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Ravenell, et al. v. Auto Club Insurance Association (COA – UNP 10/15/2020; RB #4159)


Michigan Court of Appeals; Docket # 348436; Unpublished
Judges Swartzle, Jansen, and Borrello; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion

Not Applicable

No-Fault Insurer Claims for Reimbursement – Insurer Unequal Priority Reimbursement
No-Fault Insurer Claims for Reimbursement – Reimbursement Based on a Mistake

In this unanimous unpublished per curiam decision, the Court of Appeals (1) vacated the trial court’s denial of defendant Auto Club Insurance Association’s (ACIA) motion for summary disposition, in which ACIA sought a ruling that it was not required to reimburse defendant NGM Insurance Company (NGM) for money NGM mistakenly paid to the plaintiff, Oliver Ravenell, (2) reversed the trial court’s summary disposition order in favor of NGM, and (3) remanded for entry of summary disposition in favor of ACIA.  The Court of Appeals held that NGM’s action against ACIA—for reimbursement of PIP benefits it mistakenly paid to Ravenell, before it discovered that ACIA was the insurer of highest priority—was one for equitable subrogation, and that because NGM was a “mere volunteer” that accidentally paid PIP benefits to someone with whom it never had a contractual or statutory obligation to pay PIP benefits to, it could not seek equitable subrogation from ACIA.

Ravenell was struck by a vehicle being driven by Thaddeus Stec and subsequently sought PIP benefits from NGM, the commercial automobile insurer of three vehicles owned by Omega Appraisals, LLC—a company for which Ravenell’s wife was the resident agent.  NGM paid more than $331,000 in PIP benefits to Ravenell after the crash, but eventually took the position that Ravenell was not covered under the policy because neither he nor his wife were named insureds.  Furthermore, NGM argued that ACIA, Stec’s insurer, was the insurer of highest priority, and was therefore responsible for reimbursing NGM for the PIP benefits it mistakenly paid to Ravenell.  Ultimately, the trial court granted summary disposition in favor of NGM and entered a judgment against ACIA for the amount owed as reimbursement to NGM.

On appeal, NGM argued that the trial court erred in denying its motion for summary disposition and instead granting summary disposition in NGM’s favor, and the Court of Appeals agreed.  The Court of Appeals first held that NGM’s action was one of equitable subrogation, relying on its prior rulings in Amerisure Cos v State Farm Mut Auto Ins Co, 222 Mich App 97 (1997) and Titan Ins Co v North Pointe Ins Co, 270 Mich App 339 (2006).  In Amerisure and Titan, the Court of Appeals held that an action by one insurer against another for reimbursement of benefits paid by mistake was one of equitable subrogation

Accordingly, this Court’s opinions in both Amerisure and Titan rejected the reasoning of Madden, and both require a conclusion that where an insurer is suing another insurer based on its mistaken payment of benefits for which the defendant insurer was liable, such action is one of subrogation, and the plaintiff insurer acquired no greater rights than the injured person had against the defendant insurer. See Amerisure, 222 Mich App at 103; Titan, 270 Mich App at 347. As a matter of law, NGM’s action against ACIA is one of subrogation.

Furthermore, the Court of Appeals held that NGM could not prevail on an equitable subrogation claim because it was acting as a “mere volunteer” when it paid benefits to Ravenell—NGM never insured Ravenell, and had no statutory or contractual obligation to pay PIP benefits to Ravenell.

If NGM had paid PIP benefits to one of its insureds, it would not be considered a “volunteer.” NGM takes the position, however, that it never insured Ravenell. Accepting NGM’s position that it had no contractual or statutory obligation to pay PIP benefits to Ravenell, we conclude that NGM was a “mere volunteer” that cannot prevail on an equitable-subrogation claim.

. . .

Because NGM takes the position that Ravenell was not a named insured under the commercial-automobile-insurance policy that it issued to Omega Appraisals, and that it did not owe Ravenell PIP benefits, NGM’s equitable-subrogation claim necessarily fails. “Without a policy, plaintiff would have paid benefits not to its insured, but to an individual with whom it had no relationship. Without any legal or equitable duty to pay PIP benefits, plaintiff is a mere volunteer—one who accidentally paid” PIP benefits. Id. (slip op at 6). “As a mere volunteer, plaintiff cannot seek equitable subrogation.” Id.

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