Michigan Supreme Court Confirms That Contracts Are To Be Enforced As Written And That Traditional Contract Principles Must Be Applied Even-Handedly


In two recent opinions, the Michigan Supreme Court has confirmed that it requires courts in Michigan to enforce contracts as written, and that courts must apply traditional contract principles in an evenhanded manner, regardless who the parties are.

DeFrain v State Farm Mutual Auto Ins Co

The first case involved a no-fault insurance policy provision requiring 30 days’ notice of a hit-and-run motor vehicle claim. See DeFrain v State Farm Mutual Auto Ins Co, ___ Mich ___ (Docket No. 142956, May 30, 2012). DeFrain was seriously injured when he was struck by an uninsured hit-and-run driver. DeFrain had an uninsuredmotorist (“UM”) policy with State Farm, which contained a provision requiring hit-and-run accidents to be reported “to the police within 24 hours and to [State Farm] within 30 days[.]” Because State Farm did not receive notice of the accident within 30 days of the accident, it denied coverage. DeFrain filed suit seeking UM benefits. After he subsequently died from his injuries, DeFrain’s wife, Nancy, became the personal representative of his estate and substituted into the case as the plaintiff.

State Farm moved for summary disposition, "arguing that the failure to comply with the 30-day notice provision applicable to hit-and-run cases required dismissal of [the] plaintiff’s complaint." The trial court agreed and dismissed the case, but the Court of Appeals reversed, concluding that State Farm could not rely on the 30-day notice provision because it was unable to establish that it was prejudiced by the delay.

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