Provider Bill & Treatment Records Satisfied No-Fault Notice Requirement

Michigan Supreme Court: PIP claim not barred by statute of limitations

medical-billIn a ruling that is a victory for accident victims and their medical providers, the Michigan Supreme Court has held that an insurer wrongly denied PIP benefits to an injured claimant because the bill and treatment records the medical provider had sent the insurer satisfied the No-Fault Act’s one-year notice requirement.

In Perkovic v Zurich American Ins Co (Docket #152484), plaintiff was injured while driving a semi-truck. The hospital that treated plaintiff, The Nebraska Medical Center, sent Zurich American Insurance, plaintiff’s employer’s no-fault insurer, a bill for its services and a copy of plaintiff’s treatment records. Zurich denied the claim, asserting the bill and treatment records did not sufficiently put it on notice that plaintiff would be making a claim for PIP benefits. Initially, plaintiff filed suit seeking coverage in August 2009, naming his own no-fault insurer, Citizens Insurance, as defendant. He later amended the complaint to also include his bobtail insurer, Hudson Insurance, as a defendant. He added Zurich  as a defendant on March 25, 2010, about 13 months after the accident. Plaintiff’s claims against Citizens and Hudson were dismissed by the Court of Appeals, which found that Zurich was the insurer with highest priority. The case returned to trial court, where Zurich moved for summary disposition, arguing it had not received written notice of plaintiff’s claim and had not paid any benefits on his behalf before the one-year limitations period expired. The trial court granted Zurich’s motion for summary disposition, finding the bill and treatment records did not fulfill the notice requirements of the No-Fault Act, MCL 500.3145(1).

Plaintiff appealed, arguing that he complied with the one-year notice requirement in §3145(1) because the bill and treatment records were in written form, and included his address and the nature of his injury. The Court of Appeals affirmed summary disposition for Zurich, finding the information sent to Zurich did not convey an intent to make a claim for PIP benefits, as required by §3145(1). The panel noted that, while strict compliance with §3145(1) is not required, plaintiff’s situation differed from prior appellate cases because no letter or written notice was ever sent to Zurich alerting it to a possible claim.

The Michigan Supreme Court, in an opinion written by Justice Richard H. Bernstein, reversed the Court of Appeals, holding that when documentation sent to an insurance company includes all the information required by §3145(1) and is provided within one year of the accident, the no-fault notice requirement is satisfied and the injured person’s claim is not barred by the statute of limitations.

In its analysis, the Supreme Court explained that under §3145(1), a claim for PIP benefits must be filed within one year after the accident causing the injury unless one of two exceptions applies:

  • the insurer was properly notified of the injury, or
  • the insurer had previously paid PIP benefits for the same injury.

In this case, because Zurich was not added to the complaint until 13 months after plaintiff’s accident, the issue was whether Zurich was properly notified of the injury through the medical bills and records it was provided by the hospital.

To address this issue, the Supreme Court examined the Court of Appeals ruling and reasoning, saying the appellate panel’s reliance on the “perceived purpose” of the notice requirement in §3145(1) was contrary to “established canons of statutory interpretation.” The Supreme Court wrote:

“Nothing in MCL 500.3145(1) suggests that a notice provision’s purpose is ‘to provide time to investigate and to appropriate funds for settlement purposes’. … The Court of Appeals’ reliance on the perceived purpose of the statute runs counter to the rule of statutory construction directing us to discern legislative intent from plain statutory language. … The person who asserts a right or title is the party that ultimately makes a claim — in this case, plaintiff, whose name and address appeared on the bills and records received by defendant. The statute contains no temporal requirement that the insured be claiming benefits at the time the notice of injury is transmitted to the insurer.”

Next, the Supreme Court looked at the “in his behalf” language of §3145(1), finding that it means notice can be provided to an insurer without the actual knowledge or directive of the insured.  The Supreme Court pointed out the plain language of §3145(1) “does not impose any unarticulated requirements as to the form of the notice, such as an explicit request for no-fault benefits.” According to the Supreme Court, this clear language refutes the argument made by Justice Robert Young Jr. in his dissenting opinion that the insured must be “actively claiming benefits” at the time the notice is provided to the insurer.

In conclusion, the Supreme Court held:

“[T]he notice given in this case satisfied the first exception of MCL 500.3145(1) so that the one-year statute of limitations does not bar plaintiff’s claim. The documents transmitted to defendant contained all of the information required by MCL 500.3145(1) and were sent in behalf of plaintiff by The Nebraska Medical Center. The statute does not require any additional information about the possible pendency of a claim. We hold that, under the circumstances of this case, plaintiff satisfied the notice requirements of MCL500.3145(1).”

Joining Justice Bernstein’s majority opinion were Chief Justice Stephen J. Markman and Justices Brian K. Zahra, Bridget M. McCormack, David F. Viviano and Joan L. Larsen.

In his dissent, Justice Young said Zurich was entitled to summary disposition. He wrote:

“I disagree with the majority that the alleged notice sent to defendant by The Nebraska Medical Center was given to an insurer by or in behalf of ‘a person claiming to be entitled to’ personal protection insurance benefits under the no-fault act for accidental bodily injury, as required by MCL 500.3145(1). Neither the medical bill nor the medical records sent to defendant indicated that the documents were sent in behalf of a person claiming at that time to be entitled to no-fault benefits, as opposed to other benefits payable under the insurance contract.”