October 03, 2019
In the published decision in Spectrum Health Hospitals v. MACP, MAIPF, & John Doe Insurance Company, the Michigan Court of Appeals clarified the MAIPF (Michigan Automobile Insurance Placement Facility) and MACP’s (Michigan Assigned Claims Plan) scope of authority, specifically addressing the notice provisions set forth in the MACP.
The case involved a single car accident which occurred on August 30, 2016, where the passenger, Robin Benoit, suffered injuries requiring in-hospital care for roughly three weeks. The bill for her care at Spectrum Hospital totaled $129,000. Benoit provided ‘verbal consent’ to an assignment that was witnessed by two Spectrum staff members and notated on a general assignment form. That assignment form was lost, and no other assignment was ever signed by Benoit. Almost one year later, Spectrum filed an application for PIP benefits on behalf of Benoit with the MAIPF and MACP. Spectrum had little information regarding Benoit’s insurance coverage and simply listed ‘unknown’ on the application form under the section for insurer. The form was signed by a representative of Spectrum but did not include a signature of the “injured Person or Representative.” The MAIPF/MACP issued a generic denial. Spectrum then found Benoit with the help of an investigator and Benoit signed a full assignment of rights to Spectrum. Benoit also confirmed that neither she, nor the driver, had any no-fault insurance. The assignment was faxed to MAIPF/MACP on August 30, 2017, the final day to submit a claim. MAIPF/MACP again denied the claim, and Specrum filed suit on that same day, seeking declaratory relief.
The Trial Court granted summary disposition in favor of the MAIPF/MACP finding Spectrum failed to provide the appropriate information on the MAIPF/MACP form at the time of the initial application. The Trial Court found Spectrum also failed to present a timely amended application when it submitted the assignment and proof of ‘no insurance.’ The Trial Court acknowledged in its ruling that summary disposition was granted based on a technicality, but stated “the law is full of technicalities.”
The Court of Appeals noted that although the Legislature authorized the MAIPF to establish its own MACP, the Legislature did not authorize the MAIPF to establish eligibility criteria. Instead, MCL 500.3172(1) provides the eligibility criteria for the MACP, such that a person is entitled to claim PIP benefits from the MACP if no PIP insurance is applicable to the injury, no PIP Insurance can be identified, there is a dispute amongst insurers regarding PIP coverage, or the only applicable policy is inadequate due to financial inability. A person claiming through the MACP must notify the MAIPF within the time that a claim would have been allowed if identifiable coverage applicable to the claim had been in effect. Once the person notifies the MAIPF of his claim, the MAIPF must “promptly assign the claim in accordance with the plan…” Before assigning the claim, however, the MAIPF must “make an initial determination of a claimant’s eligibility for benefits under the MACP” and “shall deny an obviously ineligible claim.” MCL 500.3173a(1).
The Court of Appeals found Spectrum gave the MAIPF/MACP the notice required by the statute by filing the application for assignment within one year, and Spectrum’s claim was not “obviously ineligible” for assignment because Spectrum indicated that it was “unknown” whether Benoit, her resident relatives, the driver, or the other involved vehicle possessed a no-fault policy. Thus, the MAIPF/MACP was required to promptly assign the claim, which it did not do. The MAIPF/MACP also failed to identify, in writing, its reasons for rejecting Spectrum’s claim. The Court further found that, even if Spectrum’s earlier notice failed, Spectrum timely filed its lawsuit against MAIPF/MACP which asserted the amount of the claim, that Benoit did not maintain a no-fault insurance policy, that she was not domiciled with insured relatives, and that the involved vehicle was not insured. Thus, Spectrum’s claim could not be deemed “obviously ineligible and the MAIPF/MACP was required to assign it to an insurer.
Finally, the Court of Appeals determined that the Legislature authorized the MAIPF to adopt an MACP, but did not grant the MAIPF authority to establish rules governing the processing, timing, and review of claims under the MACP. The Court noted that nothing in the no-fault act requires a claimant to file a claim with MAIPF/MACP on a form application, or through communication signed by the claimant. Mandating strict adherence to the minutiae of the notice provisions found only in the MACP, therefore, would be inconsistent with Michigan law which allows substantial compliance that fulfills the purpose of the statute. In other words, the Legislature did not grant the MAIPF/MACP authority to impose filing requirements beyond those provided in the statutes. Thus, once the MAIPF/MACP received reasonable proof of the fact and amount of loss sustained by a claimant eligible to claim benefits, Spectrum, it was required to promptly assign the claim in accordance with the plan.
Notably, the Court of Appeals identified the MAIPF/MACP’s argument that Spectrum could not file a direct claim against an insurer as invalid based upon the recent amendments to MCL 500.3112 in 2019 PA 21, effective June 11, 2019. The Court applied the language of MCL 500.3174, regarding the MAIPF/MACP’s legal and ministerial duty to assign a claim, as it was written at the time of Spectrum’s application and lawsuit.