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No-Fault ‘notice’ requires auto accident victims to go above and beyond the law

Although this  truck accident victim’s ‘notice of injury’ was ‘sufficient in content,’ No Fault insurance benefits are denied for not complying with “judge-made” rule

Pot meet kettle

Ask any auto accident attorney over the past 20 years about what’s really “exciting” (tongue firmly in cheek) about Michigan’s No Fault auto insurance laws. The answer is it has been a moving target. This is because of partisan politics and outcome-based decision making that reached the height of legal ugliness – and judicial hypocrisy – during the “Gang of Four” years, but still continues to this day. This unpredictability of the No Fault law makes it so easy for judges and courts to change them. It can happen on a moment’s notice – and without any interference (read: constitutionally required involvement) by the Michigan Legislature.

Here’s how the creation and enforcement of the No Fault insurance rules that apply to auto accident victims are supposed to work:

The Michigan Legislature is tasked with making the law, and the courts are supposed to follow those laws, applying the “letter of the law” – no more and no less – to each of the auto accident victims who bring No Fault claims before the courts.

That’s what they taught us in law school. Actually, that is what they teach my son and daughter in 4th grade as well. But being a practicing No Fault insurance lawyer in Michigan over the past two decades has taught me something else.

Things in the auto No-Fault insurance world seldom work as that way.

The most recent example of No Fault “reality” being wildly different is the Michigan Court of Appeals ruling in Perkovic v. Zurich American Insurance Company.

When I read this, I was just bewildered that we allow this to happen. In Perkovic, Bloomfield Hills, Michigan-based trucker Dragen Perkovic was injured in a truck accident that occurred in Nebraska. Within two months of the crash, the hospital that treated him and provided him with medical care sent a bill and a copy of his medical records to Zurich Insurance “to obtain payment for his accident related injuries.”

Zurich refused to pay for No Fault medical benefits to cover Perkovic’s accident-related medical expenses and, when Perkovic ultimately sued, the auto insurer insisted it didn’t have to pay because Perkovic hadn’t provided the proper “written notice of injury … within one year immediately following [his] accident” as required by the Michigan No Fault Law.

Now, this is where things get interesting – and terribly frustrating – for me as an attorney. Maybe even for 4th grade children who are learning about government, too.

After reviewing the contents of the medical bill and medical records that were forwarded to Zurich, the Michigan Court of Appeals unanimous three-judge panel concluded “the medical bill and medical records” were “sufficient in content” to satisfy the No Fault Law’s “notice of injury” requirement.

Indeed, the Court of Appeals judges observed that the “medical bill and medical records” – which the judges referred to as “the notice” and the “notice of injury” (see pages 5 and 8) – had all of the information that the No Fault law requires of a “notice of injury.”

Whereas the No Fault law (MCL 500.3145) requires that a “notice of injury” “give the name and address of the claimant and indicate in ordinary language the name of the person injured and the time, place and nature of his injury,” Perkovic’s “notice” included the following:

“[T]he medical bill and plaintiff’s medical records listed ‘Dragen Perkovic’ as the ‘insured’ and provided his address of ‘3472 South Blvd, Bloomfield Hills, MI 48304.’ The medical records also indicated that Dragen Perkovic was the person injured, that he was admitted to The Nebraska Medical Center in Omaha, Nebraska, at 12:03 p.m. on February 28, 2009, after a car accident that occurred on the interstate, and that he suffered a ‘back sprain, cervical sprain or fracture, chest wall contusion, contusion, head injury, liver injury, myocardial contusion, pneumothorax, splenic injury, sprained or fractured extremity.’ Thus, the notice provided plaintiff’s name and address, and indicated in ordinary language the name of the person injured and the time, place, and nature of his injury. Additionally, the medical bill and medical records were given to defendant within one year after the accident, as the accident occurred on February 29, 2009, and the medical bill and medical records were sent to defendant on April 30, 2009.”

Yet, somehow, inexplicably, despite being “sufficient in content” to satisfy the specific requirements detailed in the “notice of injury” statute, the Court of Appeals still found a way to invalidate Perkovic’s “notice” and, thus, side with Zurich in its efforts to avoiding paying No Fault insurance benefits.

So what glaring, monumental and insurmountable legal technicality did Perkovic’s “notice” run afoul?

Perkovic’s “notice” failed to comply – not with the statutory rules enacted by the Michigan Legislature, but – with a judge-made “rule” that had been cooked up by Court of Appeals judges in a short string of decisions in the early 1980’s.

Specifically, the Court of Appeals stated:

“[N]o letter or written notice form was sent that would alert [Zurich] to the possible pendency of a no-fault claim. … Rather, the medical bill and medical records were sent to [Zurich] without any indication of a possible claim. In fact, … the bill and records were sent for the purpose of obtaining payment.”

Not only does this defy common sense, but it defies the rule of law that the Court of Appeals profess to be upholding. It completely violates the Michigan No Fault Law.

Zurich American Insurance Company is a huge, national insurer.  It’s inconceivable that Zurich, upon receiving Perkovic’s medical bill and medical records (referred to by the judges as Perkovic’s “notice” and “notice of injury”) which were “sufficient in content” to comply with the “notice on injury” statute, wouldn’t have reasonably concluded that the correspondence had do with a claim for No Fault insurance benefits.

What possible other reason would an auto No Fault insurer such as Zurich be receiving these medical bills?

Additionally, it’s just outrageous that the Perkovic judges are denying Perkovic his No Fault insurance benefits on the basis of a judicially created “rule”  that has no statutory or legal basis, and no support or foundation in the “notice of injury” statute that was passed by the Michigan Legislature when it enacted the No Fault Laws.

What makes this exercise of extra-judicial power even more galling is how the court tries to avoid the charge of hypocrisy of the result.

Before launching into their history lesson about the evolution of this judge-made rule that is found nowhere in the actual statutes or laws that make up the Michigan No Fault Act that a “notice of injury” must “alert [an auto insurer] to the possible pendency of a no-fault claim,” the Perkovic judges actually quote the Michigan Supreme Court for the proposition that:

“[T]he language of the statute ‘must be enforced according to its plain meaning, and cannot be judicially revised or amended to harmonize with the prevailing policy whims of members” of the court.”

Pot, meet kettle.

I think the Perkovic judges should go back and read the Supreme Court’s instruction more closely.

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Blog Author Steven M. Gursten
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