Michigan Court of Appeals; Docket # 343563; Published
Judges Swartzle, Gleicher, and Kelly; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Rule Making Regarding Operation of the Assigned Claims Facility (§3175(1))
TOPICAL INDEXING:
Not Applicable
SUMMARY:
In this unanimous published per curiam decision, the Court of Appeals reversed the trial court’s summary disposition order dismissing the plaintiff’s suit against the Michigan Assigned Claims Plan for mandamus and declaratory relief, and remanded for entry of summary disposition in favor of plaintiff, Spectrum Health Hospitals (“Spectrum”). The Court of Appeals held that the absence of a claimant’s signature on an application for benefits through the MACP is not sufficient grounds for denying a claim.
Robin Benoit was traveling as a passenger in her ex-boyfriend’s uninsured motor vehicle when she was involved in a single-vehicle accident and seriously injured. Spectrum provided more than $129,000 in medical services to Benoit over the next month, and upon Benoit’s admission to Spectrum, Spectrum secured a verbal assignment of rights because Benoit was “unable to sign.” Benoit disappeared after her treatment, and almost a year after the accident, Spectrum filed an application for no-fault PIP benefits with the MACP. Attached to the application was a list of all the steps Spectrum had taken to uncover more information about Benoit, but the signature line for the “injured Person or Representative” was left blank. The MACP initially denied Spectrum’s application, prompting Spectrum to hire a private investigator to try and locate Benoit. The investigator was successful in doing so, and obtained a signed assignment of rights from Benoit, which Spectrum then forwarded to the MACP by fax on the final day to timely file a claim. The MACP notified Spectrum that it was still unable to process Spectrum’s claim, and that it needed additional information in order to make an initial eligibility determination.
Spectrum then filed suit for mandamus and declaratory relief, asserting that the MACP/MAIPF had a clear duty to assign the claim under MCL 500.3174. The MACP moved for summary disposition, arguing that although Spectrum signed the original application as its preparer, no one signed as the claimant or claimant’s representative, as is required by the MACP’s internal operating procedures. The trial court ultimately granted the MACP’s motion for summary disposition, reasoning that the focus was on the application and whether it was valid when originally filed. Since the MACP’s rule require that the application be signed by the claimant or the representative, and since Spectrum did not file a new or amended application after locating Benoit, the original application was invalid.
On Appeal, the Court of Appeals first determined that the MACP was given timely notice of Spectrum’s claim, and that the claim was obviously eligible for assignment to a no-fault insurer under MCL 500.3172(1). MACP was thus duty-bound to promptly assign the claim to an eligible no-fault insurer.
The MACP continued to argue, however, that because neither Benoit nor her representative signed the application, the claim was “obviously ineligible.” The Court of Appeals disagreed, holding that Spectrum’s claim substantially complied with the statute, and that the no-fault act does not grant the MACP the authority to establish rules governing the processing, timing, and review of claims submitted to it. Rather, those requirements are enumerated by statute, and the MAIPF has only limited authority to deny “obviously ineligible” claims. Thus, once the MAIPF receives “reasonable proof of the fact and amount of loss sustained by a claimant eligible to claim benefits as stated in MCL 500.3172(1), it must ‘promptly assign the claim in accordance with the plan.’” It cannot “impose filing requirements beyond those provided in the statutes,” and it cannot act outside the scope of its statutory function and declare a claim to be “obviously ineligible” based on a minor noncomformity in an application.
Ultimately, the MACP/MAIPF has only those rulemaking powers conveyed to it by the Legislature. See Consumers Power Co v Public Serv Comm, 460 Mich 148, 155-156; 596 NW2d 126 (1999). The MACP/MAIPF’s powers must derive from MCL 500.3171 to MCL 500.3179. The Legislature authorized the MAIPF’s board of governors to adopt an MACP. MCL 500.3171(3). However, the authority to adopt a plan does not grant the authority to establish rules governing the processing, timing, and review of claims under the MACP; those requirements are enumerated by statute. Jackson v Secretary of State, 105 Mich App 132, 138- 140; 306 NW2d 422 (1981). While the Legislature subsequently enacted MCL 500.3173a, giving the Secretary of State and then the MAIPF the limited authority to deny claims that are “obviously ineligible,” the Legislature did not substantively alter the remainder of the no-fault act to expand the MAIPF’s authority. Under the act, notice is “reasonable proof of the fact and of the amount of loss sustained.” MCL 500.3142(2). As our Supreme Court has stated in an analogous context, an insurer cannot vitiate its statutory duty to pay benefits in a timely fashion through a contractually agreed upon condition precedent; rather, once it receives reasonable proof of the fact and amount of loss sustained, the insurer must comply with its statutory duty to pay. See Cruz v State Farm Mut Auto Ins Co, 466 Mich 588, 600; 648 NW2d 591 (2002). Similarly, once the MAIPF receives reasonable proof of the fact and amount of loss sustained by a claimant eligible to claim benefits as stated in MCL 500.3172(1), it must “promptly assign the claim in accordance with the plan.” MCL 500.3174.
Contrary to the MACP/MAIPF’s contention, MCL 500.3175 did not grant it authority to impose filing requirements beyond those provided in the statutes. MCL 500.3175 includes a list of elements that the MAIPF was required to incorporate into the MACP when power transferred to the MAIPF from the Secretary of State. The statutory provisions address the transfer of claims already assigned or filed under the Secretary of State’s plan to the MAIPF’s plan and the allocation of costs during the crossover period. The purpose of the statute was to set the start date for filing claims with the new MACP, not to confer additional rulemaking authority. The existence of similar filing requirements in the administrative rules promulgated by the Secretary of State under the former MACP also does not control the outcome here. The fact that no court was asked to invalidate the old administrative rule requiring a signed application is not dispositive and does not establish that that the Secretary of State had the statutory authority to promulgate the rule and deny claims for noncompliance.
The MACP/MAIPF is tasked only with making the initial determination of eligibility of a claim and may only deny a claim if it is “obviously ineligible.” MCL 500.3173a(1). Eligibility is determined by the conditions outlined in MCL 500.3172(1), not by the form in which the notice is given. The MACP/MAIPF could request that the claimant amend the notice to comply with its form application to make its tasks more manageable, but it could not declare the claim to be obviously ineligible based on a minor nonconformity. As Spectrum’s claim was not “obviously ineligible,” the MACP/MAIPF was required to assign it to a member insurer.
