CLICK HERE TO READ ENTIRE VOLUME
Volume XXVIII, No. 6, March 22, 2016
From the Law Offices of Garan Lucow Miller, P.C.
From the Editor: Sarah Nadeau
COURT OF APPEALS HOLDS ASSIGNED CLAIMS CARRIER’S OWN INVESTIGATION
INTO COVERAGE DID NOT OPERATE AS A DEFENSE TO ALLEGATION OF LATE
PAYMENT OF PIP BENEFITS
By Nicholas Draugelis
On March 15, 2016, the Court of Appeals published its decision in Bronson Health Care Group, Inc., v. Titan Ins. Co., et. al. (Docket No. 324847). The case arose after Amber French was injured in a May 9, 2013 motor vehicle accident. After the accident, she sought treatment at Bronson Methodist Hospital which ultimately charged $51,596.13 for its services. Ms. French had no applicable no-fault coverage available to her so she filed a claim with the Michigan Assigned Claims Plan (MACP) on July 31, 2013 and then again on August 29, 2013. Both applications were denied by the MACP because the applications failed to identify whether or not the involved vehicle was insured. Thereafter, on September 12, 2013, Ms. French submitted a third application to the MACP which was accepted and triggered assignment of the claim to Titan on September 24, 2013.
After assignment of the claim, Plaintiff Bronson Hospital submitted a police report, bills for services, and medical records supporting the claim to Titan. Titan did not issue payment within 30 days and, ultimately, on January 14, 2014, Bronson sued Titan to collect payment on the $51,596.13 bill. During the course of discovery in that litigation, Titan deposed Ms. French in order to investigate discrepancies contained within the three different applications mentioned above. In the end, after the deposition of Ms. French, Titan was apparently satisfied that it owed the Bronson Hospital bill and sent a letter to the hospital which said as much but further stated that Titan refused to pay any penalty interest pursuant to MCL 500.3142(2).
Following receipt of Titan’s letter, Bronson Hospital filed a motion seeking 12% penalty interest pursuant to MCL 500.3142(2) and attorney’s fees pursuant to MCL 600.2591 (a statute which provides for payment of attorney’s fees if a party to a lawsuit sets forth a frivolous claim or defense). Titan responded that there was a question regarding coverage and that Ms. French’s deposition was necessary prior to making a determination regarding coverage. Bronson argued that its September 24, 2013 submission contained sufficient reasonable proof. The trial court agreed with Titan and denied Bronson’s motion. Bronson appealed the decision.
The Court of Appeals reasoned that the September 24, 2013 submission contained “reasonable proof” that Ms. French was “in an automobile accident, injured, sustained significant medical bills for her care and treatment, and that neither she, the driver, nor the vehicle owner were covered by insurance.” The panel went on to say that, in this case, the trial court “improperly read a requirement into [the No-Fault Act]: that penalty interest was not available until more than 30 days after an assigned carrier confirms for itself and on its own timeline a claimant’s eligibility for benefits.” The Court affirmed that MCL 500.3142(2) does not permit an assigned insurer additional time beyond the statutory 30 days to conduct its own investigation regarding eligibility of the claimant to receive benefits. The Court found Titan’s defenses frivolous and awarded Bronson both penalty interest and attorney fees.
For anyone who works with claims assigned through the MACP this is a significant decision. The Bronson Court created a clear distinction between a determination of eligibility for benefits versus a determination of entitlement to benefits. The MACP is given the power to determine whether a claimant is eligible for benefits. Once that determination is made, and a claim is assigned to an insurer such as Titan, Titan is then permitted to determine whether a claimant is entitled to benefits (ie. whether the claimant’s injury is related to the accident, whether an exclusion applies, whether the vehicle is stolen, etc.). Titan cannot delay a payment based upon eligibility because that determination has already been made by the MACP. In other words, assigned insurers must treat assigned claims as if eligibility for coverage is conclusively established, and use discovery (or pre-suit investigatory tools) to confirm the facts necessary to establish the claimant’s entitlement to benefits.
GRAND RAPIDS SPRING BREAKFAST SEMINAR
April 21, 2016 at the Frederik Meijer Gardens and Sculpture Park
You and your co-workers are invited to attend our Annual Spring Breakfast Seminar at the Frederik Meijer Gardens and Sculpture Park on Thursday, April 21, 2016. After the seminar, please enjoy all of the indoor and outdoor garden areas as our guests, including the always wonderful Butterflies Are Blooming exhibit.
If you are able to attend this complimentary client event, please R.S.V.P., along with the full names and number of attendees, to Lynn Beatty at firstname.lastname@example.org or call our office at 616-742-5500. We look forward to seeing you at the gardens.
8:00 – 8:25 a.m. Registration and Continental Breakfast
8:25 – 8:30 a.m. Welcome and Introduction
L. Ladd Culbertson, Moderator
8:30 – 8:50 a.m. Michigan Third-Party (Automobile Negligence and Premises Liability) Updates
How courts have applied McCormick v Carrier and Lugo v Ameritech over the past year
Speaker: Berton K. May
8:50 – 9:10 a.m. The Effect of Covenant v State Farm on First Party No-Fault (PIP) Settlements and the Continued
Importance of Properly Drafted Releases and Dismissal Orders
Speaker: Paul W. Gipson
9:10 – 9:30 a.m. Recent Challenges to the Innocent Third Party Rule in PIP Cases
Speaker: Tara L. Velting
9:30 – 10:00 a.m. Utilizing Proprietary Software to Effortlessly Track and Document the Online Activity of
Claimants or Plaintiffs
Guest Speaker: Curt De Vries, President of Fraudsniffr
10:00 – 10:15 a.m. Break
10:15 – 11:30 a.m. Michigan First Party No-Fault (PIP) Updates
A comprehensive review of significant court decisions over the past year
Speaker: Emily L. Partridge
11:30 – 11:50 a.m. Utilizing the Bankruptcy Code as a Tool for Insurers to Recover Benefits Paid to Insureds as the Result
of Fraudulent Claims
Speaker: Courtney A. Krause
11:50 – 12:05 p.m. Uber and Self-Driving Vehicles: the Implications on Coverage and Liability from
Speaker: David A. Couch
12:05 – 12:15 p.m. Question and Answer Session with the Panel of Speakers
SAVE THE DATE!
INDY CITY SEMINAR
The Indy City Seminar is scheduled for
Thursday, May 19, 2016
at the Indianapolis Marriott Downtown.
This will be an all-day seminar with No-Fault Updates in the morning and the Deposition Boot Camp in the afternoon. Lunch will be provided.
Watch Law Fax and GLM’s website for seminar agenda.