Michigan Court of Appeals; Docket No. 270406; Published
Judges Markey, Saad, and Wilder; unanimous; per curiam
Official Michigan Reporter Citation: 275 Mich. App. 58, Link to Opinion 
STATUTORY INDEXING:
Obligation of Claimant to Submit to Physician Examination [3151]
Nonattendance As a Basis for PIP Benefit Cutoff [3151]
TOPICAL INDEXING:
Not applicable
CASE SUMMARY:
In this unanimous published per curiam opinion, the Court of Appeals held that defendant Farmers Insurance Exchange could cancel an insured’s personal protection insurance benefits for repeatedly failing to attend scheduled independent medical examinations.
The 12-year-old plaintiff in this case, Brittany Underwood, sustained a closed head injury in a motor vehicle accident that occurred on December 11, 2002. In April 2003, Brittany was examined by Dr. Jacobus Donders of Mary Free Bed Hospital. Dr. Donders noted that Brittany complained of right frontal headaches that radiated to her neck and shoulders which were apparently related to pressure and tension. In December 2003, Brittany failed to appear for counseling on two occasions at Mary Free Bed Hospital. In 2004, Brittany repeatedly failed to attend physical and neuropsychological IMEs that Farmers had scheduled. After Brittany failed to attend an IME scheduled for May 21, 2004, for which Farmers was assessed a $1,000 no-show cancellation fee, Farmers cancelled Brittany’s first-party no-fault benefits. In a letter dated July 13, 2004, plaintiff’s attorney requested that Farmers reinstate plaintiff’s no-fault benefits. Farmers responded that upon receipt of repayment of the $1,000 no-show cancellation fee, it would reschedule the IME and reinstate the plaintiff’s benefits. Plaintiff then filed a complaint asserting that Farmers had refused to pay plaintiff’s personal protection insurance benefits in accordance with the No-Fault Act. Farmers filed a third-party complaint against plaintiff alleging breach of contract for failure to repay Farmers for the $1,000 cancellation fee.
The trial court determined that Farmers unreasonably denied plaintiff no-fault benefits and, therefore, owed attorney fees. It also determined that plaintiff had breached her contract with Farmers and was liable for the $1,000 cancellation fee. On appeal, the Court of Appeals held that Farmers had a statutory right under MCL 500.3151 to require Brittany to undergo physical and psychological IMEs. In so holding, it noted that because Brittany’s mental and physical conditions were material to her claim for benefits, she had a statutory duty to undergo the IMEs. Furthermore, the court noted that Farmers’ no-fault policy imposed a duty on claimants to submit to physical examinations at Farmers’ expense, as often as Farmers deemed necessary. Although the policy does not set forth a remedy for breach of this duty, the general rule for breach of contract is to make the non-breaching party whole. Allowing Farmers to suspend benefits placed Farmers in the same position it would be if Brittany had undergone an IME and the IME showed Brittany was uninjured. In this regard, the court stated:
“Farmers had a statutory right to require Brittany undergo physical and psychological IMEs. MCL 500.3151 provides: ‘When the mental or physical condition of a person is material to a claim that has been or may be made for past or future personal protection insurance benefits, the person shall submit to mental or physical examination by physicians.’. . . Because Brittany’s mental and physical conditions were material to her claims for benefits relating to her mental and physical health, Brittany had a statutory duty under MCL 500.315 to undergo the neuropsychological and physical IMEs. . . . We hold that where a claimant repeatedly breaches her statutory duty to submit to IMEs, an insurer may properly suspend benefits pending completion of any requisite IME. Otherwise, an insured could breach with impunity her duty to submit to IMEs, and the insurer would have no way of investigating whether the injury claims were legitimate. In addition to the statutory duty to submit to IMEs, Farmers’ no-fault policy imposes on ‘[a] person claiming any coverage of this policy’ a duty to ‘[s]ubmit to physical examinations at our expense by doctors we select as often as we may reasonably require.’ The policy does not articulate the remedy for breach of this duty. The general rule is that a remedy for breach of contract should make the nonbreaching party whole or put the nonbreaching party in as good a position as if the breach had not occurred. . . . Allowing Farmers to suspend benefits places Farmers in as good a position as if Brittany had submitted to a neuropsychological IME because it puts Farmers in the same awkward position as it would be had the IME shown that Brittany lacked a bona fide brain injury caused by the accident. . . . “
(emphasis in original)
