Mich. Supreme Court Limits Time to Sue Insurers

April 28, 2008

The Michigan Supreme Court on Wednesday, April 23rd, struck down a legal precedent that generally gave motorists more time to sue their insurance company for unpaid claims under some circumstances.

The 4-3 ruling follows similar insurance-related decisions by the court in recent years. The issue involves delaying the time period for filing lawsuits when plaintiffs meet certain conditions.

The majority said an auto insurance policy by Farm Bureau Insurance Company was unambiguous and clearly gave a motorist in Genessee County one year to sue after her auto accident. Mary McDonald, whose claim for underinsured motorist benefits was denied, sued beyond the time limit but after letters were exchanged between her lawyer and Farm Bureau discussing a settlement.

The dissent said the ruling is unjust _ partly because the law in effect at the time the motorist and insurer entered into their contract allowed for time periods to be delayed. The dissent also said the doctrine established by courts more than 30 years ago is fair and efficient.

Chief Justice Clifford Taylor was joined in the majority by Justices Maura Corrigan, Stephen Markman and Robert Young Jr. Justices Michael Cavanagh, Marilyn Kelly and Elizabeth Weaver dissented.

The case is McDonald v. Farm Bureau Insurance Co.

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