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Be Timely When Filing Claims for Damages Against the State

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Richard C. Kraus & David M. Lick
Foster Swift Construction Law News
March 2011

Any individual or business with a potential claim for damages against the state or a state agency must pay careful attention to the deadline for filing claims or notices of intent. Your claim for damages will be dismissed if a claim or a notice of intent to sue is not filed by the deadlines under the Court of Claims Act.

Most claims for damages against the state or its departments, commissions, boards, institutions, arms or agencies must be filed in the Court of Claims in Ingham County. The Court of Claims has exclusive jurisdiction over damage claims based in contract or tort, as well as certain claims arising from statutory violations. The Act includes a mandatory notice provision, MCL 600.6431, which states that "no claim may be maintained" unless the claimant files the claim or a notice of intent to file claim with the Court of Claims’ clerk within the specified period. The claim or notice must be signed under oath and include specific details about the claim and damages.

The time allowed for filing claims or notices are much shorter than the statute of limitations applicable to other cases.

  • For most claims, the filing deadline is one year after the claim accrues.
  • For claims relating to property damage or personal injuries, the notice period is shortened to six months.
  • There are other notice periods governing certain statutory claims.

Because the time for filing notice runs from when a claim "accrues," it is important to consult with counsel to determine both the date of accrual and the notice deadline.

In a recent published decision, the Michigan Court of Appeals held that an action must be dismissed when the plaintiff does not file the statutorily required notice with the Court of Claims’ clerk within the time allowed by statute. McCahan v Brennan, __ Mich App __ ; __ NW2d __ (February 1, 2011). Dismissal is required even if failing to file a notice with the clerk does not result in any prejudice to the state. In fact, dismissal is required even if the state has been notified in writing about the potential claim.

This is a significant change in the law. In a series of cases dating to the mid 1970’s, courts held that actions could only be dismissed when a plaintiff’s failure to file a timely claim or notice caused "substantial prejudice" to the defendant. An example of "substantial prejudice" would be the inability to investigate the background or facts related to the claim.

In 2007, the Supreme Court interpreted a similar notice requirement for claims based on highway defects. Rowland v Washtenaw County Road Com’n, 477 Mich 197; 731 NW2d 41 (2007). Rowland held that the statute’s plain language imposed "a notice provision with no prejudice requirement." The Court held that dismissal was required when timely notice was not filed even if there is no prejudice as a result.

The majority in McCahan followed Rowland’s reasoning. First, the court held "substantial compliance does not satisfy" the statute. The plaintiff sent a letter to the university’s counsel stating that a lawsuit would be filed. The court held that the letter was not a substitute for the notice required by the statute. Second, the court held that the plaintiff’s failure to file a notice of intent within the statutory deadline required dismissal even without a showing of prejudice to the defendant.

McCahan is binding precedent and will apply to all claims brought in the Court of Claims. There are many other statutes requiring notice to the state, counties and municipalities of potential claims. In light of Rowland and McCahan, it is possible that these statutory notice requirements will be strictly enforced by the courts.

If you have any questions, please contact Richard Kraus at 517.371.8104 or David Lick at 517.371.8294.