Katie M. Klida v. Gregory S. Braman, et al.

Defendant, Farm Bureau General Insurance Company of Michigan (Farm Bureau),
appeals as of right the denial of its motion for summary dismissal of plaintiff's underinsured
motorist claim on the ground that the one-year contractual limitation period in the insurance
policy barred plaintiff's action.1 We affirm.

Plaintiff sustained injuries in a motor vehicle accident involving her mother's vehicle
when she was fifteen years old. It is undisputed that plaintiff was an insured under an
underinsured motorist (UIM) insurance policy. That policy contained the following provisions:

No action can be brought against the company, unless there has been full
compliance with all the policy provisions. No claimant may bring a legal action
against the company more than one year after the date of the accident.

Shortly after she turned eighteen years old, plaintiff filed this lawsuit seeking benefits under the
policy "more than one year after the date of the accident." Defendant moved to dismiss the
action pursuant to MCR 2.116(C)(10) on the ground that the plain language of the contract
clearly barred the action. Plaintiff responded that MCL 600.5851(1) - the minority tolling
provision2 of the Revised Judicature Act (RJA), MCL 600.101 et seq. - allowed her to avoid the
contractual limitation. The trial court agreed with plaintiff, holding that MCL 600.5851(1)
applied to this breach of contract action that fell under the RJA and "a minor claimant has one
year after attaining the age of majority to bring a breach of contract claim." Accordingly,
defendant's motion for summary dismissal was denied. After entering into a stipulated final
order, defendant appeals this decision.

We review de novo a trial court's ruling on a motion for summary disposition. Cameron
v ACIA (Cameron II), 476 Mich 55, 60; 718 NW2d 784 (2006). A motion under MCR
2.116(C)(10) tests the factual sufficiency of the complaint. Maiden v Rozwood, 461 Mich 109,
120; 597 NW2d 817 (1999). Admissible evidence submitted by the parties is considered in a
light most favorable to the nonmovant to determine if the moving party is entitled to judgment as
a matter of law. Id. Issues of statutory construction and contract interpretation are also reviewed
de novo. Id.; Rory v Continental Ins Co, 473 Mich 457, 464; 703 NW2d 23 (2005).

UIM insurance coverage is not mandated by statute, therefore the provisions of the
contract generally determine the circumstances under which benefits will be awarded. Mate v
Wolverine Mut Ins Co, 233 Mich App 14, 19; 592 NW2d 379 (1998). The same contract
construction principles apply to insurance policies as to any other type of contract. Rory, supra
at 461. The provision of the contract at issue here is the one-year contractual limitation. Our
Supreme Court has previously held that
an unambiguous contractual provision providing for a shortened period of
limitations is to be enforced as written unless the provision would violate law or
public policy. . . . [Id. at 470.]

Because plaintiff did not file her legal action until over three years after the accident, the action
was barred under the terms of the policy unless she could establish that the one-year limitation
was not applicable to her claim. See id.; Clark v DaimlerChrysler Corp, 268 Mich App 138,
141-142; 706 NW2d 471 (2005). Plaintiff argued that the minority tolling provision excepted
her claim from the one-year limitation. The trial court agreed, as do we, although for different
reasons.

The minority tolling provision, MCL 600.5851(1), provides:
Except as otherwise provided in subsections (7) and (8), if the person first
entitled to make an entry or bring an action under this act is under 18 years of age
or insane at the time the claim accrues, the person or those claiming under the
person shall have 1 year after the disability is removed through death or
otherwise, to make the entry or bring the action although the period of limitations
has run. This section does not lessen the time provided for in section 5852.
[Emphasis added.]

Plaintiff argues, and the trial court agreed, that her breach of contract lawsuit is such "an action
under this act" because the RJA governs this civil action. As noted by the Rory Court, if the
contract did not contain a limitations provision, the limitation period set forth in MCL
600.5807(8) of the RJA would govern this breach of contract claim. See Rory, supra at 465.
Defendant, also citing Rory, supra, argues that the unambiguous contractual limitation must be
enforced as written. Id. at 468-470. Defendant claims that MCL 600.5851(1) does not apply by
its plain language because, consistent with this Court's holding in Cameron v ACIA (Cameron I),
263 Mich App 95, 100-101; 687 NW2d 354 (2004),3 this action is not an "action under [the
RJA]" and this contractual limitation is not a "period of limitations" provided for by the RJA.
In construing a statute, our primary goal is to ascertain the legislative intent. Cameron II,
supra at 60. "The words of a statute provide ‘the most reliable evidence of [the Legislature's]
intent . . . .'" Sun Valley Foods Co v Ward, 460 Mich 230, 237; 596 NW2d 119 (1999), quoting
United States v Turkette, 452 US 576, 593; 101 S Ct 2524; 69 L Ed 2d 246 (1981). Therefore,
we first consider the statutory language. Unless defined in the statute, every word or phrase of a
statute should be accorded its plain and ordinary meaning, considering the context in which the
words are used. Sun Valley Foods Co, supra at 237. If the language is clear and unambiguous, it
is assumed that the Legislature intended its plain meaning and the statute is enforced as written.
Id. at 236.

At issue here is the phrase "entitled to . . . bring an action under this act." MCL
600.5851(1). Of critical importance is the meaning of the phrase "under this act." Clearly, "this
act" refers to the RJA. Thus, we consider what the Legislature meant by the term "under" as
relates to actions brought "under" the RJA. Because the term is not defined by the statute, we
may consult a lay dictionary to determine its common, ordinary meaning. Stanton v Battle
Creek, 466 Mich 611, 617; 647 NW2d 508 (2002); Robinson v Detroit, 462 Mich 439, 456 n 13;
613 NW2d 307 (2000). There are several definitions for the term but, considered in the context
of this statute, it seems that "in accordance with: under the provisions of the law" is the most
plausible. See The Random House College Dictionary (1988). Thus, the minority tolling
provision is applicable to actions brought in accordance with the RJA. But, are not all civil
actions brought in accordance with the RJA, including this breach of contract action? Are only
causes of action that are created by statutes within the RJA actions brought "under" the RJA?

Or, are only the causes of action for which the RJA sets forth the applicable statute of limitations
actions brought "under" the RJA? The Legislature's intent is unclear.

A court may look beyond the words of a statute to ascertain legislative intent where the
statutory language is ambiguous. Shiroka v Farm Bureau Gen Ins Co of Michigan, 276 Mich
App 98, 103; 740 NW2d 316 (2007). A statutory provision is ambiguous if it is equally
susceptible to more than a single meaning. Fluor Enterprises, Inc v Dep't of Treasury, 477 Mich
170, 177 n 3; 730 NW2d 722 (2007), citing Lansing Mayor v Pub Service Comm, 470 Mich 154,
166; 680 NW2d 840 (2004). Statutory language is not ambiguous "merely because a reviewing
court questions whether the Legislature intended the consequences of the language under
review." McGhee v Helsel, 262 Mich App 221, 224; 686 NW2d 6 (2004), quoting Colucci v
McMillin, 256 Mich App 88, 94; 662 NW2d 87 (2003). Rather, an ambiguity exists only
where the language of a statute as used in its particular context has more than one
common and accepted meaning. Thus, where common words used in their
ordinary fashion lead to one reasonable interpretation, a statute cannot be found
ambiguous. [Id.]

Further, "a finding of ambiguity is to be reached only after ‘all other conventional means of [ ]
interpretation' have been applied and found wanting." Lansing Mayor, supra at 165, quoting
Klapp v United Ins Group Agency, Inc, 468 Mich 459, 474; 663 NW2d 447 (2003). Thus, we
take a closer look to determine whether the statutory provision is truly equally susceptible to
more than a single meaning. See Fluor Enterprises, Inc, supra.

First we consider the proposition that all civil actions are brought in accordance with the
RJA; thus, all civil actions are brought "under" the RJA. The RJA sets forth the organization
and jurisdiction of the judiciary, as well as procedural provisions that are applicable to civil
actions. See Woodard v Custer, 476 Mich 545, 611; 719 NW2d 842 (2006). The preamble to
the RJA, MCL 600.101 et seq., reads:

An act to revise and consolidate the statutes relating to the organization and
jurisdiction of the courts of this state; the powers and duties of such courts, and of
the judges and other officers thereof; the forms and attributes of civil claims and
actions; the time within which civil actions and proceedings may be brought in
said courts; pleading, evidence, practice and procedure in civil and criminal
actions and proceedings in said courts; to provide remedies and penalties for the
violation of certain provisions of this act; to repeal all acts and parts of acts
inconsistent with or contravening any of the provisions of this act; and to repeal
acts and parts of acts.

Although the preamble is not binding authority for construing an act, it can be useful for
interpreting statutory purpose and scope. King v Ford Motor Credit Co, 257 Mich App 303,
311-312; 668 NW2d 357 (2003). Consistent with this preamble, Justice Cavanagh in his dissent
in Cameron II, quoting the plaintiff's brief, noted:
The RJA prescribes the jurisdiction of the courts, the basis of jurisdiction, and
various other procedural guidelines within our civil justice system. It also
prescribes a method for disputes to be resolved through the filing of a civil action.

Specifically, at MCL 600.1901, the RJA states, ‘a civil action is commenced by
filing a complaint with the court.' Therefore, it is basic civil procedure that all
lawsuits filed are brought ‘under this act,' i.e., the RJA. [Id. at 91 n 5.]

We agree that this interpretation of the phrase "under this act" is plausible. Specifically
here, as the preamble advises, the RJA not only dictates other significant aspects of this civil
action, such as jurisdiction and venue, it also sets forth "the time within which civil actions and
proceedings may be brought in said courts [of this state]." Justice Markman noted this purpose
in his concurrence in Cameron II, stating "the tolling provision instructs minors and insane
persons that they are entitled to wait until one year after their legal disabilities have been
removed to bring their civil actions, [but] if they do wait, [under the one year back rule, MCL
500.3145(1)], they will only be allowed to recover what may be a portion of the total damages
incurred." Id. at 73. Accordingly, it is plausible to conclude that plaintiff's civil action was
brought under - in accordance with - the RJA.

However, the phrase "under this act" could also be construed to limit the application of
the minority tolling provision, MCL 600.5851(1), to causes of action arising from a purported
violation of a specific statutory provision contained within the RJA. This was the interpretation,
for example, of the Cameron I Court, although this portion of the opinion was vacated as outside
the scope of review. Cameron II, supra at 64. Under this construction, only causes of action
alleging a violation of certain statutory provisions of the RJA would be considered brought in
accordance with the RJA and, thus, subject to the minority tolling provision. A review of the
RJA reveals that, in significant part, such causes of action would be premised on a violation of a
statute contained in Chapter 29 of the RJA, MCL 600.2901 et seq. Examples of such causes of
action may include malicious prosecution,4 encumbering property,5 libel or slander,6 nuisance,7
stalking,8 and malpractice against certified public accountant.9 The minority tolling provision
would not apply, for example, to minors entitled to bring causes of actions arising from contract,
common-law or statutes not contained within the RJA, even if the applicable statute of
limitations was provided by the RJA. This interpretation of the phrase "under this act" is also
plausible.

A third possible construction is that the minority tolling provision may apply only to
causes of action for which the applicable statute of limitations is set forth in the RJA; these cases
would be brought "under" the RJA. This construction would expand the ambit of its application
to include some statutory, common-law, and contract actions that are subject to the limitations
periods set forth in the RJA. For example, third-party no-fault claims brought pursuant to MCL
500.3135(1) would be considered brought "under" the RJA because the three-year limitation
period provided by MCL 600.5805(10) of the RJA applies. See Rory, supra at 465 n 9. And, a
claim premised on an UIM contract that did not contain a limitations provision would be brought
"under" the RJA because the general six-year period of limitations applicable to contract actions,
MCL 600.5807(8), would apply. See Rory, supra at 465. But, causes of action not governed by
a statute of limitations period provided for by the RJA would not be considered brought "under"
the RJA despite the fact that other significant provisions of the RJA would be applicable to the
action. It is unclear whether the Cameron II Court implied this construction when it concluded
"it unnecessary in [the Cameron II] case to reach the broader question whether the legislative
amendments in 1993 PA 78 limit the applicability of the minority/insanity tolling provision to
causes of action for which the applicable statute of limitations is set forth in the RJA." Id. at 64.
Nevertheless, it appears also to be a plausible construction of the phrase "under this act."

A review of the legislative history with regard to the minority tolling provision offers
little guidance as to the Legislature's intended meaning. Before the RJA was enacted, the
minority tolling provision of the Judicature Act of 1915, MCL 609.15, provided that it applied to
"any of the actions mentioned in this chapter," where "this chapter" was Chapter IX, titled
"limitation of actions." It did not set forth a period of limitations for contract actions, but it did
set forth the periods of limitations for several "real actions" and "personal actions," and
contained other provisions pertaining to causes of action. 1948 CL 609.1 et seq. When the RJA
was enacted in 1961, it added a period of limitations provision applicable to contract actions,
MCL 600.5807. 1961 PA 236. And, the minority tolling provision, MCL 600.5851(1), was
amended to provide that it applied to "any action," which was interpreted to include, at least,
causes of action created by the common-law and Michigan statutes, Lambert v Calhoun, 394
Mich 179, 191-192; 229 NW2d 332 (1975), including "causes of action created under the nofault
statute, a Michigan statute." Rawlins v Aetna Cas & Surety Co, 92 Mich App 268, 277; 284
NW2d 782 (1979). In 1972, the statute was amended so as to apply to persons entitled to "bring
an action," which did not result in a discernable change in meaning. In 1993, MCL 600.5851(1)
was amended to its current form by 1993 PA 78 § 1 so as to apply to "an action under this act."

It appears that § 5851(1) of the bill was introduced on January 28, 1993, with the additional
language "under this act" already included. See SB 270 as introduced on January 28, 1993. Our
research of the legislative journals, changes in the bill during its passage, staff analysis,
committee reports, and other historical data has failed to reveal any reference to this particular
change in the statutory language. Thus, there is no clear legislative intent to change the manner
in which the minority tolling provision has previously been interpreted. But, as discussed above,
there are three plausible interpretations of the phrase "under this act."

Because the statutory provision at issue is equally susceptible to more than a single
meaning and we are neither able to ascertain the Legislature's intent by its specific language nor
are we guided by the Legislature's pre-enactment proceedings, we conclude that the minority
tolling provision, MCL 600.5851(1), is ambiguous. Therefore, judicial construction is
appropriate. See Adrian School Dist v MPSERS, 458 Mich 326, 332; 582 NW2d 767 (1998). In
that regard, our duty is to consider the object of the statute, as well as the harm it is designed to
remedy, and apply a reasonable construction that best accomplishes the statute's purpose.
Marquis v Hartford Accident & Indemnity, 444 Mich 638, 644; 513 NW2d 799 (1994).

Our construction of the minority tolling provision, MCL 600.5851(1), is guided by the
legislative directive that the RJA "is remedial in character, and shall be liberally construed to
effectuate the intents and purposes thereof." MCL 600.102. First, we consider the object of the
statute. Generally, the purpose of statutes tolling the period of limitations for persons to whom a
legal disability is attributed "is to allow protected classes of persons an opportunity to be made
whole once their disabilities have been removed." Cameron II, supra at 74 (Markman
concurring). Stated differently, "[t]he purpose of a savings or tolling statute for persons under a
disability is to protect the legal rights of those who are unable to assert their own rights and to
mitigate the difficulties of preparing and maintaining a civil suit while the plaintiff is under a
disability." 51 Am Jur 2d, Limitation of Actions, § 218, p 591.

Next, we consider the harm MCL 600.5851(1) was designed to remedy. A minor cannot
sue on his own behalf. MCR 2.201(E)(1). Thus, a minor's civil cause of action that accrues and
expires during his disability must be brought in a representative capacity by, for example a next
friend, or not at all. See id. That is unless MCL 600.5851(1) operates to safeguard that right
until the minor reaches the age of majority and can legally exercise his legal rights or choose not
to do so. Without the tolling provision the minor's legal rights are pursued or lost at the
discretion of someone to whom the claim does not belong. And, if his rights are not pursued, the
minor is completely denied the opportunity to act in his own best interest upon reaching the age
of majority. Justice Cavanagh, in his dissenting opinion in Cameron II, supra, succinctly
described the harm the tolling provision was designed to remedy:

[t]he saving provision is a necessary counterpart to the rule created by this Court
that prohibits minors and the incompetent from bringing lawsuits on their own.
MCR 2.201(E)(1)(c). Under that rule, minors and incompetents who wish to
pursue a cause of action have no choice but to be represented by a conservator or
next friend. Through the saving provision of MCL 600.5851(1), the Legislature
has recognized not only that this group is prohibited from suing on its own, but
that not all infants and incompetents have the benefit of someone who takes the
initiative to sue for them, and not all infants and incompetents can petition the
court to appoint someone in that capacity. Presumably, the Legislature
recognized that "whether such an action is in fact brought depends on good
fortune since the [infant or] incompetent is helpless." Thus, the saving provision,
a necessary answer to our court rule, prevents the abrogation of the claims of
infants and the incompetent. [Id. at 94-95 (footnotes and citation omitted).]

And, whether the minor's cause of action arose from violation of a statute or the
common-law was considered by our Supreme Court in Lambert, supra, which held:

There is scant reason to ascribe to a legislature an intent to distinguish
between common-law and statutory causes of action in the application of saving
provisions.
* * *

The need and desirability for saving in one case are the same as in the
other. Infants or insane persons are under the same disability whether their
actions be common-law or statutory; the defendant in one case is generally in no
greater need than the defendant in the other of protection from delay in
commencement of the action. We are unable to distinguish the two cases or to
ascribe to the Legislature such an intention. [Id. at 191.]

We opine that this rationale is cogent with respect to breach of contract claims that accrue to a
minor. Infants and insane persons are under the same disability whether their actions arise from
statute, the common-law, or a contract.

In arriving at a reasonable construction of MCL 600.5851(1) we are mindful of the
interests of potential litigants. Plaintiffs will be attempting to pursue legal rights that likely
accrued years ago, and defendants will be attempting to defend against these stale claims. The
difficulties attendant to these causes of actions, however, are fairly balanced. Plaintiffs will have
a difficult time carrying their burdens of proof, and defendants will be equally challenged in
defending against those proofs. But, we conclude that preserving causes of action accruing to
minors until a year after reaching majority is an important and long-standing public policy that is
"clearly rooted in the law," Rory, supra at 471, as reflected in MCL 600.5851(1).

We are also cognizant of the well-established tenet that "[c]ourts enforce contracts
according to their unambiguous terms because doing so respects the freedom of individuals
freely to arrange their affairs via contract." Rory, supra at 468. But contracts may also not grant
a right and then burden that right with a condition that cannot be met. Minors whose right of
action accrues and expires, without legal proceedings, while they are laboring under their
disability are permanently precluded, through no fault of their own, from exercising their legal
rights under the contract in violation of the clear public policy that such minors are to be
protected. For example, such as in this case, it is only that unique minor who reaches the age of
majority within one year of the date of the accident for which the UIM coverage applied who
could personally exercise the legal right to bring suit. This result is tantamount to prohibiting a
beneficiary of the contract - a minor who does not reach the age of majority within one year of
the accident - from commencing and maintaining a lawsuit in violation of MCL 500.2254, which
provides:

No article, bylaw, resolution or policy provision adopted by any life,
disability, surety, or casualty insurance company doing business in this state
prohibiting a member or beneficiary from commencing and maintaining suits at
law or in equity against such company shall be valid and no such article, bylaw,
provision or resolution shall hereafter be a bar to any suit in any court in this state

. . . .
This result is untenable.

We conclude that a reasonable construction of the phrase "under this act" contained
within the minority tolling provision, MCL 600.5851(1), that best accomplishes the statute's
purpose is that all civil actions are brought "under" the RJA, including plaintiff's breach of
contract action. We discern no persuasive reason to ascribe a legislative intent to limit the
application of MCL 600.5851(1) to causes of action arising from a purported violation of a
specific statutory provision contained within the RJA or to causes of action for which the
applicable statute of limitations is provided by the RJA. See Cameron II, supra at 91 n 5. And,
considering the RJA's remedial character, the protective purpose of the minority tolling
provision, as well as the harm it was designed to remedy - the deprivation of legal rights - we
conclude that whether the cause of action arises by statute, common-law or contract, the minority
tolling provision is applicable. To deny minors whose cause of action accrues during their
disability the opportunity to pursue their otherwise unasserted legal rights would be the antithesis
of a firmly-rooted public policy that such minors are to be protected until one year after they
reach the age of majority. Such persons would be denied their legal rights simply because they
labored under a legal disability.

Here, plaintiff's claim premised on the breach of an UIM contract is "an action under [the
RJA]." Her cause of action accrued when she was under eighteen years of age, but she brought
this claim within one year of reaching the age of majority thus meeting the requirements of MCL
600.5851(1). Therefore, the trial court properly denied defendant's motion for summary
dismissal on this ground.

* * *

http://courtofappeals.mijud.net/documents/OPINIONS/FINAL/COA/20080219_C273334_42_273334.OPN.PDF

Affirmed.

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