Children and incapacitated adults granted limited relief from "one year back" rule
This week the Michigan Supreme Court backed away from a prior decision that had denied infants and incompetent persons the benefit of additional time to file lawsuits in no fault cases. Under provisions of the Revised Judicature Act that have been the law in Michigan for decades, the statute of limitations is "tolled" while a person is an infant or mentally incompetent. The potential litigant--who by definition cannot sue on his own without a court-appointed conservator, "next friend" or guardian-- then has a brief period after the "disability" is removed in which to file suit. These provisions were applied to all claims of an infant or incompetent person up until the Engler Majority of the Supreme Court decided the Cameron case in 2006. In the latter decision, the 4-3 conservative majority held that the no fault "one-year back" rule was not a statute of limitations and exempted it from the operation of the tolling provision of the RJA. The decision was also given retroactive effect: the immediate impact was a windfall of literally millions of dollars to the state's auto insurers who were relieved of the duty to pay no fault benefits--particularly medical benefits--where payment negotiations had extended beyond the "one year" limitation.
This month the Supreme Court rejected the Cameron analysis and confirmed that the "one year back" rule is a statute of limitations subject to the "tolling" or savings provisions of the RJA. While the one year back rule will still apply to ordinary people and nullify unpaid claims after one year, it does not apply to any exceptional situations addressed in the broad judicature act. This month's case was brought by the University of Michigan Health System against Titan Insurance Company after the University incurred some $70,000.00 in medical expenses providing medical care to an accident victim. The RJA allows a state agency that pays medical costs unlimited time to recoup those costs from a responsible individual. Under the Cameron rule, the University's claim was dismissed in the lower court because the RJA provided relief only for statute of limitations exemptions (which theoretically did not include "one year back:" under the new decision, any provision of the RJA that provides relief from limitation periods applies also to the no fault one-year back rule.