July 23, 2026
/
seva firm
Progressive Marathon v. McDowell: Court of Appeals Holds That an Insurer Cannot Appeal an Order From a Separate, Non-Consolidated Case
By Pratheep Sevanthinathan, Esq.
The Seva Law Firm
Case: Progressive Marathon Insurance Company v. McDowell, No. 373228 (Mich. Ct. App. July 23, 2026) (Unpublished)
Court: Michigan Court of Appeals
Panel: Mariani, P.J., and O’Brien and Wallace, JJ.
Decision: Affirmed — Per Curiam
Lower Court: Wayne Circuit Court, Case No. 23-008181-CK
- Introduction
In Progressive Marathon Insurance Company v. McDowell, the Michigan Court of Appeals affirmed the trial court’s orders regarding a priority dispute over personal protection insurance (PIP) benefits arising from a motor vehicle accident. The case is a cautionary tale for insurance companies about the importance of raising issues in the correct case and preserving arguments for appeal. Progressive attempted to challenge a ruling about unlimited allowable expense coverage that was entered in a separate, non-consolidated case — and the Court of Appeals refused to hear it. The decision reinforces that insurers must be diligent about where and when they raise their arguments, and that procedural missteps will not be excused simply because the cases involve the same accident.
- Facts
This dispute arose out of a collision between a vehicle owned by Dwight Harvey, insured by Progressive Marathon Insurance Company (Progressive), and driven by Daira McDowell, and a three-wheeled motorcycle insured by Esurance Insurance Company (Esurance) and driven by Detwan Hall, with Terrica Alonzo-Marshall riding as a passenger.
After the accident, Progressive filed a declaratory judgment action seeking to rescind Harvey’s policy on the grounds that he had made material misrepresentations in his insurance application. Progressive argued that it owed no coverage whatsoever — including PIP benefits, collision coverage, defense, and indemnity — to anyone under the policy.
Meanwhile, four separate lawsuits were filed in Wayne County Circuit Court by parties seeking PIP benefits arising from the same accident. Those cases were consolidated before the same trial judge. Critically, Progressive’s declaratory judgment action was never consolidated with those cases.
At a hearing on cross-motions for summary disposition, the trial court addressed both the consolidated cases and Progressive’s declaratory action. The court found that Progressive was the insurer first in priority for Hall and Alonzo-Marshall’s PIP benefits. On the rescission issue, the court applied the five-factor analysis from Pioneer State Mutual Insurance Co. v. Wright, 331 Mich App 396 (2020), and concluded that rescission would be inequitable as to the innocent third parties, Hall and Alonzo-Marshall.
The dispute over whether allowable expense coverage was unlimited or capped at $250,000 played out primarily in the consolidated case. Progressive raised this issue during the hearing and argued for a $250,000 cap. The trial court allowed supplemental briefing in the consolidated case. Progressive never replied to the supplemental brief filed by Alonzo-Marshall. Eventually, the trial court in the consolidated case ruled that allowable expense coverage was not subject to the limitations in Harvey’s policy because those limitations applied only to Harvey himself — not to innocent third parties.
Progressive’s application for leave to appeal the consolidated case ruling was denied. So Progressive filed a claim of appeal in its own declaratory judgment action and attempted to challenge the allowable expense ruling from the consolidated case in that appeal.
- Issues
The sole issue on appeal was whether the trial court erred by holding that Progressive’s policy provided unlimited coverage for allowable expenses for innocent third parties Hall and Alonzo-Marshall.
However, the threshold question was whether Progressive properly preserved this issue in the declaratory action, given that the ruling it challenged was entered in a separate, non-consolidated case.
- Holding
The Court of Appeals affirmed, holding that Progressive’s appeal failed for two independent reasons.
First, the issue was not preserved. Progressive’s complaint in the declaratory action sought rescission of the entire policy. It never sought a declaratory judgment that allowable expense coverage was capped at $250,000. Progressive never moved to amend its complaint to add that claim. The issue was first raised in the declaratory action in a motion for reconsideration, which does not preserve an issue for appeal under George v. Allstate Insurance Co., 329 Mich App 448 (2019). The Court applied the raise-or-waive rule from Tolas Oil & Gas Exploration Co. v. Bach Services & Manufacturing, LLC, 347 Mich App 280 (2023), and held that Progressive waived the issue.
Second, the ruling Progressive challenged was never entered in the declaratory action. The order holding that allowable expense coverage was unlimited was entered in the consolidated case — a separate proceeding that was never consolidated with Progressive’s declaratory action. The Court emphasized that it cannot find a trial court erred in one case based on an order entered in a different case. Progressive knew the consolidated case was the proper vehicle for this appeal, as evidenced by the application for leave to appeal it had already filed in that case. When that application was denied, Progressive tried to use its declaratory action as a backdoor appeal — and the Court refused to allow it.
The Court also noted that all the facts necessary for resolution of the allowable expense issue were not before it in the declaratory action, and that Progressive had adequate opportunity to address the issue in the consolidated case where the order was actually entered.
- Conclusion
The Court of Appeals affirmed the trial court’s orders in the declaratory action. Progressive conceded on appeal that rescission of Harvey’s policy does not affect Hall and Alonzo-Marshall’s entitlement to PIP benefits as innocent third parties under Bazzi v. Sentinel Insurance Co., 502 Mich 390 (2018). Progressive’s attempt to challenge the unlimited allowable expense ruling failed because (1) the issue was waived in the declaratory action, and (2) the order was entered in a separate case.
- What Does This Mean for Our Clients?
This decision has several important takeaways for individuals involved in no-fault insurance disputes in Michigan:
Innocent third parties are protected from rescission. Progressive conceded — and the trial court held — that an insurer cannot rescind a policy as to innocent third parties who had nothing to do with procuring the policy. This is consistent with Bazzi and Pioneer State, and it means that if you were a passenger or another driver injured in an accident, the at-fault driver’s insurer cannot escape responsibility just because the policyholder made a misrepresentation on the application.
Allowable expense opt-outs may not apply to innocent third parties. The trial court ruled that the allowable expense limitations in Harvey’s policy applied only to Harvey himself — not to innocent third parties like Hall and Alonzo-Marshall. While the Court of Appeals did not rule on the merits of this issue, the underlying trial court ruling stands. This is significant because insurance companies increasingly use allowable expense opt-outs under the 2019 no-fault reforms to limit their exposure. This case suggests that those opt-outs may not shield insurers from covering innocent third parties.
Insurance companies must raise issues in the right case at the right time. Progressive lost this appeal because it tried to challenge a ruling from a separate case. The Court of Appeals strictly applied the raise-or-waive rule and refused to consider arguments that were not properly raised in the declaratory action. This is a reminder that procedural diligence matters — and that courts will hold insurance companies to the same procedural rules as everyone else.
If your insurer is trying to deny your PIP claim based on rescission or policy limitations, you have rights. Michigan law provides strong protections for innocent third parties, and insurance companies cannot simply point to a policyholder’s misrepresentation or an opt-out provision to avoid paying your benefits. Contact The Seva Law Firm to discuss your options.
Pratheep Sevanthinathan is the owner and managing attorney of The Seva Law Firm, located at 100 W. Big Beaver Rd, Suite 500, Troy, MI 48084. He can be reached at (248) 385-5704.
This article is for informational purposes only and does not constitute legal advice. Every case is different, and past results do not guarantee future outcomes.