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I. IMPORTANT NO-FAULT CASE LAW DEVELOPMENTS
EQUITABLE APPORTIONMENT WHERE BENEFIT CLAIMS EXCEED POLICY LIMITS. As the 2019 reforms continue to work their way through our appellate system, we continue to get new guidance from our appellate courts. One important new case is the published decision in Michigan Head & Spine Institute et al v Nationwide Mut Fire Ins Co, __ Mich App __ (2025), in which M&T partner Martin Hogg represented the plaintiff. This case involved a now unfortunately common situation where the various claims to a limited no-fault policy (in this case, $250,000) exceed the value of that policy. Section 3112 of the no-fault law allows the trial court to make an “equitable apportionment” of the competing claims. This is the first published case that analyzes the meaning of an “equitable apportionment.” In Michigan Head & Spine, the injured patient was catastrophically injured, incurring many hundreds of thousands of dollars of benefits, with the prospect of incurring much more into the future. Unfortunately, the patient was eligible for coverage under the MACP, with a lifetime limit of $250,000. So we have a classic case where the benefits at issue exceed the available no-fault limits. The providers argued that the apportionment should be guided by the principle of “First In/First Out” (“FIFO”). Because the providers incurred their charges first, the vast bulk of the available benefits should be awarded to the providers. The trial court disagreed and awarded 90.7% of the funds to the plaintiff and 9.3% to the providers. The trial court was persuaded that the no-fault fund should be available to protect the injured patient for benefits in the years to come, including future attendant care benefits. On appeal, the providers argued that the trial court improperly considered future attendant care benefits. For one, those benefits had not yet been “incurred” and may not ever be incurred (e.g., what if the patient should die long before incurring those expenses). The Court of Appeals agreed with the providers that these not yet “incurred” benefits should not be included in any equitable apportionment:
“Consequently, the trial court improperly awarded PIP benefits for future attendant care expenses that [the injured person] had not incurred. In doing so, it substituted its policy considerations for those expressed by the Legislature.”
Curiously, however, the Court of Appeals held that the trial court may still consider yet to be incurred benefits when analyzing an equitable apportionment:
“This is not to say, however that the trial court was precluded from considering the incomplete nature of [the injured person’s] costs when equitably distributing the available funds. Under MCL 500.3112, the trial court has broad discretion to ‘tak[e] into account...other factors as the court considers appropriate.’ While the court may not rely on a legal fiction to treat future expenses as ‘incurred’ when they plainly are not, it may consider a claimant’s ongoing needs as part of its equitable analysis.”
This curious passage is compounded by the very next paragraph where the Court of Appeals said:
“...because the no-fault act does not authorize payment of PIP benefits for losses that the injured person has not yet incurred, the trial court abused its discretion by awarding PIP benefits for future attendant care.”
The Court of Appeals remanded the case for a revised equitable apportionment with the following guidance:
“[The trial court] cannot ‘consider incurred’ expenses that are not actually incurred, but also that it retains broad equitable discretion to consider [the injured person’s] ongoing needs and the relative hardships faced by the parties.”
We have to admit that we are confused by this guidance. Trial courts may not consider unincurred expenses, but may consider “ongoing needs.” It’s difficult to advise clients as to their entitlements and to advise courts as to how they should exercise their discretion. Trying to apply some perspective to the situation, it is not uncommon that confusion can happen as courts first grapple with difficult issues. We therefore look forward to further case law developments in this area.
REMINDER THAT PATIENTS MUST “INCUR” PROVIDER CHARGES. A fundamental rule in the no-fault law is that all charges must be “incurred.” This means that the patient must be “liable” for any services rendered. In Centria Home Rehabilitation v Allstate, __ Mich App __ (2025), the Court of Appeals affirmed summary disposition for the defendant insurer where plaintiff presented no documentary evidence to show that plaintiff ever charged their patient the amount claimed from the no-fault insurer. It is worth reminding all providers that they should always have the patient sign some kind of financial responsibility statement.
BALANCE BILLING. A commonly asked question is whether providers can bill their patients beyond the regulated fees set forth for people injured under the new law (i.e., injured after June 11, 2019). In Regency at Shelby Township v Naeyaert, Ct App #367084 (October 9, 2024), the plaintiff provided inpatient rehabilitation services to the defendant. Defendant signed an “Admission Agreement” in which she agreed to pay for any services not covered by insurance. Defendant’s no-fault insurer (AAA) paid a minimal portion for these services. Instead of suing the no-fault insurer, Plaintiff chose to sue its patient. Relying on Auto Owners v Compass Healthcare, 326 Mich App 595 (2018), the Court said: “Under Compass Healthcare, plaintiff cannot pursue reimbursement under a contractual-liability theory.” Rather, a service provider’s claim is limited to the no-fault act. Note that this is different than the situation where the patient is capped under a PIP Choice policy. That is, the provider may NOT sue the patient for amounts beyond those set forth in the PIP fee regulations in section 3157. However, the provider MAY sue the patient for amounts incurred beyond the chosen PIP choice limit.
II. SETTLEMENTS AND VERDICTS
Wayne Miller obtained an Arbitration award of $437,500 on a mild TBI case involving an uninsured motorist. Our plaintiff was in a relatively minor car crash with resulting post-concussion syndrome (aka mild TBI). This is unfortunately a common story. Because the defendant driver was uninsured, we made a claim against our plaintiff’s Uninsured Motorist coverage. The insurance company of course did not believe that our plaintiff could be seriously injured in a relatively minor impact. The arbitrators were obviously convinced otherwise!
Wayne Miller obtained a $275,000 verdict in automobile negligence trial in Saginaw. The defendant fell asleep and crashed into a line of vehicles stopped at a traffic signal. Our plaintiff was a motorcyclist stopped within that line of vehicles. Videotape from a nearby truck showed the dramatic crash scene in its entirety. Our client’s major injuries were a fractured right medial malleolus (ankle) and fractured left foot that required surgery to fuse the joint. Our plaintiff missed 3 months of work and then had a lengthy and incomplete recovery process.
Martin Hogg received substantial no-fault penalties representing a paraplegic woman in a dispute with her no-fault insurer over payment to in-home health aides. After refusing payment for over a year, on the eve of trial the insurer agreed to pay all outstanding claims in full, with the no-fault penalties to be argued at a later hearing. Instead of proceeding with the hearing, the insurer agreed to pay an additional $150,000 to resolve the claims for overdue interest and attorney fees.
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