Insurer loses notice battle with municipality

Great Northern Insurance Company insured the Rivers Edge Community Credit Union and had to pay to clean up the office after a sewer back-up occurred in the City of Allen Park on June 22, 2009. Great Northern wrtote to the "Wayne County Drain Commission," an entity that doesn't exist, at the Department of Environment, to give it written notice of the insurer's subrogation claim. A paralegal wrote back, providing a claim form and informing Great Northern that it was required to file the form within 45 days of the damage being suffered. The insurer didn't comply until several months later. When the claim was denied for non-compliance with the statutory notice provision, Great Northern sued. It alleged "substantial compliance" with the notice provision and a lack of prejudice to the municipality. The Court of Appeals reversed the trial court's decision and dismissed the insurer's claim. It pointed out that under recent decisions of the Republican Michigan Supreme Court majority, the government need not prove prejudice resulting from the lack of notice and substantial compliance wasn't adequate: a notice which does not comply with all of the statutory notice terms bars any recovery. This notice provision has barred any number of individual injury claimants since the Republican justices changed the standard: this time an insurer was "hoisted by its own petard" as the insurers' judicial friends were forced to interpret the notice provision on a consistent basis and against the insurer's interest.