CPAN issues information related to important decision regarding the retroactive applicability of the recently enacted legislative changes to Michigan’s Auto No-Fault Insurance Law

CPAN issues information related to important decision regarding the retroactive applicability of the recently enacted legislative changes to Michigan’s Auto No-Fault Insurance Law

Kuhlgert (Ostendorf) v State Farm: Clinton County Circuit

Court Case No. 21-12102-NF; Judge Shannon Schlegel

On Friday, May 13, 2022, Clinton County Circuit Court Judge Shannon Schlegel issued an important decision regarding the retroactive applicability of the recently enacted legislative changes to Michigan’s Auto No-Fault Insurance Law. Specifically, in a ruling from the bench, Judge Schlegel held that the new fee schedule limitations contained in MCL 500.3157(7), enacted in 2019, cannot be retroactively applied to patients who purchased auto no-fault insurance policies and sustained injury prior to the effective date of the new provisions. Therefore, insurance companies cannot enforce these new fee schedule provisions to limit the level of reimbursements to medical providers who render services after July 1, 2021 to such previously injured patients.

In so ruling, Judge Schlegel held that the no-fault insurance policies purchased by such patients required the payment of “all reasonable charges” for reasonably necessary products, services, and accommodations for an injured person’s care, recovery, or rehabilitation, and insurers had the duty to pay those benefits without regard to any government “fee schedules.” Accordingly, the Court held that any effort to apply the new fee schedules to such patients injured prior to the new law would constitute an illegal attempt to retroactively enforce benefit reductions because the contractual right of those patients had “legally vested” as of the date of their injury. In reaching its decision, the Court relied on the recent decision of the Michigan Supreme Court in the case of Buhl v City of Oak Park, 507 Mich 236 (2021), which case sets forth four (4) factors that should be utilized to determine when legislation can be retroactively applied. Judge Schlegel ruled that all of those factors established that retroactive application of the new benefit cuts was not proper. Her decision came in the case of Kuhlgert (Ostendorf) v State Farm, Case No. 21-12102-NF, where the Plaintiff was represented by George Sinas, Catherine Tucker, and Lauren Kissel of the Sinas Dramis Law Firm in Lansing.

Judge Schlegel is the fifth Michigan Circuit Judge to reach the conclusion that the benefit limitations set forth in the new 2019 no-fault law cannot be retroactively enforced as to patients who purchased auto insurance policies and were injured prior to the effective date of the new legislation. The other judges so ruling in these earlier cases were: Genesee County Circuit Court Judge F. Kay Behm in the case of Melrose v Nationwide Mutual Ins Co, Case No. 19-113455-NF; Kent County Circuit Court Judge Mark A. Trusock in the case of Advisacare Healthcare Solutions, Inc v Progressive Marathon Ins Co, Case No. 21-1118-NF; Calhoun County Circuit Judge Sarah S. Lincoln in the case of Thomason v Allstate Ins Co, Case No. 2011-281-NF; and Washtenaw County Circuit Court Judge Archie C. Brown in the case of Gedda v State Farm Mutual Automobile Ins Co, Case No. 22-152-NF.

The issue will soon be presented to the Michigan Court of Appeals on June 7, 2022 in the pending case of Andary et al v USAA Casualty Ins Co et al, Court of Appeals Case No. 356487, which is scheduled to be argued before Court of Appeals Judges, Hon. Jane Markey, Hon. Douglas Shapiro, and Hon. Sima Patel.