By Lee Dryden
BridgeTower Media Newswires
DETROIT—A Michigan Court of Appeals panel ruled that a missing signature was not grounds for the Michigan Assigned Claims Plan (MACP)/Michigan Automobile Insurance Placement Facility (MAIPF) to deny a claim for assignment.
In Spectrum Health Hospitals v. Michigan Assigned Claims Plan, the panel reversed the Kent County Circuit Court, which granted summary disposition for MACP/MAIPF after they rejected Spectrum’s claim for assignment because the injured party did not sign the assignment application.
“The purpose of the MACP is to ensure prompt coverage for persons injured in motor vehicle accidents when coverage cannot be found or is unavailable,” the COA opinion stated. “To achieve that end, the MACP/MAIPF has extremely limited authority to deny claims for assignment — it may only deny an ‘obviously ineligible’ claim. The absence of a signature does not meet that threshold.”
The published per curiam opinion was issued by Judges Brock A. Swartzle, Elizabeth L. Gleicher, and Michael J. Kelly.
Robin Benoit was seriously injured on Aug. 30, 2016, as a passenger in a single-car accident. Spectrum Health provided more than $129,000 in services to Benoit through Sept. 19, 2016. She was not covered by any no-fault insurance policy, according to the COA opinion.
Spectrum secured a “verbal consent” witnessed by two staff members for a general assignment of rights, but Benoit was “unable to sign.” The hospital did not secure a more specific assignment to apply to the MACP/MAIPF on Benoit’s behalf.
“Spectrum allegedly misplaced the general assignment, then searched high and low for Benoit, but to no avail,” the opinion stated.
Nearly a year after the accident, Spectrum filed an “application for personal injury protection [PIP] benefits” with the MACP/MAIPF. Spectrum’s agent signed as the “preparer” and the signature line for the “injured Person or Representative” was left blank.
After being tracked down by a private investigator, Benoit signed an “assignment of rights, benefits and causes of action” to permit Spectrum to seek PIP benefits on her behalf.
MACP/MAIPF argued that Spectrum’s application for assignment was “facially deficient as Spectrum made inadequate efforts before filing to determine whether Benoit had available insurance coverage.”
“It announced its intent to file a motion for summary disposition ‘to draw a line in the sand to prevent these efforts at obtaining assignment with little more than the most bare of information,’” the opinion stated.
Spectrum stated that it was entitled to summary disposition because the MACP/MAIPF was only authorized to reject an application “if from the outset the claim was obviously ineligible under the no-fault act.”
MACP/MAIPF continued to “insist that the application was invalid at its inception based on the absence of Benoit’s signature as claimant.”
The circuit court agreed and summarily dismissed Spectrum’s action while acknowledging that Spectrum secured an assignment from Benoit after it filed its application.
“However, the court reasoned, the focus was on the application and whether it was valid when originally filed. The plan rules required that the application be signed by the claimant or her representative and Spectrum did not sign in that capacity,” the opinion stated.
Spectrum gave the MACP/MAIPF the notice required under MCL 500.3174, the panel stated.
“By indicating that it was ‘unknown’ to Spectrum whether Benoit, her resident relatives, the driver, or the involved vehicle possessed a no-fault policy, Spectrum communicated that applicable PIP benefits could not be identified,” according to the opinion. “The MACP/MAIPF was then required by MCL 500.3174 to promptly assign the claim.
“The MACP/MAIPF did not promptly assign the claim. Indeed, it did not even comply with MCL 500.3173a(1) in notifying Spectrum of its denial. The form letter did not cite the reasons for rejection.”
“Even if the earlier notice failed, upon receiving notice of the lawsuit, Spectrum’s claim could not be deemed ‘obviously ineligible’ and the MACP/MAIPF was duty-bound to assign it to an insurer.”
The MACP/MAIPF argued that the claim remained “obviously ineligible” because Spectrum never submitted an amended application with a signature for the claimant or her representative.
The COA panel stated that mandating “strict adherence to the minutiae of these notice provisions would be inconsistent with Michigan law.”
“Even with the notice provisions enacted by our Legislature in the no-fault act, substantial compliance that fulfills the purpose of the statute is sufficient to preserve a claim,” the opinion stated, citing Perkovic v. Zurich American Ins Co (2017).
While the MACP/MAIPF could request that the claimant amend the notice to comply with its form application to make its tasks more manageable, it could not declare the claim to be obviously ineligible based on a minor nonconformity, the panel stated.
“As Spectrum’s claim was not ‘obviously ineligible,’ the MACP/MAIPF was required to assign it to a member insurer,” the opinion stated.
Plaintiff’s counsel Joseph J. Gavin of Miller Johnson in Grand Rapids said the opinion is a “significant decision.”
“The court correctly recognized that the Michigan Assigned Claims Plan (MACP), in its attempt to add eligibility thresholds to whether a claim is payable under the law, was clearly overreaching,” he said.
As for how the published opinion could influence future cases, Gavin stated, “Our Legislature has seen fit to provide extremely limited authority to the MACP to review claims. The reason is because that is not the MACP’s role. This decision vindicates that fact and should serve as a guide to lower courts in their review of the MACP’s denials in future cases.”
Gavin added that the MACP has “long-ignored the limitations our Legislature places on its authority and has sought to shift the burden to patients and their medical providers.”
“I hope and expect the MACP will heed the language of the court’s opinion and process eligible claims, instead of creating a litigation bottleneck to coverage,” he said. “Time will tell whether it does.”
Defense counsel Robert D. Steffes of Hewson & Van Hellemont PC in Grand Rapids stated, “At this time, my client has decided not to appeal.” He declined further comment.
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