State Farm may be estopped from denial where its agent assigned claim to wrong policy
For the second time in two years, an appellate panel has reversed the trial court's summary disposition of Jennifer Albrecht's 2008 no fault claim against State Farm. Albrecht suffered fractures in her back and arm after a trailer door fell and struck her. The trailer was attached to a farm pickup at the time of the injury, making her indisputably entitled to recover no fault PIP benefits (basically wage loss, limited replacement services and lifetime medical expenses). Jennifer's husband reported the injury to their insurance agent's General Manager, Gregg Hughes. All of the Albrecht's insurance, including homeowners, no fault and health insurance were purchased through State Farm, its captive agent and subsidiaries.
For some reason that he couldn't adequately explain, Hughes made a claim for health benefits totaling $1,000.00 but did not process a claim for no fault benefits. The Albrechts did not learn of Hughes' error until 13 months after the injury, making their formal claim to State Farm one month late under the statute of limitations. On that basis, State Farm denied the claim in its entirety, and the trial court dismissed Albrecht's lawsuit.
For the second time, this month the Court of Appeals repudiated the Kent County judge's holding that State Farm owed no benefits as a matter of law. The higher court returned the case for a trial on the merits to determine whether the negligence of State Farm's captive agent led to the delay in making a written injury claim to State Farm's auto insurer. The Court pointed out that under previous holdings, when an insured makes a formal report to the right insurer--but under the wrong theory, the notice is deemed satisfactory.In any event, even though the Albrecht's bought all of their coverage from State Farm's agent, and even though they reported the injury to that agent--whom they obviously relied upon for insurance expertise--State Farm is not embarrassed by an effort to deny their undisputedly valid claims. And because State Farm is bold enough to raise the argument, its captive Justices very well may relieve the insurer of its responsibilities--even though its agents "caused" the delay that the insurer now complains of. We live in that kind of a state with that kind of Chamber of Commerce-dominated judiciary.