Applicability of the one-year-back rule (MCL 500.3145) in an action by an insurer seeking reimbursement from another insurer; “Claimant”; Allstate Ins Co v State Farm Mut Auto Ins Co; “Subrogee”

Holding that the one-year-back rule did not apply because plaintiff-LM General was not a claimant under the No-Fault Act and the underlying claim was timely under the rule, the court reversed summary disposition for defendant-Trumbull Insurance and remanded. It noted that this was “the second chapter of an ongoing dispute between two insurance companies. The first chapter arose” when the injured person (H) sought payment of first-party no-fault benefits. H sued both LM General “and the Hartford Insurance Company, known here as Trumbull Insurance Company.” LM General paid benefits under protest. The only dispute in the first case was which company was first in priority. “Trumbull admitted liability after LM General” moved for summary disposition and Trumbull failed to respond. Trumbull “agreed to an order, and the case was dismissed. But Trumbull” did not reimburse LM General, which then filed this action for reimbursement. The court found that Allstate was analogous. “Under the circumstances presented in this case, LM General, an insurance company, is not a ‘claimant.’” H was the claimant in the prior “action, and her claim for benefits was timely under the one-year-back rule. Because LM General” was not a claimant under the No-Fault Act and timely made payments to H, “Allstate counsels that the one-year-back rule does not apply, despite that some of LM General’s timely payments to the claimant . . . were made more than a year before it was forced to file this suit.” Trumbull contended that as H’s “‘subrogee,’ LM General acquired only the same rights as [H] would have had” and it reasoned that H could not have recovered benefits had she sued in 2019 when LM General did. The court noted that whether LM General was her subrogees was “not entirely straightforward.” LM General was “not suing to enforce a right, duty, or claim owed to [H]; her claim for benefits has been paid and liability decided. Rather,” it alleged that Trumbull violated a “separate and distinct agreement to reimburse LM General for the payments that LM General had made.” Because the issue here was “whether Trumbull’s promise to pay is legally enforceable[,]” the one-year-back rule did not apply. And even assuming LM General was H’s subrogee, “her claim was timely under the one-year-back rule. Standing in [H’s] shoes, so is LM General’s.”