Statute of limitations is tolled when insurer discussed "final" offers but does not make statutory "formal denial"

 Under the AAA policy in this case, an insured homeowner who suffers a loss must bring a legal action within one year of the loss; this is typical Michigan homeowners' insurance language.  Under Michigan law, however, the statute of limitations on a homeowners' claim cannot expire if the insurer has not issued a "formal denial."  In this case, Tyrosh Brown v. AAA Michigan, the parties were unsuccessful in negotiating a property loss and Brown did not sue within one year.  The trial court judge granted summary disposition at AAA's request, based on the statute of limitations. 

The Court of Appeals reversed, pointing out that there was no evidence in the case to support AAA's claim that it had issued Brown a "formal denial" under the statute. The Court pointed out that under longstanding law, simply making an offer that is less than demanded by the insured does not constitute a "formal denial."