A Michigan appeals court says arbitrators, not trial judges, must decide if long-delayed no-fault arbitration demands are too late, reviving an old Citizens Insurance PIP dispute.
On December 19, 2025, the Michigan Court of Appeals reversed a Wayne County trial court's decision that had dismissed a no-fault dispute between Citizens Insurance Company of America and the Estate of Abdel M. Bazzy. The appeals court held that defenses based on statute of limitations and laches, when raised against enforcing an arbitration agreement, are generally questions for the arbitrator, not the judge.
The case began with a May 26, 2007 accident in Dearborn, where Abdel M. Bazzy was struck by a motor vehicle and injured. Citizens was the responsible no-fault insurer but, according to the complaint, paid only some of the benefits claimed to be due.
Bazzy initially sued Citizens in Wayne Circuit Court in 2008. The parties then agreed to submit their dispute to binding arbitration and entered into a stipulated order on February 19, 2009 dismissing the case without prejudice. The written arbitration agreement, executed around March 24, 2009, set out the arbitrators' role: to determine the nature and extent of Bazzy's injuries, whether those injuries arose from the accident, whether he was entitled to no-fault benefits from Citizens, and the amount of damages. The agreement stated that the written decision of two arbitrators would be binding and would represent a full and final resolution of all past and present no-fault PIP benefits up to the date of the arbitration.
After the agreement was reached, the parties engaged in discovery. Bazzy was deposed and two independent medical examinations were conducted at Citizens' request. Then the case stalled for years.
Bazzy died on January 4, 2017, from causes unrelated to the accident. His son, Kareem Bazzy, was appointed personal representative of the estate. During the probate claims period, three of Bazzy's children filed claims against the estate for attendant care services they said they had provided after the accident. Each claim was for $105,150. Those claims were served on Citizens through its resident agent, but Citizens did not respond.
According to the plaintiff's filings, Citizens had been represented by four different attorneys since the dispute began, contributing to delays. In December 2021, plaintiff's counsel wrote to Citizens' then attorney seeking to schedule the arbitration. On January 10, 2022, the attorney replied that "whatever contract that the alleged arbitration agreement may have created [sic] between Mr. Bazzy and Citizens can no longer be fulfilled by Mr. Bazzy."
In January 2023, the estate filed a new complaint asking the court to enforce the arbitration agreement and order the parties to proceed with arbitration.
Citizens moved for summary disposition, arguing that Michigan's six-year statute of limitations for breach of contract barred the complaint because the arbitration agreement was executed in 2009 and the enforcement action was not brought until 2023. Citizens also raised laches, asserting that forcing it to arbitrate a 16-year-old case where original parties and witnesses were deceased or unavailable would cause unfair prejudice.
The estate countered that timeliness defenses were for the arbitrator to decide, not the court. It also argued that any breach of the arbitration agreement occurred in 2022, when Citizens indicated it would not comply.
The trial court sided with Citizens. The judge concluded that while an arbitration agreement had existed, the plaintiff's inaction meant it was no longer enforceable. The court reasoned that the agreement to arbitrate was itself a contract subject to the six-year statute of limitations, and that no action had been taken within that period to enforce it. On that basis, the court granted summary disposition to Citizens and dismissed the case.
On appeal, the Court of Appeals examined Michigan's Uniform Arbitration Act and relevant case law. The panel noted that under the UAA, courts decide whether an agreement to arbitrate exists and whether a controversy is subject to that agreement. Arbitrators, however, decide whether a condition precedent to arbitrability has been fulfilled and whether a contract containing a valid arbitration agreement is enforceable.
The court concluded that timeliness defenses to a request for arbitration – including statute of limitations and laches – are generally questions for the arbitrator, not the court. Importantly, the appellate court did not decide whether the estate's claims were ultimately timely. It stated that those questions are for the arbitrator to resolve.
The Court of Appeals reversed the trial court's order and remanded the case for further proceedings.
For insurers and claims professionals operating in Michigan, the practical effect is significant. Where there is a valid arbitration agreement covering a no-fault dispute, Michigan courts should generally leave questions about whether the arbitration demand or related claims are too late to the arbitrators. The defenses remain available, but they must be raised and decided within the arbitration, rather than used by a trial court to block arbitration at the outset.
