Declaratory-Judgment Litigation as an Unequivocal “Formal Denial” Signal for Michigan PIP Tolling; Texas Insurance Code Art. 21.42 Limited to Policies Made in the Course of Texas Business

1. Introduction

In Para v. Progressive Michigan Insurance Company (5th Cir. Mar. 17, 2026) (per curiam) (unpublished), Alexander Manse Para, a Texas resident and truck driver, sought Personal Injury Protection (“PIP”) benefits under his former employer’s commercial auto policy. The insurer, Progressive Michigan Insurance Company, issued the policy in Michigan to a Michigan employer for vehicles garaged in Michigan, and the policy contained a Michigan-law clause for PIP claims.

After Para’s May 5, 2020 accident, Progressive denied or suspended payment based on “non-cooperation,” sent multiple letters stating it was denying benefits unless Para provided requested information, and later sued Para in Michigan for declaratory relief (the action was dismissed for failure to prosecute on January 26, 2023). Para then sued Progressive in Texas federal court (May 9, 2024), asserting breach of contract and extra-contractual Texas claims.

The key appellate issues were: (i) whether res judicata barred Para’s suit, (ii) whether Michigan or Texas law governed the contract claim (including limitations), and (iii) whether the limitations period was tolled because Progressive allegedly never “formally denied” the PIP claim.

2. Summary of the Opinion

The Fifth Circuit affirmed summary judgment for Progressive. It held:

  • Res judicata did not apply because a prior dismissal relied upon by the district court was vacated while the appeal was pending.
  • Michigan law governed the breach of contract claim because Texas Insurance Code article 21.42 did not apply and the parties’ Michigan choice-of-law clause was enforceable under Texas choice-of-law rules.
  • The PIP claim was time-barred under Michigan law because Progressive’s Michigan declaratory-judgment lawsuit “unequivocally signaled” Para needed to pursue relief in court—functionally ending any tolling—yet Para waited until May 2024 to sue.

3. Analysis

3.1. Precedents Cited

Summary judgment standard

  • Rogers v. Bromac Title Servs., L.L.C., 755 F.3d 347 (5th Cir. 2014): Provided the de novo standard of review and the requirement to view evidence in the nonmovant’s favor; framed the court’s approach to whether any genuine dispute of material fact existed on limitations and denial.

Res judicata requirement of a final merits judgment; effect of vacatur

  • Test Masters Educ. Servs., Inc. v. Singh, 428 F.3d 559 (5th Cir. 2005): Cited for the baseline rule that res judicata requires a prior final judgment on the merits.
  • Bey v. Progressive Ins. Co., No. 24-50890, 2025 WL 3124837 (5th Cir. Nov. 7, 2025): The Fifth Circuit’s vacatur and remand of Para’s earlier pro se case eliminated the “final judgment” predicate. The panel treated vacatur as dispositive of the res judicata rationale used below.

Choice-of-law framework in diversity cases; Texas adoption of Restatement principles

  • Cantu v. Jackson Nat. Life Ins. Co., 579 F.3d 434 (5th Cir. 2009): Reiterated that a federal court sitting in diversity applies the forum state’s choice-of-law rules (here, Texas).
  • DeSantis v. Wackenhut Corp., 793 S.W.2d 670 (Tex. 1990): Anchored Texas’s use of the Restatement (Second) of Conflict of Laws and the analysis of contractual choice-of-law clauses under Restatement § 187.
  • Amerisure Mut. Ins. Co. v. Arch Specialty Ins. Co., 784 F.3d 270 (5th Cir. 2015): Supported the court’s authority to affirm summary judgment on any ground supported by the record and presented below, allowing the panel to focus on limitations/choice-of-law even after res judicata fell away.

Texas Insurance Code article 21.42’s “doing business” limitation

  • Howell v. Am. Live Stock Ins. Co., 483 F.2d 1354 (5th Cir. 1973): Central to the holding that article 21.42’s “doing business” element is met “when and only when” the insurance contract is made in the course of the insurer’s Texas business.
  • Austin Bldg. Co. v. Nat'l Union Fire Ins. Co., 432 S.W.2d 697 (Tex. 1968): Reinforced the narrow construction of article 21.42’s “doing business” concept, which the panel applied to a Michigan-issued policy for Michigan-garaged vehicles.

Michigan PIP tolling and “formal denial”

  • Encompass Healthcare, PLLC v. Citizens Ins. Co., 998 N.W.2d 751 (Mich. Ct. App. 2022), vacated on other grounds, 18 N.W.3d 319 (Mich. Ct. App. 2025): Supplied the operative definition of “formal denial” as “explicit and direct,” i.e., “unequivocally” communicating finality and the need to seek relief in court.
  • Girimonte v. Liberty Mut. Ins. Co., 19 N.W.3d 921 (Mich. Ct. App. 2023): Cited as recognizing Encompass Healthcare’s definition, supporting the panel’s view of what qualifies as a sufficiently unequivocal denial signal.

Appellate forfeiture for inadequate briefing

  • Rollins v. Home Depot USA, 8 F.4th 393 (5th Cir. 2021): Used to reject, as forfeited, Para’s undeveloped arguments that his non-contract claims should be timely under Texas law.

3.2. Legal Reasoning

(a) Res judicata collapses when the earlier judgment is vacated

The district court relied on a prior dismissal with prejudice in Para’s separate pro se case to apply res judicata. On appeal, however, the panel recognized that vacatur of that dismissal (as to the operative claim) removed the “prior final judgment on the merits” element. Invoking Test Masters Educ. Servs., Inc. v. Singh and the intervening decision in Bey v. Progressive Ins. Co., the court treated res judicata as inapplicable.

(b) Texas Insurance Code article 21.42 did not mandate Texas law

Para argued that article 21.42 is a statutory choice-of-law directive requiring Texas insurance law for a policy “payable” to a Texas citizen/inhabitant. The panel accepted that Para fit the “payable” aspect, but held the statute still requires that the insurer be “doing business within” Texas in the relevant sense—i.e., the contract must have been made in the course of the insurer’s Texas business.

Applying Howell v. Am. Live Stock Ins. Co. and Austin Bldg. Co. v. Nat'l Union Fire Ins. Co., the court found the record showed: two Michigan companies, a Michigan-issued policy, Michigan-garaged vehicles, and no evidence that policy creation or issuance occurred in the course of Progressive’s Texas business. Thus, article 21.42 did not supply a Texas-law directive.

(c) Enforcing the Michigan choice-of-law clause under Restatement § 187

With no statutory directive, the court followed Texas’s Restatement approach (via DeSantis v. Wackenhut Corp.) and enforced the contractual selection of Michigan law. The panel focused on Restatement § 187(2)(a), rejecting Para’s argument that Michigan lacked a substantial relationship. Michigan had abundant connections: both contracting parties were Michigan companies, the policy was issued in Michigan, and the insured vehicles were garaged there. The court emphasized that Texas contacts (Para’s residence, work, pay, licensure) did not negate Michigan’s substantial relationship for purposes of § 187(2)(a).

(d) Time bar under Michigan’s one-year PIP limitations period, with tolling tied to “formal denial”

Under Mich. Comp. Laws § 500.3145(1) (2019), a PIP action must be brought within one year of the accident, and § 500.3145(3) tolls the limitations period from a specific claim for payment until the insurer “formally denies” the claim. Para argued the letters were not a “formal denial,” so tolling continued.

The court sidestepped whether Progressive’s denial letters satisfied the “formal denial” standard as described by Encompass Healthcare, PLLC v. Citizens Ins. Co. and recognized in Girimonte v. Liberty Mut. Ins. Co.. Instead, it held that Progressive’s subsequent declaratory-judgment action against Para in Michigan “unequivocally signaled” the need to pursue court relief—language the panel borrowed directly from Encompass Healthcare’s definition of the operative concept.

On that reasoning, even assuming tolling had been in effect, Para’s May 2024 suit was filed more than a year after January 26, 2023 (dismissal of Progressive’s declaratory action), making the PIP contract claim untimely.

(e) Non-contract Texas claims: forfeiture on appeal

The district court also held certain Texas-law claims time-barred. The panel declined to revisit those issues because Para did not adequately brief them, applying Rollins v. Home Depot USA.

3.3. Impact

  • Practical “formal denial” proxy: The decision suggests that, for Michigan PIP tolling purposes, insurer-initiated litigation seeking declaratory relief can itself serve as an unequivocal signal that the dispute has moved to court—potentially ending tolling even if prior communications were arguably conditional (e.g., denials tied to “non-cooperation” with invitations to reopen upon compliance).
  • Article 21.42 remains narrow in multistate insurance disputes: The opinion reinforces that Texas residents cannot invoke Texas Insurance Code article 21.42 merely because a policy may pay them; they must show the policy was made in the course of the insurer’s Texas business.
  • Choice-of-law clause stability in cross-border employment driving contexts: Where the policy’s state has strong transactional ties (issuance, garaging, insurer/employer domicile), a driver’s residence and work contacts in another state may be insufficient to displace the chosen law under Restatement § 187(2)(a).
  • Limitations strategy and record development: The panel’s reliance on “no summary judgment evidence” regarding Texas-business policy formation underscores the importance of developing procurement/issuance facts early (broker location, underwriting office, negotiation locus, premium flows, endorsements) when fighting choice-of-law.

4. Complex Concepts Simplified

  • Res judicata: A rule preventing re-litigation of the same claim after a final merits judgment. If the earlier judgment is vacated, it is as though it no longer exists for preclusion purposes.
  • Choice of law (Texas Restatement approach): Texas courts often honor contract clauses choosing which state’s law applies unless an exception applies. Under Restatement § 187(2)(a), the chosen state must have a “substantial relationship” to the parties/transaction (a relatively low bar when the contract is centered there).
  • Texas Insurance Code article 21.42: A statute that can force Texas insurance law to apply, but only if the insurer was “doing business” in Texas in the relevant way— meaning the policy was made as part of the insurer’s Texas business, not merely that the insurer has some Texas operations.
  • Michigan PIP one-year limitations and tolling: Michigan generally requires PIP suits within one year of the accident, but pauses (“tolls”) the clock from the time a specific claim is submitted until the insurer “formally denies” it.
  • “Formal denial”: Not necessarily a particular form letter; it must be clear and final enough to tell the claimant, in effect, “you need to go to court.” The opinion treats an insurer’s declaratory-judgment lawsuit as meeting that clarity/finality function.
  • Forfeiture on appeal: If a party does not adequately brief an argument, the appellate court may treat it as abandoned and refuse to consider it.

5. Conclusion

Para v. Progressive Michigan Insurance Company crystallizes two practical rules in cross-border insurance disputes litigated in Texas federal court: (1) Texas Insurance Code article 21.42 does not automatically impose Texas law for a Texas beneficiary unless the policy was made in the course of the insurer’s Texas business; and (2) for Michigan PIP claims, insurer conduct that unmistakably forces the dispute into court—here, a declaratory-judgment action—can function as an unequivocal “formal denial” signal, cutting off tolling and exposing late-filed claims to Michigan’s strict one-year time bar.