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Andary v USAA – Where Do We Go From Here?

On Behalf of | Oct 5, 2023 | Firm News

Christopher P. Endres, Esq. of Anselmi Mierzejewski Ruth & Sowle P.C.

As Published, IASIU – Michigan Chapter October 2023 Newsletter

As we all know, the Michigan no-fault amendments that became effective June 11, 2019, have posed a litany of questions for both insurers and insureds. One of the most pressing issues was whether the attendant care provision in MCL 500.3157(10) was to be applied to people injured before June 11, 2019. This section limited the allowable number of weekly hours of in-home attendant care to 56 hours if provided by a relative, someone domiciled in the same household, or someone with whom the injured person had a business or social relationship before the injury. The other issue was whether the “non-Medicare fee schedule” provision of MCL 500.3157(7) was applicable to those claims where the injury took place prior to June 11, 2019. This section provided for a percentage reduction for those services where Medicare does not provide an amount payable.

The Michigan Supreme Court took up these issues in the case of Andary v USAA Casualty Insurance Company. The suit was brought by two injured individuals (in addition to Eisenhower Center) alleging that the reformed no-fault act should only be applied prospectively (to those injured in motor vehicle accidents after the effective date of the reform) among a number of other claims. Initially, the circuit court agreed with Defendants and dismissed all of the claims. That decision was appealed to the Michigan Court of Appeals which largely reversed the trial court. In a lengthy opinion issued on July 31, 2023, the Michigan Supreme Court essentially agreed with the Michigan Court of Appeals and held that MCL 500.3157(7) & (10) should be applied prospectively only. So how did the Court arrive at this conclusion?

What the Court found was that there was no express legislative intent to have the amendments apply retroactively. The Court stated that an injured person’s “vested contractual right to continuation of those benefits at pre-amendment levels cannot be stripped away or diminished when the Legislature has failed to clearly state its intent to do so.” The Court went on to say that no-fault benefits are both contractual and statutory in nature. The Court found that no-fault benefits are not akin to workers’ compensation benefits, which are “purely statutory.” Therefore, workers’ compensation benefits cannot be vested rights, unlike no-fault benefits, which can be vested rights. “Accordingly, the PIP benefits under a no-fault insurance policy remain binding post-injury as to the individuals covered by the policy unless clearly and retroactively invalidated by the Legislature.” But when do these rights for no-fault benefits vest?

The Court went on to evaluate what law applies when the rights vest. To answer this question, the Court evaluated long-standing contract principles from both Michigan and the United States Supreme Court. Following this analysis, the Court concluded that an injured person’s “rights to PIP benefits under the applicable no-fault insurance policies vested, at the latest, when their injuries occurred and they first became eligible for PIP benefits.” “[T]he scope of available PIP benefits under an insurance policy vests at the time of the injury.”

Finally, the Court determined that the no-fault amendments apply prospectively only. There was nothing in the language of MCL 500.3157 (the amended version) that “suggests an intent to modify the contractual rights of an injured individual who has uncapped PIP benefits and family-provided attendant care that vested prior to the enactment of the amendments.” The Court concluded MCL 500.3157(7) & (10) “do not apply to any insured who was injured while covered by an insurance policy issued before June 11, 2019.”

However, questions remain. Does this only apply to MCL 500.3157(7) & (10)? Does this only apply to people covered under insurance policies? And where do we go from here? The only clear answer is to wait for the Michigan Court of Appeals to clarify some of the issues presented by this opinion.

The information provided in this article is informative only. It is not meant to constitute legal advice or create an attorney-client relationship. For legal issues that arise, please consult a licensed attorney.