Michigan Supreme Court Rules Medical Providers Can Satisfy No-Fault Notice Requirement by Submitting Bills and Records

In a recent opinion, the Michigan Supreme Court clarified, and eased, the written notice necessary under the No-Fault Act.

The Court held in Perkovic v. Zurich American Insurance Co. that a medical provider’s submission of medical records and bills to the insurer, which did not contain reference to a potential no-fault claim, satisfied the notice requirement in MCL 500.3145(1), thereby preserving the plaintiff’s claim from being barred by the one-year statute of limitations.

The underlying accident occurred in Nebraska on February 28, 2009. On April 30, 2009, a nonparty medical provider mailed Zurich, the defendant no-fault insurer, a bill and corresponding records for the services it provided to the injured party for the purpose of obtaining payment. The provider did not include any reference to a potential no-fault claim. Zurich denied payment and returned the bills and records because there was no injury report on file for the injured insured. The plaintiff filed suit on August 11, 2009, but Zurich was not added as a party until an amended complaint was filed on March 25, 2010.

The trial court granted summary judgment in Zurich’s favor based on the one-year statute of limitations because it had not received written notice of the claim or paid any benefits before the limitations period expired. The Michigan Court of Appeals affirmed the trial court, and the Michigan Supreme Court granted leave to appeal.

The Court noted that under MCL 500.3145(1), a claim for no-fault PIP benefits must be filed within one year after the accident causing the injury, unless 1) the insurer was properly notified of the injury, or 2) the insurer had previously paid PIP benefits for the same injury. Because no payments had been made, the question remained as to whether Zurich was properly notified of the injury to extend the one-year statute of limitations.

The Court recognized a line of Court of Appeals decisions on the notice exception in MCL 500.3145(1), which consistently held that the statute of limitations can be tolled if the plaintiff substantially complies with the purpose of the statute, even if all requirements of the statute are not entirely met. After analyzing the Court of Appeals’ reasoning in affirming the trial court, the Supreme Court disagreed with its conclusion that the purpose of the statute is to provide time to investigate and to appropriate funds for settlement purposes. The Court found no such purpose in the plain language of MCL 500.3145(1), which delineates the information that the requisite written notice must include: “The notice shall give the name and address of the claimant and indicate in ordinary language the name of the person injured and the time, place and nature of his injury.”

Contrary to previous Court of Appeals opinions, the Court found the statute does not require a particular format for the notice, nor does it require explicit language indicating a potential claim for PIP benefits. Finally, the Court stated that the statutory language provides that notice may be given by a person claiming to be entitled to PIP benefits or by someone in his behalf, meaning that the notice can be provided to the insurer without the knowledge or direction of the injured person.

Because the documents timely submitted to Zurich contained all the information required by MCL 500.3145(1) and were sent in behalf of the plaintiff by a medical provider, the notice requirement in MCL 500.3145(1) was satisfied, and the plaintiff’s claim was not barred by the one-year statute of limitations.

This decision favors injured claimants as well as medical providers that might pursue separate claims for PIP benefits. Based on this opinion, if a medical provider or the injured person has submitted medical records and bills containing the required information for statutory notice, the statute of limitations will be tolled on the claim.

Insurers can no longer return bills and records and claim no notice of injury simply because the injured person has not submitted written notice of an injury. Instead, insurers should expect medical providers to rely on this case by submitting detailed bills and records that contain the injured person’s name and the time, place, and nature of the injuries in order to preserve a cause of action if the claim is denied on the basis that the injured person did not provide notice of a potential no-fault claim.