August 25, 2022
In Great Lakes Pain & Injury Chiropractic Center, et al v Farm Bureau Mutual Ins Co of Mich, William Jones was a passenger in his friend’s vehicle and sustained injuries in an accident on May 19, 2020. Neither Jones nor his friend had auto insurance and the driver of the other vehicle could not be located. Jones filed an application for No-Fault benefits with the Michigan Automobile Insurance Placement Facility (“MAIPF”) on June 17, 2020, and assigned his claim to plaintiff providers on July 1, 2020.
The plaintiff providers filed a complaint on September 9, 2020, alleging that MAIPF/MACP had failed to make an initial determination as to Jones’ eligibility for PIP benefits and had failed to promptly assign the claim to a servicing insurer. In October of 2020, Farm Bureau was assigned the claim. Farm Bureau was substituted in for MAIPF/MACP, and plaintiffs’ claimed that despite timely billing submissions and reasonable proof of loss, Farm Bureau had made only partial payments or unreasonably refused/delayed in making payment for medical services rendered to Jones. Thereafter, Farm Bureau subpoenaed Jones for a deposition as well as a defense medical examination (DME). Jones did not appear for either. Even more, when Farm Bureau’s investigator contacted Jones, Jones was uncooperative and informed him that he no longer wished to pursue a claim for PIP benefits.
The trial court granted Farm Bureau’s motion to show cause and entered an order requiring Jones to appear for a deposition and DME scheduled in April of 2021. Farm Bureau also denied Jones’ claim for benefits based upon his failure to cooperate with its investigation in February of 2021. Subsequently, after Jones failed to appear for the court ordered deposition and DME, Farm Bureau filed a motion for summary disposition under MCR 2.116 (C)(10), which was granted by the trial court.
On appeal, plaintiffs argued that the trial court erred in granting summary disposition because the matter was governed by the decision in Spectrum Health Hosps v Mich Assigned Claims Plan, 330 Mich App 21; 944 NW2d 412 (2019), where, interpreting a prior version of MCL 500.3173a, the Court held that the MAIPF could only deny “obviously ineligible” claims and that “[e]ligibility is determined by the conditions outlined in MCL 500.3172(1) ” Id. The Great Lakes Court noted, however, that the holding in Spectrum has been superseded by the current version of MCL 500.3173a(1), which mandates that the MAIPF “shall review a claim for personal protection insurance benefits under the assigned claims plan, shall make an initial determination of the eligibility for benefits under this chapter and the assigned claims plan, and shall deny a claim that the Michigan automobile insurance placement facility determines is ineligible under this chapter or the assigned claims plan.” Thus the Great Lakes Court found plaintiffs’ reliance on Spectrum, was misplaced.
Plaintiffs further argued that Farm Bureau as a servicing insurer, could not deny a claim based upon a claimant’s failure to cooperate under MCL 500.3173a(2). The Great Lakes Court found that when reading the statute MCL 500.3173a(2) as a whole, the duty to cooperate in subsection (2) requires a claimant or individual making a claim through or on behalf of a claimant to cooperate with the servicing insurer when that insurer is indirectly carrying out the MAIPF’s functions and responsibilities. However, MCL 500.3173a(1) further addresses the consequences of a claimant’s failure to cooperate under subsection (2), and provides that if a claimant or person making a claim through or on behalf of a claimant fails to cooperate with the Michigan automobile insurance placement facility as required by subsection (2), the MAIPF shall suspend benefits to the claimant under the assigned claims plan. A suspension under this subsection is not an irrevocable denial of benefits, and must continue only until the MAIPF determines that the claimant or person making a claim through or on behalf of a claimant cooperates or resumes cooperation with the MAIPF.
The Great Lakes Court noted that a suspension of benefits is separate and distinct from the denial of a claim such that MAIPF was only permitted to suspend benefits if a claimant failed to cooperate. The Great Lakes Court found that Farm Bureau’s denial was improper, therefore, because that sanction for failure to cooperate was contrary to the statutory language. Thus, the Court reversed and remanded for further proceedings.