ELECTRONIC SIGNATURES AND PRESUMPTIONS REGARDING PIP LIMITS ON NEW POLICIES UNDER MCL 500.3017c

Alexander Heritier

The Court of Appeals addressed two questions in the recent case of Bronson Health Care Group v Esurance Prop. and Casualty Ins. Co resulting from the Legislature’s recent changes to the No-Fault Act. First, the Court addressed what standards are necessary to establish an electronic signature for the purposes of selecting less than unlimited PIP limits. Second, the Court addressed whether a premium payment by an insured that matches the correct amount for a specific PIP limit, creates a presumption of proper PIP limit selection. The Court ultimately remanded the case for specific discovery findings, but also gave clear instructions on how insurers can prove that specific PIP limits were selected.

The basic facts of the case are that Brandi Russell purchased a policy of insurance from Esurance, and four days later, on October 26, 2020, she was involved in a car accident. Provider Bronson Health presented claims in excess of $350,000 and Esurance defended the claim by stating that Russell had purchased coverage with a $250,000 PIP limit, and that limit had already been exhausted. Esurance filed a Motion for Summary Disposition seeking a declaration that the PIP limits had been exhausted and therefore, it owed no amounts to Bronson Health. Bronson Health filed a cross-motion arguing that the PIP limit selection was ineffective such that Esurance must pay unlimited PIP benefits.

Esurance first argued that Russell’s electronic signature on her PIP selection form was sufficient to limit coverage to $250,000. Bronson Health argued the electronic signature was not in compliance with the statutory requirements found in MCL 500.3107c(1), and was not on a form presented to Russell before the policy began. The Court of Appeals analyzed the statutory language and found there was no requirement to present the PIP selection form to the insured before the policy was issued.

The Court further noted that an electronic signature must comply with the uniform electronic transactions act (UETA) which provides specialized security procedures that can be taken to verify the signature is that of a specific person. The Court found that simply writing or typing an insureds name under the “signature” line on the PIP selection form was insufficient to comply with this standard. While specific IT Metadata would have sufficiently proven that Russell had signed the electronic form, an expert was needed to explain the Metadata and Esurance failed to provide an expert. The Court remanded the case for further discovery into the electronic signature and IT Metadata issue.

The Court next addressed the ‘premium rebuttal’ question. Under MCL 500.3107c(3), there is a presumption that if a policy is properly issued and the insured did not properly make a selection of PIP limits, then the payment of premiums that correlate with a specific PIP level creates a rebuttable presumption for PIP coverage at that level. For example if the premium for $500,000 PIP limits was $100, then a payment of $100 would lead to a presumption that the insured and insurer agreed to the $500,000 in PIP limits. Bronson Health disputed both the actual statutory language and the theory of the policy itself. The Court, however, again relied upon the statutory language itself and chose to enforce the possibility of a rebuttable presumption. The Court noted that Esurance had failed to present sufficient and timely proof that the payments made by Russell correlate with the specific PIP premium for $250,000 coverage. So, the Court also remanded this issue for further discovery to confirm the proper PIP limits.

While the case was remanded for further discovery on both issues, the Court enforced the statute as written rather than as Bronson Health argued it should be interpreted. Insurers would be wise to comply with all PIP limit selection requirements if they intend to bring motions based on reduced PIP limits. Effective disclosure of all relevant and supporting information at the time the Motion is filed will save an insurer from further factual questions.