Federal Kemper Insurance Company V. - Court of Appeals of Michigan

Federal Kemper Insurance Company V.

By Court of Appeals of Michigan

  • Release Date: 1980-04-24
  • Genre: Law
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Federal Kemper Insurance Company V. Court of Appeals of Michigan Book Review Score: ★★★★★ 5/5 stars

Donald Krzesowiak was injured while a passenger in a vehicle driven by Jon F. Smith who was insured with Federal Kemper Insurance Company and Federal Mutual Insurance Company. The Western Insurance Companies insured Donald's brother, with whom Donald was domiciled at the time of the accident. Both parties refused payment upon the premise that the other was primarily liable under the no-fault insurance statute. The Federal companies finally agreed to provide benefits and then either to arbitrate or litigate the legal issues with Western. The Federal companies paid $9,914.15, with an expected exposure of over $10,000. Western refused to assume responsibility or to provide benefits. The Federal companies brought an action against Western in Presque Isle Circuit Court. Accelerated judgment for defendant on the ground that the action was barred by the one-year statute of limitations for recovery of personal protection benefits in the no-fault act and summary judgment for defendant for failure to state a claim upon which relief could be granted was granted, Joseph P. Swallow, J. Plaintiffs appeal. Held : 1. The proper action in this case is one in equity for subrogation. An insurer becomes subrogated to the rights of an insured where it pays a claim and its liability is arguably secondary to that of a primary insurer. The no-fault act does not preempt plaintiffs' claim for equitable relief as subrogees.

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