                           STATE OF MICHIGAN

                            COURT OF APPEALS



STANLEY JACKSON,                                                     UNPUBLISHED
                                                                     July 6, 2017
               Plaintiff-Appellant,

v                                                                    No. 331253
                                                                     Macomb Circuit Court
SUBURBAN MOBILITY AUTHORITY FOR                                      LC No. 2014-004860-NF
REGIONAL TRANSPORTATION,

               Defendant-Appellee.


Before: FORT HOOD, P.J., and CAVANAGH and RONAYNE KRAUSE, JJ.

PER CURIAM.

        Plaintiff Stanley Jackson appeals as of right the trial court’s order granting summary
disposition under MCR 2.116(C)(10) in favor of defendant Suburban Mobility Authority for
Regional Transportation (“SMART”). We reverse and remand for further proceedings.

        Plaintiff was injured on March 29, 2013, when the driver of a SMART bus shut the bus
door on plaintiff’s arm and pumped the brakes while plaintiff was attempting to board the bus.
At the time of the injury, plaintiff did not own a vehicle, but he was living with his mother, who
had an automobile insurance policy issued by American Fellowship Mutual Insurance Company
(American). Also at the time of the injury, American had been placed in Chapter 81
rehabilitation pursuant to MCL 500.8101 et seq. Shortly after the injury, plaintiff sent notice of
his injury to SMART pursuant to the notice requirement for recovery of no-fault benefits under
MCL 500.3145(1); however, plaintiff did not send any notice to American. SMART was self-
insured. Shortly after that notice was sent, American was liquidated, and a deadline of
December 12, 2013, was set for the filing of any claims against American. At no time did
plaintiff provide any notice to American or attempt to commence any claim against American or
the Michigan Property and Casualty Guaranty Association (MPCGA). The instant action, solely
against SMART, was commenced on December 22, 2014.

        A grant or denial of summary disposition is reviewed de novo on the basis of the entire
record to determine if the moving party is entitled to judgment as a matter of law. Maiden v
Rozwood, 461 Mich 109, 118; 597 NW2d 817 (1999). For the purposes of the instant appeal,
there are no material facts in dispute; rather, the issue is entirely a question of law and statutory
interpretation. We review de novo questions of statutory interpretation, with the goal of giving



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effect to the Legislature’s intent; unambiguous language must be applied as it is written.
Gladych v New Family Homes, Inc, 468 Mich 594, 597; 664 NW2d 705 (2003).

         It is not disputed that in theory American should have been a higher-priority insurer than
SMART, which is self-insured. As defendant argues and plaintiff correctly admits, the insurer of
a relative with whom a plaintiff resides would be the highest priority insurer for an injured
person who was not required to have insurance of his own. MCL 500.3114(1); Corwin v
DaimlerChrysler Ins Co, 296 Mich App 242, 254-256; 819 NW2d 68 (2012). If no such
insurance is available, the next insurers in priority would be “the insurer of the owner or
registrant of the vehicle occupied” and then “the insurer of the operator of the vehicle occupied.”
MCL 500.3114(4). As a consequence, there is no dispute that under the ordinary course of
affairs, American should have been the highest-priority insurer. At issue is what effect, if any,
American’s insolvency and liquidation had on the priority of insurers.

        Pursuant to MCL 500.3145(1), a claim for no-fault insurance benefits must be filed
within one year of the injury unless, in relevant part, the insurer had been properly notified of the
injury within that one year. See Perkovic v Zurich American Insurance Co, ___ Mich ___, ___;
893 NW2d 322 (2017) (Docket No. 152484), slip op at 4-5. Plaintiff’s accident occurred on
March 29, 2013. American was liquidated and the deadline for filing claims against it expired
long before the statutory limitations period for giving notice or filing a claim did. There is no
dispute that plaintiff never notified American or attempted to file a claim against it. However, by
the time American ceased to exist, there remained approximately three and a half months under
MCL 500.3145(1) to file notice or a claim. The trial court’s conclusion that plaintiff was
“untimely” is simply wrong under the correctly applicable statutory framework; i.e., the no-fault
act. The situation might be different if no-fault limitations period expired first, but on these
facts, by the time plaintiff was required to file notice or a claim, his mother no longer had an
insurer to pursue.

         Additionally, the MPCGA is not a “substitute” insurer at the highest priority. Rather, the
MPCGA is strictly an insurer of last resort and only liable if no other solvent insurer exists at any
level of priority. Auto Club Ins Ass’n v Meridian Mutual Ins Co, 207 Mich App 37, 40-42; 523
NW2d 821 (1994). Irrespective of SMART’s contentions about exactly where in the priority
stack it lies and whether plaintiff properly commenced the action against it, SMART
indisputably is a solvent insurer at some level of priority. If plaintiff’s mother’s policy did not
cover plaintiff, or did not exist at all, there is no question that SMART would be liable. It is
therefore definitionally at a higher priority than the MPCGA. Plaintiff therefore properly did not
file his claim against the MPCGA, and the MPCGA cannot be liable in place of SMART.

        SMART argues, in effect, that because American existed at the time of the injury for a
time thereafter, plaintiff was obligated to file a claim against American, even after American
became insolvent, in order to proceed against SMART. This argument elevates procedure over
substance. As discussed, it might be accurate had American still existed when the no-fault
limitations period expired; however, that limitations period did not obligate plaintiff to provide
notice or file a claim until after it was no longer possible to proceed against American in any
way. SMART’s argument would at this point simply mandate jumping through useless
procedural hoops. In any event, a no-fault insurer may not deny benefits on the basis of a
potentially existing higher-priority insurer. See, e.g., Regents of the Univ of Mich v State Farm

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Mut Ins Co, 250 Mich App 719, 737; 650 NW2d 129 (2002) (“when the only question is which
of two insurers will pay, it is unreasonable for an insurer to refuse payment of benefits”), and
Bloemsma v Auto Club Ins Co, 174 Mich App 692, 697; 436 NW2d 442 (1989) (“A dispute of
priority among insurers will not excuse the delay in making timely payment.”). In any event, by
the time the no-fault limitations period expired, no such higher-priority insurer existed.

        Although SMART correctly cites case law in which the insureds had filed claims against
their own insurer in addition to lower-priority insurers, we can find no case law requiring an
insurer to do so. Rather, it appears that the expected procedure is for the paying insurer to sue
the higher-priority insurer or for the sued insurer to join the higher-priority insurer in the suit.
See, e.g., Grange Ins Co of Mich v Lawrence, 494 Mich 475; 835 NW2d 363 (2013)
(“household” insurer that paid medical bills commenced an action to recoup payments from the
insurer of the vehicle); Rambin v Allstate Ins Co, 297 Mich App 679, 682 n 2; 825 NW2d 95
(2012), aff’d in part & rev’d in part 495 Mich 316; 852 NW2d 34 (2014) (“Third-party defendant
AAA of Michigan, the insurer of a relative with whom plaintiff resided, was added to the case by
defendant Allstate, as a potential higher-priority insurer”).

         Finally, SMART argues that plaintiff’s claim is not a “covered claim” because he failed
to file it against the liquidation estate, so SMART’s liability under MCL 500.7931(3) was never
triggered. As noted, the no-fault limitations period did not obligate plaintiff to file a claim at all
until the liquidation estate had closed. In any event, a “covered claim” is limited to obligations
that “[a]re presented as a claim to the receiver in this state or the association on or before the last
date fixed for the filing of claims” in the liquidation proceedings. MCL 500.7925(1)(c).
Plaintiff did not do so, but he was not seeking benefits from the MPCGA under the MPCGA Act;
he sought no-fault benefits from an insurer under the no-fault act.

        Accordingly, we conclude that plaintiff’s suit should not have been dismissed on the
basis of his failure to file a claim against the insolvent American Fellowship. We therefore
reverse and remand for proceedings consistent with this opinion. We do not retain jurisdiction.

                                                               /s/ Karen M. Fort Hood
                                                               /s/ Mark J. Cavanagh
                                                               /s/ Amy Ronayne Krause




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