Estate of Nickola v MIC General Ins. Co. (Opinion on Application)Annotate this Case
In 2004, George and Thelma Nickola, were injured in a car accident. The driver of the other car was insured with a no-fault insurance policy provided the minimum liability coverage allowed by law: $20,000 per person, up to $40,000 per accident. The Nickolas’ (acting through their attorney) wrote to their insurer, defendant MIC General Insurance Company, explaining that the no-fault liability insurance policy was insufficient to cover the Nickolas' injuries. The letter also advised MIC that the Nickolas were claiming UIM benefits under their automobile policy. The Nickolas’ policy provided for UIM limits of $100,000 per person, up to $300,000 per accident, and they sought payment of UIM benefits in the amount of $160,000; $80,000 for each insured. An adjuster for defendant MIC denied the claim, asserting that the Nickolas could not establish a threshold injury for noneconomic tort recovery. The matter was ultimately ordered to arbitration, the outcome of which resulted in an award of $80,000 for George’s injuries and $33,000 for Thelma’s. The award specified that the amounts were “inclusive of interest, if any, as an element of damage from the date of injury to the date of suit, but not inclusive of other interest, fees or costs that may otherwise be allowable.” The trial court affirmed the arbitration awards but declined to award penalty interest under the UTPA, finding that penalty interest did not apply because the UIM claim was “reasonably in dispute” for purposes of MCL 500.2006(4). The Court of Appeals affirmed the trial court, holding that the “reasonably in dispute” language applied to plaintiff’s UIM claim because a UIM claim “essentially” places the insured in the shoes of a third-party claimant. The Michigan Supreme Court held that an insured making a claim under his or her own insurance policy for UIM benefits cannot be considered a “third party tort claimant” under MCL 500.2006(4). The Court reversed the Court of Appeals denying plaintiff penalty interest under the UTPA, and remanded this case back to the trial court for further proceedings.