Lambert v. Calhoun

48 Mich. App. 506 (1973) 210 N.W.2d 796

LAMBERT
v.
CALHOUN

Docket No. 14640.

Michigan Court of Appeals.

Decided July 25, 1973.

Sommers, Schwartz, Silver, Schwartz, Tyler & Gordon (by Stanley S. Schwartz and Richard D. Toth), for plaintiff.

Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and Joseph B. Bilitzke and Carl K. Carlsen, Assistants Attorney General, for the Secretary of State.

Before: J.H. GILLIS, P.J., and HOLBROOK and BASHARA, JJ.

Leave to appeal applied for.

J.H. GILLIS, P.J.

Plaintiff, Beverly Lambert, was injured in an automobile accident on October 6, 1968. She was 14 years old at the time, and was a passenger in a car driven by James W. Holland. The negligence of Esker Calhoun, an uninsured motorist, was alleged to be the proximate cause of the accident. Plaintiff received an award from Holland's insurance company, which then sued Calhoun in Detroit Common Pleas Court pursuant to subrogation rights.

On November 27, 1971,^[1] plaintiff, through her next friend, brought suit against defendant Calhoun in Wayne County Circuit Court. The Secretary of State intervened in the action pursuant to MCLA 257.1105; MSA 9.2805, and moved for accelerated judgment alleging plaintiff's claim against the Motor Vehicle Accident Claims Fund was barred by the three-year statute of limitations set out in MCLA 257.1118; MSA 9.2818,^[2] and MCLA 257.1128; MSA 9.2828.^[3]

Plaintiff argued below that her minority saved her cause of action under the Motor Vehicle Accident Claims Act, by virtue of a provision in the general statute of limitations.^[4]

The trial court granted the Secretary's motion. Plaintiff appeals raising three issues which we will consider seriatim.

It is well-settled that a specific legislative time limitation on bringing suit contained in a statute creating a cause of action excludes the operation of savings provisions contained in the general statute of limitations. Holland v Eaton, 373 Mich. 34, 39-40; 127 NW2d 892, 895 (1964); Genesee Merchants Bank v Bourrie, 375 Mich. 383, 390; 134 NW2d 713, 716 (1965); Troy W Maschmeyer Co v Haas, 376 Mich. 289, 296; 136 NW2d 902, 904 (1965).

The entire concept of establishing a fund for the payment of judgments obtained against uninsured motorists, though remedial in nature, is new and did not exist at common law. Steele v Wilson, 29 Mich. App. 388, 392; 185 NW2d 417, 418-419 (1971). Like the dramshop act,^[5] the limitation contained in the Motor Vehicle Accident Claims Act is on the right to seek recovery from a previously immune source and both the right and the remedy created are exclusively controlled by the limitations contained therein. See Holland v Eaton, supra. We hold the trial court properly ruled on that issue.

We do not consider that such a holding denies due process or violates equal protection of law. Any claim of ambiguity or inconsistency engendered by the disparate wording of MCLA 257.1118, supra, and MCLA 257.1128, supra, has been overcome by the judicial interpretation in Lisee v Secretary of State, 388 Mich. 32, 41, 42; 199 NW2d 188, 191, 192 (1972), which delineates the different legislative intendments of the two sections. Further, it is only recovery from the Motor Vehicle Accident Claims Fund that is barred by the limitation period, not the action against the uninsured motorist. All persons, whether infants or adults, seeking recovery from the fund must do so within the prescribed period, and such "nondiscrimination" is justified by the practical consideration that stale claims by anyone can prejudice an insurer's opportunity to investigate and preserve evidence, be they private companies or "funds" created by the government. See, e.g., Oakland Motor Co v American Fidelity Co, 190 Mich. 74; 155 N.W. 729 (1916); Wehner v Foster, 331 Mich. 113; 49 NW2d 87 (1951).

We cannot hold that the institution of proceedings by Holland's insurance carrier against Calhoun tolled the limitation period here in question. That suit did not, and could not,^[6] seek recovery from the Motor Vehicle Accident Claims Fund for this incident. Defendant denies it received notice of the claim against the fund within the prescribed time limit and there is nothing in the record to refute this claim. Cf. Lisee v Secretary of State, supra.

Affirmed. Costs to appellee.

BASHARA, J., concurred.

HOLBROOK, J. (dissenting).

This writer is unable to subscribe to the prevailing opinion and therefore respectfully dissents. On the authority of Holland v Eaton, 373 Mich. 34; 127 NW2d 892 (1964), the circuit judge ruled that the infancy exception contained in the general statute of limitations could not "save" plaintiff's cause of action. Plaintiff asserted that the savings provision of MCLA 600.5851(1); MSA 27A.5851(1), does apply to the Motor Vehicle Accident Claims Act, and that the holding of Holland, supra, was not applicable to the situation here. The language of Holland that is applicable here reads as follows at pp 39-40:

"It has long been a rule well-settled in Michigan that the intent of the Legislature, in including a time limitation on bringing suit in a statute creating a right, is that the savings provisions of the general statute of limitations are not applicable unless expressly included. Bement v Grand Rapids & IR Co, 194 Mich. 64; 160 N.W. 424 (1916), Bigelow v Otis, 267 Mich. 409; 255 N.W. 270 (1934). Plaintiffs contend that this rule has been modified by White v Michigan Consolidated Gas Co, 352 Mich. 201; 89 NW2d 439 (1958). However, as the trial court in the instant case indicated, the White Case is distinguished from this case in that the Court there applied a savings clause of the general statute of limitations, by reason of policy considerations, to modify the compensable period created by the workmen's compensation act, rather than to extend the period within which any action must be commenced. It is the dissenting opinion (pp 214, 219) in the White Case which properly states the general rule." (Emphasis supplied.)

See subsequent authority in Genesee Merchants Bank v Bourrie, 375 Mich. 383, 390; 134 NW2d 713, 716 (1965); Troy W Maschmeyer Co v Haas, 376 Mich. 289, 296; 136 NW2d 902, 904 (1965). In Maschmeyer the Supreme Court emphasized the specific ruling of Holland:

"What is most significant in each case cited [Holland, Bement and Bigelow, supra] is that plaintiff commenced action after the limitational period contained in the statute creating the cause of action. And in each case, plaintiff asserted matters which, if true, would excuse the late filing and, hence, except plaintiff from the operation of the statute." (Emphasis supplied.)

It is clear, then, that if the Motor Vehicle Accident Claims Act creates a new cause of action, i.e., a new right, its statute of limitations per the Holland rule would not be affected by the savings provisos of the general tort statute of limitations.

An analysis of the Motor Vehicle Accident Claims Act forces this writer to conclude that the provisions of that act applicable here did not create a new cause of action. Therefore, the savings proviso embodied in MCLA 600.5851(1); MSA 27A.5851(1), did apply to the three-year statute of limitations provision of the Motor Vehicle Accident Claims Act, and plaintiff's cause of action is saved. This conclusion rests on a number of grounds. In the first place, the Supreme Court has itself specifically described the Motor Vehicle Accident Claims Act as one remedial in character, rather than as one necessarily creating new substantive rights unknown at common law. In Lisee v Secretary of State, 388 Mich. 32, 44, 46; 199 NW2d 188, 193, 194 (1972), the Court stated:

"The purpose of the Legislature in passing the Motor Vehicle Accident Claims Act was to compensate those persons who were injured as a result of the negligent operation of a motor vehicle by an uninsured person. * * *

"In dealing with this issue, we must not lose sight of the fact that this is remedial legislation to aid an innocent injured person. The Legislature intended that the Fund be available to promptly provide compensation for such injuries." (Emphasis supplied.) The Court in Holland, supra, by way of contrast, was concerned with the interpretation of the dramshop act and its two-year statute of limitations; the dramshop act was conceded therein to be in derogation of the common-law rule because it created a new cause of action.

Secondly, the Motor Vehicle Accident Claims Act is structured in such a way that it becomes apparent when analyzing it that the Legislature did not create a new cause of action to arise when a claimant against the fund sued a known uninsured defendant. Sections 6 through 11 of the act (MCLA 257.1106-257.1111; MSA 9.2806-9.2811) are the operative sections when the uninsured motorist is known, like here. In such cases the Secretary of State may intervene, but his position is derivative from that of the uninsured defendant. The common-law right of the plaintiff to sue the uninsured defendant is not altered or expanded by these sections. On the other hand, the Secretary of State, if he chooses to intervene, has no new defenses. All that is different from the common law is that the tortfeasor is involuntarily insured by the state, and the victim if he is entitled to a judgment has an assured remedy from the fund. In contrast, §§ 12-21 of the act (MCLA 257.1112-257.1121; MSA 9.2812-9.2821) are the operative sections when the defendant is unknown. In such a case the plaintiff, in the interest of supplying him with a remedy, is given the Secretary of State as a defendant to stand in for the unknown defendant. Sections 12-21 have, in § 18,^[1] a three-year statute of limitations. Subject to this writer's interpretation, § 28 is the statute of limitations applicable when the uninsured defendant is known. Any other structural interpretation of the act would make §§ 18 and 28 redundant since they both prescribe a three-year statute of limitations for recovery against the fund. Conceivably, §§ 12-21 of the act, since they may be interpreted to create a right against the Secretary of State unknown at common law, might not be affected by the savings provisions embodied in MCLA 600.5851; MSA 27A.5851. While this might raise equal protection and due process problems, that issue was not before this Court since here plaintiff seeks recovery against a known defendant, in which action the Secretary of State has intervened. The statute of limitations contained in § 28 was correctly seen as applicable to this case by the court below, but it erred in finding the holding of Holland, supra, controlling. Sections 6-11 coupled with § 28 hang together and separably from §§ 12-21 but create no new cause of action. The former sections are remedial only, and as such the savings provision of the general statute of limitations apply to preserve plaintiff's cause of action until one year passes after she reaches the age of majority.

The policy behind the Motor Vehicle Accident Claims Act supports this conclusion. The purpose of the act, as stated, is to assure just compensation for those victims of accidents negligently caused by uninsured motorists. It might be validly argued that there is a rational state interest in denying effect of the savings provisions of MCLA 600.5851; MSA 27A.5851, where the real defendant is unknown and the Secretary of State is sued per §§ 12-21, since state claims might prevent the Secretary of State from making effective investigations of the accident in the fund's defense. Contrariwise, when the Secretary of State intervenes in an action where there is a known defendant under §§ 6-11 of the act he need not worry if the case is old because the plaintiff was protected by the savings clause of the general statute of limitations. In such situations the Secretary of State's interests will presumably be protected by the real defendant's own defense of the matter, and if the defense is inadequate the Secretary of State has an identified defendant from which to seek reimbursement for any sums paid out of the fund as a result of the suit. The intent of the Legislature in passing the act was to provide a remedy for those accident victims who normally would receive no compensation for their injuries because of uncollectability from a guilty tortfeasor. By excluding infants, incompetents and others disabled from bringing immediate suit by denying them the protection of the saving provision of the general statute of limitations we would directly counter that legislative intent. The fund was created to provide just compensation for injured accident victims, and not so that it could merely be counted as another state bank account.

Arguendo, if the Motor Vehicle Accident Claims Act is applied so that plaintiff is denied protection of the savings clause of the general statute of limitations under §§ 6-11 of the act, the result would offend constitutional principles of due process. See Grubaugh v St Johns, 384 Mich. 165, 175; 588 NW2d 778, 783-784 (1970); Corona v Lenawee County Road Commissioners, 36 Mich. App. 579, 588; 194 NW2d 46, 50 (1971). It is notable on this point that even though it is here held that the Motor Vehicle Accident Claims Act does not create a new cause of action, the Court in Holland, supra, was not confronted with the constitutional issues that would arise if a minor or other incompetent were not given the benefit of savings provisions of the general statute of limitations under statutes creating causes of action unknown at common law.

Accordingly, I would reverse and remand.

NOTES

[1] Approximately 3 years and 2 months after the accident.

[2] MCLA 257.1118; MSA 9.2818, provides: "In all actions in which recovery is to be sought against the fund, said action must be commenced within 3 years from the time the cause of action accrues".

[3] MCLA 257.1128; MSA 9.2828, provides: "All claims or actions under which any person seeks to recover from the fund shall be filed or commenced within 3 years from the date of the accident".

[4] MCLA 600.5851(1); MSA 27A.5851(1), provides: "If the person first entitled to * * * bring any action is under 21 years of age * * * he or those claiming under him shall have 1 year after his disability is removed * * * to * * * bring the action although the period of limitations has run".

[5] MCLA 436.22; MSA 18.993.

[6] MCLA 257.1122; MSA 9.2822, prohibits indemnification by the fund of any insurer in such situations.

[1] The circuit judge apparently felt that § 18 was in toto unconstitutional because of Lisee, supra, in text. Lisee, however, only held that the notice provision of § 18 was not jurisdictional, not that the section was unconstitutional.