicle Roshaun Edwards was driving at the time of the subject motor vehicle collision was titled to and registered by one individual, but covered by a Colorado Esurance insurance policy issued to another individual, Luana Edwards-White.  Edwards-White obtained the policy by representing to Esurance that she owned the vehicle and that it would be garaged in Colorado.  After the collision, Roshaun sought PIP benefits from Esurance under Edwards-White’s policy, and applied for benefits from the MAIPF.  Esurance began paying PIP benefits to Edwards, however, so the MAIPF did not assign his claim to another insurer.

After Esurance had paid approximately $571,000 in benefits to Edwards, it discovered that Edwards-White had lied on her application for insurance, and obtained an order rescinding its policy and declaring the policy void ab initio.  Esurance then filed the instant action against the MACP and the MAIPF, asserting a claim of equitable subrogation and requesting an order requiring the MACP and the MAIPF to reimburse it for the PIP benefits it paid to Edwards.  The trial court ultimately granted summary disposition in favor of the MACP and the MAIPF, ruling that because the no-fault act does not contemplate reimbursement in such a situation, equitable subrogation was not available to Esurance.

The Court of Appeals did not necessarily agree with the trial court’s reasoning for granting summary disposition in favor of the MACP and the MAIPF, but affirmed its order nonetheless.  The Court of Appeals determined, firstly, that just because the no-fault act does not explicitly  contemplate a right of equitable subrogation by a no-fault insurer against the MACP and the MAIPF, that does not necessarily mean that such a right is never available.

The trial court concluded that the doctrine could not be invoked because the no-fault act does not explicitly contemplate it being used in circumstances such as those present here. The trial court relied on the maxim expressio unius est exclusio alterius to reach that conclusion. It is true that there are a number of provisions of the no-fault act that address reimbursement or similar concepts under several distinct factual scenarios, none of which would apply here. But it is a misapplication of the expressio unius maxim to conclude that the Legislature must have intended to exclude the type of suit brought by plaintiff because such action is not specified in the no-fault act. The maxim “has force only when the items expressed are members of an associated group or series, justifying the inference that items not mentioned were excluded by deliberate choice, not inadvertence.” Barnhart v Peabody Coal Co, 537 US 149, 168; 123 S Ct 748; 154 L Ed 2d 653 (2003). Given that the various reimbursement provisions contained in the no-fault act are scattered throughout the act and involve distinct factual scenarios, we cannot presume that those statutes are necessarily exclusive of any and all other similar remedies in all factual scenarios. Doing so would presume that the Legislature deliberately chose not to include a right to equitable subrogation by a no-fault insurer against defendants, which is unwarranted from the text of the no-fault act.

However, even if equitable subrogation is not prohibited by the no-fault act, it would still not be available to Esurance under these circumstances.  By voiding Edwards’s policy ab initio, and thus considering the policy “never to have existed,” Esurance argued that it should be able to step into Edwards’s shoes and enforce a claim that Edwards’s should have had against the defendants for PIP benefits.  However, the Court pointed out that when Edwards applied for benefits from the MAIPF, there was an applicable no-fault insurer; the Esurance policy had not yet been voided ab initio.  Thus, Edwards did not have a claim for benefits against the MACP and the MAIPF at the time of the collision, and now, as Edwards’s subrogee, neither does Esurance. 

Esurance attempted to counter that problem by arguing that the policy should be presumed never to have existed.  However, the Court determined that Esurance would have to be held to that same state of affairs, and in that state of affairs, Esurance becomes a mere volunteer who accidentally paid nearly $600,000 in PIP benefits despite have no obligation to do so.  And, as a mere volunteer, Esurance cannot seek equitable subrogation.

In the end, there are two ways to look at the problem. Either the equitable subrogation claim must be analyzed under the circumstances that existed when benefits were paid, which was before the policy was rescinded, or it must be looked at through the lens that the policy never existed in the first place. If the policy exists, plaintiff’s claim of equitable subrogation fails as a matter of law because Roshaun could not have pursued benefits from defendants under MCL 500.3172(1). If the policy never existed, then plaintiff was a mere volunteer when it paid $571,000 in PIP benefits. In either case, plaintiff’s equitable subrogation claim fails as a matter of law.

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