In order to have their case assigned by the MACP to an insurance company, uninsured car accident victims must show they’re not ‘obviously ineligible’ and they’ve exercised ‘due diligence’ in investigating their claim; landmines for auto attorneys are everywhere
It’s getting much harder to get the Michigan Assigned Claims Plan to assign a No Fault claim and insurer.
If you’re an attorney and you’ve been involved with auto accident litigation and No Fault insurance claims in Michigan over the past decade, you are already aware of the change. But, as I’ll discuss below, there are also more potential landmines and areas where a lawyer can commit malpractice when dealing with the Michigan Assigned Claims Plan today than ever before.
But it’s the uninsured auto accident victims – the passengers, pedestrians, bicyclists and, even, non-owner drivers – who are feeling this change the most. These uninsured car accident victims must rely on the Michigan Assigned Claims Plan (MACP) to receive the No Fault insurance benefits so they can recover wage loss and get medical bills paid for their care, recovery and rehabilitation.
As the lawyers for many of these people, we see first-hand how hard it is getting just to set up a claim and recover No Fault PIP benefits (such as medical-expense and wage-loss reimbursement) for these uninsured passengers, pedestrians, and bicyclists that they’re legally entitled to.
The future for uninsured auto accident victims also looks ominous. At the close of the last legislative session a No Fault reform plan was being circulated which sought to eliminate the guarantee of unlimited No Fault medical benefits for all necessary medical care for uninsured car accident victims and replacing this with a cap of $400,000.
Collecting against the MACP is hard, but not impossible
In a recent Michigan Court of Appeals ruling, we see that the high hurdles that uninsured motor vehicle accident victims must clear in order to receive No Faults through the MACP are not necessarily (thank goodness) as insurmountably high as the MACP – and the auto insurance companies, as heads of the Michigan Automobile Insurance Placement Facility (MAIPF), that control it –would like them to be.
In Bronson Health Care Group, Inc., v. Michigan Assigned Claims Plan, et al., the unanimous, three-judge panel addressed three “excuses” the MACP has tried to use to rationalize its refusal to assign claims (all of which are familiar to our lawyers):
- Contending the application for No Fault benefits was “insufficient” or “inadequate”;
- Relying on “suspicious circumstances” to reject a claim for No Fault benefits as “obviously ineligible”;
- Challenging a victim’s “eligibility” for benefits based on the victim’s alleged lack of “due diligence” to try to identify “applicable” No Fault coverage.
Taking each point in turn, the Court of Appeals explained:
- An application for No Fault benefits may be “adequate” for the MACP’s “initial determination of eligibility” where it “indicat[es] that there was no insurance in effect on the date of the accident,” includes both a “police report … which had a blank space in the box for the insurance carrier” and a “report of [a] private investigator, who detailed his unsuccessful attempts” to determine the existence or non-existence of available insurance coverage.
- Insistence by the MACP that the uninsured driver was driving under so-called “‘suspicious circumstances’” does not render the claim for No Fault benefits “obviously ineligible” where the MACP fails to “adequately explain and set forth citations regarding why these alleged ‘suspicious circumstances’ established that it was plainly evident that [the] claim was ineligible.”
- There was no failure to “exercise due diligence” in “investigat[ing] and exhaust[ing] all avenues of any other available coverage” where the uninsured car accident victim and the vehicle’s owner both confirmed a lack of insurance coverage and neither a private investigator nor a lawyer were able to identify an “applicable” source of No Fault insurance coverage.
What are the Michigan Assigned Claims Plan’s rules for uninsured car accident victims?
Under Michigan’s No Fault Law, an uninsured car accident victim (i.e., an uninsured occupant, pedestrian, bicyclist or non-owner driver) can apply for No Fault benefits (such as medical expense and lost wages reimbursements) through the Michigan Assigned Claims Plan (MACP).
The MACP will assign the uninsured victim’s claim for No Fault benefits to a Michigan auto insurance company if the victim has shown that:
- “[N]o personal protection insurance [i.e., No Fault PIP benefits coverage] is applicable to the injury …” (MCL 500.3172(1))
- “[N]o personal protection insurance [i.e., No Fault PIP benefits coverage] applicable to the injury can be identified …” (MCL 500.3172(1))
Before making the assignment, the Michigan Automobile Insurance Placement Facility (MAIPF), which controls the MACP, must:
- “[M]ake an initial determination of a claimant’s eligibility for benefits under the assigned claims plan”; and,
- “[D]eny an obviously ineligible claim.” (MCL 500.3173a(1))
Additionally, as required by the MACP Plan of Operation, the “initial [eligibility] determination” may include assessing whether the victim has “exercised” “due diligence” in “investigat[ing] and exhaust[ing] all avenues of any other available [insurance] coverage,” including “any other actions that the MAIPF deems necessary for the claimant or their representative to determine that the claimant may be entitled to benefits through the MACP.”
The Michigan Assigned Claims Plan becomes very dangerous for Michigan auto accident lawyers
The most important tip I can give Michigan lawyers, especially those who don’t do a lot of auto accident litigation work, is to also sue as a party defendant the unnamed assignee as well as the MACP.
That’s because of a recent case that found the Michigan one-year-back rule for No Fault claims also applies to assigned claims and to the MACP.
This was addressed by the Court of Appeals in Linden (India Arne Thomas) v Citizens Ins. Co of America, 308 Mich App 89 (2014). In that case, the Court specifically held that the one-year-back rule contained in §3145(1) applies to assigned claims under §3174. In this regard, the Court in Linden stated:
“The trial court nevertheless ruled that MCL 500.3145(1) one-year-back rule did not apply to a plaintiff seeking PIP benefits under an assigned claims plan because MCL 500.3174 does not contain a one-year-back rule. Defendant, relying on Bronson Methodist Hosp v Allstate Ins Co, 286 Mich App 219; 779 NW2d 304 (2009), argues that the trial court erred. Plaintiff responds that Bronson Methodist Hosp did not actually decide whether the one-year-back-rule applies to claims under an assigned claims plan because the parties implicitly assumed that it applied. Contrary to plaintiff’s contention, we conclude that Bronson squarely decided this issue. The Court, citing Henry Ford Health Sys, 275 Mich App at 646-647, noted that ‘[c]laims filed through the MACF remain subject to the one-year-back rule found in MCL 500.3145(1).” Bronson Methodist Hosp, 286 Mich App at 225. The Court reasoned that the Legislature’s ‘omission of language in MCL 500.3174 extending the recovery limitation was intentional’ and, therefore, ‘recovery of benefits remains subject to the one-year-back rule.’ Id. at 228. Thus, the Court explicitly held that ‘MCL 500.3174 does not extend the recovery limitation found in MCL 500.3145(1) because the language used by the Legislature in MCL 500.3174 unambiguously describes only an extension of the statute of limitations period.’ Bronson Methodist Hosp, 286 Mich App at 229. Thus, the trial court erred by not applying the one-year-back rule on the basis of MCL 500.3174.”
Application for leave to appeal the Linden decision was denied by the Michigan Supreme Court. Therefore, for Michigan lawyers, this issue has been decided. The one-year-back rule applies to assigned claims and to the MACP under §3174.
Too much can happen that is outside of your knowledge and control. An applicable auto insurance company that has a higher priority than the MACP can and is found all the time. The best thing you can do is to protect yourself against this if it happens by also suing as a party defendant the unnamed assignee as well as the MACP.