Summary
In Spayde v Advanced Foam Systems, Inc, 124 Mich. App. 454; 335 N.W.2d 1 (1981), this Court held that notice of a claim for workers' compensation benefits made to an employer's workers' compensation carrier did not constitute "notice of injury" within the meaning of MCL 500.3145(1); MSA 24.13145(1), when the workers' compensation carrier was also the employer's no-fault insurer.
Summary of this case from State Farm Mutual Automobile Insurance v. Insurance Co. of North AmericaOpinion
Docket No. 49041.
Decided May 26, 1981.
Reamon, Williams, Klukowski, Wood Drew, P.C. (by Paul A. Williams), for plaintiff.
Baxter Hammond (by Michael D. Wade), for defendant.
Before: D.F. WALSH, P.J., and R.B. BURNS and D.E. HOLBROOK, JR., JJ.
Plaintiff appeals from the accelerated judgment entered in favor of defendants.
On January 12, 1977, plaintiff was injured while in the process of loading merchandise onto a parked trailer belonging to defendant Advanced Foam Systems, Inc., plaintiff's employer. A supervisor's report of the accident and a workers' compensation basic Form 100 were completed on January 12, 1977, and January 17, 1977, respectively. Within one year of the accident, both the workers' compensation form and the accident report were sent to defendant Citizens Insurance Company of America (Citizens). Citizens was both the workers' compensation and no-fault insurance carrier for Advanced Foam Systems, Inc. Subsequently, Citizens commenced to pay workers' compensation benefits.
On January 26, 1979, plaintiff's attorney made a demand for no-fault benefits from defendants. On June 15, 1979, plaintiff filed a complaint for no-fault benefits arising from the accident on January 12, 1977. Defendants moved for accelerated judgment on the ground that plaintiff's claim was barred by the controlling statute of limitations, since the one-year limitation period provided under MCL 500.3145; MSA 24.13145 had elapsed and the plaintiff had not extended the period by giving proper "notice of injury". The trial court granted defendants' motions.
One of the original defendants, American Motorist Insurance Company, plaintiff's private no-fault insurance carrier, was dismissed on appeal by stipulation.
The sole issue before us is whether notice of a claim for workers' compensation benefits made to an employer's workers' compensation carrier constitutes a "notice of [no-fault] injury" within the meaning of MCL 500.3145(1); MSA 24.13145(1) when the workers' compensation carrier is also the employer's no-fault insurer. We hold that such notice is not sufficient under the statute.
MCL 500.3145(1); MSA 24.13145(1) provides:
"An action for recovery of personal protection insurance benefits payable under this chapter for accidental bodily injury may not be commenced later than 1 year after the date of the accident causing the injury unless written notice of injury as provided herein has been given to the insurer within 1 year after the accident or unless the insurer has previously made a payment of personal protection insurance benefits for the injury. If the notice has been given or a payment has been made, the action may be commenced at any time within 1 year after the most recent allowable expense, work loss or survivor's loss has been incurred. However, the claimant may not recover benefits for any portion of the loss incurred more than 1 year before the date on which the action was commenced. The notice of injury required by this subsection may be given to the insurer or any of its authorized agents by a person claiming to be entitled to benefits therefor, or by someone in his behalf. The notice shall give the name and address of the claimant and indicate in ordinary language the name of the person injured and the time, place and nature of his injury."
This section of the no-fault insurance act establishes a one-year limitation period on an action for recovery of personal protection benefits, with a provision enabling a claimant to extend the period for recovery up to one year after the most recent allowable expense, work loss or survivor's loss by giving proper written notice of injury. Dozier v State Farm Mutual Automobile Ins Co, 95 Mich. App. 121, 126; 290 N.W.2d 408 (1980). The exact nature of this "notice" is at issue here.
Defendant argues that the statute refers to a "notice of injury" and not to a notice that a claim for benefits will be made. However, in Davis v Farmers Ins Group, 86 Mich. App. 45, 47; 272 N.W.2d 334 (1978), this Court held that the purpose of the notice provision was to "provide time to investigate and to appropriate funds for settlement purposes". The accomplishment of this legislative purpose requires that the insurer be alerted to the probability that a claim would be filed under the policy. Mere notice of an injury under circumstances unrelated to a possible claim for benefits will not serve to trigger the insurer's investigative procedures nor advise the insurer of the need to appropriate funds for settlement.
For the foregoing reasons, the statute mandates that the notice be given "by a person claiming to be entitled to benefits * * * or by someone in his behalf". MCL 500.3145(1); MSA 24.13145(1). In Burns v Auto-Owners Ins Co, 88 Mich. App. 663; 279 N.W.2d 43 (1979), this Court ruled that notice of injury given other than by the claimant or by someone in behalf of the claimant was insufficient because such notice did not alert the insurer to the pendency of a possible claim. Relying on the analysis in Richards v American Fellowship Mutual Ins Co, 84 Mich. App. 629; 270 N.W.2d 670 (1978), the Burns Court held:
"Unless the insurer receives notice from the claimant or someone acting in behalf of the claimant there is no reason to assume that the insurer will or should begin to assess its liability under the insurance contract with its insured." Burns v Auto-Owners Ins Co, supra, p 666, fn 1.
As noted by the trial court, most insurers are large departmentalized companies. A claim for workers' compensation benefits made on a form provided by the state would be channeled to a specific department in that company. The presentation of a workers' compensation claim would not alert the insurer to the existence of another existing claim on a totally unrelated no-fault policy.
The notice given in this case, therefore, was not sufficient under the statute to extend the one-year limitation period. The trial court did not err in granting defendants' motion for accelerated judgment.
The decision of the circuit court is affirmed.