When Life Gives You Lemons: The Positive Side to Muci v. State Farm

On October 4, 2007, I spoke at the ICLE No Fault Update Seminar in Plymouth, Michigan. My topic this year was “The Plaintiff Lawyers Perspective on Insurance and Defense Medical Examinations,” and in particular to discuss the recent case of Muci v. State Farm, 478 Mich 178 (2007). I was also asked to talk about strategies lawyers should employ in dealing with these compulsory defense medical evaluations in auto accident cases.

The audience at these seminars predominantly consists of defense lawyers and insurance adjusters. Most of these lawyers and adjusters were already familiar with Muci. It has already been widely heralded to lawyers and insurance company adjusters alike as an important “defense win” for the insurance industry in Michigan (as if they need another one).

In some respects Muci is a win for the insurance companies. Muci does strip away some of the few remaining protections for Michigan auto accident victims who are required to attend these compulsory insurance medical examinations, also known as IMEs. The Michigan Supreme Court ruled in Muci that a trial judge cannot order conditions be imposed on IMEs, robbing an auto accident victim who is required to attend an IME evaluation, no matter how reasonable those protections may be absent a “good cause” showing beforehand.

Muci is an example of the type of outcome-determinative reasoning that is sadly no longer suprising for Michigan lawyers. And it is an example of why the four justice majority of Justices Taylor, Young, Corrigan and Markman have been so criticized by lawyers, judges, and law professors. From a purely textualist perspective, there is nothing that allows the majority to rule as they did. Muci directly contradicts the Court’s prior decision in People v. Philips, 468 Mich 583(2003) where this same Court found that the rules regarding discovery are procedural rather than substantive in nature. Muci also contradicts the federal precedent established by the U.S. Supreme Court in Sibbach v. Wilson & Co., 312 U.S. 1, 13 (1941) holding that the federal equivalent to Michigan’s MCR 2.311, is procedural and not substantive in nature.

As I told the lawyers at the No Fault Update seminar, once again the whole country goes one way, and Michigan, thanks to another sharply divided 4-3 decision by our Supreme Court, now goes another. Michigan lawyers can certainly now add Muci to the growing list of decisions by our Supreme Court that should one day be reversed.

However, Muci is not as catastrophic to Michigan lawyers and auto accident victims as the insurance industry is making it out to be. Muci is very limited in scope and applies to first party no fault automobile negligence cases only. It does not effect third party cases for pain and suffering or any other personal injury tort cases. In these other types of personal injury tort cases, including auto accident cases, lawyers can still go to court seeking protections and reasonable conditions on the scope of insurance medical examinations under the Michigan Court Rule, MCR 2.311.

Now, in the category of “if life you gives you lemons” let me share what type of lemonade we lawyers who represent people who are hurt in automobile accidents can make. In some ways, I believe the insurance industry will strongly regret Muci v. State Farm. As I said, there really is no textualist reason for the decision. To reach its intended result, the majority ruled that the Michigan Court Rule 2.311 does not apply to first party insurance medical examinations. To get to its intended result, the majority said that the Michigan No Fault Act is “entirely self-contained” and it would be “entirely antithetical” to the Michigan Legislature’s desired approach to find otherwise and allow a trial court judge to impose conditions on these exams, as they are otherwise be empowered to do under the court rule. Instead, the majority stated that the parameters of IMEs are solely established by the Michigan No Fault Act and the contract of insurance, and the Court’s role is “confined to adjudicating disputes under them.”

Well, under this reasoning, insurance companies should not be entitled to IMEs with anyone who is not a physician. This means no more compulsory no fault insurance medical examinations with neuropsychologists, chiropractors, vocational rehabilitation experts and anyone else who is not a physician. Why? According to the Michigan Supreme Court in Muci, the Michigan No Fault Act is entirely self-contained, and the Michigan No Fault Act only allows for insurance medical examinations with physicians. MCL 500.3151. In fact, MCL 500.3151 refers to mental or physical examinations only. If, as the Supreme Court writes in Muci, that is what the Legislature solely intended, then that is all an insurance company should now be entitled. This means no more IME examinations of any kind that include testing: no more EMGs, x-rays, MRIs, or diagnostic testing of any kind. It also means people who are injured in car accidents and sent to these compulsory insurance company IMEs are no longer required to fill out those tedious ten and twenty page auto accident questionnaires that so many of these IME doctors require injured people to fill out. The No Fault Act says only mental or physical examinations, and allowing any type of testing – whether vocational, neuropsychological, etc. should now be “entirely antithetical” and no longer required after Muci v. State Farm.