Anselmi Mierzejewski Ruth & Sowle, PC pursued a multifaceted appellate strategy, a/k/a “full court press” in a pivotal case before the Michigan Court of Appeals. In the published case of Labser v Farmers Insurance Exchange, (COA docket 373765, August 5, 2026) Joshua Simpson was operating an uninsured 2009 Dodge Journey (“vehicle”) and was involved in a motor vehicle accident. The vehicle was titled to Simpson’s fiancée. As a result of the accident, Simpson sustained injuries and obtained medical treatment at Labser and Northland Radiology. Thereafter, Simpson filed a claim with the MAIPF, which assigned the matter to Farmers Insurance Exchange.
In Simpson’s own first-party case, the Wayne County Circuit Court granted Farmers’ dispositive motion. Farmers argued that Simpson was barred from receiving no-fault benefits as he was a constructive owner of an uninsured vehicle, pursuant to MCL 500.3113(b). The trial court agreed, granted the dispositive motion and dismissed Farmers from the case.
Additionally, Labser and Northland Radiology filed a lawsuit against the MAIPF in Oakland County Circuit Court for reimbursement of no-fault benefits, pursuant to MCL 500.3112. Shareholder, Kevin Wirth represented Farmers, which was substituted in place of the MAIPF. Farmers filed its dispositive motion arguing that Simpson was a constructive owner of the involved, uninsured vehicle and as a result was barred from no-fault benefits pursuant to Sec. 3113(b) and as a result Plaintiffs’ cause of action is likewise barred as there is no valid underlying claim covered by PIP benefits. The trial court adopted Plaintiff’s argument and found that Simpson did not possess a lease agreement, contract of sale, or other documentation that created a vested possessory interest in the vehicle for greater than 30 days and denied the motion finding that Simpson was not a constructive owner of the involved vehicle.
After considerable supplemental briefing regarding Farmers’ motion for reconsideration concerning constructive ownership and specifically the application of Mota-Peguero v Falls Lake Nat’l Ins Co, 350 Mich App 692 (2024), the trial court granted Farmers’ motion for reconsideration. The trial court found Simpson to be a constructive owner of the uninsured, involved vehicle and was barred from benefits. Furthermore, it held that while Sec. 3112 allows a medical provider to initiate its own case for payment, the insurer was not responsible for payment when the underlying claimant did not qualify for benefits. The trial distinguished Mota-Peguero from the instant case, reversed its prior decision, and granted Farmers’ motion for reconsideration. Plaintiff appealed.
On Appeal, the Plaintiff argued that the trial court erred when it found that Simpson was not a constructive owner of the involved vehicle and that a medical provider can maintain a cause of action pursuant to Sec. 3112, regardless if the underlying claimant, Simpson, was eligible for no-fault benefits. Shareholder Kevin Wirth successfully guided the matter through circuit court, with Shareholder Mark Nawrocki preparing the appellate briefs, while A-M President/Shareholder, Mark Sowle handled the oral arguments for Farmers before the Court of Appeals.
As to the issue of constructive ownership, the Court affirmed the trial court’s holding that Simpson was a constructive owner of the involved, uninsured vehicle. The Court disagreed with Plaintiff’s argument that Simpson required permanent and exclusive right to use the vehicle for more than 30 days based on a written agreement between Simpson and his fiancée. The Court stated “[w]e find no grounds to read into this statutory language a written-agreement requirement.”
As to the issue of whether a medical provider can maintain a claim when the underlying claimant is barred, the Court affirmed the trial court’s ruling. The Court agreed that Sec. 3112 allows medical providers to bring a direct cause of action to recover PIP benefits. The Court distinguished Mota-Pegureo, which involved the post-collision recession of an insurance policy involving the balancing of the equities to determine if rescission between the medical provider and insurer is available. In this case, the claim was filed with the MAIPF, which issued no insurance policy requiring rescission or a balancing of the equities. (With an insurance policy, benefits are presumed/expected as an insurance premium is paid thus requiring Court approved rescission; however, the Legislature mandated that claimants with the MAIPF satisfy conditions precedent to be eligible and entitled to PIP benefits as there is no insurance policy or premium paid as it is funded by all insured drivers in Michigan).
The Court examined Sec. 3157, which states in relevant part “a physician, hospital, clinic, or other person that lawfully renders treatment to an injured person for an accidental bodily injury covered by personal protection insurance[.]” the Court found that while Simpson was injured, but he was not covered by personal protection insurance under the No-Fault Act as he was barred by Sec. 3113(b) as the owner of an uninsured vehicle involved in the accident.
The Court of Appeals delivered a big win to Farmers in this published case holding that Mota-Pegureo does not give providers a “free pass” when the claimant is ineligible. Importantly, because an ineligible claimant is not “covered by personal protection insurance” as required within MCL 500.3157, there is consequently no ability to maintain the provider’s MCL 500.3112 direct cause of action