No-Fault: the 'objectively manifested' war

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By Agenique Smiley

What was intended to create a simple system in which motorist who had the misfortune of finding themselves in some sort of motor vehicle-related melodrama could easily have their medical bills paid and vehicles repaired erupted into gladiator-style hand-to-hand combat between motorists and insurance companies, attorneys against attorneys, fighting it out in courtrooms day in and day out.

In the seminal case interpreting MCL 500.113(b), Iqbal v Bristol West Ins Group, the Michigan Court of Appeals held that the critical inquiry in determining whether a person is required under MCL 500.3101 to maintain security for payment of personal protection insurance, property protection insurance and residual liability insurance is whether the vehicle, itself, is insured, not whether the owner or registrant of the vehicle was the purchaser of the policy. Iqbal v Bristol West Ins Group, February 14, 2008 (Docket No. 275847) As the Court clarified, what this means it that the statutory language links the required security or insurance solely to the vehicle.

The insured

What this means to the average motorist is that he is she is covered, no matter whose car they may be driving, so long as the vehicle itself is insured. But, this vastly complicates life for both insurers and practitioners because it opens the door to liability to so many different parties as priority of insurers, and in some cases the assignment of insurers, comes into play.

To a No-Fault practitioner this would mean determining if the vehicle or vehicles involved a particular incident were insured and, in a perfect world, they would be. But, this world isn’t perfect and we live in Michigan. If one or more of the vehicles involved in a particular incident is uninsured, a simple case for First-Party Personal Protection Insurance benefits would essentially become a dual cause of action with an additional uninsured motorist claim now attached to it.

To be noted, the nature of an uninsured motorist claim is, essentially, a contract claim being that, uninsured motor vehicle coverage is not required by statute, therefore, the insurance contract dictates under what circumstances benefits will be awarded.

Under the No-Fault Act, an insurer is responsible for payment of all reasonable and necessary treatment for the care, recovery and rehabilitation of the injured party in connection with the subject accident. However, this payment is not guaranteed. The injured person must prove that their injury meets the threshold injury requirement as set forth in MCL 500.3135.

‘Objectively manifested’

As interpreted by the Supreme Court in the landmark case McCormick v Carrier, MCL 500.135 essentially asks the question of whether the injury has resulted in an objectively manifested impairment of an important body function that affects the person’s general ability to lead his or her normal life. McCormick v Carrier, July 31, 2010 (Docket No. 136738)

 “Objectively manifested is not an easy hurdle to overcome. As the Court of Appeals explained in the unpublished opinion, Pelc v North Star Ranch, Inc., an “objectively manifested impairment” is commonly understood as one observable or perceived from actual symptoms or conditions. “Symptoms and conditions” must be well documented. Pelc v North Star Ranch, Inc, February 21, 2019 (Docket No. 339635).

Notably, as pointed out in Pelc, MCL 500.3135 does not contain the word “injury.” As pointed noted by the Court, this is because “impairment” and “injury” have two different meanings. “Injury” focuses on actual damage or wound itself while “impairment” has more of an eye toward how the injuries affect a particular body function. The words are not interchangeable and should not be treated as such.

A very powerful weapon an arsenal in the raging war that is No-Fault Law is the argument that a party’s claimed injuries are the result of pre-existing conditions. If an injured party fails to disclose a condition for which he or she received past treatment and later claims that ailment was a result of the subject accident that may strong grounds for a motion for summary disposition. However, that is not a bright-line rule.

As the Court of Appeals explained in Pelc, “the aggravation or triggering of a preexisting condition and a history of treatment of that condition does not necessarily require granting summary disposition and dismissal of a lawsuit brought by a plaintiff following a motor vehicle accident.”

With that said, a good strategic move would still be leaving it to the court to determine as a matter of law if the plaintiff has established the existence of an objectively manifested impairment of an important body function or at least of the existence of a genuine issue of fact as to the existence of a objectively manifested impairment of an important body function.

Should the court enter a dismissal, case closed. Should the court deny the motion, plaintiff still bears the burden of proving that all claimed medical expenses are reasonable and necessary and that he or she continues to meet the threshold injury – “objectively manifested” impairment – requirement to receive benefits under the No-Fault Act.

The No-Fault war rages on and neither side is going down without a fight and with rulings like Covenant Medical Center, Inc v State Farm Mutual Automobile Insurance Company decided by the Michigan Supreme Court May 25, 2017 (Docket No. 152758), it seems like the war has no intent on slowing down.

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