AMYRUTH L COOPER V AUTO CLUB INS ASSN
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STATE OF MICHIGAN
COURT OF APPEALS
SHARON L. STROZEWSKI, as Next Friend of
AMYRUTH L. COOPER and LORALEE A.
COOPER,
UNPUBLISHED
May 28, 2009
Plaintiff-Appellee,
V
No. 261736
Washtenaw Circuit Court
LC No. 03-000367-NF
AUTO CLUB INSURANCE ASSOCIATION,
Defendant-Appellant.
ON REMAND
Before: Murphy, P.J., and Meter and Davis, JJ.
PER CURIAM.
This case returns to this Court on remand from the Supreme Court for resolution of issues
initially placed before, but not decided by, this Court. We now affirm the trial court.
Amyruth L. Cooper and Loralee A. Cooper were, respectively, one and two years old in
1987, when they sustained severe brain injuries in an automobile accident. At the time, they
were passengers in a car driven by their mother and next friend in this case, Sharon L.
Strozewski. Both children initially required skilled care, but after two years, only one continued
to require continuous skilled care. The other child could be cared for at home. Defendant
insurer encouraged the mother to leave her job and to provide that at-home care herself.
Defendant offered her various rates of compensation. The mother commenced this suit in 2003,
alleging that defendant underpaid her. Our Supreme Court has provided a comprehensive
discussion of the procedural history of this case. See Cooper v Auto Club Ins Ass’n, 481 Mich
399, 402-405; 751 NW2d 443 (2008). In salient part, the mother contended that she was entitled
to additional PIP benefits under the no-fault act, MCL 500.3101 et seq, and in addition, she
contended that she had been fraudulently induced to accept an unreasonably low rate of
compensation. Defendant filed a variety of motions for summary disposition, which were
denied. The parties stipulated to an award of damages, subject to defendant’s right to appeal.
When we first considered this matter, we viewed the only functional issue as whether the
mother was entitled to anything at all for damages that were incurred more than a year prior to
her filing of the suit. In other words, the issue as we saw it was whether the one-year-back rule
found in MCL 500.3145(1) applied to the entirety of the claims. We concluded that the minority
tolling provision, MCL 600.5851(1), was inapplicable to the one-year-back rule, and further that
the fraud claim was merely a restatement of the no-fault claim.
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However, on appeal, our Supreme Court explained that “[t]here is a distinction between
claiming that an insurer has refused to pay no-fault benefits to its insureds and claiming that the
insurer has defrauded its insureds.” Cooper, supra, 481 Mich at 407. The Supreme Court
discussed the distinction at length, but the gravamen is that it reversed the portion of this Court’s
opinion that held that the fraud claim was merely a re-labeled restatement of the no-fault claim.
Furthermore, the Supreme Court explained that a fraud claim was actionable “even where a selfcontained system, such as the no-fault system, exists.” Id. at 410. It just so happens that, on the
basis of the allegations, the loss from the alleged fraud would be primarily a loss of statutory
benefits – although possibly other consequential losses as well. Id. at 412. In short, the fraud
claim is wholly independent of the no-fault claim, and as a consequence, the one-year-back rule
is simply irrelevant thereto. Our Supreme Court did not address our prior determination that the
minority tolling provision is inapplicable to the one-year-back rule. The Court then remanded
this case to this Court with instructions “to address the remaining issues raised by the parties.”
Id. at 417.
The first remaining issue is whether the mother is a proper claimant for no-fault benefits
in this action, given that the children themselves actually received care. The mother is the
plaintiff in this action as the children’s next friend rather than on her own behalf, although she is
the person who would receive additional compensation should plaintiff prevail. As discussed,
the one-year-back rule of the no-fault act is unaffected by the minority tolling provision;
furthermore, defendant does not contest its obligations under the no-fault act aside from the
tolling argument. This issue is therefore essentially moot. See B P 7 v Bureau of State Lottery,
231 Mich App 356, 359; 586 NW2d 117 (1998). However, in light of the Supreme Court’s
remand order, and out of concern for any other issues that may arise if plaintiff’s children are
deemed ineligible to participate in this case as claimants, we will address it.
MCL 500.3112 provides that “[p]ersonal protection insurance benefits are payable to or
for the benefit of an injured person. . . .” Citing this language, this Court has stated as follows:
This statute expressly confers a cause of action on the injured party
to collect PIP benefits for expenses incurred as the result of his injury. We find
no indication from the statute that the right to PIP benefits necessarily accrues to
the person who is legally responsible for the expenses incurred as a result of the
injury. [Geiger v Detroit Automobile Inter-Ins Exchange, 114 Mich App 283,
287; 318 NW2d 833 (1982), overruled in part by Cameron v Auto Club Ins Ass’n
(Cameron II), 476 Mich 55; 718 NW2d 784 (2006).]
Citing the statute and Geiger, this Court more recently held as follows:
The statute confers a cause of action on the injured party and does not create an
independent cause of action for the party who is legally responsible for the injured
party’s expenses. Further, a parent’s cause of action to recover benefits for
expenses incurred during an insured’s minority is derivative of the injured
minor’s rights under the no-fault act. Therefore . . . the right to bring an action for
personal protection insurance benefits, including claims for attendant care
services, belongs to the injured party. [Hatcher v State Farm Mut Automobile Ins
Co, 269 Mich App 596, 600; 712 NW2d 744 (2006).]
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In Cameron II, supra at 63-64, the Supreme Court overruled “Geiger’s conclusion that the
minority/insanity tolling provision applies to extend the one-year-back rule . . . .” However,
because that is not the purpose for which Hatcher cited Geiger, Hatcher remains good law. This
Court has thus established that an injured person has standing to sue for damages on behalf of
that person’s caregiver.
In Lakeland Neurocare Centers v State Farm Mut Automobile Ins Co, 250 Mich App 35,
39; 645 NW2d 59 (2002), this Court noted that MCL 500.3112 includes “the phrase ‘benefits are
payable to or for the benefit of an injured person,’” and held that the statute “specifically
contemplates the payment of benefits to someone other than the injured person.” In this case the
children do indeed have standing to make the claims asserted on their behalf by their mother and
next friend, who herself may recover without having the status of plaintiff in an individual
capacity. The trial court did not err in its ruling that “it is the law of the state that the tolling
provision does apply to these claims and it is a claim of the—of the minor—of the injured
person.”
The major remaining issue is whether the mother can invoke the minority tolling
provision to save her fraud claim from the operation of the six-year statute of limitations set forth
in MCL 600.5813. We hold that she can.1
Our Supreme Court provided us with some “cautionary notes,” including an enumeration
of the elements of a fraud claim: “(1) that the insurer made a material representation; (2) that it
was false; (3) that when the statement was made, the insurer knew that it was false, or the insurer
made it recklessly without any knowledge of its truth and as a positive assertion; (4) that the
insurer made the statement with the intention that it would be acted upon by the insureds; (5) that
the insureds acted in reliance upon the statement; and (6) that the insureds consequently suffered
injury.” Cooper, supra, 481 Mich at 414. Given the procedural posture of this case, we presume
that the first three elements have at least been sufficiently well pleaded. Defendant argues that
no misrepresentations were made to the children, and the fraud claim belongs only to the mother
in her own personal capacity, so she cannot avail herself of the minority tolling provision. We
find defendant’s reasoning inapposite.
The last three elements of a fraud claim do not depend on to whom a misrepresentation is
made. The gravamen of the final three elements is that false statements were, in the passive
voice, made and were calculated to trick some particular party. The party to whom
misstatements were made is relevant, and indeed in the typical situation, it may be unlikely for a
third party to rely on statements made to another. An illustrative case is Int’l Brotherhood of
Electrical Workers v McNulty, 214 Mich App 437; 543 NW2d 25 (1995). That case involved a
suit by a union against a company that allegedly won a contract bid by claiming that it would pay
its workers prevailing wages but in fact underpayed those workers and threatened them into
1
If the fraud claim accrued in 1989 and 1990, then six years would have passed by the time suit
was filed in 2003. However, the alleged fraudulent misrepresentations are asserted to have taken
place “in 1990 and continuing,” suggesting the possibility of an ongoing wrong, some of which
might have taken place within six years of filing suit. Because we cannot determine that from
the record, we merely note this as a point of interest; it is not part of the basis for our conclusion.
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silence about it. This Court stated that “misrepresentations made to a third party [do] not
constitute a valid fraud claim,” but its reasoning was that the union itself had not acted in
reliance on the false statements made by the defendant. Id. at 447. Again, proving reliance may
be difficult where a misrepresentation is not made directly to the allegedly defrauded party, but
we cannot conclude that it is legally impossible.
In this case, we find that reliance by the children has been sufficiently well pleaded. The
alleged loss is a loss of statutory benefits under the no-fault act. As discussed, this constitutes a
loss to the children (as the insureds) irrespective of whether they actually received the care for
which the benefits were intended to pay. The person to whom the alleged misrepresentations
were made was, at all relevant times, acting solely on the children’s behalf. She participates in
this case as the children’s next friend, and the misrepresentations were made to her as the
children’s caretaker. A misrepresentation to the caretaker, intended to induce the caretaker to
take some action or omission that affects the children’s statutory benefits is, as a realistic matter,
a misrepresentation calculated to induce reliance by the insureds. Indeed, the only way the
insureds could have any dealings with their insurer is through their mother.
We conclude that, as a practical matter, the alleged fraud in this case was perpetrated
against the insured children, albeit through their mother in her role as their caretaker. We find
that the minority tolling provision is therefore applicable to the fraud claim in this case, and so
the six-year limitations period does not bar the claim.
We therefore need not reach any of the other remaining issues.
The trial court is affirmed.
/s/ William B. Murphy
/s/ Alton T. Davis
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