Let me say first that I do still support Michigan Attorney General Dana Nessel. As disappointed as I am with Michigan Attorney General Dana Nessel’s position on the retroactivity of the new No Fault law in her amicus filing in Andary vs. USAA Casualty Insurance Company (Michigan Court of Appeals, #356487; Ingham Circuit Court No. 19-738-CZ) that I discuss in much greater detail below, I continue to hold her and the work she does for Michigan in high esteem.
But I could not disagree more with her amicus filing in the Andary case. To be blunt, her arguments are dead wrong. Worse, her arguments, if adopted by the Courts, will exacerbate the real harms that the auto insurance companies have already unleashed on car accident victims with catastrophic injuries who depend on attendant care for their very survival.
I write this blog post not to attack Michigan Attorney General Dana Nessel, but to correct the dangerous misimpression that her brief creates about the effect of the new auto No Fault law on the rights of auto accident victims who were seriously injured in crashes that occurred before the new law’s effective date. My hope is to educate accident victims and their families to know what the law actually is.
What the AG got so wrong in the Andary Case
It’s one thing for Michigan Attorney General Dana Nessel to be wrong. It’s another thing to be so spectacularly wrong on an issue of such critical importance at a time when thousands of catastrophically injured auto accident victims are essentially being extorted by insurance companies to “agree” (under threat and under severe duress) to drastic cuts in attendant care hours and rates. Many of these people’s lives literally depend on this attendant care.
Statutory amendments are always presumed prospective under Michigan law. And Michigan case law clearly prevents exactly this type of retroactivity application when it applies to previously vested rights years before the new auto No Fault law took effect on June 11, 2019. Furthermore, the new auto No Fault law contains no “retroactivity” language.
None of this has stopped auto insurance companies from disingenuously claiming the new auto law’s fee schedule and the new changes to attendant care limitations will in fact retroactively apply to No-Fault claims based on car accidents that occurred before June 11, 2019 – the effective date of Public Act 21 of 2019, which created the fee schedule and attendant care limitation.
Claims adjusters are falsely claiming that the new auto law is retroactive. They are threatening people who currently receive attendant care benefits from older car accidents before the new auto law even took effect to “renegotiate” attendant care rates and hours in a manner that would make any mobster proud: “that’s some real nice attendant care benefits you receive, would be a real shame to see something bad happen to it.”
This wrongful “retroactive application” of the new No Fault law is currently being challenged in the Michigan Court of Appeals in Andary v. USAA Casualty Insurance Company.
Unfortunately, Michigan Attorney General Dana Nessel filed an amicus curiae brief in the case adopting the insurance industry argument that the law will apply to car accidents that occurred before the new auto law took effect. This is in essence a basic fairness issue. She is siding against innocent and catastrophically injured car crash victims – and the providers and caregivers dedicated to caring for and helping those victims by providing life-saving care – and who are now losing vested rights by a new law that didn’t even exist when these people were injured.
Below I provide the case law and citations that show how Michigan Attorney General Dana Nessel got it so wrong on the new No Fault law’s application to the fee schedule and to people who depend on attendant care.
Michigan Attorney General Dana Nessel fails to acknowledge that the law presumes the changes to the No Fault law will be applied prospectively
Attorney General Dana Nessel fails to acknowledge that under Michigan law statutory amendments such as the fee schedule and attendant care limitation under the new No Fault law are presumed to apply prospectively only to causes of action or claims that arise after the effective date of the amendments.
The effective date of Public Act 21 of 2019, which created the fee schedule and attendant care limitation, is June 11, 2019. That would mean that the law presumes the fee schedule and attendant care limitation to apply to car accidents that occurred after June 11, 2019.
The Michigan Supreme Court has repeatedly stated that statutory amendments are presumed to apply prospectively:
- “Statutes are presumed to apply prospectively unless the Legislature clearly manifests the intent for retroactive application.” (Buhl v. City of Oak Park, Michigan Supreme Court, #160355, June 9, 2021, page 6; Johnson v. Pastoriza, Michigan Supreme Court, #142127, June 5, 2012, Page 12; Brewer v. A.D. Transport Express, Inc., Michigan Supreme Court, #139068, May 10, 2010, Page 6; Frank W. Lynch & Co. v. Flex Technologies, Michigan Supreme Court, #115324, April 3, 2001, Page 6)
- The presumption that statutes apply prospectively is “especially true when giving a statute retroactive operation will . . . create a new liability in connection with a past transaction, or invalidate a defense which was good when the statute was passed” (Johnson, Page 12) or “impair vested rights, create a new obligation and impose a new duty, or attach a disability with respect to past transactions.” (Lynch, Page 6)
Michigan Attorney General Dana Nessel fails to acknowledge auto insurers’ ongoing retroactive application of changes to No Fault law
Attorney General Dana Nessel fails to acknowledge that Michigan auto insurance companies are currently and actively making retroactive application of the new No Fault law’s fee schedule and attendant care limitation to crash victims whose car accidents occurred before the new law’s effective date.
In her brief filed with the Michigan Court of Appeals, Attorney General Dana Nessel states that the fee schedule and limitation on in-home, family-provided attendant care are being applied to No-Fault “PIP benefit services rendered after July 1, 2021” (Pages 1 and 7 of the AG brief, “Introduction” and “Argument” “II”), but she overlooks that many of those benefits are based on No-Fault claims arising from car accidents that occurred before June 11, 2019, the effective date of Public Act 21 of 2019 that created the fee schedule and attendant care limitation.
Contrary to the Attorney General Dana Nessel’s statements, what auto insurance companies are doing with the new Michigan No Fault law’s fee schedule and attendant care limitation is textbook “retroactive application” of the statutory amendments.
This is illustrated by the following Michigan Supreme Court rulings:
- Buhl v. City of Oak Park, Michigan Supreme Court, #160355, June 9, 2021 (“Because [the amendment] was not enacted until after the incident in this case took place, the outcome here turns on whether this provision applies retroactively. We hold that it does not and that [the amendment] may only be applied to causes of action that accrued after the effective date of the amendment. In this case, because plaintiff’s cause of action accrued before the effective date of [the amendment], the amendment may not be applied retroactively to bar her claim against defendant.” (Page 5));
- LaFontaine v. Chrysler, Michigan Supreme Court, #146722, June 10, 2014 (“Retroactive application of the 2010 Amendment would subject Chrysler to greater burdens than those in place when the 2007 Dealer Agreement went into effect . . .”);
- Johnson v. Pastoriza, Michigan Supreme Court, #142127, June 5, 2012 (“We hold that the 2005 amendment of the wrongful-death statute, incorporating the language ‘or death as described in’ MCL 600.2922a, does not apply to claims arising before the effective date of the amendment. The Legislature only intended the 2005 amendment to apply to claims arising on or after the effective date. Further, because defendants would be subjected to liability that did not exist at the time the cause of action arose, the amendment is not remedial and, therefore, cannot be deemed retroactive.” (Page 2));
- Brewer v. A.D. Transport Express, Inc., Michigan Supreme Court, #139068, May 10, 2010 (“We hold that the amendment of MCL 418.845 enacted by 2008 PA 499 does not apply retroactively to cases in which the claimant was injured before the effective date of the amendment.” (Page 9))
Attorney General Dana Nessel fails to acknowledge that a cause of action or claim for No-Fault PIP benefits accrues or arises when the car accident occurred
Attorney General Dana Nessel fails to acknowledge that a cause of action or claim for Michigan No-Fault PIP benefits accrues or arises on the date of the car accident that resulted in the injuries for which No-Fault benefits are sought, not when the No-Fault benefits are incurred.
Without the car accident, there can be no cause of action or claim for No-Fault benefits – because without a car accident, there are no No-Fault benefits. (See MCL 500.3105(1)(“Under personal protection insurance an insurer is liable to pay benefits for accidental bodily injury arising out of the ownership, operation, maintenance or use of a motor vehicle as a motor vehicle . . .”)
The No-Fault law supports the notion that a cause of action or claim for No-Fault benefits accrues on the date of the motor vehicle accident. The 1-year period for filing an “action for recovery of personal protection insurance benefits payable . . . for an accidental bodily injury” is based on “the date of the accident that caused the injury.” (MCL 500.3145(1)) Similarly, the tolling of the 1-year period for filing an “action” depends on filing a notice “within 1 year after the accident.” (MCL 500.3145(1))
The Revised Judicature Act also supports the notion that a cause of action or claim for No-Fault benefits accrues on the date of the motor vehicle accident. MCL 600.5827 states that a “claim accrues at the time the wrong upon which the claim is based was done regardless of the time when damage results.” In the context of a cause of action or claim for No-Fault benefits, the “wrong” is the motor vehicle accident and the “damage” is the non-payment or under-payment of No-Fault benefits.
Yet, Michigan Attorney General Dana Nessel’s brief seems to want to rewrite both the No Fault law and the Revised Judicature Act to insist that “the date that a person is injured in an automobile accident and/or the date that the person’s insurance policy issued has absolutely no bearing on” the cause of action or claim for No-Fault benefits. (Page 8, Argument II)(Emphasis added)
Attorney General Dana Nessel failed to acknowledge that the new Michigan No Fault law applies prospectively because it was given a “specific, future effective date”
Attorney General Dana Nessel should have acknowledged that because the new Michigan No Fault law (Public Act 21 of 2019) that created the fee schedule and attendant care limitation was given a “specific, future effective date,” it should be applied prospectively only to car accidents that occur after June 11, 2019.
Public Act 21 of 2019, which created the medical fee schedule (500.3157(2)-(7)) and the 56-hours-per-week limitation on in-home, family provided attendant care (500.3157(10)) was approved by the Governor on May 30, 2019.
However, the new No Fault law – Public Act 21 of 2019 – was given an effective date of June 11, 2019, which was the date it was filed with the Secretary of State.
The Michigan Supreme Court has said repeatedly that setting a “specific, future effective date” indicates that an amendment is intended to apply prospectively only:
- In LaFontaine, where the amendment was approved by the Governor on August 3, 2010 and an effective date was set for August 4, 2010 (the same day the amendment was filed with the Secretary of State), the Michigan Supreme Court stated that the fact that “the Legislature provided for the law to take immediate effect upon its filing date [with the Secretary of State] only confirms its textual prospectivity.” (Page 14) [Note. In footnote 32, the Supreme Court cited Brewer v. AD Transport Express for the proposition that “[P]roviding a specific, future effective date and omitting any eference to retroactivity supports a conclusion that a statute should be applied prospectively only.”]
- In Johnson, where the amendment was approved by the Governor on December 18, 2005 and an effective date was set for December 19, 2005 (the same day the amendment was filed with the Secretary of State), the Michigan Supreme Court stated that “[t]his Court has recognized that ‘providing a specific, future effective date and omitting any reference to retroactivity supports a conclusion that a statute should be applied prospectively only.’” The court concluded that because the amendment in question “provides a specific effective date . . . without the slightest hint of retroactive application,” the “amended language applies only to injuries occurring on or after the effective date” of the amendment.” (Page 15)[Note: In footnote 33, the court cited Brewer v. AD Transport Express.]
- In Brewer, where the amendment was approved by the Governor on January 12, 2009 and an effective date was set for January 13, 2009 (the same date that the amendment was filed with the Secretary of State), the MSC stated that “this Court has recognized that ‘providing a specific, future effective date and omitting any reference to retroactivity’ supports a conclusion that a statute should be applied prospectively only.” The Michigan Supreme Court concluded that “in adopting [the amendment], the Legislature provided a specific, future effective date of January 13, 2009, and omitted any reference to retroactivity” which “undermin[es] any notion of a legislative intent to apply the amendment . . . retroactively . . .” (Page 7)
Attorney General Dana Nessel failed to acknowledge there is no “retroactivity” language in the new Michigan No Fault law – and that lawmakers considered and rejected retroactivity language
Attorney General Dana Nessel ignored the fact that the new Michigan No Fault law contains no “retroactivity” language allowing retroactive application of the fee schedule and the attendant care limitation to No-Fault benefits based on car accidents that occurred before Public Act 21 of 2019’s effective date of June 11, 2019.
Attorney General Dana Nessel also fails to mention that Michigan lawmakers considered – but rejected – “retroactivity” language that would allow the fee schedule and attendant care limitation to apply to claims based on car accidents that predated the effective date of the new No Fault law.
There is no “retroactivity” language in the No-Fault statute that creates the fee schedule and attendant care limitation (MCL 500.3157(2-7) and (10)). The statute merely states that the fee schedule and attendant care limitation apply to “treatment or rehabilitative occupational training rendered after July 1, 2021.” (MCL 500.3157(14))
Similarly, there is no “retroactivity” language anywhere in the No Fault law, itself, which consists of Chapter 31 (“Motor Vehicle Personal and Property Protection”) of the Insurance Code.
Additionally, there is no “retroactivity” language in the non-No-Fault statute in Chapter 21 of the Insurance Code that Michigan Attorney General Dana Nessel highlights in her brief. (Page 9, “Argument” “II”) The statute, MCL 500.2111f(8), provides: “An insurer shall pass on, in filings to which this section applies, savings realized from the application of section 3157(2) to (12) to treatment, products, services, accommodations, or training rendered to individuals who suffered accidental bodily injury from motor vehicle accidents that occurred before July 2, 2021.”
Significantly, Attorney General Dana Nessel never actually argues that this non-Michigan No-Fault statute -MCL 500.2111f(8) – allows retroactive application of the fee schedule and the attendant care limitation to No-Fault claims based on car accidents that occurred before the effective date (June 11, 2019) of the amendments to the No Fault law that created the fee schedule and attendant care limitation.
Instead, Michigan Attorney General Dana Nessel limited her comments about MCL 500.2111f(8) to citing the statute – which is not part of the “No-Fault Act” – for the unremarkable proposition that “there is express language in the No-Fault Act evidencing that the Legislature intended MCL 500.3157 to apply to motor vehicle accidents occurring before July 2, 2021.” (Page 9, “Argument” “II”)
Importantly, Attorney General Dana Nessel DOES NOT mention in her brief to the Michigan Court of Appeals that lawmakers considered – but rejected – “retroactivity” language that would have made the fee schedule and attendant care limitation apply retroactively to car accidents that occurred before the June 11, 2019, effective date of Public Act 21 of 2019.
For MCL 500.3157(14), lawmakers rejected “retroactivity” language that would have applied the fee schedule and attendant care limitation to treatment and care “rendered after the effective date of the amendatory act that added this subsection, regardless of when the accidental bodily injury occurred.”
For MCL 500.2111f(8), lawmakers initially passed a version that suggested the fee schedule and attendant care limitation would apply to No-Fault benefits “rendered to individuals who suffered accidental bodily injury from motor vehicle accidents that occurred before the effective date of the amendatory act that added this section,” which was June 11, 2019.
However, lawmakers quickly changed their mind and removed the “retroactivity” language from what would become the non-No-Fault statute, MCL 500.2111f(8). In Public Act 22 of 2019, which had an effective date of June 11, 2019, they altered the statute so that it applied to the fee schedule only applied to “motor vehicle accidents that occurred before July 2, 2021.”
AG ignored how “retroactive” application of the new No Fault law impairs car accident victims’ No-Fault rights
Attorney General Dana Nessel is ignoring how “retroactive” application of the fee schedule and attendant care limitation under the new Michigan No Fault law impairs car crash victims’ rights to have No-Fault pay all “reasonable” medical charges and “reasonably necessary” in-home, family-provided attendant care.
The Michigan Supreme Court has stated that “[w]hen determining whether a statute should be applied retroactively or prospectively,” one of the factors that the Court “must keep in mind [is] that retroactive laws impair vested rights acquired under existing laws or create new obligations or duties [or “a new disability” (Buhl, page 7)] with respect to transactions or considerations already past.” (Buhl, Page 5; LaFontaine, Pages 12-13)
Michigan Attorney General Dana Nessel has ignored this issue completely.
For people who were injured in car accidents prior to June 11, 2019 – the effective date of Public Act 21 of 2019, which created the fee schedule and attendant care limitation – both the No-Fault law and their auto insurance policy contracts gave them the right to have their auto insurance company pay “reasonable charges” for “products, services and accommodations” that were “reasonably necessary” to their “care, recovery or rehabilitation.” (MCL 500.3107(1)(a)) The only limit on their right to have their auto insurers pay “charges” for their “reasonably necessary” treatment and care was that the charges be (1) “reasonable” and (2) “not exceed the amount the person or institution customarily charges for like products, services and accommodations in cases not involving insurance.” (Former MCL 500.3157)
There was no fee schedule that capped the amount of “charges” that auto insurers were legally obligated to pay for a crash victim’s medical care. Car accident victims had the right to have their auto insurance company pay for all of their medical “charges” so long as the charges were “reasonable” and “customary.”
However, under the new No Fault law’s fee schedule, victims’ rights to have “reasonable charges” paid for has been impaired because the only charges that an auto insurer is obligated to pay – even if the charges otherwise qualify as “reasonable” and “customary” – are the charges that do not exceed the payable amount dictated by the fee schedule.
Similarly, for crash victims whose doctors had prescribed for them 24/7 attendant care, there was no limit that allowed auto insurers to only pay 56 hours of those 168 hours per week when the attendant care was being provided in the crash victim’s home by family-members. Car accident victims had the right to have their auto insurance company pay for all of their in-home, family-provided, 24/7 attendant so long as it was “reasonably necessary” to the victim’s crash-related care, recovery or rehabilitation.
However, under the new No Fault law’s attendant care limitation, victims’ rights to “reasonably necessary” in-home, family-provided attendant is impaired because auto insurers are no longer legally obligated to cover more than 56 hours per week of in-home, family-provided attendant care – even if the care is “reasonably necessary” to the victim’s care, recovery or rehabilitation.
Attorney General Dana Nessel ignored Michigan Supreme Court precedent that affects “retroactive” application of the new No Fault law
Attorney General Dana Nessel has failed to address the Michigan Supreme Courts’ ruling in LaFontaine v. Chrysler and how it affects auto insurance companies retroactive application of the new No Fault’s fee schedule and attendant care limitation to No-Fault claims based on car accidents that occurred before June 11, 2019.
In LaFontaine v. Chrysler, Michigan Supreme Court, #146722, June 10, 2014 (unanimous), the Michigan Supreme Court held that a 2010 amendment to the Motor Vehicle Dealer Act (MVDA) which took effect on August 4, 2010, did not apply retroactively to a September 24, 2007 Dealer Agreement which was subject to the MDVA.
The LaFontaine Court ruled: “The 2010 Amendment of the MVDA contains no language suggesting retroactivity, and applying the amendment retroactively would alter the parties’ existing contract rights. A manufacturer-dealer relationship, absent contrary language in the contract, incorporates the relevant market area in effect at the time when the dealer agreement was entered. The six-mile relevant market area in effect in 2007, then, governs the 2007 manufacturer dealer agreement at issue in this case.” (Page 2)
The LaFontaine Court explained: “Retroactive application of the 2010 Amendment would subject Chrysler to greater burdens than those in place when the 2007 Dealer Agreement went into effect because it would require Chrysler to show good cause for the establishment of a broader geographical range of dealerships. Likewise, retroactive application would grant LaFontaine greater substantive rights than the 2007 agreement, allowing LaFontaine to challenge the establishment of dealerships that it previously could not. Accordingly, retroactive application of the 2010 Amendment’s nine-mile relevant market area would impinge upon Chrysler’s rights under its 2007 agreement with LaFontaine. Because nothing in the language of the 2010 Amendment evinces the Legislature’s intent that the amendment apply retroactively, we decline to give it retroactive effect.” (Page 18)
As in LaFontaine, the 2019 amendment to the No-Fault law contains no language suggesting that the fee schedule and attendant care limitation apply to causes of action or claims for No-Fault benefits based on car accidents that occurred before the amendment’s effective date of June 11, 2019.
Also, as in LaFontaine, retroactive application of the fee schedule and the attendant care limitation would alter victims’ “existing contract rights” (based on accidents that occurred and policies that were issued before June 11, 2019) in that car accident victims would be subject to “greater burdens than those in place when [their auto insurance policies] went into effect.” Crash victims face “greater burdens” now in obtaining medical care because the fee schedule has slashed their ability to pay by nearly half. Crash victims also face “greater burdens” now in obtaining “reasonably necessary” in-home, family-provided attendant care because despite the 24/7 care being prescribed by their doctor their auto insurers are only legally required to pay for 56 hours of the total 168 hours per week that are needed.
Finally, as in LaFontaine, retroactive application of the fee schedule and the attendant care limitation would alter the auto insurers’ “existing contract rights” (based policies that were issued before June 11, 2019) in that it would “grant [auto insurers] greater substantive rights” than they “previously” had under the policies that were issued before June 11, 2019. Under the new No Fault law’s amendments, auto insurers would have “greater substantive rights” to deny or refuse to pay for crash victims’ medical “charges” even though they are otherwise “reasonable” and “customary.” The new No Fault law’s amendments also give auto insurance companies “greater substantive rights” to deny or refuse to refuse more than 56 hours per week of in-home, family-provided attendant even if 24/7 attendant care (168 hours per week) is otherwise “reasonably necessary.”
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