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Can an uninsured car crash victim commit No-Fault fraud?

August 22, 2017 by Steven M. Gursten

Court rules that No-Fault fraud involving a claim for benefits under the Michigan Assigned Claims Plan requires knowledge and intent to defraud and deceive


Can No-Fault fraud be a basis for denying present and future benefits to an uninsured car crash victim who’s pursuing a No-Fault claim through the Michigan Assigned Claims Plan?

Yes, according to a recent Michigan Court of Appeals ruling — but only if certain things can be proved about the victim’s state of mind as it pertains the No-Fault claim:

  • He knew that the No-Fault claim “contains or is supported” by a “statement that contains false information concerning a fact or thing material to the claim …” (MCL 500.3173a(2))
  • He made the knowingly false, material statement “with an intent to … defraud, or deceive.” (MCL 500.4503)

No-Fault fraud claim with conflicting evidence is rejected

In Mills v. Titan Insurance Company, Titan, as the assigned insurer by the Michigan Assigned Claims Plan (MACP), tried to deny all present and future auto No-Fault benefits to an uninsured car crash victim because he “submitted fraudulent documentation in support of his claim for attendant care services.”

Although the court acknowledged the “conflicting,” “contradictory” and “confusing” evidence presented in support of the car accident victim’s claim for No-Fault attendant care benefits, the judges, ultimately, rejected Titan’s No-Fault fraud argument:

“While the record evidence is no doubt contradictory, conflicting and often times confusing with regard to when [the providers] provided attendant care and household replacement services for plaintiff following his motor vehicle accident, it is also devoid of any indication of plaintiff’s involvement in, or understanding or awareness of, the submission of the claim forms by [the providers] with regard to attendant care and household replacement services. Put another way, as the trial court aptly recognized, the record does not contain any indication that plaintiff ‘[knew] that the statements [submitted by [the providers]] contained false information concerning a fact or thing material to the claim …’”

“Put another way, it is clear from the record that the trial court was unable to determine whether plaintiff had an intent to defraud or deceive defendant.”

Notably, however, the Court of Appeals did affirm the dismissal of the car crash victim’s attendant care services claim based on the trial judge’s conclusion that “‘[t]here’s no question there’s fraud here,’” but “‘I can’t tell who did what.’”

Pedestrians, bicyclists and passengers have better protection against No-Fault fraud accusations

For me as an auto accident attorney and for the uninsured car crash victims who I help every day, the Mills ruling is a welcome relief. I’ve watched (and written on this auto law blog) how terrible court decisions like Bahri have given insurance defense lawyers the license to allege fraud at the drop of a hat. In this respect, Mills represents a step back to sanity from the Twilight Zone-like feeling that I and many other Michigan car accident attorneys have these days as we watch insurance company adjusters refuse to pay No-Fault benefits to people who desperately need them based upon the flimsiest of excuses.

This is a victory for pedestrians, bicyclists and passengers who have no source of No-Fault benefits coverage except through the Michigan Assigned Claims Plan, as Mills puts a stop to insurers’ nasty, disingenuous practice of recasting the most innocent mistakes that car crash victims make — or that the people who are helping them might make on attendant care submittals and replacement services forms. It allows us to take a step back from the precipice of insurance defense lawyers labelling these attendant care and replacement service providers as frauds — and then using this allegation to attempt to avoid paying forever No Fault benefits to the innocent car accident victim.

But Mills also serves as a wake-up call for Michigan auto accident lawyers about their clients submittals with their attendant care and replacement services claims.

I’ll talk about why in tomorrow’s blog post.

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