Why it’s most likely that increased coverage limited and ‘uninsured vehicle’ disqualification will apply only to crashes after October 1, 2012 Mini Tort new law date
As word continues to spread about the recent changes to the Michigan Mini Tort Law, both myself and the other attorneys here who help people with No-Fault insurance issues keep hearing the following question:
Will the Mini Tort changes apply retroactively to Michigan auto accidents that occurred before the new law takes effect on October 1, 2012?
There’s no case law on this yet, and no guidance whatsoever on whether the increase in the mini tort amount from $500 to $1,000 will apply retroactively yet.
So the best answer I can give you today is “most likely not.” Here’s why:
Based on existing Michigan Supreme Court case law, the Michigan Mini Tort law change, which includes an increased coverage limit to $1,000 and an “uninsured vehicle” disqualification, are unlikely to be applied retroactively. My analysis on the Supreme Court part does get a little “legal heavy” and beyond the purpose of helping consumers, so I’ve included this analysis at the end of today’s blog.
The recently enacted Mini Tort changes will likely be given prospective-only application: They will apply to car accidents that caused vehicle damage on or after, but not before, the new law’s effective date, which is October 1, 2012.
The reasons for prospective-only, rather than retroactive, application of the new law include:
- The legislation creating the Mini Tort changes says nothing about them being applied retroactively.
- The legislation creating the Mini Tort changes sets a specific date in the future for the changes to take effect.
- The new Mini Tort changes create new rights and obligations for Michigan auto accident victims and “at fault” drivers.
Nevertheless, the final and official decision as to whether the recent Mini Tort changes will be given retroactive or prospective-only application will come from the Michigan courts and, ultimately, with the Michigan Supreme Court.
Recent Mini Tort changes
On June 7, 2012, Gov. Rick Snyder signed House Bill 5362 into law, which resulted in two major changes to the Michigan Mini Tort law which forces negligent, “at fault” drivers to pay for the vehicle damage they cause:
- First, the Mini Tort coverage limit increased from $500 to $1,000. (MCL 500.3135(3)(e))
- Second, uninsured vehicles have been disqualified from all Mini Tort coverage. (MCL 500.3135(4)(e))
According to the language of the existing Mini Tort Law, which will arguably continue to be the law until the Mini Tort changes enacted by Public Act 158 take effect on October 1, 2012, an auto accident victim has the right to full Mini Tort coverage regardless of whether the victim’s damaged vehicle was covered by a Michigan No Fault auto insurance policy.
Public Act 158 changed that by amending the existing statute, MCL 500.3135(4), to include the following language:
“Damages shall not be assessed if the damaged motor vehicle was being operated at the time of the damage without the security required by Section 3101.”
MCL 500.3101 of the Michigan No Fault law requires all vehicle owners and/or registrants to secure No Fault auto insurance for their vehicles.
HB 5362 was assigned Public Act number 158 and, thus, will be known as 2012 Public Act 158.
As for when the new Mini Tort changes would take effect, Public Act 158 stated: “This amendatory act takes effect October 1, 2012.”
Rules for retroactive vs. prospective-only application
Below are the rules developed by the Michigan Supreme Court for determining whether a statutory amendment, such as the Mini Tort changes, shall apply retroactively or prospectively-only:
“Statutes are presumed to apply prospectively unless the Legislature clearly manifests the intent for retroactive application.” (Johnson v. Pastoriza, Michigan Supreme Court, 2012)
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“‘[P]roviding a specific, future effective date and omitting any reference to retroactivity supports a conclusion that a statute should be applied prospectively only.” (Johnson v. Pastoriza, Michigan Supreme Court, 2012)
Additionally, a statutory amendment will be given prospective-only application when retroactive application would:
“‘[C]reate a new liability in connection with a past transaction, or invalidate a defense which was good when the statute was passed.” (Johnson v. Pastoriza, Michigan Supreme Court, 2012)
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“[I]mpair vested rights, create a new obligation and impose a new duty, or attach a disability with respect to past transactions.” (Lynch v. Flex Technologies, Inc., et al., Michigan Supreme Court, 2001)
Finally, the Michigan Supreme Court has stated that a statutory amendment should be given prospective-only application when:
“[I]t enacts a substantive change in the law” (Johnson v. Pastoriza, Michigan Supreme Court, 2012)
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It “create[s] new rights” or “destroy[s], enlarge[s], or diminish[es] existing rights …” (Johnson v. Pastoriza, Michigan Supreme Court, 2012)
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It “create[s] an important new legal burden …” (Brewer v. A.D. Transport Express, Inc., et al., Michigan Supreme Court, 2010)
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Here are the “most likely” reasons the Mini Tort changes enacted by Public Act 158 of 2012 will be applied prospectively, rather than retroactively:
- Statutory amendments, such as the Mini Tort changes, are presumed to apply prospectively.
- Public Act 158 says nothing about the Mini Tort changes applying retroactively.
- Public Act 158 provides for a specific, future date, i.e., October 1, 2012, for the Mini Tort changes to take effect.
- By increasing the Mini Tort coverage limit from $500 to $1,000, Public Act 158 creates a new right of recovery for Michigan auto accident victims or, at least, it enlarges their existing right of recovery.
- Similarly, Public Act 158 creates a new liability, obligation or “legal burden” for “at fault” drivers by doubling the amount of vehicle damage they may be liable to pay for.
- Finally, Public Act 158’s “uninsured vehicle” disqualification impairs, disables, diminishes or otherwise destroys an accident victim’s right of recovery under the Mini Tort, which currently allows coverage regardless of whether the damaged vehicle was covered by a Michigan No Fault auto insurance policy at the time of the crash.
- Steve Gursten is head of Michigan Auto Law. He is president of the Motor Vehicle Trial Lawyers Association and past chair of the Michigan Association for Justice Automobile Accident No‐Fault Committee. He frequently writes and speaks about Michigan No-Fault law and insurance law issues, and is available for comment.
Michigan Auto Law is the largest law firm exclusively handling car accident, truck accident and motorcycle accident cases throughout the entire state. We have offices in Farmington Hills, Detroit, Ann Arbor, Grand Rapids and Sterling Heights. Call (800) 777-0028 to speak with one of our attorneys.