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Tedder, et al v Geico Indemnity Co, et al (COA – UNP 11/23/2021; RB #4356)


Michigan Court of Appeals; Docket #354910; Unpublished
Judges Murray, Jansen, and Riordan; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion

Not Applicable

Legislative Purpose and Intent
Plaintiffs in Bankruptcy

In this unanimous unpublished per curiam decision, the Court of Appeals affirmed the trial court’s summary disposition order dismissing Plaintiff Kym Tedder’s first-party action against Defendant Geico Indemnity Company (“Geico”). The Court of Appeals held that Tedder lacked standing to bring her claim for unpaid no-fault PIP benefits because the bankruptcy trustee in her pending bankruptcy action was the real party in interest. Central to the Court’s holding was Tedder’s inability/failure to exempt her first-party claims from her bankruptcy estate.

Kym Tedder was injured in a car crash on October 6, 2017, and in May of 2018, Tedder filed for Chapter 7 bankruptcy. Approximately one month after filing for Chapter 7 bankruptcy, Tedder amended her bankruptcy petition to reflect her possession of a potential “automobile negligence claim.” She sought to exempt her claim from the bankruptcy estate pursuant to 11 USC 522(d)(11)(D), and her bankruptcy petition was ultimately discharged in August of 2018. In October of 2018, Tedder filed the underlying first-party action against Geico. Geico moved for summary disposition, arguing that Tedder lacked standing to bring the action because, by merely listing an “automobile negligence claim” in her amended petition, she did not properly exempt her claim for unpaid no-fault PIP benefits from the bankruptcy estate. Thus, Geico argued, the bankruptcy trustee, not Tedder, was the real party in interest. Furthermore, Geico argued that, even if Tedder had properly listed her first-party claim in her amended petition, such claims cannot be exempted under 11 USC 522(d)(11)(D). The trial court agreed and granted Geico’s motion.

The Court of Appeals affirmed the trial court’s summary disposition order, observing, preliminarily, that the statute under which Tedder sought to exempt her no-fault claim provides as follows:

(d) The following property may be exempted under subsection (b)(2) of this section:

(11) The debtor’s right to receive, or property that is traceable to—

(D) a payment, not to exceed $25,150, on account of personal bodily injury, not including pain and suffering or compensation for actual pecuniary loss, of the debtor or an individual of whom the debtor is a dependent . . . . [11 USC § 522(d)(11)(D).]

The Court of Appeals held that Geico was correct with respect to both its arguments at the trial court: “(1) that [Tedder] failed to list the first-party claim as an exemption in the first instance, and (2) that the cited exemption would not apply to a first-party claim even if [Tedder] had properly listed it.” As to the first argument, the Court held that Tedder’s mere assertion that she possessed an “automobile negligence claim” was not sufficient to apprise the bankruptcy court that she also possessed a first-party claim against her no-fault insurer. Those are two entirely distinct claims.

“First, and as is relevant to both issues raised on appeal, we conclude that plaintiff’s listing of an ‘automobile negligence claim’ in her amended bankruptcy schedules did not include the listing of her first-party no-fault claim. At first blush one might conclude that plaintiff’s listing of a potential ‘automobile negligence claim’ as an asset would include all claims filed relative to the accident, particularly because plaintiff also listed the date of the accident and her attorney handling the matter. However, and not even considering that plaintiff in fact made three negligence claims, the law simply does not support the argument that listing ‘automobile negligence claim’ was sufficient to apprise the bankruptcy court that plaintiff also intended to bring a first-party claim against an insurer.”

As to Geico’s second argument, the Court of Appeals held that, because Tedder’s damages in her first-party claim were entirely economic—which is to say, “compensation for actual pecuniary loss”—11 USC 522(d)(11)(D) did not apply.

“ . . . because the damages recoverable for a first-party claim are economic alone, plaintiff’s first-party claim categorically does not fall under the exemption prescribed by 11 USC § 522(d)(11)(D). See In re Holley, 609 BR 269, 278 (D NM, 2019) (Distinguishing between types of damages that are exempt and not exempt for the same injury); In re Territo, 32 BR 377, 381 (EDNY, 1983)(‘the personal injury exemption mentioned in section 522(d)(11)(D)(3) does not cover pain and suffering or compensation for actual pecuniary loss, the exemption is designed to cover only payments covering actual bodily injury, e.g., the loss of a limb.’).”

Lastly, the Court rejected Tedder’s argument that dismissal was improper because of the possibility that she might incur additional first-party damages in the future which could not be considered part of the bankruptcy estate. The Court held that Tedder presented no evidence that she would actually incur additional damages in the future, nor did she provide “any authority to support the assertion that she was not required to properly exempt an actually-accrued claim on the basis that future debts related to that [sic] climb might arise.”

Lansing car accident lawyer 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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