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Time Bomb: Federal Appeals Court Holds Six-Year Limitations Period Applies for Statutory Based Claim for Payment of Penalty Interest

Insurance Coverage / January 15, 2018

In Palmer Park Square, LLC v Scottsdale Insurance Company, an opinion set for publication regarding this issue of first impression, the Court held an action for penalty interest derived from statute and not under a policy was not subject to the policy’s contractual limitations provisions. The Court held that the six-year “catch-all” limitations period in MCL 600.5813 applied. As a federal decision applying Michigan law in diversity, Palmer Park Square is not binding precedent on Michigan state courts. See Omian v Chrysler Group LLC, 309 Mich App 297, 307 n 6 (2015). It will be interesting to see if Michigan courts follow Palmer Park Square as persuasive authority.

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