Preliminary Injunctive Relief: The Next Big Thing in Michigan No-Fault Law?

Preliminary Injunctive Relief: The Next Big Thing in Michigan No-Fault Law?

04/12/2021

Preliminary injunctive relief has long been recognized in commercial contract disputes, particularly where a dispute has the potential to disrupt a commercial supply chain. A party to litigation can file a request for a preliminary injunction and seek an order from the court to maintain the status quo until the dispute is resolved.

Recently, the Court of Appeals recognized and upheld this type of relief in the context of a no-fault claim. The Court’s unpublished decision in Melrose v Nationwide Mut Ins Co (Docket No. 352843) provides a potential basis for an insured to obtain an order requiring an insurer to maintain benefit payments until trial or another resolution of the parties’ dispute.

The plaintiff in Melrose had been receiving no-fault benefits for 34 years. When her insurer decreased her therapy and attendant care benefits based on the results of an independent medical examination, she filed suit and requested a preliminary injunction reinstating her services to the prior levels. In support of her request for injunctive relief, the plaintiff relied on her treating physician’s opinion that a decrease in her benefits “will most likely cause [her] great harm“ and other professionals’ opinions that the earlier level of services was necessary. Melrose, unpub op at 2, 5. The trial court granted the preliminary injunction, and the no-fault insurer appealed.

In analyzing the facts, the Court of Appeals considered the three circumstances required for an award of injunctive relief: “(1) there is no adequate remedy at law, (2) there exists a real and imminent danger of irreparable injury, and (3) justice so requires.” Id. at 4 (quotation marks and citation omitted). It also applied the four factors that courts must consider in deciding a preliminary-injunction request:

  • The likelihood that the party seeking the injunction will prevail on the merits;
  • The danger that the party seeking the injunction will suffer irreparable harm if the injunction is not issued;
  • The risk that the party seeking the injunction would be harmed more by the absence of an injunction than the opposing party would be by the granting of the relief; and
  • The harm to the public interest if the injunction is issued. [Melrose, unpub op at 4 (quotation marks and citation omitted).]

In its reasoning, the Court first recognized that the purpose of a preliminary injunction is to preserve the status quo. In doing so, it differentiated between cases where an insurer discontinued benefits and cases where the insurer never paid benefits. Unlike in Bratton v Detroit Automobile Inter-Ins Exch, 120 Mich App 73; 327 NW2d 396 (1982), the no-fault insurer in Melrose had paid no-fault benefits for decades.

Next, the Court of Appeals agreed with the trial court that the plaintiff had a strong likelihood of prevailing on the merits. Among other things, the plaintiff presented opinion testimony from her doctor of 34 years and opinions from other professionals that (1) her prescribed services were reasonably necessary for her accident-related injuries, and (2) terminating those services would harm her. The insurer, on the other hand, only presented the opinion of a doctor who examined the plaintiff on one occasion, without consulting anyone but the plaintiff (who was legally incapacitated).

The Court of Appeals also weighed the potential irreparable injuries of each party. If the preliminary injunction were not granted, the plaintiff would face irreparable harm. She wouldn’t be able to retroactively obtain the services that she didn’t receive while the lawsuit was pending.  In contrast, the insurer may incur a financial loss if the preliminary injunction were granted. Relying on precedent concerning the economic-loss doctrine, the Court concluded that concerns of physical safety outweigh economic concerns.

Lastly, the Court of Appeals implicitly agreed with the trial court that public interests supported continuing the plaintiff’s services. Accordingly, it affirmed the trial court’s ruling.

The Court of Appeals’ decision doesn’t support a preliminary injunction after every benefit discontinuance or denial. The facts before the Court were specific, and the circumstances were unusual. But, then again, the four factors for a preliminary injunction are open to interpretation and subject to a trial court’s discretion. So it is still left to be seen whether courts will apply the Melrose analysis to less extenuating circumstances.

If you have questions about the role of preliminary injunctions in no-fault actions, please feel free to contact the author, Chelsea E. Pasquali. More information about Collins Einhorn’s General and Automotive Liability Practice Group is available here.


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