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Auto Club Ins Assoc/MemberSelect Ins Co v Farm Bureau General Ins Co of Mich, et al (COA – UNP 9/23/2021; RB #4321)


Michigan Court of Appeals; Docket #353439; Unpublished  
Judges Rick, Ronayne Krause, and Letica; Per Curiam 
Official Michigan Reporter Citation: Not Applicable; Link to Opinion

General Rule of Priority [§3114(1)]
Named Insured [§3114]
Recoupment Between Equal Priority Insurers [§3115(2)]

Not Applicable

In this unanimous unpublished per curiam decision, the Court of Appeals reversed the trial court’s summary disposition order in which the trial court dismissed Plaintiff Auto Club Insurance Association/MemberSelect Insurance Company’s (“Auto Club”) action against Defendant Farm Bureau General Insurance Company of Michigan (“Farm Bureau”) arising out of a priority dispute.  The Court of Appeals held that Auto Club and Farm Bureau were equal in priority for payment of Sabreen Shamoon’s no-fault PIP benefits, and that Auto Club was therefore entitled to partial recoupment of the benefits it paid to Shamoon pursuant to MCL 500.3115(2).  Furthermore, the Court of Appeals held that actions for partial recoupment under MCL 500.3115(2) are not subject to the one-year-back rule as are subrogation actions, but rather to the six-year limitations period set forth in MCL 600.5813.

Sabreen Shamoon was injured in a motor vehicle collision while a passenger in a Dodge Journey.  She sought no-fault PIP benefits from Auto Club under her sister’s automobile insurance policy, which listed Shamoon as an “assigned driver” of the Dodge Journey.  Notably, the policy provided also that an “assigned driver” was to be considered a “named insured” with respect to the vehicle(s) to which he or she was assigned.  

After Auto Club paid approximately $43,000 in no-fault PIP benefits to Shamoon, Shamoon filed a first-party action to recover additional PIP benefits against both Auto Club and Farm Bureau, her husband’s no-fault insurer.  Upon discovering that Shamoon’s husband was insured by Farm Bureau, Auto Club filed the underlying action against Farm Bureau, alleging that Farm Bureau was higher in priority and therefore obligated to reimburse Auto Club for all benefits it had paid.  Farm Bureau filed a motion for summary disposition, arguing that Auto Club’s action was one for subrogation and therefore subject to the one-year-back rule. Since Auto Club filed its action after the one-year limitations period, Farm Bureau argued, its action was barred.  

In response, Auto Club argued that Shamoon was a “person named in the policy” for purposes of MCL 500.3114, because the policy made it clear that that an “assigned driver” was to be considered a “named insured” with respect to the vehicle(s) to which he or she was assigned, thereby making Auto Club and Farm Bureau insurers of equal priority and entitling Auto Club to seek partial recoupment from Farm Bureau pursuant to MCL 500.3115(2).  Actions for partial recoupment, Auto Club noted, are governed not by the one-year-back rule, but rather by the six-year limitations period set forth in MCL 600.5813.  Ultimately, the trial court agreed with Farm Bureau and dismissed Auto Club’s action altogether.

The Court of Appeals reversed the trial court’s summary disposition order, noting that the “caselaw is well settled that ‘person named in the policy’ is the same as ‘named insured.’ ”  Here, the policy made it explicitly clear that Shamoon—as an “assigned driver” of the Dodge Journey—was also considered a “named driver” with respect to the Dodge Journey.   Thus, Shamoon was a “person named in the policy” for purposes of MCL 500.3114, and Auto Club, therefore, equal in priority to Farm Bureau.  Auto Club was entitled to partial recoupment from Farm Bureau under MCL 500.3115(2), actions pursuant to which are governed not by the one-year-back rule, but rather by the six-year limitations period set forth in MCL 600.5813.

“Because Shamoon was an assigned driver who was injured in the specific vehicle designated in the policy declarations, plaintiff’s policy plainly provided that Shamoon is a ‘named insured’ for the present purposes. Because ‘named insured’ is ‘synonymous with’ the statutory term ‘person named in the policy,’ Shamoon was a ‘person named’ with respect to plaintiff’s policy, and the trial court erred by ruling otherwise. And because it is undisputed that she was also a ‘person named in the policy’ issued by Farm Bureau, the parties have equal priority. Thus, the one-year limitations period in MCL 500.3145(1) did not apply to plaintiff’s claims for reimbursement. Accordingly, the trial court erred in ruling that plaintiff’s complaint was untimely and granting summary disposition on that basis.” 

The Court of Appeals also rejected Farm Bureau’s argument that Auto Club should be held to its original allegation in its complaint: that Farm Bureau was a higher-priority insurer and therefore required to reimburse Auto Club for all the benefits it had paid to Shamoon.  Farm Bureau pointed out that Auto Club only advanced its equal-priority argument in response to Farm Bureau’s motion for summary disposition.  The Court of Appeals rejected this argument, however, holding that “[t]he gravamen of plaintiff’s complaint is that it paid no-fault benefits on behalf of Shamoon that Farm Bureau should have paid.  The only difference between [Auto Club’s] position in its complaint and its position in response to Farm Bureau’s motion . . . is the mechanism through which [Auto Club] seeks reimbursement . . . i.e. subrogation or statutory reimbursement.”

Michigan auto accident attorney Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit

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