The no-fault act prohibits the filing of a lawsuit for benefits more than one year after an accident unless the insurer received written notice of the injured person’s injuries within the first year or the insurer previously paid benefits. In Jawad A. Shah MD v State Farm Mut Auto Ins Co (Docket No. 351156), the Michigan Court of Appeals held that an insurer’s act of entering information into a digital claim-file system and requesting a police report met the written notice requirement under MCL 500.3145.
Tina Fulkerth was involved in a car accident in February 2015. Less than two months later, she discussed the accident over the telephone with a State Farm claim representative who was investigating a related property-damage claim. During the call, Fulkerth provided information about the collision and reported that she suffered “[n]eck pains.” The claim representative entered this information into a computer system under a claim file for Fulkerth and ordered a copy of the police report from the accident. After reviewing the report, the claim representative forwarded the information to State Farm’s personal injury protection (PIP) department. Employees from that department attempted to call Fulkerth three times and sent a follow-up letter. Fulkerth never responded, so State Farm closed her file.
In 2017, Fulkerth began treatment with the plaintiff medical providers. She also executed an assignment that allowed them to collect no-fault benefits from State Farm for the services that she received. The providers then filed the underlying lawsuit, seeking payment for their services.
State Farm moved for summary disposition, arguing, among other things, that the providers’ claims were barred because it didn’t receive the written notice required under MCL 500.3145(1). Ultimately, the trial court granted the motion, and the plaintiff providers appealed.
The statute-of-limitations provision under the no-fault act, MCL 500.3145, prevents a party from filing an action to recover PIP benefits more than one year after an accident unless one of two exceptions applies. The first exception exists when the insurer receives written notice of the injury within one year after the accident. At the time of the accident and the complaint in this case, MCL 500.3145(1) stated:
The notice of injury required by this subsection may be given to the insurer or any of its authorized agents by a person claiming to be entitled to benefits therefor, or by someone in his behalf. 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.
(The current version of the statute contains substantively identical language.)
Court of Appeals’ Analysis
The Court of Appeals reversed the trial court’s grant of summary disposition, holding that State Farm received written notice that substantially complied with the requirements under MCL 500.3145.
The Court explained that a notice provided in a claimant’s interest is a notice “given . . . by someone in his behalf.” MCL 500.3145(1) (emphasis added). (The panel noted that “in his behalf” has a different meaning than “on his behalf.”) The statute doesn’t require a special format for the notice and doesn’t limit who can prepare it. So a claimant doesn’t need to know that written notice was provided to her insurer in order for the notice to satisfy MCL 500.3145.
Applying these rules, the Court concluded that an insurer may generate the requisite written notice by entering information into a computer system. Through the claim representative’s on-screen record of her telephone conversation with Fulkerth and the police report requested by the representative, State Farm received written documentation of the facts required under the statute. Accordingly, State Farm was not entitled to summary disposition under MCL 500.3145(1).
In support of its holding, the Court noted that “‘[t]he no-fault insurance act is remedial in nature and must be liberally construed in favor of persons intended to benefit thereby.’” Shah, unpub op at 5, quoting In re Geror, 286 Mich App 132, 134-135; 779 NW2d 316 (2009) (alteration in original).
State Farm filed an application for leave to appeal in the Michigan Supreme Court. It’s unclear at this time whether the Court will grant leave and, if so, affirm the Court of Appeals’ decision. In the meantime, insurers should be mindful that their own actions may have unintended consequences under MCL 500.3145.
If you have questions about the notice requirement under MCL 500.3145, please feel free to contact the author, Melanie T. Camara. More information about Collins Einhorn’s General and Automotive Liability Practice Group is available here.