MSC denies rehearing of U-M v Titan, says no error using ‘insanity’ and ‘incompentency’ interchangeably

The Michigan Supreme Court has denied a motion for reconsideration in Regents of University of Michigan v Titan Insurance Co., one of the decisions released at the end of its 2009-2010 term.

The court ruled in Regents that University of Michigan Hospital, as a state entity, was not bound by the No-Fault Act’s one-year back rule under a statute that says that state claims for medical bills have no statute of limitations.

According to Titan’s attorney, Mark D. Sowle of Anselmi & Mierzejewski P.C., the decision created a problem that may not have been intended: in ruling as it did, the court overturned its own decision in Cameron v Auto Club Ins. Cameron held a minority/insanity tolling statute didn’t apply to the one-year back rule.

But the majority continuously used the terms “insanity” and “incompetency” interchangeably, which could open the door for a whole new class of plaintiffs to avoid the one-year back rule.

Sowle explained the scenario in August:

“Let’s say I was in a car accident 10 years ago and I claim I had a head injury, and therefore, I’m covered under the insanity provision,” he said. “Under this decision, I can theoretically file suit against my no-fault carrier and say, ‘Hey, you underpaid me for attendant care $1 an hour for the last 10 years.’ All of the sudden, I have a million-dollar lawsuit and I’m not bound by any statute of limitations. That’s the real danger here.”

Sowle filed a motion of reconsideration, which is still pending in the Michigan Supreme Court. His biggest concern, he said, was the Court using the term “incompetent” 15 times in place of the term “insane.”

“When you look at the dictionary definition of ‘incompetent,’ it’s a whole lot broader than the dictionary definition of ‘insane,’” he said. “On top of that, the statute defines the word ‘insane.’ It doesn’t define ‘incompetent.’”

Chief Justice Marilyn Kelly explained why she decided against reconsidering the case on the “incompetency/insanity” issue:

I write also to address our opinion’s use of the word “incompetent” rather than “insane” in discussing MCL 600.5851(1). This was not improper nor was it intended to expand the scope of MCL 600.5851(1). Indeed, I would not hesitate to vote to grant rehearing if I thought there was a need for clarification on this point. However,  there are several reasons why the opinion’s use of “incompetent” in place of “insane” is not a basis for granting rehearing. First, the legally recognized definition of “incompetent” is consistent with the statutory definition of “insane” in MCL 600.5851(2). Both terms contemplate persons who are unable to comprehend their legal rights. Second, there is nothing novel about using these terms interchangeably. The United States Supreme Court and numerous other courts, have done so for years.

Finally, it is pure speculation to predict the economic consequences of our decision. Defendant claims that it will inevitably lead to higher insurance premiums for Michigan drivers. No one is omniscient regarding when or why insurance companies choose to raise or lower premiums. However, the practical effects of our decisions generally do not dictate this Court’s reading of statutory language. This is a point with which at least one dissenting justice agrees.

One of those dissenting justices is Maura Corrigan:

In overruling Cameron v Auto Club Insurance Association, 476 Mich 55 (2006), the majority inaccurately described the class of individuals protected by the tolling provision in MCL 600.5851(1). The statute protects a person who “is under 18 years of age or insane at the time the claim accrues.” The majority distorted this clear language by repeatedly using the term “incompetent” interchangeably with  insane.” Whereas “insane” is statutorily defined as “a condition of mental derangement” that prevents a person from comprehending his rights, the term “incompetent” includes persons who are not properly qualified, capable, or legally fit to make a decision. MCL 600.5851(2);
Websters II New College Dictionary (2005). Thus, the term incompetent” has a potentially far broader reach than “insane,” thereby expanding the class of protected persons beyond those suffering from insanity.

The practical ramifications of the majority’s error in overruling Cameron include potentially higher premiums for all Michigan motorists who must by law purchase nofault automobile insurance. Defendant has documented that from 1978 through 2009, the Michigan Catastrophic Claims Association received a total of 24,533 claims, nearly half of which involved a brain injury, the type of injury most likely to trigger the tolling provision in MCL 600.5851. By expanding that provision beyond the reach of its plain language, the majority permits a new universe of claims for accidents that occurred decades ago, claims that will ultimately be paid by the public through increased premiums.

Justice Robert P. Young, Jr. echoed Corrigan’s dissent as well as Justice Stephen J. Markman’s dissent from the original Regents decision:

And so, in this case, on an issue of the majority’s own creation—an issue not even related to the case at hand—the majority has inexplicably attempted to rewrite MCL 600.5851(1) by broadening the class of individuals covered from those who are insane to those who are merely incompetent. There is perhaps no clearer example than this case of
this majority’s demonstrated indifference to the actual words of a statute and the legislative process that considers, debates,  compromises, and ultimately selects those words. Neither the author of the majority’s opinion nor the justices who today sanction that opinion by denying rehearing deign to explain why it is appropriate for this Court to substitute a new protected category of persons for the one the Legislature actually chose. Once again in Michigan, judicial preferences trump legislative ones.