Michigan Supreme Court Clarifies No-Fault Act’s Notice Requirement
By: Steven M. Couch
Every claim under the Michigan No-Fault Act requires a description of the physical injury for which payment of benefits is sought. But what happens when more than one year has passed since the application for benefits was submitted and the insured seeks coverage for an injury that was not explicitly identified? In Dillon v. State Farm Mutual Automobile Insurance Company, the Michigan Supreme Court recently rejected the Court of Appeals’ broad interpretation of the No-Fault Act’s notice provision. Instead, the Court held that the condition for which benefits are claimed must have a connection to the injuries described within one year of the accident. This decision ultimately offers some new guidance for the appropriate handling of claims for injuries that were not initially attributed to a motor vehicle accident.
The Notice Statute: MCL 500.3145 The No-Fault Act requires that an injured party put the insurance carrier on notice of the claimed injury within one year of the accident giving rise to it. The relevant statutory language is as follows:
An action for recovery of personal protection insurance benefits payable under this chapter for accidental bodily injury may not be commenced later than 1 year after the date of the accident causing the injury unless written notice of injury as provided herein has been given to the insurer within 1 year after the accident or unless the insurer has previously made a payment of personal protection insurance benefits for the injury. If the notice has been given or a payment has been made, the action may be commenced at any time within 1 year after the most recent allowable expense, work loss or survivor’s loss has been incurred. [. . .] The notice of injury required by this subsection may be given to the insurer or any of its authorized agents by a person claiming to be entitled to benefits therefor, or by someone in his behalf. The notice shall give the name and address of the claimant and indicate in ordinary language the name of the person injured and the time, place and nature of his injury.
MCL 500.3145 (1) (emphasis added). Within this framework, questions remained about what constituted adequate notice. For example, would a notice identifying “neck pain” also include headaches? Or, would a notice citing “shoulder pain” also include symptoms further down the arm, closer to the hand? This was the issue before the courts In Dillon.
What Constitutes Notice: the Court of Appeals Took a Broad View In Dillon, the plaintiff was injured in an August 2008 motor vehicle accident. In her application for no-fault benefits, she identified only injuries to her lower back and left shoulder, along with some abrasions. She made no mention of any injury to her left hip at that time.
Nearly three years post-accident, in March 2011, Dillon sought treatment for left hip pain. Treatment for this condition extended into early 2012, when she ultimately underwent an arthroscopic procedure on the hip. Because she claimed that the hip injury was related to the 2008 motor vehicle accident, Dillon sought payment of no-fault benefits from State Farm. State Farm denied the claim on the basis that it did not receive notice of the hip injury within one year of the accident. Dillon filed suit and State Farm moved for summary disposition. The trial court denied the dispositive motion and, after a trial, a jury found for Dillon.
State Farm appealed. The Michigan Court of Appeals affirmed the trial court’s decision. After an examination of the statute and several cases interpreting it, the Court of Appeals opined that “we reject defendant’s argument that the notice of injury must have specified injury to plaintiff’s left hip. The fact that defendant received notice that plaintiff suffered physical injuries in a motor vehicle accident was sufficient to satisfy the statute.” Dillon v. State Farm Mutual Automobile Insurance Company, 315 Mich App 339, 345 (May 3, 2016). In essence, the rule set forth by the Court of Appeals was that notice of any physical injury suffered in the accident was adequate to place the insurer on notice of all injuries allegedly caused by the accident. Naturally, the ruling created questions about the extent to which injuries identified more than one year after a motor vehicle accident would be handled under the No-Fault Act.
Curbed: the Michigan Supreme Court Rejects the Court of Appeals Rule State Farm sought leave to appeal to the Michigan Supreme Court. The Court heard oral arguments on the application and, In lieu of granting leave, issued an order vacating that portion of the Court of Appeals decision that interpreted MCL 500.3145, but affirming the decision on other grounds.
The Court rejected the rule adopted by the Court of Appeals. Specifically, the lower court erred “by suggesting that a claimant can satisfy the statute by merely providing notice that she was physically injured. This holding ignores the requirement that the notice describe the ‘nature of [her] injury.’” Dillon v. State Farm Mutual Automobile Insurance Company, No. 153936 at p. 2 (November 9, 2017). Further, the Court observed that the statute requires only that the notice identify the injury “in ordinary language.” Id. The Court concluded that the statute “requires only the kind of notice that an ordinary layperson can provide. A description of symptoms that are traceable to a diagnosed injury is sufficient to constitute such notice.” Id. (emphasis added).
Upon reaching this conclusion, the court noted that Dillon had expert testimony, which the jury credited, that her hip injury could have caused her lower back pain. For that reason, the Court affirmed the judgment of the trial court.
What Does This Mean for No-Fault Carriers? This effect of this decision is two-fold. First, and more obviously, the notice presented by the Plaintiff must have some description of the nature of the alleged injuries. The Court of Appeals’ rule that notice of any physical injury will satisfy the MCL 500.3145 standard is no longer in effect. Thus, claims professionals should pay particular attention to the benefits claimed in comparison with the injuries described within one year of the accident. If medical treatment is claimed for a condition not identified during the notice period, then further investigation should be considered.
Second, claims professionals and counsel should strongly consider consulting with an expert, such as an independent medical examiner, to evaluate the potential for a connection between the injuries described through ordinary language in the notice (e.g., neck pain, back pain, headaches) and the specific conditions for which benefits are claimed. Such consultations will often be valuable for the appropriate handling of claims where the connection between the injuries described within the first year post-accident and the claimed no-fault benefits is not immediately clear.
For more information or questions on how this pertains to cases you are handling please e-mail the author here.