Elijah DeQuon Spann v. Empire Fire & Marine Ins. Co. ( 2024 )

NOT RECOMMENDED FOR PUBLICATION
File Name: 24a0126n.06
No. 23-1798
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
ELIJAH DEQUON SPANN, ) Mar 15, 2024
)
Plaintiff , KELLY L. STEPHENS, Clerk
)
)
v. ON APPEAL FROM THE
)
UNITED STATES DISTRICT
EMPIRE FIRE & MARINE INSURANCE ) COURT FOR THE EASTERN
COMPANY, )
) DISTRICT OF MICHIGAN
Defendant - Appellant, )
) OPINION
ALLSTATE INSURANCE COMPANY, )
Defendant - Appellee. )
)
Before: COLE, CLAY, and BLOOMEKATZ, Circuit Judges.
BLOOMEKATZ, Circuit Judge. Elijah Spann crashed his rented Chevrolet Malibu outside
Detroit, Michigan. Empire, which insured the car, thought it had to pay for Spann’s medical bills
and lost wages under its policy, so it did. As it turns out, Spann was driving for Uber when he
collided, and Empire’s policy does not cover rideshare crashes. Instead, Uber’s policy with Allstate
covers the crash. More than a year after the collision, Empire brought this lawsuit to get Allstate
to reimburse it for the insurance benefits it had mistakenly paid. But the district court granted
Allstate summary judgment because Empire’s claims were untimely under Michigan’s No-Fault
Auto Insurance Act. We affirm.
BACKGROUND
The facts are not in dispute. Elijah Spann was a Detroit-area Uber driver. He rented his car
from Maven Drive LLC, a car-sharing business that rented vehicles to individuals for rideshare or
No. 23-1798, Spann v. Empire Fire & Marine Ins. Co.; Allstate Ins. Co.
delivery work and for personal use. Maven had a collision insurance policy issued by Empire Fire
& Marine Insurance Company. Empire’s policy covered Spann’s personal use of the car when he
was not logged in to a rideshare app. But that doesn’t mean he had no coverage while driving for
Uber. Under Michigan law, rideshare companies must carry auto insurance for their drivers. Mich.
Comp. Laws § 257.2123(2)(b). So, when Spann was driving for Uber, he was covered by Uber’s
policy with Allstate Insurance Company.
On July 29, 2019, Spann and another driver collided in Hamtramck, Michigan. The police
report from the scene showed Spann did not suffer any serious injuries and refused an ambulance.
A month later, Spann had persistent pain from the accident, and he sought medical treatment. Over
time, the costs of his medical treatment and lost wages added up to hundreds of thousands of
dollars.
Spann and his medical providers began to submit insurance claims to Empire. Before
paying any of Spann’s claims, Empire asked Uber whether Spann was on its app at the time of the
accident. Uber incorrectly told Empire that Spann was not logged in when the accident occurred,
so Empire began to pay personal injury protection benefits as though Spann was covered by its
policy. Empire says Spann and his healthcare providers have submitted claims for roughly
$377,000 in medical benefits and lost wages, of which Empire has paid approximately $225,000.
This case began in February 2021, when Spann sued Empire in state court for denial of
benefits under the Michigan No-Fault Auto Insurance Act (“No-Fault Act”), Mich. Comp. Laws
§§ 500.3101–3179. That law governs all auto insurance policies for motor vehicles required to be
registered in Michigan. Id. § 3101(1). Empire removed the case to the United States District Court
for the Eastern District of Michigan, invoking the court’s diversity jurisdiction.
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No. 23-1798, Spann v. Empire Fire & Marine Ins. Co.; Allstate Ins. Co.
Meanwhile, some of Spann’s providers had brought other actions against Empire for denial
of benefits. In August 2021, through one of those other lawsuits, Empire discovered that Spann
was logged into Uber at the time of the accident. Spann filed an amended complaint in April 2022,
adding Allstate as a defendant in this case. It is undisputed that the amended complaint is the first
time Allstate received notice that Spann was injured in the July 2019 accident and that it could
therefore be liable to pay benefits for claims related to the accident.
Empire answered and filed a cross complaint against Allstate, seeking reimbursement for
all the benefits Empire paid when it thought Spann was entitled to them under its policy. The
parties cross-moved for summary judgment. As relevant here, the district court held that the one-
year limitations period of the No-Fault Act barred Empire’s action, so it granted Allstate’s motion
for summary judgment as to the cross complaint. Empire timely appealed.
ANALYSIS
We review the district court’s order granting Allstate summary judgment de novo. Anton
v. Nat’l Union Fire Ins. Co. of Pittsburgh, 634 F.3d 364, 367 (6th Cir. 2011). Summary judgment
is proper if the movant shows there are no genuine disputes of material fact and it is therefore
entitled to judgment as a matter of law. Id. (citing Fed. R. Civ. P. 56(c)). Michigan law applies to
this diversity dispute. Id.The only question we must answer in this appeal is whether the No-Fault Act’s one-year
limitations period applies to Empire’s claim against Allstate. See Mich. Comp. Laws § 500.3145.
Empire seeks reimbursement from Allstate for the benefits Empire mistakenly paid to Spann when
it thought its policy covered his losses from the July 2019 accident. Empire argues that the one-
year limitations period from the No-Fault Act does not apply because it was never on the hook to
pay Spann No-Fault auto insurance benefits in the first place.
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No. 23-1798, Spann v. Empire Fire & Marine Ins. Co.; Allstate Ins. Co.
The No-Fault Act’s one-year statute of limitations states: “An action for recovery of
personal protection insurance benefits payable under this chapter for an accidental bodily injury
may not be commenced later than 1 year after the date of the accident that caused the injury . . . .”
Mich. Comp. Laws § 500.3145(1). There are two exceptions to this one-year limitations period:
(1) if the insured gives written notice of the injury within a year of the accident; or (2) the insurer
has begun to pay benefits within a year of the accident. Id.; see also Perkovic v. Zurich Am. Ins.
Co., 893 N.W.2d 322, 325–26 (Mich. 2017). On appeal, Empire does not dispute that it
commenced its action against Allstate more than a year after the date of Spann’s accident and that
neither exception applies here. Accordingly, if the one-year limitations period applies to Empire’s
suit, it loses.
Empire’s suit to recover the benefits that Allstate owed under its policy is properly
considered a subrogation action under Michigan law. Esurance Prop. & Cas. Ins. Co. v. Mich.
Assigned Claims Plan, 968 N.W.2d 482, 488–89, 490–91 (Mich. 2021). A subrogation action
allows an insurer who mistakenly paid “a debt for which another is primarily responsible” to assert
the rights of the insured party under the correct policy. Id. at 489. Michigan courts have often
described it as a “legal fiction” that permits the party seeking reimbursement “to stand in the shoes
of” the party entitled to benefits under another policy. Id. at 486 n.7 (citation omitted).
Empire’s ability to recover depends on Spann’s rights under Allstate’s auto insurance
policy. See id. at 488–89. After all, Allstate does not owe a duty to Empire, and the only way
Empire can sue Allstate under Spann’s policy is by standing in Spann’s shoes. Thus, Empire is
bound by Spann’s obligations under the policy and the laws that govern it. Titan Ins. Co. v. N.
Pointe Ins. Co., 715 N.W.2d 324, 326–27 (Mich. Ct. App. 2006) (citing Devillers v. Auto Club
Ins. Ass’n, 702 N.W.2d 539, 547–51 (Mich. 2005)). Critically, that includes any limitations period.
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No. 23-1798, Spann v. Empire Fire & Marine Ins. Co.; Allstate Ins. Co.
Id. As the Michigan Court of Appeals made clear in Titan Insurance Co. v. North Pointe Insurance
Co., the one-year limitations period in the No-Fault Act applies to a subrogation action asserting
an insured’s right to No-Fault benefits just as it would apply to an action by the insured party itself.
Id. at 326–27.
Following Titan, because the one-year limitations period governs Spann’s policy with
Allstate, it also applies to Empire’s subrogation action to seek reimbursement for benefits owed
under that policy. To recover personal injury protection benefits under the Allstate policy, Spann
had to bring an action within a year of the accident, or otherwise meet the No-Fault Act’s
exceptions to the one-year limitations period. See Mich. Comp. Laws § 500.3145(1). As the district
court held, Spann is barred from collecting personal injury protection benefits from Allstate
because he missed the one-year window. Likewise, Empire—standing in Spann’s shoes—is too
late with its subrogation action, which it initiated well after the one-year mark. Accordingly, the
district court did not err in granting Allstate summary judgment based on the No-Fault Act’s statute
of limitations.1
None of Empire’s counterarguments are persuasive. First, Empire argues that Titan applies
only to priority disputes, which occur when multiple insurance policies cover a car accident, and
one insurer must pay first. 715 N.W.2d at 325; see Mich. Comp. Laws § 500.3114(5) (setting order
of payment priority). Empire emphasizes that this case does not involve a priority dispute because
Empire had no duty to pay Spann benefits under its policy. Titan’s reasoning, however, is not
limited to priority disputes, and its holding covers subrogation claims generally. See 715 N.W.2d
at 326–27; see also Esurance, 968 N.W.2d at 490 (insurer that was not in the order of priority
1
Because existing Michigan law is directly on point, we decline Empire’s invitation to
certify this question to the Michigan Supreme Court. Cf. Morrissette v. Indian Harbor Ins. Co.,
No. 359503, 2022 WL 17072815, at *2–4 (Mich. Ct. App. Nov. 17, 2022).
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No. 23-1798, Spann v. Empire Fire & Marine Ins. Co.; Allstate Ins. Co.
could nonetheless pursue a claim for equitable subrogation and had “no greater rights than those
possessed by [the subrogor]”). Titan followed the established principle that a party bringing a
subrogation action stands in the shoes of the insured and is thus limited by the scope of the
insured’s rights, recognizing that a right to No-Fault benefits is always subject to the Act’s one-
year bar. Id. Since Empire’s action against Allstate depends on Spann’s rights to No-Fault benefits,
the Act’s one-year bar applies. See Morrissette v. Indian Harbor Ins. Co., No. 359503, 2022 WL
17072815, at *2–4 (Mich. Ct. App. Nov. 17, 2022) (applying settled Michigan law to bar action
against belatedly discovered rideshare insurer).
Next, Empire argues that the one-year bar applies only to subrogation actions seeking
“benefits payable under” the No-Fault Act, and instead characterizes its suit as a common law
action for “recoupment” of monies “mistakenly paid.” Appellant Br. at 8, 14 (quoting Mich. Comp.
Laws § 500.3145(1)). Empire then cites several cases in which Michigan courts have applied the
state’s general six-year statute of limitations when auto insurers seek reimbursement from other
insurers based on the other insurer’s policy. But the nature of Empire’s claim depends on the relief
sought, not what it is called. See Auto Club Ins. Ass’n v. N.Y. Life Ins. Co., 485 N.W.2d 695, 699
(Mich. 1992). As Titan held, even if the plaintiff-insurer “paid the benefits by mistake,” a claim
seeking No-Fault benefits “is still one of subrogation and subject to the limitations period in [the
No-Fault Act].” 715 N.W.2d at 328. In the cases Empire cites, the one-year bar did not apply
because the party sought reimbursement based on the insured’s rights under policies not governed
by the No-Fault Act’s limitations period. See N.Y. Life Ins. Co., 485 N.W.2d at 700 (auto insurer
asserted insured’s rights to health insurance benefits under health and accident contract governed
by different provision of Michigan insurance laws); Hofmann v. Auto Club Ins. Ass’n, 535 N.W.2d
529, 558 (Mich. Ct. App. 1995) (same); Auto Club Ins. Ass’n v. Health All. Plan, No. 2:07–cv–
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No. 23-1798, Spann v. Empire Fire & Marine Ins. Co.; Allstate Ins. Co.
14839, 2009 WL 236064, at *3–4 (E.D. Mich. Jan. 29, 2009) (auto insurer asserted insured’s rights
to receive ERISA benefits). By contrast, there is no dispute that Allstate’s policy that covers Uber
drivers is governed by the No-Fault Act.
Finally, Empire argues it would frustrate the goals of the No-Fault Act to apply the
limitations period here. It points out that one of the statute’s goals is to encourage insurers to pay
“benefits to [personal injury] claimants promptly and sort out priority and reimbursement issues
later.” Esurance, 968 N.W.2d at 493. It underscores that Uber incorrectly told Empire that Spann
was not logged into the app during the collision and contends that applying the one-year bar to
insurers who mistakenly paid benefits would incentivize insurers to withhold payment until
liability is conclusively established. But Michigan courts have rejected these fairness and policy-
based arguments and consistently applied the one-year bar to any action to recover No-Fault
benefits, even claims by insurers that are late—through no fault of their own—to discover they
don’t owe any benefits. See Titan, 715 N.W.2d at 328 (holding that the statute does not have a
“separate limitations period” for claims paid by “mistake”); see also Morrissette, 2022 WL
17072815, at *4; Button v. Progressive Mich. Ins. Co., Nos. 314836, 319312, 2014 WL 4375729,
at *3 (Mich. Ct. App. Sept. 4, 2014); Geico Direct v. Allstate Ins. Co., No. 267504, 2006 WL
1716743, at *2 (Mich. Ct. App. June 22, 2006).
Spann has visited many different medical providers, and some of them asserted actions
against Empire and Allstate similar to this one. In each case, Empire has argued that Allstate should
pay despite the No-Fault Act’s one-year bar. And each court to consider the argument has rejected
it. Spine Specialists of Mich., P.C. v. Empire Fire & Marine Ins. Co., No. 21-10496, 2023 WL
4489428, at *1 (E.D. Mich. July 11, 2023); Wook Kim MD v. Allstate Ins. Co., No. 21-2430 (Mich.
D. Ct. Sept. 21, 2022) (Order Granting Allstate’s Mot. Summ. J.); Michigan Head & Spine Inst.,
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No. 23-1798, Spann v. Empire Fire & Marine Ins. Co.; Allstate Ins. Co.
P.C. v. Allstate Ins. Co., et al., No. 22-015393-AV (Mich. Cir. Ct. Apr. 11, 2023) (Order Granting
Allstate’s Appeal). We join them—the No-Fault limitations period applies to and bars Empire’s
subrogation claim against Allstate.
CONCLUSION
For these reasons, we affirm the judgment of the district court.
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