Miller & Tischler, P.C.

28470 W. 13 Mile Rd. Ste. 300

Farmington Hills, MI 48334
(248) 945-1040

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Holiday 2015

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Dear Friends,

Happy Holidays to one and all.

Sincerely,

Wayne, Maureen and Milea

IMPORTANT DEVELOPMENTS IN NO-FAULT CASE LAW
REGARDING SERVICE PROVIDER CLAIMS

There have been significant developments in No-Fault case law on the rights of service providers over the past year. For a change, the news is very good!

Right of Direct Action. In the case of Wyoming Chiropractic v Auto Owners, the Supreme Court denied leave, thereby refusing to disturb the Court of Appeals holding that once again confirmed that providers have a right to directly sue No-Fault insurers. Though this right was recognized in 2002, No-Fault insurers have continually challenged it. The Court of Appeals has repeatedly upheld this right. The Supreme Court has not ruled on the issue, so the action of the Supreme Court in denying leave in this case is very significant.
Power of the Patient to Settle No-Fault Claims of the Provider (part 1): services rendered after full and final release. The relationships between and among the patient, provider, and No-Fault insurer have developed significantly in the past couple of years. In particular, 3 scenarios will be discussed. The first scenario is when the service provider claims benefits for services rendered after the injured person has settled the case by releasing all No-Fault benefits (past, present and future). This scenario occurred in Michigan Head & Spine PC v State Farm (2013). The injured person settled her claim for No-Fault benefits with defendant in July 2009. The release waived the injured person's right to claim medical expenses incurred after the date of the release (July 30, 2009). The injured person then began treating with plaintiff on February 26, 2010, i.e., after the injured person released all future benefits. The service provider sued after the execution of the release, but within one year of expenses incurred. The Court of Appeals held that an insured's release bars a health care provider's claim for reimbursement for medical services rendered to the insured after the release was executed.
Power of the Patient to Settle No-Fault Claims of the Provider (Part 2): Services Rendered Before Release, But Not Included in the Release . One of the nightmare scenarios for plaintiff attorneys in PIP litigation is where a settlement purports to cover all No-Fault benefits incurred to the date of the settlement, and the plaintiff later discovers a significant charge. Just such a scenario occurred in Clark v Progressive Ins Co et al, (2015). In brief, the plaintiff settled her case for $78,000. A few days later, plaintiff and her attorney became aware of a bill for $28,942, the facility charge for a surgery she had several months earlier. Plaintiff tried to void the settlement, claiming that she would not have settled at the settlement figure if she had been aware of this additional charge. The Court of Appeals rejected the effort to set aside the settlement. The Court held it was the duty of the plaintiff's attorney, not the defense or defense attorney, to make sure the plaintiff considers all claims and the ramifications of any settlement.
Power of the Patient to Settle No-Fault Claims of the Provider (Part 3): Service Provider Claims For Services Rendered Before Release, But Not Included in the Release; The Covenant Case. The Clark case dealt with service provider charges that were incurred before a release, but apparently where the insurer was not on notice of the charges. Would the result be different if the insurer was on notice of the provider charges, and if the provider brings the later suit after a plaintiff settles their case? The answer is YES, per the Court of Appeals decision in Covenant Medical Center v State Farm (2015). In Covenant, plaintiff's patient Stockford was injured in a motor vehicle accident in 2011. Plaintiff rendered medical services in 2012. Plaintiff billed State Farm in 2012, and State Farm responded in writing in 2012. On April 2, 2013, Stockford entered into a written agreement with State Farm that purported to release State Farm from liability "regarding all past and present claims incurred through January 10, 2013" as a result of the 2011 accident. The Court of Appeals reversed the trial court's order of summary disposition to the defendant. The Court of Appeals relied on the language in the No-Fault law (�3112) that a good faith payment of No-Fault benefits "discharges the insurer's liability to the extent of the payments unless the insurer has been notified in writing of the claim of some other person." The Court ruled that this language prevents an insurer from discharging its liability even though the patient has signed a release:

"However, the plain text of the statute provides that if the insurer has notice in writing of a third party's claim, then the insurer cannot discharge its liability to the third party simply by settling with its insured. Such a payment is not in good faith because the insurer is aware of a third party's right and seeks to extinguish it without providing notice to the affected third party. Instead, the statute requires that the insurer apply to the circuit court for an appropriate order directing how the No-Fault benefits should be allocated. That was not done in this case. Accordingly, pursuant to the plain language of the statute, because State Farm had notice in writing of Covenant Medical's claim, State Farm's payment to Stockford did not discharge its liability to Covenant Medical."

As a result, we are now seeing a flood of motions under Covenant and �3112, asking the Court to allocate settlements. I.e., the parties are now being forced to protect the interests and claims of service providers. This is great news for service providers who were often victimized by settlements between patients and their insurers.

LESSONS LEARNED. Given the evolving relationships between patients, their attorneys, their No-Fault insurers and service providers, as well as the developing case law described above, some practice pointers for providers are appropriate:

Invoices should always be sent to the responsible No-Fault insurer. That will implicate the protections from the Covenant case. It has long been our advice anyway in order to invoke the No-Fault penalty provisions.
Communications with the patient's attorney should be very clear. If the provider does not wish to use the services of the patient's attorney to collect charges, that must be confirmed in writing. Likewise, if the provider does wish to use the services of the patient's attorney, the terms and conditions must be discussed and confirmed in writing. We caution that the patient's attorney may have a conflict of interest in representing both the patient (i.e., the debtor) and the provider (i.e., the creditor). There are certainly circumstances when representing both patient and provider results from a consonance of interest, but all parties must be alert and cautious in navigating these relationships.

Generally, but not always, it will be in the provider's interest to have a separate presence and separate representation in any litigation pending over the provider's charges.

VERDICTS AND SETTLEMENTS

Wayne Miller settled a motorcycle versus motor vehicle negligence case for $128,000. The case had numerous elements of interest. As the injured person had only $25,000 in coverage, we had to access 2 separate layers of underinsured motorist coverage. In addition, we obtained approximately $40,000 in attendant care benefits for a 4 month period of disability. Finally, as our client was on active duty in the Army, he was covered by Tricare, which asserted a lien for reimbursement of the substantial medical expenses paid. We were able to get the No-Fault insurer to admit its primacy over Tricare and accept responsibility for reimbursement of the Tricare lien.

Wayne Miller settled a complex medical causation No-Fault PIP case for $215,000, which included over $40,000 in No-Fault penalties. The injured person received services from our client, a hospital, for services rendered almost 25 years after the initial injury. After receiving satisfactory proof of the relationship between car accident and services, the insurer inexplicably delayed in making payment, resulting in the imposition of substantial penalties.

M&T ABOUT TOWN

On 11/9/15 Wayne Miller appeared at the New Bethel Baptist Church to discuss Mayor Duggan's disastrous D-Insurance proposal. For those who do not know, the Mayor's response to high insurance rates in Detroit is NOT to end red-lining. Rather, D-Insurance calls for a cap of $25,000 on No-Fault benefits except in very limited circumstances when up to $250,000 may be available. Of all the horrible proposals that we have seen in the last couple of years, this is by far the most shameful. Please be vigilant in the new year and continue to aggressively and energetically defend our No-Fault system.

Wayne Miller authored an article in the Wayne Law Review providing a summary of developments on the No-Fault law for the year 2015. The article will be published next year.

Wayne Miller and Maureen Kinsella will be speaking at the ICLE No-Fault Summit in April, 2016.

IMPORTANT ANNOUNCEMENTS

WELCOME ABOARD

Miller & Tischler would like to welcome the newest addition to our firm, attorney Amanda L. Winagar.

Amanda is a graduate of The University of Michigan (2008) where she received a Bachelor of Arts in Psychology and Criminal Justice and graduated with high distinction. She graduated, magna cum laude, from Western Michigan University Cooley Law School (2015) in the top 5% of her class. During law school, she received an Honor's Scholarship and was a consistent Dean's List and Honor Roll member. Amanda received the Certificate of Merit Award in the following courses: Workers' Compensation; Family Law; Juvenile Law; Interviewing, Counseling & Negotiation; and Pre-Trial Skills.

Amanda has been a member of the State Bar of Michigan since 2015.

About Our Law Firm

Miller & Tischler, P.C., represents survivors of catastrophic brain and spinal injuries, their families and their professional service providers who are having difficulty pursuing their entitlement to receive No-Fault benefits for injuries sustained in motor vehicle accidents. We help our clients understand how their No-Fault insurance may coordinate with other kinds of insurances they have whether it be private health insurance, Medicaid, Medicare, Workers' Compensation, or Veterans benefits. We assist our clients in learning about and obtaining all of the benefits to which they are entitled, whether they be individuals or service providers. We also represent our clients with their auto negligence and wrongful death claims. In other words, we are a full service auto No-Fault law firm.

Let Us Help You.