Michigan Supreme Court
Lansing, Michigan
Chief Justice: Justices:
Opinion Clifford W. Taylor Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Maura D. Corrigan
Robert P. Young, Jr.
Stephen J. Markman
FILED JULY 29, 2005
EVA DEVILLERS, as Guardian and
Conservator of Michael J. Devillers,
Plaintiff-Appellee,
v No. 126899
AUTO CLUB INSURANCE ASSOCIATION,
Defendant-Appellant.
_______________________________
BEFORE THE ENTIRE BENCH
YOUNG, J.
In its bypass application for leave to appeal,
defendant insurer asks that we overrule Lewis v DAIIE1 and
apply as written the “one-year-back” limitation provided
for in MCL 500.3145(1) for recovering no-fault personal
protection insurance benefits. In Lewis, this Court
adopted a judicial tolling doctrine under which the one-
year statutory period is tolled from the time a specific
claim for benefits is filed to the date the insurer
formally denies liability. The trial court in this case
1
426 Mich 93; 393 NW2d 167 (1986).
1
relied on Lewis in rejecting defendant’s assertion that
plaintiff’s claim was limited by the statutory one-year-
back rule.
No member of this Court disputes that § 3145(1)
clearly and unambiguously states that a 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.” Because the Lewis rule contravenes this plain
statutory directive and ignores almost a century of
contrary precedent, it is hereby overruled. Defendant is
entitled to summary disposition to the extent that
plaintiff seeks benefits for losses incurred more than one
year prior to the date on which this action was commenced.
I. FACTS AND PROCEDURAL HISTORY
Michael Devillers was an insured under a policy of no-
fault automobile insurance issued to his parents by
defendant Auto Club Insurance Association. In September
2000, Michael, then age sixteen, was seriously injured in
an automobile accident. His injuries included a traumatic
brain injury. Michael’s mother, plaintiff in this case,
cared for him after he was discharged from the hospital.
Defendant paid plaintiff benefits for home health care
for the period of October 20, 2000, to February 14, 2001.
On February 14, 2001, defendant received a physician’s
2
prescription stating that Michael could function without
close supervision. Defendant discontinued home health care
payments effective February 15, 2001, based on the
prescription indicating that Michael did not require
supervision.2 Plaintiff continued, without payment, to
provide services for Michael, including driving him to and
from school and the doctor’s office. On October 7, 2002,
defendant wrote a letter to plaintiff memorializing the
February 2001 discontinuation of benefits.
Plaintiff filed a complaint on November 12, 2002,
seeking payment for services allegedly rendered for which
she did not receive payment. At issue in this case is the
nine-month period beginning on February 16, 2001 (the day
after defendant discontinued paying home health care
benefits), and ending on November 12, 2001 (one year prior
to the filing of the complaint). Defendant moved for
partial summary disposition with respect to the benefits
sought for that nine-month period, arguing that plaintiff
was precluded from recovering benefits under the one-year-
back rule of MCL 500.3145(1).
2
However, based upon a later prescription, defendant
began paying plaintiff for home health care and attendant
care as of October 15, 2003, and it continues to make these
payments.
3
Plaintiff contested defendant’s motion, arguing that,
pursuant to Lewis, the one-year limitations period provided
for in § 3145(1) was tolled from February 15, 2001 (the
date that defendant discontinued home health care benefits
and attendant care benefits) to October 7, 2002 (the date
of defendant’s letter memorializing the termination).
The trial court denied defendant’s motion for partial
summary disposition, citing Lewis. Defendant then filed an
emergency application for leave to appeal in the Court of
Appeals, arguing that the judicial tolling doctrine adopted
in Lewis should be abrogated. Defendant additionally filed
a bypass application for leave to appeal in this Court,
noting that only this Court has the power to overrule
Lewis.
The Court of Appeals denied leave to appeal. This
Court entered an order staying trial, and we subsequently
entered an order granting defendant’s application for leave
to appeal. Because we believe that the Lewis Court
exceeded its constitutional authority by engrafting onto
the statutory one-year period a judicial tolling mechanism,
we overrule Lewis. Moreover, because this case does not
fall into that limited category of decisions in which
prospective application is justified, we give our decision
retroactive effect for this and pending cases in which a
4
Lewis challenge has been preserved. Accordingly, we remand
to the trial court with directions to enter partial summary
disposition in favor of defendant with respect to the
benefits sought for the period from February 16 to November
12, 2001.
II. STANDARD OF REVIEW
Issues of statutory construction and other questions
of law are subject to review de novo by this Court.3
Similarly, we review de novo a trial court’s decision
whether to grant summary disposition.4
III. ANALYSIS
A. BACKGROUND: JUDICIAL TOLLING AS APPLIED TO PRIVATE INSURANCE
CONTRACTS AND STATUTORY FORM INSURANCE POLICIES
The germination of the idea that a judicial tolling
doctrine should be applied to § 3145(1) can be traced to
this Court’s 1976 decision in Tom Thomas Organization, Inc
v Reliance Ins Co.5 Rather than a statutory provision, Tom
Thomas concerned a contractual provision in an inland
marine policy of insurance limiting the time for bringing
3
Preserve the Dunes, Inc v Dep't of Environmental
Quality, 471 Mich 508, 513; 684 NW2d 847 (2004); Mack v
Detroit, 467 Mich 186, 193; 649 NW2d 47 (2002).
4
Jarrad v Integon Nat'l Ins Co, 472 Mich 207, 212; 696
NW2d 621 (2005); Maiden v Rozwood, 461 Mich 109, 118; 597
NW2d 817 (1999).
5
396 Mich 588; 242 NW2d 396 (1976).
5
suit under the policy to twelve months “after discovery by
the insured of the occurrence which gives rise to the
claim.” Noting that this Court had long enforced such
policy limitations as written,6 the Tom Thomas Court
nevertheless rejected this prevailing rule in favor of the
judicial tolling approach taken by the New Jersey Supreme
Court in Peloso v Hartford Fire Ins Co,7 which held that the
twelve-month limitation of actions provision in a statutory
6
See Tom Thomas, supra at 592 n 4. Policy limitations
of less than six years have been enforced by this Court
without discussion of reasonableness. See, e.g., Lombardi
v Metropolitan Life Insurance Co, 271 Mich 265; 260 NW 160
(1935) (group disability plan; two-year limitation);
Bashans v Metro Mutual Insurance Co, 369 Mich 141; 119 NW2d
622 (1963) (accidental injury and illness; two-year
limitation); Dahrooge v Rochester German Insurance Co, 177
Mich 442; 143 NW 608 (1913) (standard fire insurance
policy; one-year limitation); Betteys v Aetna Life
Insurance Co, 222 Mich 626; 193 NW 197 (1923) (disability
or death indemnity policy; one-year limitation); Harris v
Phoenix Accident & Sick Benefit Ass'n, 149 Mich 285; 112 NW
935 (1907) (accident and sick benefit policy; six-month
limitation).
While it acknowledged this contrary line of precedent,
Tom Thomas did not overrule any of those cases. This
appears to have been a common practice of this Court during
this era. See, e.g., Raska v Farm Bureau Mut Ins Co of
Michigan, 412 Mich 355; 314 NW2d 440 (1982); People v
Jones, 395 Mich 379; 236 NW2d 461 (1975), and People v
Chamblis, 395 Mich 408; 236 NW2d 473 (1975), both overruled
in part in People v Cornell, 466 Mich 335 (2002); Simon v
Security Ins Co, 390 Mich 72; 210 NW2d 322 (1973).
7
56 NJ 514; 267 A2d 498 (1970).
6
form insurance policy8 was tolled from the time an insured
gave notice of loss until the insurer formally denied
liability. The Peloso court, opining that statutory proof
of loss and payment of claim provisions operated to shorten
the time for bringing suit, stated that tolling the
limitations period would ensure that the insured was “not
penalized for the time consumed by the company while it
pursues its contractual and statutory rights to have a
proof of loss, call the insured in for examination, and
consider what amount to pay . . . .”9
In adopting wholesale the approach of the Peloso
court, this Court in Tom Thomas stated that doing so was
necessary in order to reconcile the twelve-month policy
limitation with other policy provisions that incorporated
“[s]ubstantial delays”10 into the claim process:
The insured is generally allowed 60 to 90 days
to file proof of loss. The insurer is generally
given another 60 days to pay or settle the claim.
Notwithstanding diligence by both parties at
all stages of the claim procedure, considerable
time often elapses before the insured learns
8
A “statutory form” insurance policy refers to an
insurance policy that includes mandatory terms and
provisions compelled by statute. See, e.g., former MCL
500.2832, discussed later in this opinion, concerning fire
insurance policies issued in Michigan.
9
Peloso, supra at 521.
10
Tom Thomas, supra at 592.
7
whether the insurer will pay. Even if the insured
promptly reports a loss to his insurance agent,
discussions concerning resolution of the claim may
take weeks. Additional time often passes before
the insurance company provides a form for filing
proof of loss. Even then the insured does not know
whether it will be necessary to start an action;
under the policy in this case, payment is not
required until 60 days after “acceptance” by the
insurer of the proof of loss. No time limit for
acceptance is imposed.[11]
Thus, the Tom Thomas Court held that the insured’s action,
which was filed more than twelve months after the date of
the loss, but less than twelve months after the insurer
denied liability, was not barred by the twelve-month policy
limitation.12
In In re Certified Question (Ford Motor Co v
Lumbermens Mut Cas Co),13 this Court extended the Peloso/Tom
Thomas tolling doctrine to Michigan’s statutory standard
form fire insurance policy, former MCL 500.2832, which then
provided that
[n]o suit or action on this policy for the recovery
of any claim shall be sustainable in any court of
law or equity unless all the requirements of this
policy shall have been complied with, and unless
11
Id. at 592-593.
12
Justice Lindemer, joined by Justice Coleman,
dissented, noting that “[t]o adopt [the Peloso approach]
is, in effect, to rewrite the contract in favor of the
party which, for a six-month period, was guilty of sleeping
on its bargained-for rights.” Tom Thomas, supra at 601.
13
413 Mich 22; 319 NW2d 320 (1982).
8
commenced within twelve months next after inception
of the loss.
Noting that § 2832 contained proof-of-loss and claim
payment provisions identical to those contained in the New
Jersey statutory policy form at issue in Peloso,14 this
Court held that
[l]ogic requires that we apply the same analysis
when faced with Michigan’s statutory policy
provisions which are identical to the provisions
reconciled in Peloso. By permitting the limitation
period to be tolled, we reconcile the apparently
identical incongruity between the statutory proof-
of-loss and payment provisions, and the limitation
clause.[15]
The Ford Court rejected the defendants’ argument that
our 1913 decision in Dahrooge v Rochester German Ins Co16
was controlling and had expressly repudiated judicial
revision of the terms of the statute. In Dahrooge, this
Court had refused to engraft onto the terms of the
statutory standard fire insurance policy then in effect17 a
judicial tolling provision that would have tolled the
14
See Ford, supra at 31, 32 n 4. The statutory policy
provided a sixty-day period for the insured to supply proof
of loss and a sixty-day period following proof of loss and
ascertainment of the loss for the insurer to pay the claim.
MCL 500.2832.
15
Id. at 31-32 (emphasis in original).
16
177 Mich 442; 143 NW 608 (1913).
17
1905 PA 277. This predecessor of former MCL
500.2832 contained essentially the same terms as the
version of § 2832 at issue in Ford.
9
commencement of the twelve-month limitations period until
sixty days after the filing of the proof of loss:
Standard policies similar to that before us
have been adopted, and their use made compulsory by
statute in many States. It has been repeatedly
held, in passing on their various provisions, that
they should be construed according to the plain
meaning of the language used, and that the trend of
authority is towards enforcing the legislative
command when clearly expressed, rather than to
nullify and modify by strained constructions. The
provision that an action cannot be sustained
“unless commenced within twelve months next after
the fire” is very plain, clear, and simple
language. If it was the legislative intent that
this should have other than the natural meaning, it
would have been a simple matter to have so
provided.[18]
Rather than explicitly overruling Dahrooge, the Ford Court
“distinguished” that case on the basis that its
narrow reasoning . . . did not attempt to reconcile
the obvious incongruity between the proof-of-loss
and payment provisions, and the limitation
provision of the statute. Accordingly, Dahrooge
did not address the Tom Thomas-Peloso tolling
analysis.
* * *
Since our focus today must fairly encompass
all interwoven statutory provisions, we cannot
subscribe to a narrow analysis which unduly
emphasizes a single statutory provision. While the
limitation provision commands that the insured has
a clear 12 months to institute suit, the proof of
loss and payment clauses shrink this period.
* * *
18
Dahrooge, supra at 451.
10
. . . The statutory standard policy provisions
are reconciled, as was stated in Peloso, 521, to
reach a “fair resolution of the statutory
incongruity”. The period of limitation begins to
run from the date of the loss, but the running of
the period is tolled from the time the insured
gives notice until the insurer formally denies
liability.[19]
Justice Ryan, joined by Chief Justice Coleman, opined
in dissent that there existed no justification “for writing
into the Michigan statutory form of fire insurance policy
the tolling provision which the Court has announced
today.”20 Justice Ryan noted that in once again subscribing
to the approach of “the villain in the piece,” Peloso, the
majority “completely disregards, indeed rejects, the
plainly expressed intent of the Legislature in favor of the
appearance of judicial consistency.”21 Justice Ryan further
noted that Dahrooge had addressed and rejected the claim
19
Ford, supra at 33-38. Because Dahrooge pointedly
refused to adopt judicial tolling in contravention of the
statutory limitation, it is hard to understand why Ford and
Dahrooge are not irreconcilably in conflict. However, as
noted previously, see n 6 of this opinion, during this era,
this Court frequently paid little attention to the
inconsistencies among its cases and declined to reduce
confusion in its jurisprudence by overruling conflicting
decisions. Dahrooge has never been overruled. Dahrooge,
and cases like Dahrooge extending back to the turn of the
20th century, still appear to be good law, despite Lewis.
20
Id. at 39.
21
Id. at 45.
11
made by the plaintiff, and that it ought to have been
followed as binding authority:
It is noteworthy that the Court today does not
overrule Dahrooge, it merely denigrates it as
employing “narrow reasoning” for its failure to
“reconcile the obvious incongruity between the
proof of loss and payment provisions, and the
limitation provision of the statute.” The Dahrooge
Court’s “failure” to undertake such reconciliation
was evidently its inability, like mine, to perceive
that the proof of loss and payment provisions, and
the limitation provision of the statute, are
“incongruous”, “conflicting” or “inconsistent”.
The proof of loss and settlement provisions of
the statutory policy provide that a proof of loss
must be filed by the insured within 60 days of the
loss and suit may not be brought until 60 days
after the proof of loss is filed. The limitation
provision declares that suit upon a loss must be
brought within 12 months of the loss.
I am unable to see how those provisions are
incongruous, inconsistent or conflicting. The
first of them announces that the insurer is liable
60 days after the proof of loss is filed by the
insured—a period obviously intended to afford
opportunity for notification of the loss by the
insured and assessment of it by the insurer. The
limitation provision provides that the insured has
12 months from the date of the loss to start suit.
Where is the inconsistency?
* * *
The majority opinion suggests to me rather
forcefully that the Court’s concern is not that the
Legislature has really contradicted itself in
establishing a proof of loss plus 60 days no-suit
period for perfecting the claim and a 12-month
limitation of action provision, but that, in the
Court’s view, a fairer, more desirable and more
reasonable approach would be a tolling of the
running of the period of limitation while the
12
parties are negotiating a settlement of the claim.
Needless to say, had the Legislature wanted to do
it that way, it could easily have done so
. . . .[22]
Like Justice Ryan, we believe that the Tom Thomas and Ford
majorities found inconsistencies where none existed and,
under this thin veil, inserted their own policy views into
the otherwise contrary statutory language at issue.
B. EXTENSION OF THE JUDICIAL TOLLING DOCTRINE TO THE NO-FAULT “ONE-
YEAR-BACK” PROVISION OF § 3145(1)
MCL 500.3145(1) provides, in relevant part, as
follows:
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 survivors 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. [Emphasis supplied.]
As we noted in Welton v Carriers Ins Co,23 § 3145(1)
contains two limitations on the time for filing suit and
22
Id. at 46-49.
23
421 Mich 571; 365 NW2d 170 (1985).
13
one limitation on the period for which benefits may be
recovered:
(1) An action for personal protection
insurance [PIP] benefits must be commenced not
later than one year after the date of accident,
unless the insured gives written notice of injury
or the insurer previously paid [PIP] benefits for
the injury.
(2) If notice has been given or payment has
been made, the action may be commenced at any time
within one year after the most recent loss was
incurred.
(3) Recovery is limited to losses incurred
during the one year preceding commencement of the
action.[24]
Thus, although a no-fault action to recover PIP benefits
may be filed more than one year after the accident and more
than one year after a particular loss has been incurred
(provided that notice of injury has been given to the
insurer or the insurer has previously paid PIP benefits for
the injury), § 3145(1) nevertheless limits recovery in that
action to those losses incurred within the one year
preceding the filing of the action. It is this “one-year-
back” provision that is at issue in this case.25
24
Id. at 576 (emphasis in original).
25
MCL 500.3141 permits an insurer to require written
notice to be given “as soon as practicable” after an
accident involving an insured motor vehicle. MCL
500.3142(2) provides generally that PIP benefits are
overdue if not paid within thirty days after an insurer
14
The Tom Thomas judicial tolling doctrine was first
applied to § 3145(1) by our Court of Appeals in Richards v
American Fellowship Mut Ins Co.26 In Richards, the
plaintiff insured filed an action to recover PIP benefits
more than one year after the automobile accident in which
he was injured, seeking to recover the balance of a
hospital bill for a term of hospitalization that had ended
more than one year prior to the commencement of the action.
Rejecting the defendant insurer’s defense that the one-
year-back provision barred recovery, the Court held that
the purpose of the no-fault law–that persons injured in
automobile accidents be promptly and adequately compensated
for their losses–required application of Tom Thomas tolling
to § 3145(1):
If we were to accept defendant’s
interpretation of the statutory provision, we
would in effect be penalizing the insured for the
time the insurance company used to assess its
liability. To bar the claimant from judicial
enforcement of his insurance contract rights
because the insurance company has unduly delayed
in denying its liability would run counter to the
receives reasonable proof of the fact and amount of loss
sustained. Moreover, the insurer is subject to penalties
for delaying payment: MCL 500.3142(3) provides for a
twelve-percent annual interest rate on delayed payments,
and MCL 500.3148(1) renders the insurer liable for a
claimant’s attorney fees if the court determines that “the
insurer unreasonably refused to pay the claim or
unreasonably delayed in making proper payment.”
26
84 Mich App 629; 270 NW2d 670 (1978).
15
Legislature’s intent to provide the insured with
prompt and adequate compensation.
* * *
Applying the approach taken by the [Tom]
Thomas Court to § 3145 would effectuate the
legislative intent in enacting the no-fault act.
Unable to profit from processing delays,
insurance companies will be encouraged to
promptly assess their liability and to notify the
insured of their decision. At the same time, the
insured will have a full year in which to bring
suit.[27]
Accordingly, the Richards Court held that the one-year-back
provision was tolled from the date that the plaintiff gave
notice of loss until liability was formally denied by the
defendant.
This Court first addressed judicial tolling of § 3145
in Welton. We held that, assuming arguendo that Richards
was correct and that the judicial tolling doctrine should
be applied to the one-year-back rule, the plaintiff’s
notice to the defendant insurer was insufficient to trigger
Tom Thomas tolling of his no-fault claim. The Welton Court
noted that it found the Richards analysis “persuasive.”28
27
Id. at 634-635.
28
Welton, supra at 578. Although we recognized that
MCL 500.3142(2) dictates that benefits are overdue if not
paid within thirty days after a claim is submitted to an
insurer, we ventured that, “[a]s a practical matter, . . .
it appears unlikely that insureds will commence suit
immediately because of the expense involved in bringing an
16
However, apparently recognizing the imbalance created by
the judicially created tolling rule, the Welton Court
stated that something more than a general notice of injury,
such as the type submitted by the plaintiff in that case,
should be required to trigger tolling; rather, tolling
should not begin until a claim for specific benefits is
submitted to the insurer:
While a rule which protects insureds from
delays attributable to their insurers is
salutary, it also must be remembered that tolling
represents a departure from the legislatively
prescribed one-year-back cap on no-fault
recoveries. Thus, any tolling of the statutory
period would properly be tailored to prevent the
former type of abuse while preserving the
legislative scheme to the fullest possible
extent.
Tolling the statute when the insured submits
a claim for specific benefits would not appear to
detract from the policies underlying the one-year
limitation on recovery. By submitting a timely
and specific claim, the insured serves the
interest in preventing stale claims by allowing
the insurer to assess its liability while the
information supporting the claim is relatively
fresh. A prompt denial of the claim would barely
affect the running of the limitation period,
while a lengthy investigation would simply
“freeze” the situation until the claim is
eventually denied. In effect, the insured would
be charged with the time spent reducing his
losses to a claim for specific benefits plus the
action and the very real possibility that the claim will be
paid without the necessity of legal action.” Id. at 579 n
3.
17
time spent deciding whether to sue after the
claim is denied.[29]
In Lewis, this Court was again presented with the
question whether the judicial tolling doctrine should be
extended to the one-year-back provision of § 3145(1). This
time, we adopted the rule, drawn from Richards and Welton,
that the one-year-back limitation is tolled from the time
the insured makes a specific claim for benefits until the
date that liability is formally denied. To this rule, we
added the “caveat” that
the insured must seek reimbursement with
reasonable diligence or lose the right to claim
the benefit of a tolling of the limitations
29
Id. at 578-579.
Interestingly, in further defense of limiting
application of Tom Thomas tolling in the one-year-back
context to those cases in which a claim for specific
benefits was submitted, the Welton Court noted (1) the fact
that § 3145(1) included a “built-in” tolling provision
permitting later suit once notice was given or partial
payment was made (in contrast to the fire insurance
context, in which the limitations provision operated as an
absolute bar to suits not brought within one year of
discovery or inception of the loss); (2) the fact that the
specified procedure for claim and recovery of fire
insurance benefits included greater built-in delays than
the no-fault law (some 150 days for fire insurance, versus
the thirty-day payment requirement for no-fault benefits);
and (3) the fact that the Legislature had already provided
in § 3145(1) that tolling was triggered by “notice of
injury,” suggesting that notice of injury was to have no
greater tolling effect. Id. at 580 n 4. None of these
considerations apparently caused the Welton Court to
reconsider the propriety of applying its tolling rule to
MCL 500.3145(1).
18
period. Such a condition should alleviate the
defendant’s fear that adoption of the tolling
principle will result in “open-ended” liability
in cases in which the claimant, having made a
specific claim for benefits, thereafter refuses
to respond to the carrier’s legitimate requests
for more information needed to process the
claim.[30]
In adopting this modified tolling rule, Lewis explained
that application of judicial tolling to the one-year-back
limitation served the Legislature’s purposes in enacting
the no-fault law:
Most persons are confident that, in the
event of a loss, their insurer will pay their
claim without the necessity for litigation. It
is only when an insurer denies liability that it
is unequivocally impressed upon the insured that
the extraordinary step of pursuing relief in
court must be taken. A contrary result today
would require the prudent claimant to file suit
as a precautionary measure when the one-year
deadline approached, regardless of the status of
the claim. In addition to requiring a level of
sophistication many claimants may not possess,
such an approach would encourage needless
litigation. One of the important reasons behind
the enactment of the no-fault system was the
reduction of automobile accident litigation.[31]
Justice Brickley, joined by Justice Riley, vigorously
dissented, noting that the majority’s approach constituted
an impermissible departure from the plain and unambiguous
language of § 3145(1). With some prescience, Justice
30
Lewis, supra at 102-103.
31
Id. at 101-102.
19
Brickley predicted that “this judicial amendment of a clear
legislative directive will have a pernicious long-term
effect.”32 Justice Brickley further opined that the
majority had supplanted the will of the Legislature with
its own assessment of policy and consumer expectations:
The majority observes that most people
expect that insurance companies will pay their
claims without having to begin litigation, and
that it is only when a claim is formally denied
that litigation will be necessary. The majority
thus concludes that to follow the statute as
written would require a claimant to file a suit
as a “precautionary measure” when the one-year
deadline approached. Although the majority
approach may further the general policy of
reducing litigation, the statute is not
necessarily inconsistent with other purposes and
provisions of the act. For example, §§ 3142 and
3148 impose sanctions upon an insurer for late
payments. Thus, § 3145 may be viewed as a
complementary provision which “sanctions” an
insured who is not diligent in pursuing a claim.
. . . This Court was not privy to all of the
arguments and purposes presented to the
Legislature when it drafted these specific
tolling requirements. When statutory language is
as clear as it is here, it is outside our
province to second-guess the Legislature as to
which policy is paramount in regard to § 3145.[33]
With respect to the majority’s addition of a
requirement that the insured pursue reimbursement with
“reasonable diligence,” Justice Brickley remarked that
32
Id. at 104.
33
Id. at 107-108.
20
“[t]he necessity for this addition demonstrates the fact
that this Court has engaged in judicial legislation.”34
Finally, Justice Brickley noted a curious incongruity
in the majority opinion, as carried forward from Welton:
The majority does not suggest that § 3145
contains any ambiguity or that the Legislature
was not in full command of what it intended to
do. To the contrary, the Legislature was
cognizant of a need for some tolling. Again, as
we said in Welton, supra, and as pointed out by
the majority:
“[T]he fact that the Legislature has already
provided a tolling provision for commencing a no-
fault action, triggered by ‘notice of injury,’
suggests both that notice of injury was intended
to have no greater effect and that there is less
justification for this Court to interfere with
the statutory scheme. [Welton, supra, 580, n
4.]”[35]
In attestation of Justice Brickley’s admonition that
the Lewis rule would have far-reaching implications, our
Court of Appeals in Johnson v State Farm Mut Automobile Ins
Co36 further extended the judicial tolling doctrine. The
plaintiff’s decedent in Johnson was insured under a
motorcycle policy and an automobile policy, both written by
the same agent and issued by the defendant insurer.
Although the plaintiff immediately notified the agent of
34
Id. at 108.
35
Id.
36
183 Mich App 752; 455 NW2d 420 (1990).
21
the accident and requested coverage under the motorcycle
policy, she did not specifically request payment of
benefits under the automobile policy until shortly before
filing suit, several years after the accident. Noting that
this Court did not define in Lewis and Welton what
constituted a “specific claim for benefits,” the Johnson
Court held that the plaintiff’s notice of injury under the
motorcycle policy constituted sufficient notice of a claim
for PIP benefits under the automobile insurance policy, and
that the § 3145(1) one-year-back provision was therefore
tolled. Additionally, the Court announced a completely
new, and quite broad, tolling rule:
[E]ven if tolling under Lewis, supra, is not
applicable to the case at bar, the one-year-back
rule should nevertheless be tolled for that
period from which defendant knew or reasonably
should have known that plaintiff was entitled to
benefits under the automobile policy until such
time as defendant either formally and explicitly
denied liability for benefits or affirmatively
informed plaintiff that she might be entitled to
benefits under the policy and requested that she
file a formal claim of benefits under the
policy.[37]
Thus, not only did the Johnson Court disregard Lewis’s
admonition that a “specific claim” must be filed in order
37
Id. at 762-763; see also id. at 765. The panel
noted that “once the insured files such a claim, the
provisions of Lewis, supra, apply and the one-year-back
rule is again tolled until such time as that claim is
denied.” Id. at 765 n 4 (emphasis supplied).
22
to initiate tolling, the Johnson Court, in expanding the
Lewis doctrine to include a vague “knew or should have
known” standard, dismantled the certainty that the
Legislature intended to create in enacting the one-year
limitation.
C. LEWIS MUST BE OVERRULED AS WRONGLY DECIDED
As is no doubt evident from the foregoing discussion
of the questionable lineage of Lewis, as well as the
expansion of the Lewis doctrine by our Court of Appeals, we
are today compelled to overrule Lewis to reaffirm the
Legislature’s prerogative to set policy and our long-
established commitment to the application of statutes
according to their plain and unambiguous terms to preserve
that legislative prerogative.
The long road leading to the judicial negation of the
statutory one-year-back rule began with this Court’s abrupt
departure from settled precedent and adoption of the
inapposite minority Peloso rule in Tom Thomas. Then, in
Ford, finding ourselves “figuratively examining [our] own
tail,”38 we determined that it would be illogical to apply
Peloso in the off-point private contract setting without
also applying that rule in the context for which it was
38
Ford, supra at 43 (Ryan, J., dissenting).
23
designed, the statutory fire insurance form setting. Along
the way, we shrugged off the weight of binding precedent,
purporting to distinguish Dahrooge as a “narrow” decision
that simply did not address the judicial tolling question.39
Finally, we deigned in Lewis, purely for policy reasons and
in direct contravention of the statutory language at issue,
to extend application of Tom Thomas and Ford to the one-
year-back rule of § 3145(1). Our substitution of the
“specific claim” rule and the addition of the “reasonable
diligence” requirement to the Tom Thomas/Ford approach
stand as testimony to the lengths to which the Lewis Court
went in crafting its own amendment to § 3145(1). Further
distortion of the Lewis rule by our Court of Appeals in
Johnson demonstrates the unmanageability of the judicial
tolling doctrine and represents the vitiation of the clear
statutory directive limiting a PIP claimant’s recovery to
benefits for losses incurred one year or less before the
date on which the action was commenced.
39
See Ford, supra at 33 (noting that Dahrooge “did not
attempt to reconcile the obvious incongruity between the
proof-of-loss and payment provisions, and the limitation
provision of the statute”); see also Tom Thomas, supra at
597 n 10 (disregarding Dahrooge as binding authority on the
ground that it failed to reconcile the various policy terms
at issue).
24
In short, we wholly agree with the views expressed by
the dissenting justices in Tom Thomas, Ford, and Lewis.
Statutory–or contractual–language must be enforced
according to its plain meaning, and cannot be judicially
revised or amended to harmonize with the prevailing policy
whims of members of this Court. The Lewis majority
impermissibly legislated from the bench in allowing its own
perception concerning the lack of “sophistication”
possessed by no-fault claimants, as well as its speculation
that the average claimant expects payment without the
necessity for litigation, to supersede the plainly
expressed legislative intent that recovery of PIP benefits
be limited to losses incurred within the year prior to the
filing of the lawsuit.
Although a claimant may well find himself in a bind
similar to that of the Lewis plaintiffs, and of the
plaintiff in the case at bar, should that claimant delay
the commencement of an action (as permitted by § 3145) more
than one year beyond the accident leading to the injury,
our observation is simply this: the Legislature has made it
so. The Lewis Court acted outside its constitutional
25
authority40 in importing its own policy views into the text
of § 3145(1). “[T]he constitutional responsibility of the
judiciary is to act in accordance with the constitution and
its system of separated powers, by exercising the judicial
power and only the judicial power.”41
In any event, we are unable to perceive any sound
policy basis for the adoption of a tolling mechanism with
respect to the one-year-back rule. Although the Lewis
majority, echoing the concerns of the Tom Thomas and Ford
Courts, speaks of potential delays attributable to the
“‘lengthy investigation’” of a PIP claim,42 the only delay
possible under the no-fault law is the thirty-day payment
period following receipt of proof of loss by the insurer.43
To repeat Justice Ryan’s query in Ford, “Where is the
inconsistency?”44
40
See Const 1963, art 3, § 2; See also Const 1963, art
6, § 1, directing the judiciary to exercise its “judicial
power . . . .”
41
Nat’l Wildlife Federation v Cleveland Cliffs Iron
Co, 471 Mich 608, 637; 684 NW2d 800 (2004).
42
Lewis, supra at 101, quoting Welton, supra at 578.
43
MCL 500.3142(2). As noted by Justice Brickley in
Lewis, supra at 107, the no-fault act requires the insurer
to pay penalties for any delayed payment. See MCL
500.3142(3); MCL 500.3148(1).
44
Ford, supra at 47 (Ryan, J., dissenting).
26
Just as the Ford plaintiff had many months, even after
expiration of the potential delays permitted in the
statutory fire insurance scheme, in which to file suit,
plaintiff in the case at bar had a full year following the
February 2001 termination of payment for home health-care
benefits within which to seek reimbursement. In no way was
plaintiff’s ability to file suit thwarted by dilatory
tactics on the part of defendant or by the exercise of
defendant’s statutory right to delay payment for thirty
days following receipt of proof of loss. As soon as PIP
payments stopped, plaintiff had the surest notice that her
claim was no longer being honored by the insurer.
We conclude, therefore, that Lewis and its progeny
were wrongly decided. We must decide whether the doctrine
of stare decisis nevertheless obliges us to adhere to its
holding. Although stare decisis is generally “‘the
preferred course,’”45 we will nevertheless depart from
erroneous precedent “when governing decisions are
unworkable or are badly reasoned.”46 In determining whether
stare decisis compels adherence to the Lewis tolling
45
Robinson v Detroit, 462 Mich 439, 463; 613 NW2d 307
(2000), quoting Hohn v United States, 524 US 236, 251; 118
S Ct 1969; 141 L Ed 2d 242 (1998).
46
Robinson, supra at 464, citing Holder v Hall, 512 US
874, 936; 114 S Ct 2581; 129 L Ed 2d 687 (1994).
27
doctrine, we may examine, among other factors, the extent
to which the Lewis Court erred; the “‘practical
workability’” of that decision; whether reliance interests
would work an undue hardship if the decision were
overruled; and whether changes in the law or facts no
longer justify the questioned decision.47
Lewis does not reflect a simple “misunderstanding” of
the statute at issue;48 the Lewis decision demonstrates an
act of judicial defiance in which this Court substituted
its own judgment concerning “fairness” for the plainly
expressed will of the Legislature. Such an act of judicial
usurpation of the legislative function should not be
permitted to stand.
Moreover, Lewis has not “become so embedded, accepted
or fundamental to society’s expectations that overruling
[it] would produce significant dislocations.”49 Rather, it
is highly likely that the average no-fault claimant who has
profited from Lewis was quite unaware of this decision,
and simply received a windfall in being permitted to
collect benefits that the statute proclaims are
47
Robinson, supra at 464; see also Mitchell v W T
Grant Co, 416 US 600, 627-628; 94 S Ct 1895; 40 L Ed 2d 406
(1974).
48
See Robinson, supra at 465.
49
Id. at 466.
28
nonrecoverable. We need not, and indeed should not,
slavishly adhere to the doctrine of stare decisis where no
legitimate reliance interest is affected. As we noted in
Robinson,
if the words of the statute are clear, the actor
should be able to expect, that is, rely, that
they will be carried out by all in society,
including the courts. In fact, should a court
confound those legitimate citizen expectations by
misreading or misconstruing a statute, it is that
court itself that has disrupted the reliance
interest. When that happens, a subsequent court,
rather than holding to the distorted reading
because of the doctrine of stare decisis, should
overrule the earlier court’s misconstruction. [50]
Additionally, the Lewis judicial tolling doctrine
defies “practical workability,” as evidenced by this
Court’s efforts to cabin tolling and by the confusion of
the Court of Appeals in Johnson. On the basis that Lewis
failed to delineate what constituted a “specific claim for
benefits,” the Johnson Court took license to apply the
judicial tolling doctrine to a situation that even the
Lewis Court would presumably have found lacking.
Furthermore, it appears that the impact of Lewis is
increasingly producing a tax on the no-fault system as
claimants are being permitted to seek recovery for losses
incurred much more than one year prior to commencing suit.
50
Id. at 467.
29
Thus, far from “produc[ing] chaos,”51 overruling Lewis will
prevent potential chaos by according insurers, and the
public that funds the no-fault system through payment of
premiums, the certainty that the Legislature intended.
We today overrule Lewis and its progeny as wrongly
decided. The one-year-back rule of MCL 500.3145(1) must be
enforced by the courts of this state as our Legislature has
written it, not as the judiciary would have had it written.
D. RETROACTIVITY
In our order granting leave to appeal, we directed the
parties to address whether a decision overruling Lewis
should be given only prospective application.
Typically, our decisions are given retroactive effect,
“applying to pending cases in which a challenge . . . has
been raised and preserved.”52 Prospective application is a
departure from this usual rule and is appropriate only in
“exigent circumstances.”53 This case presents no “exigent
51
Id. at 466 n 26.
52
Wayne Co v Hathcock, 471 Mich 445, 484; 684 NW2d 765
(2004).
53
Id. at 484 n 98.
30
circumstances” of the sort warranting the “extreme measure”
of prospective-only application.54
As we reaffirmed recently in Hathcock, prospective-
only application of our decisions is generally “‘limited to
decisions which overrule clear and uncontradicted case
law.’”55 Lewis is an anomaly that, for the first time,
engrafted onto the text of § 3145(1) a tolling clause that
has absolutely no basis in the text of the statute. Lewis
itself rests upon case law that consciously and
inexplicably departed from decades of precedent holding
that contractual and statutory terms relating to insurance
are to be enforced according to their plain and unambiguous
terms.
Thus, Lewis cannot be deemed a “clear and
uncontradicted” decision that might call for prospective
application of our decision in the present case. Much like
Hathcock, our decision here is not a declaration of a new
rule, but a return to an earlier rule and a vindication of
54
See Gladych v New Family Homes, Inc, 468 Mich 594,
606 n 6; 664 NW2d 705 (2003).
55
Hathcock, supra at 484 n 98, quoting Hyde v Univ of
Michigan Bd of Regents, 426 Mich 223, 240; 393 NW2d 847
(1986) (emphasis supplied).
31
controlling legal authority—here, the “one-year-back”
limitation of MCL 500.3145(1).56
Accordingly, our decision in this case is to be given
retroactive effect as usual and is applicable to all
pending cases in which a challenge to Lewis’s judicial
tolling approach has been raised and preserved.57
E. RESPONSE TO JUSTICE CAVANAGH’S DISSENT
Given the characterization by Justice Cavanagh's
dissent of the majority’s position as “overwrought [with]
56
See Hathcock, supra at 484.
57
Id. In our case law, this form of retroactivity is
generally classified as “limited retroactivity.” See Stein
v Southeastern Michigan Family Planning Project, Inc, 432
Mich 198, 201; 438 NW2d 76 (1989).
We disagree with Justice Weaver’s assertion that our
decision to overrule Lewis should be given prospective
application. As we explained in Hathcock, supra at 484 n
97, to accord a holding only prospective application is,
essentially, an exercise of the legislative power to
determine what the law shall be for all future cases,
rather than an exercise of the judicial power to determine
what the existing law is and apply it to the case at hand.
Const 1963, art 3, § 2 prohibits this Court from exercising
powers properly belonging to another branch of government
except when expressly authorized by the Constitution. As
we further explained in Hathcock, supra at 484 n 98,
prospective opinions are, in essence, advisory opinions,
and our only constitutional authorization to issue advisory
opinions is found in Const 1963, art 3, § 8, which does not
apply in this case.
We also note, however, that payments properly made
under Lewis prior to this opinion are not subject to
recoupment or setoff.
32
scorn”58 and an “outright fabrication,”59 it is easy to lose
sight of the fact that there is substantial agreement
between Justice Cavanagh and the majority. Both the
majority and Justice Cavanagh agree that the plain text of §
3145(1) provides that an insured “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
fundamental difference between the position of the majority
and Justice Cavanagh lies in how one perceives the judicial
role.
The majority believes that statutes are to be enforced
as written, unless, of course, a statute violates the
Constitution. Such a view of the judicial role is not
merely a preference shared by a majority of this Court, but
rather a constitutional mandate.60 Justice Cavanagh, on the
other hand, apparently believes that a court’s equitable
power is an omnipresent and unassailable judicial trump
card that can be used to rewrite a constitutionally valid
statute simply because a particular judge considers the
statute to be “unfair.”
58
Post at 34.
59
Id.
60
Const 1963, art 3, § 2 and art 6, § 1.
33
The view of the majority—that statutes are to be
enforced as written unless they are unconstitutional—
represents a more limited view of the role of the
judiciary. It is grounded not just in the separation of
powers mandate of our Constitution,61 but also on prudential
concerns. The majority believes that policy decisions are
properly left for the people’s elected representatives in
the Legislature, not the judiciary. The Legislature,
unlike the judiciary, is institutionally equipped to assess
the numerous trade-offs associated with a particular policy
choice. Justice Cavanagh, however, apparently believes
that judges are omniscient and may, under the veil of
equity, supplant a specific policy choice adopted on behalf
of the people of Michigan by their elected representatives
in the Legislature.62 We could not disagree more.
61
Const 1963, art 3, § 2.
62
The fact that Justice Cavanagh is willing to make
policy choices through a court’s equitable powers is
evident from his extensive discussion of the “costs”
associated with enforcing the plain text of § 3145(1). Post
at 12-14. While the majority believes that the Legislature
is better equipped to evaluate the costs and benefits
associated with a specific policy choice, and that the
Legislature actually evaluated such trade-offs in enacting §
3145(1), Justice Cavanagh apparently believes that a judge
is free to second-guess a legislative policy choice based
on the judge’s own preconceived notions of fairness.
34
Although courts undoubtedly possess equitable power,63
such power has traditionally be reserved for “unusual
circumstances” such as fraud or mutual mistake.64 A court’s
Not surprisingly, Justice Cavanagh cites no support
for his conclusion that enforcing the unambiguous language
of § 3145(1) will increase costs to insurers and insureds.
In fact, there has been no evidence presented to this Court
on which such a determination could be made. If anything,
it would seem that the uncertainty associated with
subjecting insurers and insureds to the whims of individual
judges and their various conceptions of “equity” would
increase overall insurance costs because insurers would no
longer be able to estimate accurately actuarial risk. See,
e.g., Popik & Quackenbos, Reasonable expectations after
thirty years: A failed doctrine, 5 Conn Ins L J 425, 431-
432 (1998) (“When the courts invalidate unambiguous
exclusions, the insurance industry’s ability to calculate
and manage risk is severely impaired. The insurers’ only
alternative to this uncertainty is to hedge their bets by
increasing premiums or restricting coverage.”); Rappaport,
The ambiguity rule and insurance law: Why insurance
contracts should not be construed against the drafter, 30
Ga L R 171, 203 (1995) (“Uncertainty about how judges will
interpret insurance contracts may significantly increase
the costs of insurance.”); Comment, A critique of the
reasonable expectations doctrine, 56 U Chi L Rev 1461, 1489
(1989) (“‘[J]udicial . . . intervention renders costs quite
unpredictable and makes insurers fearful, tightening the
market.’” [citation omitted]).
63
Const 1963, art 6, § 5.
64
Cincinnati Ins Co v Citizens Ins Co, 454 Mich 263,
270; 562 NW2d 648 (1997) (stating that this Court has been
reluctant to recognize equitable estoppel, a corollary of
fraud, “absent intentional or negligent conduct designed to
induce a plaintiff from bringing a timely action.”)
(emphasis omitted); Flynn v Korneffel, 451 Mich 186, 199;
547 NW2d 249 (1996) (“this Court has exercised its
equitable power in unusual circumstances such as fraud
. . .”) (emphasis in original); Solo v Chrysler Corp (On
Rehearing), 408 Mich 345, 352-353; 292 NW2d 438 (1980);
Panozzo v Ford Motor Co, 255 Mich 149, 150-151; 237 NW 369
35
equitable power is not an unrestricted license for the
court to engage in wholesale policymaking, as Justice
Cavanagh implies.65
(1931); Gee v Gee, 254 Mich 415, 416-417; 236 NW 820
(1931).
65
Justice Cavanagh asserts that because we granted
equitable relief in Bryant v Oakpointe Villa Nursing Ctr,
Inc, 471 Mich 411, 432; 684 NW2d 864 (2004), there is no
reason not to apply equity in this case. This argument
illustrates the fundamental disagreement between a majority
of this Court and Justice Cavanagh, as well as the Lewis
Court, concerning the proper application of equitable
relief.
In Bryant, our grant of equitable relief was a
pinpoint application of equity based on the particular
circumstances surrounding the plaintiff’s claim; namely,
the preexisting jumble of convoluted case law through which
the plaintiff was forced to navigate. Accordingly, our
limited application of equity in Bryant was entirely
consistent with the “unusual circumstances” standard for
equitable relief discussed above. In Lewis, however, the
Court chose to adopt an a priori rule of equity without
regard to the particular circumstances of litigants in a
given case. In granting blanket equity to an entire class
of cases, therefore, the Lewis Court essentially rewrote §
3145(1). Such a categorical redrafting of a statute in the
name of equity violates fundamental principles of equitable
relief and is a gross departure from the proper exercise of
the “judicial power.” Const 1963, art 3, § 2 and art 6, §
1. Accordingly, Justice Cavanagh’s unmitigated praise for
the Lewis Court’s holding is, in our view, quite misplaced.
Moreover, we note that, in Bryant, there was no
controlling statute negating the application of equity.
Instead, the disputed issue in Bryant—whether a claim
sounds in medical malpractice or ordinary negligence—was
controlled by this Court’s case law. On the other hand, in
the present case, there is a statute that controls the
recovery of PIP benefits: § 3145(1). Section 3145(1)
specifically states that a claimant “may not recover
benefits for any portion of the loss incurred more than 1
36
Section 3145(1) plainly provides that an insured “may
not recover benefits for any portion of the loss incurred
more than 1 year before the date on which the action was
commenced.” There has been no allegation of fraud, mutual
mistake, or any other “unusual circumstance” in the present
case. Accordingly, there is no basis to invoke the Court’s
equitable power. Justice Cavanagh errs, as did the Lewis
Court, in assuming that equity may trump an unambiguous and
constitutionally valid statutory enactment.
Indeed, if a court is free to cast aside, under the
guise of equity, a plain statute such as § 3145(1) simply
because the court views the statute as “unfair,” then our
system of government ceases to function as a representative
democracy. No longer will policy debates occur, and policy
choices be made, in the Legislature. Instead, an aggrieved
party need only convince a willing judge to rewrite the
statute under the name of equity. While such an approach
might be extraordinarily efficient for a particular
litigant, the amount of damage it causes to the separation
of powers mandate of our Constitution and the overall
structure of our government is immeasurable. Justice
Cavanagh apparently sees no problem with using a court’s
year before the date on which the action was commenced,”
and this Court lacks the authority to say otherwise.
37
equitable power in this manner. We, however, believe the
judicial role to be far more limited than our colleague in
dissent.66
The judicial philosophy of the majority has been the
subject of much discussion from some in the bench and bar.
This is entirely to be expected and is desirable in a
vibrant, healthy republic. Yet, in his discourse on the
flaws of the majority’s judicial philosophy, Justice
Cavanagh has avoided his responsibility of explaining his
own consistent approach to interpretation. Parties before
66
Justice Cavanagh also argues that “this case is an
ideal candidate for applying the ... legislative
reenactment rule.” Post at 27. However, as we recently
explained:
[N]either “legislative acquiescence” nor
the “reenactment doctrine” may “be utilized
to subordinate the plain language of a
statute.” [People v Hawkins, 468 Mich 488,
507-510; 668 NW2d 602 (2003).] “Legislative
acquiescence” has been repeatedly rejected by
this Court because “Michigan courts [must]
determine the Legislature’s intent from its
words, not from its silence.” Donajkowski v
Alpena Power Co, 460 Mich 243, 261; 596 NW2d
574 (1999). . . . “[I]n the absence of a
clear indication that the Legislature
intended to either adopt or repudiate this
Court’s prior construction, there is no
reason to subordinate our primary principle
of construction—to ascertain the
Legislature’s intent by first examining the
statute’s language—to the reenactment rule.”
[Hawkins, supra] at 508-509. [Neal v Wilkes,
470 Mich 661, 668 n 11; 685 NW2d 648 (2004).]
38
this Court, as well as the people of Michigan generally,
have been clearly apprised over the years that the
philosophy set forth in this opinion will constitute the
process by which this Court interprets the law. Justice
Cavanagh would do well to describe, with as much care as
the majority, his own philosophy.
What, for example, are the standards upon which he is
determined consistently to give meaning to the law in
future cases coming before this Court? What are the
standards upon which litigants can reasonably predict his
future interpretations, the rule of law being dependent
upon such predictability? What are the standards that he
is prepared to articulate, in advance of his decisions, in
order to communicate that his decisions are guided by the
law and are not merely a function of the results that he
might prefer in a given case? What are the standards upon
which he would rely in order to ensure the appearance and
reality of integrity in his judicial decision-making? What
judicial principles does he represent beyond opposition to
a philosophy that he wrongly characterizes as one of
“automation-like textualist analysis”67 of the law? The
justices in the majority, by opinions such as this, have
67
Post at 22.
39
addressed these questions. Justice Cavanagh should do the
same.
Justice Cavanagh, no less than the justices in the
majority, owes it to the people of Michigan to articulate
the precise standards by which he attempts to do justice
under the law.
IV. Conclusion
Our decision in Lewis to apply a judicial tolling
mechanism to the one-year-back limitation of MCL
500.3145(1) contravenes the unambiguous text of that
statutory provision and represents an unconstitutional
usurpation of legislative authority. Accordingly, Lewis
and its progeny, Johnson, are overruled. Moreover, we
perceive no reason to depart from the general rule that our
decisions are to be given retroactive effect. Defendant is
entitled to summary disposition to the extent that
plaintiff’s claim is barred by the one-year-back rule.
Accordingly, we reverse the decision of the trial court and
remand this case to that court for entry of an order of
partial summary disposition for defendant consistent with
this opinion.
Robert P. Young, Jr.
Clifford W. Taylor
Maura D. Corrigan
Stephen J. Markman
40
S T A T E O F M I C H I G A N
SUPREME COURT
EVA DEVILLERS, as guardian and
conservator of Michael J. Devillers,
Plaintiff-Appellee,
v No. 126899
AUTO CLUB INSURANCE ASSOCIATION,
Defendant-Appellant.
_______________________________
CAVANAGH, J. (dissenting).
Contrary to the majority’s refusal to recognize as
much, equitable tolling1 is a time-honored, purposeful, and
carefully crafted rule of equity that is employed when rare
but compelling circumstances so justify its use. In Lewis
v DAIIE, 426 Mich 93; 393 NW2d 167 (1986), the latest case
to fall prey to the majority’s chopping block, this Court
employed this important mechanism for critical and
justifiable equitable reasons that the current majority
1
“Equitable tolling” is also referred to as “judicial
tolling,” “the doctrine of contra non valentem,” and, in
shareholder suits, “the doctrine of adverse domination.”
Equitable tolling is usually discussed in the context of
statutes of limitations. MCL 500.3145(1), in that it
precludes recovering no-fault benefits incurred during a
certain time period, is, for tolling purposes, no different
than a statute of limitations.
carelessly relegates to oblivion under an overwrought—and
unnecessary—cloak of textualism. What the majority
unfortunately fails to recognize is that judicial tolling
needs no basis in statutory language. It is an equitable
measure. Thus, the majority’s ardent devotion to the
strict language of the statute is admirable, but really
quite misplaced. As a result, the majority unnecessarily
ties the judiciary’s hands from importing measures of
equity in situations that require it. Because I believe
that the judicial tolling rule established in Lewis was
well-reasoned and necessary, and because the majority has
not established a persuasive reason for disregarding twenty
years of stare decisis, I respectfully dissent.
I. Equitable Tolling is an Equitable Remedy that Needs No
Basis in Statutory Language
The long-recognized equitable remedy of judicial
tolling has been applied in a variety of circumstances. In
fact, “[t]ime requirements in lawsuits between private
litigants are customarily subject to ‘equitable
tolling[.]’” Irwin v Dep’t of Veterans Affairs, 498 US 89,
95; 111 S Ct 453; 112 L Ed 2d 435 (1990), quoting Hallstrom
v Tillamook Co, 493 US 20, 27; 110 S Ct 304; 107 L Ed 2d
237 (1989). This “break[s] [no] new ground.” American
Pipe & Constr Co v Utah, 414 US 538, 558; 94 S Ct 756; 38 L
2
Ed 2d 713 (1974). Rather, equitable tolling operates to
relieve the “strict command” of a legislatively prescribed
limitation because of “considerations ‘[d]eeply rooted in
our jurisprudence.’” Id. at 559, quoting Glus v Brooklyn
Eastern Terminal, 359 US 231, 232; 79 S Ct 760; 3 L Ed 2d
770 (1959).
For instance, “in cases where the plaintiff has
refrained from commencing suit during the period of
limitation because of inducement by the defendant, [Glus,
supra] or because of fraudulent concealment, Holmberg v
Armbrecht, 327 US 392[; 66 S Ct 582; 90 L Ed 743 (1946)],
this Court has not hesitated to find the statutory period
tolled or suspended by the conduct of the defendant.”
American Pipe, supra at 559. See also Irwin, supra at 96
(recognizing that the remedy of equitable tolling can be
afforded even where a plaintiff files a defective pleading
within the statutory time period); In re MGS, 756 NE2d 990,
997 (Ind App, 2001) (recognizing that equitable tolling was
an available remedy to a statute of limitations); Harsh v
Calogero, 615 So2d 420, 422 (La App, 1993) (acknowledging
the doctrine of contra non valentem); Regents of the Univ
of Minnesota v Raygor, 620 NW2d 680, 687 (Minn, 2001),
(holding that equitable tolling is an available equitable
remedy under the proper circumstances), aff’d 534 US 533;
3
122 S Ct 999; 152 L Ed 2d 27 (2002); Friedland v Gales, 131
NC App 802, 806-809; 509 SE2d 793 (1998) (recognizing
equitable estoppel of a statute of limitations defense);
Resolution Trust Corp v Grant, 901 P2d 807, 812 nn 13, 16
(Okla, 1995) (noting that the doctrine of adverse
domination is “widely applied” by federal courts, and
collecting cases from eleven states recognizing the
doctrine).
Most recently, our Michigan Court of Appeals observed
the following:
This Court in United States Fidelity &
Guaranty Co v Amerisure Ins Co, 195 Mich App 1,
6; 489 NW2d 115 (1992), noted that “Michigan and
federal case law provides precedent for the
principle that limitation statutes are not
entirely rigid, allowing judicial tolling under
certain circumstances[.]”
In Bryant [v Oakpointe Villa Nursing Ctr,
Inc, 471 Mich 411, 432; 684 NW2d 864 (2004)],
Justice Markman, writing for the majority,
applied the principles of the doctrine of
equitable tolling in a medical malpractice
action, while not specifically referring to the
doctrine by name[.]
* * *
Equitable tolling has been applied where
“the plaintiff actively pursued his or her
judicial remedies by filing a defective pleading
during the statutory period or the claimant has
been induced or tricked by the defendant’s
misconduct into allowing the filing deadline to
pass.” [Ward v Rooney-Gandy, 265 Mich App 515,
518-520; 696 NW2d 64 (2005), quoting 51 Am Jur
2d, Limitation of Actions, § 174, p 563.]
4
Thus, applying equitable tolling is neither a novel
measure nor one employed by cunning judicial activists
seeking to advance their personal philosophies, as the
majority implies. Although equitable tolling must be
sparingly applied, Irwin, supra at 96, equitable remedies
are, nonetheless, entirely within the sanctioned parameters
of the judiciary’s powers. Indeed, when the circumstances
dictate the need, it is the obligation of the judiciary to
mete out the appropriate justice. See, e.g., Howard v
Mendez, 304 F Supp 2d 632, 638-639 (MD Pa, 2004)
(concluding that “common sense requires tolling of the
limitations period when a litigant’s right to file suit
depends on the timely conduct of the opposing party’s agent
in assisting in the exhaustion of mandatory administrative
remedies”); Harris v Hegmann, 198 F3d 153, 158-159 (CA 5,
1999) (recognizing a Louisiana “judicial rule” that tolls
the limitations period during the time in which a plaintiff
is legally unable to act).
The considerations behind equitable tolling tip the
scales in favor of the remedy even when a statute requires
strict construction and the tolling will result in the
waiver of governmental immunity. For example, in Irwin,
supra at 95-96, the United States Supreme Court found that
statutes of limitations that operated against the
5
government, like those that operate against private
parties, should be subject to the already existing
rebuttable presumption of equitable tolling. This was true
despite the fact that the civil rights statute at issue, 42
USC 2000e-16(c), had to be strictly construed because
compliance with the statute was a condition to a waiver of
sovereign immunity. Irwin, supra at 94. The Supreme Court
duly recognized that “‘Congress was entitled to assume that
the limitation period it prescribed meant just that period
and no more.’” Id., quoting Soriano v United States, 352
US 270, 276; 77 S Ct 269; 1 L Ed 2d 306 (1957). But
despite this important restriction, the Court found that
the period of limitations should be equitably tolled when
the circumstances of a particular case warranted it. The
Court explained that although this type of equitable relief
should be afforded only in rare instances, it is justified
“in situations where the claimant has actively pursued his
judicial remedies by filing a defective pleading during the
statutory period, or where the complainant has been induced
or tricked by his adversary’s misconduct into allowing the
filing deadline to pass.” Id. at 96; see also 51 Am Jur
2d, Limitation of Actions, § 174, p 563 (“The time
requirements in lawsuits between private litigants are
6
customarily subject to equitable tolling if such tolling is
necessary to prevent unfairness to a diligent plaintiff.”).2
Equitable tolling is precluded, however, if a claimant
does not “exercise due diligence in preserving his legal
rights.” Irwin, supra at 96, citing Baldwin Co Welcome Ctr
v Brown, 466 US 147, 151; 104 S Ct 1723; 80 L Ed 2d 196
(1984). With regard to the particular claim before it in
Irwin, the Supreme Court found that the plaintiff’s
untimeliness was “at best a garden variety claim of
excusable neglect,” and, thus, equitable tolling was not
available in that circumstance. Irwin, supra at 96.
Of course, equitable tolling must be consonant with
the legislative purpose of a statute to which it is
applied. American Pipe, supra at 559, see also 54 CJS,
Limitations of Actions, § 86, p 122 (“In order to serve the
ends of justice where technical forfeitures would
unjustifiably prevent a trial on the merits, the doctrine
of equitable tolling may be applied to toll the running of
the statute of limitations, provided it is in conjunction
2
Indeed, the majority explicitly recognizes that
equitable tolling is necessary in exactly the type of
circumstance described in Irwin and 51 Am Jur 2d, p 563.
See ante at 35 n 64, citing Cincinnati Ins Co v Citizens
Ins Co, 454 Mich 263, 270; 562 NW2d 648 (1997). Its
failure, discussed later in this opinion, is in refusing to
acknowledge that this case presents exactly this type of
circumstance.
7
with the legislative scheme.”). And the legislative branch
is free to indicate that it does not want equitable tolling
to apply to any particular statute. Irwin, supra at 96.
In the absence of such an indication here, equitable
tolling is available, as long as the reasons for applying
the remedy serve a justifiable purpose and comport with
legislative intent.
II. Applying Equitable Tolling to MCL 500.3145(1) is
Necessary to Prevent Unjust Results and to Effect
Legislative Intent
In Lewis, this Court thoroughly examined the purposes
of statutes of limitations, the purposes of and legislative
intent behind the no-fault act, and the parameters and
conditions of employing equitable tolling before invoking
the delicately chosen remedy. This Court did not
misapprehend that the statute at issue was in some way
ambiguous or that the text of the statute contained a
tolling requirement.3 Rather, after careful consideration,
3
After this Court applied judicial tolling to MCL
500.3145(1) in Lewis, this Court considered whether
judicial tolling was also applicable to MCL 500.3145(2).
Secura Ins Co v Auto-Owners Ins Co, 461 Mich 382; 605 NW2d
308 (2000). In refusing to apply tolling to subsection 2,
the Secura majority misunderstood the Lewis majority’s
reasoning. The Secura majority stated, “The Lewis majority
recognized tolling under subsection 1. However, that
subsection includes language indicating that the
Legislature intended that the one-year limitation period
would be suspended by the giving of notice[.]” Id. at 386.
8
we concluded that an equitable measure was necessary to
further the purposes of the no-fault act and to eliminate
the statute’s inherent blockade to an insured’s right to
receive what is rightfully his.
Nothing about the purpose of the act, the purpose of
the time limitation in the act, or the parameters of
equitable tolling have changed since Lewis to justify
overruling that well-reasoned case. Tellingly, the only
variable that has fluctuated is the makeup of this Court.
As we recognized in Lewis, one of the foremost
underlying purposes of our no-fault scheme was to reduce
litigation. Lewis, supra at 101-102, citing Welton v
Carriers Ins Co, 421 Mich 571, 578-579; 365 NW2d 170
(1984). Of equal importance, the act
was offered as an innovative social and legal
response to the long payment delays, inequitable
payment structure, and high legal costs inherent
in the tort (or “fault”) liability system. The
goal of the no-fault insurance system was to
provide victims of motor vehicle accidents
assured, adequate, and prompt reparation for
certain economic losses. [Shavers v Attorney
General, 402 Mich 554, 578-579; 267 NW2d 72
(1978) (emphasis added).]
As I noted in my dissent, “A careful reading of Lewis,
however, reveals that the basis of our decision there was
preserving legislative purposes, and not the sentence the
majority highlights. . . . Thus, the majority relies on a
phantom distinction to differentiate the instant case from
Lewis, because applying the same analysis used in Lewis
supports tolling the statute.” Secura, supra at 389 n 1
(Cavanagh, J., dissenting).
9
The portion of the no-fault act at issue in Lewis and
being reexamined in the present case, MCL 500.3145(1),
governs when an insured must bring suit to recover benefits
due under the act. The statute states in pertinent part:
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. [Id.
(emphasis added).]
Simply stated, an insured who has received benefits or
requested his insurer to pay recoverable expenses has one
year after the most recent allowable expense or loss was
incurred to sue the insurer to recover those benefits.
Thus, as long as expenses are being incurred, the time for
bringing a lawsuit is not restricted. However, the insured
will only be permitted to recover benefits that were
incurred in the one-year period before the suit was
brought.
10
Once an insured submits a claim for benefits, she has
no way of knowing, other than an indication from the
insurer, whether the claim will be paid. Quite obviously,
then, when an insured acts with due diligence in notifying
the insurance company of a claim, whether the insured
ultimately collects the full amount of benefits due is
completely at the whim of the insurance company. When an
insured submits a claim for benefits, an insurer can take
as long as it wants to approve or deny the claim. If the
insurer takes more than one year, then under the one-year-
back rule, the benefits that were due to the insured
dissipate into thin air through no fault whatsoever of the
insured.
Indeed, that was precisely what occurred in this case.
After plaintiff’s son was catastrophically injured in an
automobile accident, defendant began paying plaintiff for
her attendant care services. Defendant paid those benefits
for approximately a year and a half. But a day after
receiving a February 15, 2001, physician’s notice that
Michael had been “cleared to function without close
supervision,” defendant abruptly stopped paying benefits.
Defendant waited, however, until October 7, 2002, to notify
plaintiff that it was formally denying further benefits.
11
Shortly thereafter, on November 12, 2002, plaintiff
filed a complaint to recover the benefits defendant had
ceased paying.4 But under MCL 500.3145(1), plaintiff could
only recover benefits from the one-year period that
preceded her complaint, November 12, 2001, to November 12,
2002, even though defendant allegedly wrongfully withheld
benefits beginning on February 16, 2001. Thus, if
plaintiff was entitled to benefits from the period February
16, 2001, to November 12, 2001, the one-year-back rule
precluded her from recovering them, even though plaintiff
was allegedly diligent in providing notice of her claim to
her insurer.5
Plaintiff’s case aptly demonstrates the need for
equitable tolling. Her insurer waited nearly two years to
formally deny her claim for attendant benefits. Although
plaintiff could have brought suit earlier, before defendant
4
Defendant ultimately resumed paying the benefits on
October 15, 2003.
5
Defendant claims that plaintiff did not notify it of
her claim. Plaintiff presented evidence of a claims
adjuster’s notes that suggest that plaintiff did notify
defendant. Moreover, defendant was already paying
attendant care benefits and stopped after it received
information that it claims relieved it of its obligation to
pay further benefits. Thus, it is difficult for me to
conclude that defendant had no notice of plaintiff’s claim
for benefits. In any event, whether plaintiff properly
notified defendant would be a factual matter to be resolved
on remand.
12
formally denied her claim, such a tactic hardly advances
our Legislature’s goal of reducing litigation. In fact, it
appears from the limited record before us that plaintiff
and defendant were involved in extensive dealings and
communication regarding many types of benefits from the
time plaintiff’s son was injured onward.6 An insured
engaged in the complex day-to-day dealings with an insurer
that are common after a serious accident would quite
conceivably destroy any semblance of goodwill and
cooperation by filing a lawsuit before the insurer has even
denied a particular claim. Further, an insurer could
simply defend by stating that the plaintiff’s claim is
premature because the insurer is still investigating the
claim, at which point the lawsuit would not only have
6
The majority claims that defendant’s cessation of
payments gave plaintiff the “surest notice” that it would
not be honoring her claim for benefits. Ante at 27. This
simplistic approach fails to account for the inherent
complexities of no-fault claim resolution. In many cases
involving extensive injuries, there are hundreds if not
thousands of claims for different types of benefits
presented for payment, and there are extensive
negotiations, resubmissions, evaluations, investigations,
and the like. Thus, to conclude that an insurer’s denial
of one such claim among many is the “surest notice” that
the claim will not be paid misrepresents reality. In
essence, the majority’s statement merely emphasizes that a
preemptive lawsuit is expressly necessary under its new
rule.
13
precipitated antagonism, but would have amounted to a
colossal waste of time and resources.
Insurers, too, are hurt by today’s ruling. With the
proliferation of litigation that is now bound to occur,
insurers will be paying the costs of defending the
lawsuits, and converting resources that could otherwise go
toward investigating claims and communicating with their
insureds into payments for billable hours. This will, in
turn, translate into higher premiums, further denigrating
the opposite goal of the no-fault act.
How the majority’s abandonment of equitable tolling in
this situation furthers the legislative intent behind the
no-fault act escapes me.
Defendant claims that a deterrent mechanism that would
encourage an insurer to promptly deny claims is built into
the no-fault act and that, as such, equitable tolling is
unnecessary. I disagree. While §§ 3142(3) and 3148(1)
penalize the insurer for unreasonable delay or unreasonable
denials by attaching interest to overdue payments and
making the insurer liable for an insured’s attorney fees,
those provisions fall short of protecting insureds against
the unavoidable effects of insurer delay. Once benefits
become unreachable through operation of the one-year-back
rule, the benefits cannot form a part of a plaintiff’s
14
claim. Thus, they cannot be a part of the plaintiff’s
award. Therefore, not only is the plaintiff deprived of a
part of her benefits, she is also deprived of the
purportedly punitive interest that should have accompanied
it.
Further, a savvy insurer seeking to disburse the
lowest dollar amount possible might gamble on a cost-
benefit approach and use the one-year-back rule in its
favor. For example, assume an insured seeks benefits that,
over one year, total $100,000. If the insurer waits two
years to deny the claim, the insured, although due
$200,000, can only recover $100,000 in a lawsuit. A twelve
percent annual interest rate will be applied to the
$100,000 figure pursuant to § 3142(3), which makes the
insurer’s total bill approximately $112,000. Thus, the
insurer handily pockets $88,000 of its insured’s benefit
money, less the plaintiff’s attorney fees. Either way, the
insured ends up with $112,000 instead of the $200,000, plus
interest, that was actually owed.7
7
This assumes that the insured can successfully engage
an attorney’s services. If the amount of the potential
claim does not significantly exceed the cost of litigation,
then, presumably, getting an attorney will be a difficult
endeavor.
15
Lest anyone argue otherwise, the danger of such a
scenario is real, not imagined. In Hudick v Hastings Mut
Ins Co, 247 Mich App 602, 610; 637 NW2d 521 (2001), the
Court of Appeals found an acute need for Lewis’s equitable
tolling rule when, “[a]lthough defendant had all the
information it needed at this point to calculate the
benefits it owed to plaintiff, defendant did not process a
claim for plaintiff or formally deny its liability until” a
time that precluded the plaintiff from recovering some of
the benefits owed. The Hudick panel correctly observed
that the “[p]laintiff should not be penalized for the time
that the two insurers spent investigating the issue, which
was extended largely because defendant was aware of its
statutory duty but attempted to run the clock on the
limitations period.” Id. Such tactics were also
forewarned in William H Sill Mortgages, Inc v Ohio Cas Ins
Co, 412 F2d 341, 346 (CA 6, 1969) (“The insurer may not
lull the insured to sleep by promises of payment or
negotiations for payment or a failure to deny liability
until after the time limitation has expired and then set up
as a defense the failure to bring the action within the
limitation fixed by the policy.”).
The majority claims that the “only delay possible
under the no-fault law is the thirty-day payment period
16
following receipt of proof of loss by the insurer.” Ante
at 26 (emphasis added). This is incorrect. While §
3142(2) does technically require insurers to pay benefits
within thirty days, insurers do not always do so. Thus,
delays of more than thirty days are indeed “possible.”
The ways in which equitable tolling fulfill the
purposes of the no-fault act, and the unjustifiable
ramifications of disallowing the remedy, have been
eloquently presented in precedent. In Richards v American
Fellowship Mut Ins Co, 84 Mich App 629, 635; 270 NW2d 670
(1978), the Court of Appeals stated:
Applying the approach taken by the Thomas
Court [Tom Thomas Org, Inc v Reliance Ins Co, 396
Mich 588; 242 NW2d 396 (1976)] to § 3145 would
effectuate the legislative intent in enacting the
no-fault act. Unable to profit from processing
delays, insurance companies will be encouraged to
promptly assess their liability and to notify the
insured of their decision. At the same time, the
insured will have a full year in which to bring
suit.
The Richards Court recognized the ramifications of
disallowing tolling:
If we were to accept defendant’s
interpretation of the statutory provision, we
would in effect be penalizing the insured for the
time the insurance company used to assess its
liability. To bar the claimant from judicial
enforcement of his insurance contract rights
because the insurance company has unduly delayed
in denying its liability would run counter to the
Legislature’s intent to provide the insured with
17
prompt and adequate compensation. [Id. at 634
(emphasis added).]
In Lewis, this Court correctly found that equitable
tolling served the inherent purposes of the no-fault act by
ensuring that an insurer’s delay in handling a claim would
not work to the insured’s detriment:
“Tolling the statute when the insured
submits a claim for specific benefits would not
appear to detract from the policies underlying
the one-year limitation on recovery. By
submitting a timely and specific claim, the
insured serves the interest in preventing stale
claims by allowing the insurer to assess its
liability while the information supporting the
claim is relatively fresh. A prompt denial of
the claim would barely affect the running of the
limitation period, while a lengthy investigation
would simply ‘freeze’ the situation until the
claim is eventually denied. In effect, the
insured would be charged with the time spent
reducing his losses to a claim for specific
benefits plus the time spent deciding whether to
sue after the claim is denied.” [Lewis, supra at
101, quoting Welton, supra at 578-579.]
This Court also correctly recognized that without
tolling, an insured will have to “file suit as a
precautionary measure when the one-year deadline
approache[s], regardless of the status of the claim,” and
that such needless litigation contravenes the no-fault
act’s purpose of reducing litigation. Lewis, supra at 102,
citing Cassidy v McGovern, 415 Mich 483, 501; 330 NW2d 22
(1982).
18
Of course, equitable tolling is not “an unconditional
gift to the insured.” Norfolk & W R Co v Auto Club Ins
Ass’n, 894 F2d 838, 843 (CA 6, 1990). Astute about the
need to prevent an insured from improperly benefiting from
equitable tolling, the Lewis Court also warned that to take
advantage of tolling, the insured “must seek reimbursement
with reasonable diligence . . . .” Lewis, supra at 102.
That condition, held the Court, would “alleviate the
defendant’s fear that adoption of the tolling principle
will result in ‘open-ended’ liability in cases in which the
claimant, having made a specific claim for benefits,
thereafter refuses to respond to the carrier’s legitimate
requests for more information needed to process the claim.”
Id. at 102-103.8
Further, it is nothing short of illogical not to
require an insurer to deny a claim before imposing a
restriction on what plaintiff can recover. A plaintiff
must know that a claim exists before being required to file
one. Repudiating equitable tolling imposes a tremendous
8
In light of the majority’s renegade renunciation of
equitable tolling, it is unnecessary to address the
correctness of the Court of Appeals decision in Johnson v
State Farm Mut Automobile Ins Co, 183 Mich App 752; 455
NW2d 420 (1990). Thus, I make no conclusions regarding
whether the Court of Appeals correctly interpreted Lewis’s
requirement that an insured make a “specific claim for
benefits.”
19
burden on plaintiffs, who must assert that the insurer’s
failure to pay is a definitive denial and, thus, a
violation of the no-fault act, rather than just the result
of a pending investigation. A defense motion for failure
to state a claim puts a plaintiff in an unnecessarily
precarious position.
These many concerns are not lost on other states that
have been faced with similar problems. In Entzion v
Illinois Farmers Ins Co, 675 NW2d 925, 929 (Minn App,
2004), the court concluded that the period of limitations
on a no-fault benefits claim did not begin to run until the
insurer denied benefits. In Micha v Merchants Mut Ins Co,
94 AD2d 835; 463 NYS2d 110, 112 (1983), the court
determined that the period of limitations started when
benefits were withheld. Both courts recognized that it
would be irrational to require a plaintiff to prove that
benefits were owed before an insurer actually refused to
pay them. Refusing to apply equitable tolling to § 3145
requires plaintiffs to sue defensively, creating an
irreconcilable conflict with the legislative goal of
reducing litigation.
Interestingly, the necessity for equity of this sort
has been recognized by this very majority most recently in
Bryant v Oakpointe Villa Nursing Ctr, Inc, 471 Mich 411;
20
684 NW2d 864 (2004). In Bryant, this Court concluded that
the “[p]laintiff’s failure to comply with the applicable
statute of limitations [was] the product of an
understandable confusion about the legal nature of her
claim, rather than a negligent failure to preserve her
rights.” Id. at 432. Thus, this Court held that, although
the plaintiff’s claims would have normally been time-
barred, “[t]he equities of this case . . . compel a
different result.” Id.
If the judiciary can employ its powers to toll a
period of limitations because the nature of one’s claim is
a source of confusion, then certainly here, where an
insurer can single-handedly orchestrate a reduction in
genuinely owed benefits, equity is likewise required. The
majority’s newfound hostility to the doctrine is vastly
disturbing.9
9
The majority attempts to explain away this
discrepancy by arguing that because there is no statute to
assist one in characterizing a cause of action, equity was
appropriate in Bryant. Ante at 36 n 65. Strangely, the
Bryant plaintiff’s situation—“confusion”—fits less within
the majority’s declaration of when equity should be applied
(“fraud or mutual mistake,” ante at 35), than does the
statute at hand, which allows an insurer to single-handedly
divest a plaintiff of deserved benefits even when a
plaintiff has diligently performed all her obligations.
Thus, this is far from the lofty “fundamental disagreement”
between the majority and myself regarding when equity
should be applied that the majority proclaims. Ante at 36
21
Further, the majority’s automaton-like textualist
analysis takes no consideration of the realities
surrounding no-fault claims and payments illustrated by
amicus curiae Coalition Protecting Auto No-Fault. For
instance, when an insured does not file a lawsuit within
one year of receiving medical treatment, the insured’s
medical providers may go unpaid, merely because the insurer
has not responded to the request for benefits. This risk
of nonrecovery or substantially reduced payments may prove
too great for providers to bear. Medical providers may
resort to denying treatment to and even suing their own
patients, many of whom will not be able to pay because of
the high cost of medical care, and some of whom may be
forced into bankruptcy because of the debt. The overflow
of health-care costs will be foisted on our already
n 65. Rather, the majority’s inconsistency is a clear
manifestation of its willingness to apply equity according
to its own whims instead of according to the principles
that govern it.
Further, it is misleading to suggest that the Lewis
Court issued a protective blanket of equity to every
plaintiff encountering a problem under MCL 500.3145(1).
See ante at 36 n 65. The Lewis Court’s conditions that a
plaintiff must submit a specific claim for benefits and be
diligent necessitate a case-by-case examination of whether
a particular plaintiff can avail herself of the equitable
rule. In other words, not every plaintiff will be
permitted to benefit from equitable tolling. Rather, the
Lewis Court made the remedy potentially available to
plaintiffs, but only when they met certain conditions.
22
overtaxed Medicaid and Medicare systems, with the taxpayers
ultimately shouldering the burden. Thus, refusing to apply
equitable tolling will ultimately increase overall health-
care costs for everyone, denigrating yet another goal of
the no-fault system: affordable premiums.
In its response to my dissent, the majority does a
fine job of describing the principles of equity.
Noticeably lacking, however, is any attempt to describe why
equity is not required in the present case.10 The
majority’s chosen ignorance of the fact that its
application of the statute at hand does not further the
intent of the Legislature or the purpose of the no-fault
act, and that it unjustifiably puts an insured’s ability to
10
The majority’s statement that there are no “‘unusual
circumstance[s]’” in this case is conveniently conclusory
and, again, a variation on its dodge-and-duck theme. See
ante at 37. I invite the public to reconcile the following
premises of the majority. The majority claims that its
charge is to further legislative intent. But it also
claims that the only method of divining that intent is
through the statute’s plain language. (It also assumes
that this is possible with one-hundred percent “accuracy,”
though split decisions from this very majority belie that
assumption.) And it further claims that it can, indeed,
employ equity. But it fails to explain how it could ever
invoke its equitable powers if it limits itself to the
statute’s plain language. It then turns a blind eye to the
fact that its analysis does not further the well-known and
consistently agreed-on legislative intent behind the no-
fault act.
23
recover benefits in an insurer’s hands, is convenient for
the majority, but disturbing to me.
The application of equitable tolling strikes an
extremely palatable balance between the rights of insureds
and insurers.11 As I stated in Secura:
The legislative purposes behind limitation
provisions, preventing stale claims and easing
crowded dockets, are either inapplicable or
contrary to the majority’s decision. First,
preventing stale claims from reaching our courts
is not a consideration in this case, because the
defendant insurer can protect itself from stale
claims by promptly responding to a policyholder’s
claim. Thus, whether insurers must deal with
stale claims is uniquely within their own
control. Next, the majority’s interpretation
actually encourages needless litigation. Under
the majority’s decision, a prudent policyholder
must file suit within one year of the injury,
regardless of whether the insurer is still
processing the claim, or lose the claim
altogether. This contravenes an important
motivation for the no-fault system, reducing
litigation, see Cassidy v McGovern, 415 Mich 483,
501; 330 NW2d 22 (1982), and the similar judicial
policy of discouraging litigation. See Alexander
v Gardner-Denver Co, 415 US 36; 94 S Ct 1011; 39
L Ed 2d 147 (1974). Additionally, requiring a
precautionary suit by the policyholder could
adversely affect the negotiations between the
claimant and the insurer. Negotiating parties
usually attempt to maintain a cooperative
atmosphere, and litigation pending between the
parties would hinder that atmosphere. See
Johnson v Railway Express Agency, 421 US 454,
468; 95 S Ct 1716; 44 L Ed 2d 295 (1975)
11
This is evidenced by the sheer number of courts that
have held likewise, cited earlier in this opinion.
24
(Marshall, J., dissenting). [Secura, supra at
391 (Cavanagh, J., dissenting).][12]
Defendant’s magniloquent predictions of the demise of
our entire no-fault system barring reversal of Lewis are
sheer melodrama. First, Lewis was decided nearly twenty
years ago, and no-fault remains alive and well.13 Surely if
equitable tolling were destined to bring our no-fault
system to its knees, the system would be six feet under by
now. Second, defendant claims that the prolific number of
multimillion dollar claims being wreaked on the insurance
companies as a result of equitable tolling create great
pressure on insurers to settle. But an insurer is in the
best position to avoid the accrual of multimillion dollar
claims by promptly paying or denying benefits. Further,
the Lewis decision does not allow an insured to sleep on
his rights, as evidenced by the numerous decisions in which
plaintiffs who did not diligently pursue their claims were
denied the benefit of equitable tolling and those in which
the insurer’s prompt denial prevented tolling. See, e.g.,
12
See also Bridges v Allstate Ins Co, 158 Mich App
276, 280-281; 404 NW2d 240 (1987), in which the Court noted
that, although the “plaintiff filed a complaint, he wished
to avoid the necessity of trying the action and felt that
there was a very real possibility that his claim would be
paid.”
13
I use that term as a figure of speech, not as a
literal comment on the no-fault system.
25
Bomis v Metropolitan Life Ins Co, 970 F Supp 584, 588 (ED
Mich, 1997) (rejecting the plaintiff’s Lewis argument
because the plaintiff did not act with due diligence);
Morley v Automobile Club of Michigan, 458 Mich 459, 470;
581 NW2d 237 (1998); Grant v AAA Michigan/Wisconsin, Inc,
266 Mich App ____; ____ NW2d ____ (2005); Mt Carmel Mercy
Hosp v Allstate Ins Co, 194 Mich App 580, 587-588; 487 NW2d
849 (1992); Mousa v State Auto Ins Cos, 185 Mich App 293,
294-295; 460 NW2d 310 (1990) (finding a formal denial of
benefits when the plaintiff admitted that the insurer had
orally denied the claim); Long v Titan Ins Co, unpublished
opinion per curiam of the Court of Appeals, issued June 14,
2005 (Docket No. 260113); Detroit Medical Ctr-Sinai-Grace
Hosp v Titan Ins Co, unpublished opinion per curiam of the
Court of Appeals, issued March 10, 2005 (Docket No.
251447); Inhulsen v Citizens Ins Co, unpublished opinion
per curiam of the Court of Appeals, issued March 30, 2004
(Docket No. 243398); Jevahirian v Progressive Cas Ins Co,
unpublished opinion per curiam of the Court of Appeals,
issued April 27, 1999 (Docket No. 205577) (“Notice of an
injury that simply informs the insurer of the name and
address of the claimant and the time, place, and nature of
an injury cannot serve as the specific claim that triggers
tolling because it does not inform the insurer of the
26
expenses incurred, whether the expenses were covered
losses, and whether the claimant would file a claim.”).
In other words, equitable tolling has worked. As can
clearly be seen, equitable tolling puts neither the insured
nor the insurer in an untenable or unfair position.
Rather, it protects both parties by requiring both to act
promptly. When a party fails to act promptly, the law will
not reward that party. With these safeguards in place, the
purposes of the no-fault act are realized instead of
defeated. But with the majority’s obstinate rejection of
equitable tolling will come the temptation to prolong
denying claims, lost benefits, a proliferation of
litigation, unpaid providers, and increased costs for
everyone. Such a ruling is simply unjustifiable.
III. The Legislature Has Not Revised MCL 500.3145 Since
Lewis
Despite amending the no-fault act several times since
this Court’s decision in Lewis, the Legislature has left
untouched the language at issue in this case. Thus, this
case is an ideal candidate for applying the long-recognized
legislative reenactment rule. See, e.g., Massachusetts Mut
Life Ins Co v United States, 288 US 269, 273; 53 S Ct 337;
77 L Ed 739 (1933). As I have previously explained,
[u]nder the reenactment rule, “[i]f a legislature
reenacts a statute without modifying a high
27
court’s practical construction of that statute,
that construction is implicitly adopted.” People
v Hawkins, 468 Mich 488, 519; 668 NW2d 602 (2003)
(Cavanagh, J., dissenting), citing 28 Singer,
Statutes and Statutory Construction (2000 rev),
Contemporaneous Construction, § 49.09, pp 103-
112. The Legislature “is presumed to be aware of
an administrative or judicial interpretation of a
statute and to adopt that interpretation when it
[reenacts] a statute without change . . . .”
Lorillard, a Div of Loew’s Theatres, Inc v Pons,
434 US 575, 580; 98 S Ct 866; 55 L Ed 2d 40
(1978). “The reenactment rule differs from the
legislative-acquiescence doctrine in that the
former canon provides ‘prima facie evidence of
legislative intent’ by the adoption, without
modification, of a statutory provision that had
already received judicial interpretation.”
Hawkins, supra at 488, quoting Singer at 107.
[Neal v Wilkes, 470 Mich 661, 676; 685 NW2d 648
(2004) (Cavanagh, J., dissenting).]
I continue to find extremely persuasive the notion
that a Legislature is presumed to be aware of this Court’s
decisions. Id.; see also Lindahl v Office of Personnel
Mgt, 470 US 768, 782; 105 S Ct 1620; 84 L Ed 2d 674,
(1985). Further, if the ramifications of Lewis were so
dramatically detrimental to the no-fault system, there is
all the more reason that the Legislature would have acted
with great haste to amend the statute and explicitly ban
equitable tolling. But it did not. Rather, despite
numerous opportunities, the Legislature has left § 3145
intact. Its failure to change the statute to reflect an
intent contrary to that which we found in Lewis is further
28
support that this Court correctly concluded that equitable
tolling was appropriate.
IV. The Majority’s Reasoning for Failure to Adhere to
Stare Decisis is Faulty
The majority’s opinion seems to rest primarily on its
analytically deficient conclusion that this Court should
not employ equity in this case. Most egregiously, the
majority accuses the Lewis Court of “act[ing] outside its
constitutional authority,” ante at 25-26, while at the same
time acknowledging this Court’s constitutional authority to
do equity, ante at 35. The majority cites our
Constitution’s directive that the judiciary must “exercise
its ‘judicial power,’” see ante at 26 n 40, quoting Const
1963, art 3, § 2; art 6, § 1, but neglects to justify its
conclusion that equity should not lie in the present case.
Indeed, despite its purported recognition that this
Court’s equitable powers are, in fact, viable, the majority
insists on trivializing my application of these powers.
The majority grossly mischaracterizes my analysis as
playing “an omnipresent and unassailable judicial trump
card,” the result of my believing the statute is “unfair,”
a “policy decision[],” “omniscien[ce],” a “veil,” a “policy
choice,” “second-guess[ing],” a “whim[],” one of “various
conceptions,” an “unrestricted license,” “wholesale
29
policymaking,” without “basis,” and a “guise.” See ante at
33-37 & n 62. These accusations are transparent attempts
to suggest that a legitimate application of equity is a
mere effort to install my own policy views. Not only could
that not be further from the truth, but such belittling is
a grave disservice to the citizens of this state.
As I have discussed, and as is thoughtfully
articulated by Justice Weaver, the Lewis decision was
neither “‘unworkable’” nor “‘badly reasoned.’” See ante at
29. Rather, it was based on a centuries-old recognition of
equitable tolling as an appropriate measure for avoiding
injustices. It had “‘practical workability’” by requiring
that both parties act promptly and by not giving either
party an undue advantage over the other.14 The decision was
crafted in an effort to make undesired preemptive
litigation unnecessary. There are no changes in the law or
facts that justify overturning the decision. There are,
contrary to the majority’s assertion otherwise, reliance
14
To the extent the Court of Appeals may have
misapplied the requirement that an insured must submit a
specific claim for benefits in Johnson, supra, such error
is easily corrected. If the Court of Appeals erred, we
need not, as the majority insists, clamor to overrule the
underlying case. See ante at 30. Rather, the usual, and
much more logical, path is to overturn the aberrant Court
of Appeals case if it did not adhere to our prior
precedent.
30
interests at play that will, when Lewis is overruled, work
undue hardships on insureds and on medical providers.
Insureds routinely choose their course of action—
waiting or suing—on the basis of the actions of their
insurers. Relying on equitable tolling, an insured knows
that he need not rush to court the second the one-year
period set forth in § 3145(1) has elapsed. The undue
hardship that will result from overturning Lewis is that
instead of being able to engage in negotiations with an
insurer, an insured must jump the gun, expend unnecessary
time and resources, sue her insurer, and put herself in the
awkward position of withstanding a summary disposition
motion. Medical providers as well will suffer undue
hardship because they will, in many instances, bear the
losses that will result when an insurer does not timely
deny a claim and when the insured does not run to court to
file a now-necessary preemptive lawsuit. It is quite
logical to assume that medical providers have been relying
on the equitable tolling rule of Lewis by continuing to
provide treatment during the period in which a claim has
not yet been denied.
The majority bizarrely claims that “the impact of
Lewis is increasingly producing a tax on the no-fault
system as claimants are being permitted to seek recovery
31
for losses incurred much more than one year prior to
commencing suit.” Ante at 29. But this fails to recognize
that the benefits were already legitimately owed—thus, they
can hardly be characterized as a “tax.” And in a situation
where an insurer deliberately engages in dilatory tactics
to avoid paying benefits, the nomenclature is even more
unfitting.
The Lewis decision was sound, had practical
workability, and gave clear guidance that is being relied
upon on a daily basis. Further, the decision was grounded
in an equitable rule, not “judicial defiance” as the
majority so histrionically proclaims, so the Court did not
incorrectly interpret the statute. See ante at 28. There
is simply no basis for expunging Lewis and ignoring the
directives of the doctrine of stare decisis. The best that
can be said of today’s majority opinion is that it does
indeed create a crystal-clear directive to Michigan’s
insureds: if your claim has not been paid or formally
denied within one year of your request, sue.
V. The Majority’s Decision Should Not be Applied
Retroactively
For the reasons aptly set forth by Justice Weaver, I
fully agree that the majority’s misguided decision should
32
not be visited on any insured by way of retroactive
application.
VI. The Majority’s Tone Disserves the Judiciary
Some readers, like myself, might find it difficult to
wade through the thick swamp of hyperbole and rhetoric that
permeates the majority’s opinion. With its opprobrious
language,15 the majority haughtily assumes that no view
15
Discrediting a long line of the past opinions
written by a bench curiously not including any member of
the current majority, the majority gets quite carried away
in an apparent effort to convince the reader that its view
is superior to any other ever proffered. Keeping in mind
the above discussion of the widespread acceptance of
equitable tolling and the reasons why applying tolling to
§ 3145(1) is necessary to fulfill the purposes of the no-
fault act and to prevent an insurer from wrongfully
withholding benefits from an injured plaintiff, consider
these frenzied phraseologies: “under this thin veil, [the
majorities] inserted their own policy views,” ante at 13;
“impermissible departure,” ante at 19; “supplanted the will
of the Legislature with its own assessment of policy and
consumer expectations,” ante at 20; “curious incongruity,”
ante at 21; “quite broad,” ante at 22; “vague,” ante at 23;
“dismantled the certainty,” id.; “questionable lineage,”
id.; “judicial negation,” id.; “abrupt departure from
settled precedent,” id.; “shrugged off the weight of
binding precedent,” ante at 24; “crafting its own
amendment,” id.; “distortion,” id.; “unmanageability,” id.;
“purely for policy reasons,” id.; “direct contravention of
the statutory language,” id.; ““prevailing policy whims,”
ante at 25; “own perception,” id.; “impermissibly
legislated from the bench,” id.; “speculation,” id.; “acted
outside its constitutional authority,” ante at 25-26;
“importing its own policy views,” ante at 26; “we are
unable to perceive any sound policy basis,” id.; “judicial
defiance,” ante at 28 (emphasis in original); “judicial
33
other than its own is worthy of the printed page. Given
that equitable tolling has a long history in state and
federal jurisprudence, and given the persuasive reasons why
an equitable remedy is mandated to prevent manifest
injustice to insureds seeking benefits under § 3145, I fail
to grasp the basis for the criticisms.
Moreover, the majority’s overwrought scorn is rife
with sarcasm,16 sloganeering,17 and outright fabrication.18
The majority’s unbending devotion to strict textualism
should not come at the expense of recognizing that the
judiciary is not a mere robotic cog in the wheel of our
three-branch system of government.19 Rather, the judiciary
usurpation,” id.; and “defies ‘practical workability,’”
ante at 29; and “wrongly decided,” ante at 30.
16
See n 15 of this opinion.
17
See id.
18
See id.
19
Indeed, as in this case, strict textualism can have
consequences that we would be wise to avoid. See
Zelinsky, Travelers, reasoned textualism, & the new
jurisprudence of ERISA preemption, 21 Cardozo L R 807, 808
n 3 (1999):
See, e.g., Ellen P. Aprill, The Law of the
Word: Dictionary Shopping in the Supreme Court,
30 Ariz. St. L. J. 275, 324 (1998) (criticizing
Shaw v. Delta Air Lines, Inc., 463 U.S. 85
(1983), as an “easy, dictionary-driven, plain
meaning disposition of the term . . . [which]
produced a flood of litigation for the lower
federal courts”; Catherine L. Fisk, The Last
34
has the ability—indeed, the responsibility—to do equity
where equity is required. Were that authority not
historically within the judiciary’s purview, such a
creature as equity would not even exist.
Further, the current majority has an obvious inability
to recognize that to whatever extent a view different from
the view it holds could be considered “judicial activism,”
see, e.g., n 15 of this opinion, its own view can as well.
In other words, accusing the Lewis Court of judicial
activism simply because the Court reached a conclusion that
this majority takes issue with does nothing to further the
legitimate debate that surrounds divergent approaches. The
majority opinion reeks of an unfortunately familiar tone
that is, quite frankly, getting old.20
Article About the Language of ERISA Preemption? A
Case Study of the Failure of Textualism, 33 Harv.
J. on Legis. 35, 39 (1996) (“If ever there were a
case study of the failures of textualism as a
method of statutory interpretation, this is
it.”); Peter D. Jacobson & Scott D. Pomfret,
Form, Function, and Managed Care Torts: Achieving
Fairness and Equity in ERISA Jurisprudence, 35
Hous. L. Rev. 985, 990 (1998) (criticizing the
Supreme Court for “a mechanical approach [to
ERISA preemption] that adheres to a strict ‘plain
language’ interpretation without questioning
whether the result of these interpretations can
be reconciled with congressional intent”).
20
The authors of such phrases as those quoted in n 15
of this opinion would do well to keep in mind that despite
how ardently they convince themselves of the supremacy of
35
VII. Conclusion
Equitable tolling has a venerable history in federal
and state jurisprudence that today’s majority ill-advisedly
chooses to disregard in favor of denigrating the purposes
of the no-fault act. I, unlike the majority, am not
content with the dismissive notion that “the Legislature
has made it so.” See ante at 25. The citizens of
Michigan, and the Legislature, deserve better.
As is consistently recognized by the majority, our
role is to effectuate the intent of the Legislature.
Because I believe that equitable tolling has an important
role in effecting the Legislature’s intent, that Lewis was
correctly decided, and that overturning Lewis will work an
unjustifiable hardship on injured insureds and the no-fault
system as a whole, I respectfully dissent.
Michael F. Cavanagh
Marilyn Kelly
their position, their reasoning is not infallible. See
Halbert v Michigan, ___ US ___; 125 S Ct 2582; 162 L Ed 2d
552 (2005); Yellow Transportation, Inc v Michigan, 537 US
36; 123 S Ct 371; 154 L Ed 2d 377 (2002).
36
7/April 2005 RPY
S T A T E O F M I C H I G A N
SUPREME COURT
EVA DEVILLERS, as Guardian and
Conservator of Michael J. Devillers,
Plaintiff-Appellee,
v No. 126899
AUTO CLUB INSURANCE ASSOCIATION,
Defendant-Appellant.
_______________________________
WEAVER, J. (dissenting).
I respectfully dissent from the majority opinion
overruling Lewis v DAIIE, 426 Mich 93; 393 NW2d 167 (1986),
and I disagree with the majority’s decision to give its
opinion limited retroactive, instead of prospective,
effect.
I
Had I been on the Michigan Supreme Court in 1986, I
would likely have joined Justice Brickley and Justice Riley
in dissenting from Lewis. I agree with Justice Brickley’s
dissent in Lewis, and his statement that
[s]ection 3145 is clear in its directive
that a claimant cannot recover benefits for
losses incurred more than one year prior to
the commencement of the suit; not one year
plus the period of time between making the
claim and the denial of the claim as the
majority holds. [Lewis, supra, at 105.]
But nineteen years later, I cannot join the majority’s
decision to overrule the longstanding precedent applying
judicial tolling to this statute. In this case, there is
no need to unsettle the law and disregard the doctrine of
stare decisis.
Under the doctrine of stare decisis, it is necessary
to follow earlier judicial decisions when the same points
arise again in litigation. Garner, A Dictionary of Modern
Legal Usage (New York: Oxford University Press, 1995),
p 827. This promotes stability in the law. In determining
whether to overrule a prior case, pursuant to the doctrine
of stare decisis, this Court should first consider whether
the earlier decision was wrongly decided. If it was
wrongly decided, the Court should then examine reliance
interests: whether the prior decision defies “practical
workability”; whether the prior decision has become so
embedded, so fundamental to everyone’s expectations that to
change it would produce not just readjustments, but
practical real-world dislocations; whether changes in the
law or facts no longer justify the prior decision; and
whether the prior decision misread or misconstrued a
statute. Robinson v Detroit, 462 Mich 439, 464-467; 613
NW2d 307 (2000).
2
As stated above, I agree with Justice Brickley’s
dissent in Lewis; I would find that Lewis was wrongly
decided. But after examining the reliance interest
factors, I would not overrule Lewis. First, the Lewis
decision does not defy “practical workability”; it has been
applied for nineteen years without causing any fundamental
problems with no-fault insurance. Second, the Lewis
decision has indeed become “so embedded, so fundamental, to
everyone’s expectations that to change it would produce not
just readjustments, but practical real-world dislocations.”
Robinson, supra at 466. Claimants who consulted an
attorney on whether they needed to file suit after
receiving no response to a filed claim would have been
told, on the basis of Lewis, that filing the claim had
preserved their rights until they received an answer from
the insurance company. Changing that rule now will affect
an unknown number of claimants who will lose their rights
to benefits that had previously been protected. Third,
there have been no changes in the law or facts since Lewis
was issued. Finally, Lewis did not misread or misconstrue
a statute; instead, it applied judicial tolling to the
statute as an equitable matter.
In light of the doctrine of stare decisis and the
purposes it serves, neither the defendant nor the majority
3
have given sufficient reason to overrule Lewis. Correction
for correction’s sake does not make sense. The case has
not been made why the Court should not adhere to the
doctrine of stare decisis in this case.
If there are genuine problems with Lewis’s application
of the judicial tolling doctrine, they can be brought to
the Legislature’s attention by the insurance industry.
II
Further, I disagree with the majority’s decision to
give its decision limited retroactive effect. Because its
decision overrules nineteen years of precedent and because
claimants may have acted in reliance on Lewis, the
majority’s decision should be applied prospectively.
A
A judicial decision can be applied with full
retroactivity, with limited retroactivity, or
prospectively. Monat v State Farm Ins Co, 469 Mich 679,
702; 677 NW2d 843 (2004) (Cavanagh, J., dissenting).
When a decision is given full retroactive effect, the
parties in that case are bound by the decision, and the
parties in other cases then pending, as well as any
potential claimants who would have filed suits in the
future, are bound by it as well. See Tebo v Havlik, 418
4
Mich 350, 363-364; 343 NW2d 181 (1984) (opinion by
Brickley, J.).
The majority has decided to give its ruling limited
retroactive effect. This means that its ruling will apply
“only in cases commenced after the overruling decision and
in pending cases where the issue had been raised and
preserved.” Stein v Southeastern Michigan Family Planning
Project, Inc, 432 Mich 198, 201; 438 NW2d 76 (1989).
Accordingly, for any cases filed before today’s decision,
that is, any cases that have been brought in reliance on
our ruling in Lewis, the parties will not be bound by
today’s decision unless the issue has been raised and
preserved. However, the parties to an unknown number of
pending claims will be bound by the majority’s decision
where the claimant relied on Lewis’s ruling.
The most flexible approach, which would be the least
harmful application of the majority’s decision, would be to
apply the ruling prospectively. Prospective application
would apply this ruling only to cases filed after today’s
decision, and would not bind the parties in this case to
today’s decision. Tebo, supra at 364. See Comment,
Michigan’s civil retroactivity jurisprudence: A proposed
framework, 2002 L Rev MSU-DCL 933 (2002).
5
B
As the majority has noted, the general rule is that
judicial decisions are to be given full retroactive effect.
Hyde v Univ of Michigan Bd of Regents, 426 Mich 223, 240;
393 NW2d 847 (1986). But this Court has used a more
flexible application of its rulings in situations where
applying the ruling with complete retroactivity would
result in an injustice to a certain class of litigants.
Gladych v New Family Homes, Inc, 468 Mich 594, 606; 664
NW2d 705 (2003). In fact, this Court noted in Hyde that
“[w]e often have limited the application of decisions which
have overruled prior law or reconstrued statutes.” Hyde,
supra at 240.
Today, the majority has both overruled prior law and
reconstrued a statute. By overruling Lewis, the majority
has overruled the law regarding the tolling of the one-
year-back limitations period that has been in place in the
state of Michigan for the past nineteen years. Further,
the majority’s decision today rests largely on the
reinterpretation of MCL 500.3145(1). Under these
circumstances, the majority certainly has the discretion to
apply this ruling prospectively, and should do so out of
fairness to those who have acted in reliance on the nearly
two decades of precedent that preceded this ruling.
6
Because today’s decision overrules settled precedent,
it should be applied prospectively. This Court issued its
decision in Lewis more than nineteen years ago. Therefore,
the law in the state of Michigan over that period has been
that the one-year-back time limitation of MCL 500.3145(1)
for claimants to recover no-fault personal protection
insurance benefits was tolled from the time that the claim
was filed until the time when the insurer formally denied
liability. Furthermore, from the time of our decision in
Lewis until the present case, this Court has neither issued
a ruling nor “foreshadowed” that the interpretation of this
tolling of the one-year-back limitations period would be
changed. Under these circumstances, prospective
application of today’s decision is appropriate.
Under the majority’s rule, any claimant who postponed
his or her decision to file a suit against an insurance
company in reliance on Lewis is now barred from recovering
benefits from more than one year before the time that suit
is filed if the defendant insurance company raised and
preserved the issue at trial. Hence, any insurance company
that raised this issue at trial in the hopes that this
Court would overrule Lewis will now be rewarded at the
expense of the claimants who acted in complete accord with
the law. This situation creates precisely the type of
7
injustice that this Court intended to prevent by creating
flexibility in the application of its decisions.
Unfortunately the majority’s decision today disregards this
precedent and will cause injustice.
III
For these reasons, I respectfully dissent from the
majority’s decision.
Elizabeth A. Weaver
8
Devillers v. Auto Club Ins. Ass'n
Court: Michigan Supreme Court
Date filed: 2005-07-29
Citations: 702 N.W.2d 539, 473 Mich. 562
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