Oliver Ravenell v. Auto Club Insurance Association ( 2020 )

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
OLIVER RAVENELL, UNPUBLISHED
October 15, 2020
Plaintiff,
and
NGM INSURANCE COMPANY,
Plaintiff-Appellee,
v No. 348436
Wayne Circuit Court
AUTO CLUB INSURANCE ASSOCIATION, LC Nos. 17-009231-NF;
16-006161-NF
Defendant-Appellant.
Before: SWARTZLE, P.J., and JANSEN and BORRELLO, JJ.
PER CURIAM.
Plaintiff NGM Insurance Company seeks reimbursement from defendant, Auto Club
Insurance Association (ACIA), for PIP benefits that NGM paid to and on behalf of plaintiff Oliver
Ravenell. Because this Court is bound to follow Amerisure Cos v State Farm Mut Auto Ins Co,
222 Mich App 97; 564 NW2d 65 (1997), and Titan Ins Co v North Pointe Ins Co, 270 Mich App
339; 715 NW2d 324 (2006), we conclude that NGM is not entitled to the reimbursement it seeks,
and the trial court erred as a matter of law in granting NGM that relief. We therefore vacate the
trial court’s denial of summary disposition in favor of ACIA, both of the trial court’s orders
granting summary disposition in favor of NGM, and the trial court’s entry of a monetary judgment
in favor of NGM. We remand this matter to the trial court for entry of summary disposition in
favor of ACIA under MCR 2.116(I)(2).
I. BACKGROUND
On November 6, 2014, Oliver Ravenell was struck by a car being driven by Thaddeus Stec.
Ravenell filed a claim for personal-injury-protection (PIP) benefits with NGM, which was the
commercial-automobile insurer of three vehicles listed on a policy issued by NGM to Omega
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Appraisals, LLC, a company for which Ravenell’s wife was the resident agent. Ravenell also filed
a bodily-injury claim for threshold damages with ACIA, Stec’s auto-insurance carrier.
NGM paid in excess of $331,000 in PIP benefits to and on behalf of Ravenell. Eventually,
however, NGM took the position that Ravenell was not covered by the policy that it issued to
Omega because neither Ravenell nor his wife were listed in the policy as named insureds. NGM
further took the position that ACIA, as Stec’s insurer, was responsible for paying PIP benefits to
Ravenell. NGM filed this lawsuit against ACIA, seeking reimbursement of the PIP benefits that
it paid to Ravenell. NGM styled its complaint as one for “reimbursement, indemnification, and
declaratory relief.” The complaint contained two counts. NGM labeled the first count as
“Defendant, ACIA, is the Sole Insurer in the Orders of Priority,” and labeled the second count as
unjust enrichment. NGM alleged that ACIA was required to pay Ravenell’s PIP benefits because
it was the only auto insurer in the orders of priority, and that ACIA “owes NGM in excess of
$331,000.00.”
Ravenell then filed a lawsuit against ACIA for PIP benefits, and the two lawsuits were
consolidated in the trial court. After discovery, NGM filed a motion under MCR 2.116(C)(10),
seeking partial summary disposition regarding liability. In that motion, NGM argued that it was
never liable to pay PIP benefits to Ravenell under the no-fault act, and that ACIA was the only
auto-insurer that was liable to pay those PIP benefits. Therefore, NGM asked the trial court to find
that ACIA was “the insurer highest in the orders of priority to pay no-fault benefits” to Ravenell.
ACIA responded by arguing that NGM was not entitled to partial summary disposition and
that the trial court should instead grant summary disposition in its favor under MCR 2.116(I)(2).
ACIA first argued that NGM’s claim was barred by the one-year statute of limitations set forth in
MCL 500.3145(1) because NGM did not file suit within one year after the accident, and did not
provide ACIA notice within that first year. In addition, ACIA argued that NGM’s action was “an
attempted subrogation claim, by which NGM purports to stand in the shoes of Ravenell [and] seek
benefits” from ACIA. Furthermore, ACIA argued that NGM’s subrogation claim failed because
it had no contractual or statutory obligation to pay PIP benefits to Ravenell, and it therefore paid
those benefits as a “mere volunteer.” In support of this argument, ACIA relied on Amerisure, 222
Mich App at 102-103; and Titan, 270 Mich App at 343-344.
Although NGM did not mention its unjust-enrichment claim in its motion for partial
summary disposition, ACIA addressed the claim briefly in a footnote in its brief opposing that
motion. Citing Bellevue Ventures, Inc v Morang-Kelly Inv, Inc, 302 Mich App 59, 64; 836 NW2d
898 (2013), ACIA argued that, to be viable, an unjust-enrichment claim requires that the defendant
received a benefit from the plaintiff. ACIA argued that only Ravenell received something from
NGM,1 but that ACIA did not. ACIA argued that it could not retain something that it never
received, and that NGM’s unjust-enrichment claim therefore failed as a matter of law.
1
NGM’s attorney stated on the record at the motion hearing that NGM had “no intention of
pursuing Mr. Ravenell for anything.”
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At the hearing on NGM’s motion for partial summary disposition, the trial court ruled that
ACIA was first in line of priority under MCL 500.3115 and that it received proper notice within
one year of the accident. The trial court did not address ACIA’s arguments regarding subrogation,
and did not address NGM’s unjust-enrichment claim. The trial court granted NGM’s motion for
partial summary disposition and denied ACIA’s request for summary disposition under MCR
2.116(I)(2). NGM subsequently moved for summary disposition under MCR 2.116(C)(10),
regarding the amount of damages, and the trial court granted that motion. The trial court
subsequently entered a judgment against ACIA in the amount of $182,112.64.
This appeal followed.
II. ANALYSIS
On appeal, ACIA argues that the trial court erroneously granted NGM partial summary
disposition and erroneously denied its request for summary disposition under MCR 2.116(I)(2).
ACIA’s principal argument is that whenever a no-fault-insurance carrier pays PIP benefits to a
person injured in an auto accident and then seeks to be reimbursed for such payments from another
insurer believed to be of higher priority, the action is necessarily one of equitable subrogation.
ACIA further argues that NGM cannot prevail on an equitable-subrogation claim because it paid
PIP benefits to Ravenell as a mere “volunteer” and that it has no right of subrogation to recover
the benefits it mistakenly paid. ACIA relies on Titan, 270 Mich App at 343-344; Amerisure, 222
Mich App at 102-103; and Michigan Mut Ins Co v Home Mut Ins Co, 108 Mich App 274, 277-
279; 310 NW2d 362 (1981). In contrast, NGM relies on Madden v Employers Ins of Wausau, 168
Mich App 33; 424 NW2d 21 (1988), to argue that payments of PIP benefits made by mistake may
always be recovered.
This Court reviews de novo a trial court’s grant or denial of a motion for summary
disposition. Titan, 270 Mich App at 342. Whether NGM was entitled to recover against ACIA
under a theory of equitable subrogation also raises an issue of law that we review de novo.
Hartford Accident & Indemnity Co v Used Car Factory, Inc, 461 Mich 210, 215 n 5; 600 NW2d
630 (1999).
A. THE NATURE OF NGM’S CLAIM
On appeal, the parties argue that Madden and Amerisure established contradictory rules of
law, and they disagree regarding which precedent this Court should follow. We note that this
Court is not constrained to follow Madden because it was decided before November 1, 1990. See
MCR 7.215(J)(1).2 We also note that Amerisure considered the analysis in Madden and rejected
it, and that Titan reaffirmed and followed Amerisure’s analysis. Because Amerisure and Titan
were issued after November 1, 1990, and are published opinions of this Court, we are required to
follow those authorities. MCR 7.215(J)(1); MCR 7.215(C)(2).
2
“Although cases decided before November 1, 1990, are not binding precedent, MCR 7.215(J)(1),
they nevertheless can be considered persuasive authority.” In re Stillwell Trust, 299 Mich App
289, 299 n 1; 829 NW2d 353 (2012).
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In Madden, a passenger suffered injuries as a result of a one-vehicle accident. Madden,
168 Mich App at 35. The passenger filed an application for PIP benefits with the driver’s auto
insurer. On that application, he indicated that he did not own a vehicle and that there were no
family members residing in his household who owned a vehicle. Id. The passenger also signed
an affidavit stating that he had no other auto insurance available to him. As a result, the driver’s
auto insurer paid more than $18,000 in PIP benefits to the passenger. Id. Eventually, a dispute
arose over certain claimed benefits, and the passenger sued the driver’s auto insurer for PIP
benefits. Id. at 35-36. During discovery in the lawsuit, the passenger revealed that he had been
living with his brother on the date of the accident, and that the brother owned a vehicle that was
insured. Id. at 36. The driver’s auto insurer added the newly discovered insurer to the lawsuit as
a third-party defendant, seeking reimbursement of the PIP benefits that it had paid to the passenger.
Id. On cross-motions for summary disposition, the trial court held that the one-year statute of
limitations set forth in MCL 500.3145(1) barred recovery against the newly discovered insurer for
the PIP benefits already paid. Id. at 36-37.
On appeal, this Court considered whether the one-year statute of limitations properly
applied “when an insurer is suing another insurer on the basis that it paid benefits by mistake for
which the defendant insurer was liable.” Id. at 37. This Court considered several prior appellate
decisions touching on the issue, including Home Ins Co v Rosquin, 90 Mich App 682; 282 NW2d
446 (1979); Keller v Losinski, 92 Mich App 468; 285 NW2d 334 (1979); Federal Kemper Ins Co
v Western Ins Cos, 97 Mich App 204; 293 NW2d 765 (1980); and Michigan Mutual, 108 Mich
App 274. Ultimately, the Madden Court rejected the majority holdings of those prior decisions
and adopted the analysis set forth by the dissenting judge in Keller. Madden, 168 Mich App at 40.
The Madden panel concluded that the action between insurers was an action “for
recoupment of money paid by mistake,” not an action to recover PIP benefits. The Madden panel
reasoned that the action should be characterized as neither subrogation nor “as indemnity as used
in tort law,” because “payments of money, although voluntarily made, if made under a mistake of
material fact, may be recovered, even if the mistake is due to a lack of investigation.” Id. at 40,
citing Montgomery Ward & Co v Williams, 330 Mich 275; 47 NW2d 607 (1951). In addition, the
Madden Court held that the “recovery of money paid by mistake is a common law cause of action
that was not abrogated by the no-fault act.” Id., citing Adams v Auto Club Ins Ass’n, 154 Mich
App 186, 195; 397 NW2d 262 (1986). The Madden panel indicated that it based its decision on
equitable considerations:
Equity dictates this result. The purpose of the no-fault statute is to establish a
scheme whereby a person injured in a motor vehicle accident would promptly
receive payments of his claim for economic losses from an insurer who received
compensation, in the form of premiums, to assume the risk of having to pay the
claim. Madden received payment to his satisfaction. The purpose of the no-fault
statute will be fulfilled when an adjudication has been made that the insurance
company that received the premiums in return for accepting the risks pays those
benefits according to the priorities set forth in MCL 500.3114(1) and MCL
500.3114(4). [Id. at 41.]
Therefore, the Madden Court concluded that the action between insurers was not an action to
recover PIP benefits, and the one-year statute of limitations set forth in MCL 500.3145(1) was
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inapplicable. Id. at 40. Instead, this Court concluded that the general six-year limitation period
set forth in MCL 600.5813 applied. Id. at 40-41. Accordingly, this Court reversed the trial court’s
decision applying the one-year statute of limitations. Id. at 41.
Nine years after the decision in Madden, this Court considered a similar fact pattern in
Amerisure. In that case, Leroy Rister suffered personal injuries while descending from a semi-
trailer tractor, and he applied to Amerisure for PIP benefits, under a no-fault policy that Amerisure
issued to Trucking Services, Inc. Amerisure, 222 Mich App at 98-99. Amerisure paid over
$97,000 in PIP benefits to Rister because it was under the belief that Rister was an employee of
Trucking Services, and was unaware that Rister had his own personal policy of auto insurance
issued by State Farm. Id. at 98-99. Eventually, Amerisure discovered that Rister was not an
employee of Trucking Services, but was rather an independent contractor. Amerisure filed a
lawsuit against State Farm, seeking to recover the amount of PIP benefits that it paid Rister,
arguing that those amounts should have been paid by State Farm as the priority insurer. Id. at 99.
Amerisure and State Farm filed cross motions for summary disposition, and State Farm
argued that Amerisure’s claim was barred by the one-year statute of limitations set forth in MCL
500.3145(1). The trial court agreed with State Farm that the action was one for subrogation and
was barred under Section 3145(1), while rejecting Amerisure’s argument “that the action was one
for reimbursement of money paid by mistake to which the general six-year period of limitation
embodied in MCL 600.5813 would apply.” Id. at 99-100.
Similarly to how the Madden panel characterized the issue before the Court, the Amerisure
panel stated that “[t]he issue presented is whether the one-year period of limitation in § 3145
applies where an insurer is suing another insurer on the basis that it paid benefits by mistake for
which the defendant insurer was liable.” Id. at 100. The Amerisure Court noted that Madden was
not binding precedent because it was published before November 1, 1990. Id. at 102 n 2.
Furthermore, the Amerisure Court found “the Michigan Mutual line of cases to be better-reasoned”
and therefore chose to follow it. Id. at 103. As the Court explained:
we hold that the one-year period of limitation of § 3145 of the no-fault act governs
actions between no-fault insurers for recovery of monies mistakenly paid by the
secondary insurer. Such actions are ones of subrogation, and, as such, plaintiff
acquired no greater rights than [the injured person] had against defendant. [Id. at
103.]
Subsequently, in Titan, this Court also discussed an insurer’s claim against another insurer
based on its mistaken payment of benefits for which the defendant insurer was liable. Titan, 270
Mich App at 341, 346-347. In that case, as here, the plaintiff relied on this Court’s holding in
Madden to support its claim. Id. at 346-347. The Titan Court noted that Madden was not binding
because it was issued before November 1, 1990. Id. In addition, the Titan Court stated that
the reasoning in Madden was rejected by Amerisure Cos, which instead adopted the
reasoning of the decision in Michigan Mutual Ins Co and held that ‘actions between
no-fault insurers for recovery of monies mistakenly paid by the secondary insurer’
were claims of subrogation and subject to the limitations period in MCL
500.3145(1). [Id. at 347, quoting Amerisure, 222 Mich App at 102-103.]
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Furthermore, the Titan Court recognized that the holdings in Amerisure and Michigan Mutual had
been called into question by Devillers v Auto Club Ins Assoc, 473 Mich 562; 702 NW2d 539
(2005), but only “to the extent that they recognized the applicability of judicial tolling, [and] their
conclusions on the issue of subrogation claims remain valid and correct.” Titan, 270 Mich App at
347 n 1. Accordingly, this Court’s opinions in both Amerisure and Titan rejected the reasoning of
Madden, and both require a conclusion that where an insurer is suing another insurer based on its
mistaken payment of benefits for which the defendant insurer was liable, such action is one of
subrogation, and the plaintiff insurer acquired no greater rights than the injured person had against
the defendant insurer. See Amerisure, 222 Mich App at 103; Titan, 270 Mich App at 347. As a
matter of law, NGM’s action against ACIA is one of subrogation.
NGM argues, however, that Amerisure considered only the applicability of the one-year
limitations period, and is therefore inapplicable to the question before this Court. NGM’s
argument is unpersuasive. We note that both Madden and Amerisure considered the identical
question.3 NGM’s argument provides no reason to depart from the holdings of Amerisure and
Titan to follow the rule set forth in Madden.
NGM further argues that Amerisure did not abolish recovery of money paid under a
mistake of fact, because the Michigan Supreme Court recognized the continued validity of that
doctrine in Wilson v Newman, 463 Mich 435; 617 NW2d 318 (2000). In that case, the Michigan
Supreme Court noted “that there was a well-settled rule that payment made under a mistake of fact
can be recovered even if the mistake could have been avoided by the payor.” Id. at 439. The Court
further expressed that “[t]he longstanding Michigan authority on the subject is sound, and provides
all the necessary exceptions to protect payees where it is appropriate to do so.” Id. at 441. We
agree that neither Amerisure nor Titan abolished the common-law tort of recovery of money paid
under a mistake of fact. Nonetheless, Wilson did not address whether an auto insurer’s action
sounds in subrogation when it is suing another insurer based on its mistaken payment of benefits
for which the defendant insurer was liable. That question was addressed squarely in Amerisure
and Titan, and we are bound by those decisions.
B. “MERE VOLUNTEER”
Given our conclusion that plaintiff’s action here is one of subrogation, we must next
consider whether plaintiff can prevail on such a cause of action. ACIA argues that NGM cannot
prevail on a subrogation claim because it was a “mere volunteer.”
3
The Madden panel stated, “The issue in the present case is whether the above statute of limitations
[§ 3145] applies when an insurer is suing another insurer on the basis that it paid benefits by
mistake for which the defendant insurer was liable.” Madden, 168 Mich App at 37. Meanwhile,
the Amerisure panel stated, “The issue presented is whether the one-year period of limitation in
§ 3145 applies where an insurer is suing another insurer on the basis that it paid benefits by mistake
for which the defendant insurer was liable.” Amerisure, 222 Mich App at 100. The two cases
addressed the same question.
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This Court has explained that equitable subrogation is a legal fiction through
which a person who pays a debt for which another is primarily responsible is
substituted or subrogated to all the rights and remedies of the other. It is well-
established the subrogee acquires no greater rights than those possessed by the
subrogor, and that the subrogee may not be a “mere volunteer.”
When an insurance provider pays expenses on behalf of its insured, it is not
doing so as a volunteer. The nature of the claim asserted by the subrogee is
determined by the nature of the claim that the subrogor would have had. [Auto-
Owners Ins Co v Amoco Production Co, 468 Mich 53, 59; 658 NW2d 460 (2003)
(cleaned up).]
If NGM had paid PIP benefits to one of its insureds, it would not be considered a
“volunteer.” NGM takes the position, however, that it never insured Ravenell. Accepting NGM’s
position that it had no contractual or statutory obligation to pay PIP benefits to Ravenell, we
conclude that NGM was a “mere volunteer” that cannot prevail on an equitable-subrogation claim.
The heart of a claim of equitable subrogation “rests upon the equitable
principle that one who, in order to protect a security held by him, is compelled to
pay a debt for which another is primarily liable, is entitled to be substituted in the
place of and to be vested with the rights of the person to whom such payment is
made, without agreement to that effect.” In other words, equitable subrogation is
available only to those who are compelled to pay a debt, not to mere volunteers.
“To avoid being a volunteer, a subrogee must be acting to fulfill a legal or equitable
duty.” Accordingly, an insurer who pays expenses on behalf of its insured is not a
mere volunteer. “The rationale is that an insurance company that pays a claim that
another insurer may be liable for is protecting its own interests and not acting as a
volunteer.” [Esurance Prop & Cas Ins Co v Michigan Assigned Claims Facility,
___ Mich App __ , __; __ NW2d __ (2019) (slip op at 5-6) (cleaned up).]
Because NGM takes the position that Ravenell was not a named insured under the
commercial-automobile-insurance policy that it issued to Omega Appraisals, and that it did not
owe Ravenell PIP benefits, NGM’s equitable-subrogation claim necessarily fails. “Without a
policy, plaintiff would have paid benefits not to its insured, but to an individual with whom it had
no relationship. Without any legal or equitable duty to pay PIP benefits, plaintiff is a mere
volunteer—one who accidentally paid” PIP benefits. Id. (slip op at 6). “As a mere volunteer,
plaintiff cannot seek equitable subrogation.” Id.C. UNJUST ENRICHMENT
NGM also notes that its complaint included a count seeking relief for unjust enrichment.
NGM impliedly argues that, even if this Court determines that ACIA was entitled to summary
disposition on its equitable subrogation claim, it should be allowed to proceed in the trial court on
its unjust-enrichment claim. We note that NGM never raised this argument in the trial court, and
the trial court did not decide the issue. Issues not raised before, addressed, and decided by the trial
court may not be raised on appeal. Walters v Nadell, 481 Mich 377, 387; 751 NW2d 431 (2008).
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And, in any event, NGM’s action for erroneously paid PIP benefits is not for unjust enrichment,
but for subrogation. See Federal Kemper, 97 Mich App at 207-208.
III. CONCLUSION
Because this Court is bound to follow Amerisure, 222 Mich App 97, and Titan, 270 Mich
App 339, we conclude that NGM’s claim in this case is one of equitable subrogation. Furthermore,
we conclude that this claim is barred because NGM was a “mere volunteer” that paid benefits to
someone who was not its insured. Accordingly, NGM is not entitled to the reimbursement it seeks
from ACIA, and the trial court erred as a matter of law in granting NGM that relief.
We therefore vacate the trial court’s denial of summary disposition in favor of ACIA, both
of the trial court’s orders granting summary disposition in favor of NGM, and the trial court’s entry
of judgment in favor of NGM. We remand this matter to the trial court for entry of summary
disposition in favor of ACIA under MCR 2.116(I)(2). We do not retain jurisdiction. Defendant,
having prevailed in full, may tax costs under MCR 7.219(F).
/s/ Brock A. Swartzle
/s/ Kathleen Jansen
/s/ Stephen L. Borrello
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