Priority for payment of PIP benefits; Cancellation notice; MCL 500.3020(1)(b); “Peremptory, explicit, & unconditional” requirement; Yang v Everett Nat’l Ins Co; 10-day-written-notice requirement; Nowell v Titan Ins Co; Michigan Automobile Insurance Placement Facility (MAIPF)

The court reversed an order granting summary disposition for third-party defendant-USA Underwriters (Underwriters) in this priority dispute as to the payment of PIP benefits to plaintiff-Harris and remanded for entry of summary disposition for defendant-Farmers. Harris “was allegedly injured while riding in a vehicle owned by her mother and ostensibly insured by Underwriters.” Underwriters contended the policy had been cancelled. Farmers was assigned Harris’s claim by the MAIPF. Farmers argued “that Underwriters’ cancellation notice did not comply with MCL 500.3020(1)(b) or prevailing law because it was not ‘peremptory, explicit and unconditional’ and the 10-day-written-notice requirement was not met; therefore, the trial court erred in concluding that the cancellation notice was effective and Harris did not have insurance on the date of the” accident. The court agreed with both arguments. It found that “contrary to the trial court’s holding, the cancellation notice relied upon by Underwriters is invalid under MCL 500.3020(1)(b), and the automobile insurance policy issued to Harris by Underwriters remained in effect on” the date of the accident at issue here. Thus, “the trial court erred when it granted Underwriters’ motion for summary disposition and dismissed Farmers’ case against Underwriters.” Farmers also argued “that Underwriters’ cancellation notice did not comply with MCL 500.3020(1)(b) because it failed to satisfy the 10-day-written-notice requirement.” The court determined that although it did not have to consider this issue given its “conclusion that the cancellation notice was ineffective because it was not ‘peremptory, explicit, and unconditional,’ . . . the notice also did not comply with the 10-day-written-notice requirement.”