TOV Injury and Safety Blog

A divided court recognizes wage loss where the sub-S Corporation is losing money

Under the Michigan No Fault Act, injured persons are not compensated for the loss of "earning capacity"; they can only recover actual lost wages.  AAA argued that an injured worker shouldn't be able to recover lost wages from his own sub-chapter S corporation if the corporation appeared to be losing money.  In a 5-2 decision, with Justices disagreeing over the pertinent logic, the Michigan Supreme Court handed a rare defeat to an insurer.  It held, in essence, that the statutory language and the recognition of a corporation's separate legal identity required it to honor the victim's lost wage claim.

Farm Bureau strikes again: no coverage for a substitute vehicle

Farm Bureau is making a concerted effort to compete with Allstate's reputation for callous, obstructive bullying in claims management.  This week, it managed to avoid paying an injured woman's PIP claims by asserting that she could not transfer coverage to a rental vehicle while her vehicle was "in the shop".

Another majority abomination on "serious impairment"

  Today the Engler "Gang of Four" handed down another decision denying a seriously injured motorist any recovery.

Broe v. Allstate: Allstate forced to pay overdue PIP benefits

   In this action to recover personal injury protection benefits from Allstate Insurance Company, the summary disposition in favor of the provider was upheld where Allstate opposed the provider's motion with only conclusory affidavits disputing the allegations of the provider's complaint.  The Court held that in response to a motion for summary disposition, Allstate was required to provide specific evidence in defense of the claims and not merely conclusory objections to payment.

The Gang of Four on Michigan's Supreme Court does another favor for insurance companies

In the recent case entitled Mary Ellen McDonald v. Farm Bureau, the Engler appointees to Michigan's Supreme Court overruled 30 years of case law to allow Farm Bureau to enforce a contract provision that was previously considered illegal and unenforceable.

What qualifies as a "land motor vehicle" under your no fault policy?

Gabe Medel's neighbor pulled out into the road in front of Gabe on his lawnmower.  Gabe had to swerve to avoid the neighbor and struck a tree.  Gabe was killed on impact.  His widow attempted to collect insurance under Gabe's Underinsured Motorist Coverage.

Court acknowledges causal relationship between catastrophic injuries and hyperelipidemia

This month, the Court of Appeals in Scott v. State Farm rejected State Farm's refusal to pay for cholesterol medication on behalf of a severely head-injured young woman.  The woman's physicians had confirmed that one cause of her hyperlipidemia was her catastrophic head injury from a motor vehicle accident:  it disabled her from exercise and denied her normal mental acuity and judgment.

Titan Insurance sanctioned for failure to pay medical expenses

In Spectrum v. Titan Insurance Company v. Blue Cross Blue Shield, the Court of Appeals upheld the award of fees and costs to the Plaintiff against the Titan Insurance Company, for failing to timely pay auto no fault PIP medical expenses.

An unlikely and injudicious ruling on the impact of medical records

     It has long been maintained that "hard cases make bad law".  That principle was demonstrated once again in Thomas v. Schneider, an unpublished per curiam opinion of the the Michigan Court of Appeals.  From what can be gleaned from the opinion, it appears that the plaintiff in Thomas appeared to the Judges to be misrepresenting the injuries she suffered in a motor vehicle collision and over-stating their impact on her prior medical state.  In summarily dismissing her auto no fault claim, the judges felt that the need to eliminate her contradictory deposition testimony so that a "non-deserving" Plaintiff could be dismissed without a trial weighing conflicting evidence.  To achieve that goal, the Court held that her deposition testimony about her condition could not be considered because it contradicted her prior statements to medical treaters.

     Reading between the lines, it appears that the appellate court concluded that the Plaintiff was not truthful and did not want her to waste the resources of a "day in court".  Nevertheless, it went much too far when it struck her testimony:  no rule of evidence or court rule would justify this outcome.  We have seen too many examples of hurried, forgetful or even biased doctors making mistakes or mis-statements in medical records to allow these hurried chart notes to completely exclude a witnesses' explanation.  A health care provider's primary responsibility is to treat the patient and it does just happen on occasion that a medical chart will mistakenly refer to the wrong gender of the patient, the wrong limb being injured, the wrong accident facts (from another ER case of the same date) or create some other confusion or error.  We have personally witnessed numerous examples of this nature of the years.  The ruling in Thomas v. Schneider is simply bad law and ultimately too draconian an exercise of judicial discretion to be justifiable--simply to uphold the summary dismissal of one "bad" case.

Another abusive "serious impairment" decision

  In McCormick v. Carrier, two Court of Appeals judges applied the Michigan Supreme Court's recent interpretation of the "serious impairment" threshold to dismiss the claim of Mr. McCormick.

Leading cause of death for teens age 15 to 19

Motor vehicle accidents are the leading cause of death for teens between 15 and 20.  We have seen enough of this carnage over the past 30 years to anecdotally confirm this statistic.  The most dangerous time to ride with a young driver is after 10 pm, and a car with four teens driven by a sixteen-year old driver is more dangerous, statistically, than riding with a drunk.  Several states, including Michigan, have responded to these statistics with "graduated" drivers licenses that limit young driver's privileges.  These graduated programs have reduced teen deaths in the affected states by from 20 to 40 percent.

One-year back and third-party service providers

In Verbeke v. Innovative Rehabilitaton Systems, Allstate used the one-year back rule to take advantage of medical service providers.

The object must hit your car: your car can't hit the object

  In an effort to eliminate "phantom" uninsured motorist claims, most insurers require that there be some corroborating evidence of "physical contact" with the insured vehicle.  The "strict constructionists" in Seger v. Hartford read this requirement with such minute detail that striking a tree did not meet the contract terms and benefits were denied.

Insurance limits, inflation and "reform"

Most Michigan citizens would think that with all of the "reform" championed by the Republicans in the last twenty years, our no fault law would be "up-to-date".  Boy, would they be mistaken.

Fight over serious impairment and insurance surveillance "gamesmanship"

      In Laukkanen v. Jason, the injured Plaintiff secured a verdict against the driver who rear-ended her at a stop light.  Plaintiff worked as a physical therapist and had to undergo substantial medical treatment after the collision.  MRI and EMG testing showed abnormalities consistent with her accident-injury claims, and she endured having to wear a back brace, physician-restrictions on her activities, numerous medical therapies including orthopaedic manipulation, and physical therapy.  She provided extensive evidence supporting the limitations on her normal work duties and life activities.  Despite this evidence, the insurer claimed she did not suffer a "serious impairment of bodily function", and asked the Court of Appeals to set the verdict aside. 

     Not only did the trial court and the Court of Appeals reject the insurer's claim of no serious impairment, it also upheld the trial court's refusal to countenance the Defendant's "gamesmanship" in secretly taping the Plaintiff and then lying about it.  The Court had required both sides to disclose their evidence months before the trial (a standard scheduling order) and the Plaintiffs had also filed motions to compel the Defendants to produce any surveillance evidence.  The Court criticized the Defendant for lying about the existence of this evidence, failing to produce it for more than four months, and producing other photographic and video evidence without producing the hidden surveillance until a few days before trial--too late for the Plaintiff to examine the evidence or respond to Defendant's arguments about what it showed. 

     The Court held that the trial court did an excellent job of carefully considering the circumstances  of the Defendant's "gamesmanship" and blatant violation of the court's discovery rules.  The Appeals Judges felt that excluding this imporper evidence was a proper exercise of the trial court's discretion and refused to overturn its decision.

Serious impairment and a Michigan soldier

A no fault insurer recently avoided paying compensation to a soldier who was partially disabled for 18 months after a motor vehicle collision, claiming that her injuries were not a "serious impairment".

Children and time limits on suit

     Ever since the hand-appointed Engler Justices took control of the Supreme Court,  the four Justices have controlled Michigan jurisprudence and displayed an activist drive to manipulate the law for the benefit of their insurance constituency.  One of the Justices was even reported to have made a speech where he described he and his colleagues as allied with insurance tort "reformers" in a civil war with victims' attorneys.  As a result, insurance companies have become more aggressive in attempting to restrict the rights and interests of their insureds.  In the recent Klida v. Braman case, the Court of Appeals refused to countenance an effort by Farm Bureau to eliminate a child's right to sue.

More over-reaching by Bristol West Insurance Company

    Bristol West has been a recent entry in the Michigan competition to see who can most aggressively abuse Michigan consumers.  While no one can really compete with Allstate in this competition, Bristol West appears to be doing its best.  This week it over-reached.

Ingenix: a system to rip-off insureds and doctors on "reaonable and customary"?

New York's Attorney General and the AMA have filed separate lawsuits charging that a system used by insurers to calculate "reasonable and customary" charges is cheating customers and health care providers.

Auto rental agencies' limited liability in Michigan

  As a special favor to auto rental companies, several years ago our Republican legislature and governor included in their tort "reforms" a statute that limited the rental agencies' liability for negligent operation of a vehicle to $20,000.00. That special interest reform continues to cause problems for innocent victims who are injured by the sloppy rental practices of rental agencies and the greed of auto insurers.

The magic haybale

   In another marvelous result-oriented, pro-insurance, typically Henry Saad opinion, this week the Court of Appeals ruled that magical hay bales are capable of appearing anywhere, at any time.   In Kerr v. State Farm, the plaintiff was badly injured after she was startled by the presence of a haybale in the middle of the freeway and attempted to avoid it. She struck the bale, left the road and hit a highway obstacle, suffering vehicular damage and  severe injuries.  Since she couldn't identify the owner of the bale of hay, she brought a claim against her own carrier, State Farm, under the pertinent section of her policy.

Delivering newspapers voids your auto coverage in Michigan

        Acting pursuant to an earlier decision by the Michigan Supreme Court, the Court of Appeals yesterday held that a woman who used her car to deliver newspapers could not avail herself of the auto liability insurance she had purchased.  In addition, the woman she had seriously injured in a car accident could not avail herself of the coverage.  In Bristol West v. Butzbach, the three Court of Appeals' judges felt constrained by a prior Supreme Court decision to invalidate Butzbach's coverage, because her auto policy contained a standard exclusion for "business pursuits." 

          In Michigan, no fault insurance is mandatory, and the coverage the carrier must provide is mandatory:  on that basis, prior court decisions had held that insurers are in a better position to evaluate and underwrite risks that include incidental money-making or "business" pursuits, and have required coverage of these activities that fall short of an actual commercial venture.  For example, a number of years ago, we prevailed against the insurer in Rossman v. State Farm, when it attempted to invalidate a volunteer fireman's coverage because he received a small per diem for fire runs. 

          This issue arises regularly because many unsophisticated insureds use their vehicle for incidental money-making activities (for example, teens delivering pizza, newspapers or other materials for an employer) that aren't normally considered to be a "business".  Even if an insured were to read his or her entire policy when it comes in the mail a month after buying it, most people wouldn't recognize this exclusion from coverage as applying to them.  And, under other activist rulings of our Supreme Court, the insured's agent owes no duty to explain the exclusion to the insured.

        Before the activist Engler Justices assumed control of the Supreme Court, these incidental income-generating activities were included in mandatory coverage, and an insured's agent owed a general duty to inform the insured:  under this Court, though, many naive or uneducated Michigan consumers who are unaware of this constraint will be purchasing illusory coverage for these poorly-compensated activities.  None of them will likely come from the neighborhood of these Republican activist jurists, however, so their concerns are ignored.

Another decision on serious impairment

        Relying upon the Supreme Court's ruling in the Kreiner case, the Court of Appeals recently held that a woman who suffered (among other injuries) a rotator cuff tear in her right shoulder, did not suffer a "serious" injury.  The victim endured surgery in June of 2005 after she failed to respond to a February injury.  She wore a shoulder brace for the next four weeks, and missed six weeks of work.  She attended physical therapy three times per week for six weeks and intermittently through March of 2006, 13 months after the wreck.

        In May of 2006, she testified that her shoulder had not recovered fully.  She had continued difficulty with various household and grooming tasks and had to train herself to do some things with her non-dominant left hand.  She could no longer bowl, but otherwise conceded that there was nothing else that she "absolutely could not do".  The trial court denied the Defendant's motion to dismiss her claim on the threshold basis, but the Court of Appeals reversed and threw her claim out.  The three judges held that under Kreiner, "the plaintiff failed to show that the course or trajectory of her normal life was affected".  We'd be willing to bet that the "ordinary person" would consider her injury to be "serious"--the actual legislative standard before it was manipulated by an aggressively conservative majority on the Supreme Court.

"Good hands or boxing gloves"

        The American Association of Justice recently published a thoroughly researched article explaining the massive change that Allstate Insurance Company has initiated in the United States' insurance industry. In 1987, the Insurance Information Institute conclued in its annual report that the industry, while profitable, needed to cut costs and enhance profits in order to compete with Fortune 500 companies for investment dollars.  Twenty years later, it continues to report that the industry has reported "superb", "robust" and "excellent" investment and income results, but it also continues to call for caps on recovery that it originally advocated in the 1980s--despite the fact that the industry was highly profitable (profits increased in the first nine months of 2006, alone, by 15.1 billion dollars) and that the suggested caps had lost 75 percent of their value due to inflation.  By 2006, Allstate had captured returns for its investors that were double that of the Standard & Poor 500, yet it continued to seek higher profits by limiting payouts to consumer insureds.  It had not cut premiums.

        In 1995, Allstate initiated a program it called Claims Core Process Redesign (CCPR) at the suggestion of a corporate consulting company called McKinsey & Co.   McKinsey is better known for having provided consulting services to the Enron Company.   Most people will recall that Enron reported spectacular profits as a result of a novel and illegal accounting strategy, before it crashed and destroyed the lives of its workers and investors.  Under the guidance of a CEO who in 1999 retired with a personal fortune of more than 150 million dollars in stocks, options and incentive buyouts,  and a successor who profited by more than 50 million dollars between 1995 and 1999, Allstate secretly adopted a business paradigm that intentionally manipulated its loss payouts to insureds in order to maximize profits. 

     Historically, courts had required that insurers balance profits with a fiduciary duty to the persons they insured.  In short, the insurer "represented" the policy holder and the relationship was not entirely "at arm's length": in many cases, citizens are even compelled to buy the insurance product in order to operate a vehicle on state roads, for example, or to bid on public contracts.  In return, the insurer recieved various legislative and financial perquisites thought to be necessary to accomplish the purpose of sharing risks broadly.  Thirty years ago, the California Supreme Court characterized this "quasi-public" responsibility of insurers as an obligation of "good faith and fair dealing, encompass[ing] qualitites of decency and humanity inherent in the responsibilities of a fiduciary".

         Taking the Enron philosophy to its core, McKinsey and Allstate increased Allstate's pre-tax operating income [not including investment income] from a decade-long average of82 million dollars a year, to an average of 27.4 billion dollars per year from 1996-2006.  McKinsey and Allstate did not accomplish this by making smarter investments or through wiser risk management.  Rather, Allstate adopted a "zero-sum" approach which internal memos claimed "redefine[d] the game" and "radically alter[ed] our whole approach to the business of claims".    Allstate aimed to reduce claims payments by 15 to 20 percent, and in fact it reduced payouts on auto claims from 69 cents per premium dollar collected, in 1994, to 51.7 cents per dollar in 1998 and 43.5 cents per dollar by 2006.  Parenthetically, this should have resulted in some reduction in premiums but in fact it did not.

        In order to achieve these spectacular results, McKinsey and Allstate devised a "Good Hands or Boxing Gloves" approach, pursuant to which Allstate would pay claims fairly, or promptly, but not both.  Insureds would be offered a choice:  prompt payment of an arbitrarily computed amount (actually eighty percent of similar past claims, apparently)--or incur the expense, risk and delay of bare-knuckled litigation.    This strategy deliberately took advantage of the economic pressures which accompany a significant personal or property loss:  many policy holders would simply be unable to withstand the delay and expense of litigation and be forced to capitulate and accept unjust settlement offers that had been calculated at about eighty percent of past payouts.

        McKinsey estimated that faced with legal expenses and substantial court delays in resolution of a claim, 90 percent of policy holders would throw in the towel.  The remaining ten percent of insureds willing to contest this arbitrary reduction in a claim would be forced in to what McKinsey and Allstate called the "kill box":  no-holds-barred litigation designed not to determine the actual value of a claim, but rather to punish policyholders unwilling to accept less than the actual value of their loss.

        As further assurance of higher profits, the industry also redoubled its assault on victims' rights under state laws.  A full-scale national campaign was engaged (and then fueled with extraordinary profits) to limit payouts by all casualty and liability insurers through changes in the law and marketing to potential jurors.  "Frivolous claims" became a political by-word, despite the fact that no actual proof was offered to document that such claims were a legitimate issue. 

        In an earlier blog we documented the enormous change in the number and size of payouts in Michigan since 1987: insurers have enjoyed particular success in reducing claims and claims payouts in Michigan and have reaped profits that are even more spectacular than nationwide averages as a result.  Refer to "Record Profits..." in our weblog index.      

        Enormous insurers like Allstate, Safeco and Progressive have achieved such startling profits that they have embarked upon a massive stock buyback with excess premium dollars.  Just two y ears ago, Allstate bought back more than 15 billion dollars in stock during the same period it was complaining about large potential weather-related losses and lobbying legislatures for insurance "reform".  While insurance industry spokespeople like Mark Racicot--formerly a top Enron lobbyist and Republican National Committee Chairman, and current head of the American Insurance Association--describe the industry as "high-risk" when responding to critics, the facts show otherwise:  even in 2005 when three of the ten most destructive storms in history ravaged the United States, U.S. insurers declared RECORD profits.

        These record profits have not ocurred by coincidence.  Even while the industry was reporting 44+ billion in profits in 2005, insurance executives were manipulating to enhance profits further.  For example, Jeff Radke, CEO of a Bermuda-based reinsurer, claimed that Hurrican Katrina is a "significant event" for our company...our loss will leave us with enough capital to really thrive in the markety opportunity that's going to follow...this is one of those happy cases where if a rating agency were to insist that we raise capital...it wouldn't trouble us much at all."  AIG Executive Vice President JW Greenberg expressed similar sentiments in an intra-company memo he wrote the day Hurricane Andrew hit south Florida:  "We have opportunities from this and everyone must probe with brokers and clients.  Begin by calling your underwriters together and explaining the significance of the hurricane.  This is an opporunity to get price increases now. We must be the first and it begins by establishing the psychology with our own people.  Please get it moving today.   Lloyd's of London described the September 11 attacks similarly, as a "historic opportunity...where very large profits are possible".

        In short, the American public has been manipulated into a cultural change of significant  proportions through a campaign of deceit and greed.  Led by Allstate and McKinsey, a quasi-public industry that historically balanced state-defined risks and rights in order to broadly share accident risks accross the population, has achieved an Enron-like goal of redefining and diminishing consumer rights in order to record record profits.  Even more disgusting, it has cynically and deliberately profited from catastrophes such as September 11 and Hurricane Katrina, while diverting attention from its record profits to excoriate innocent victims and policyholders.  One can't help but wonder just how long the middle class will allow itself to be manipulated against its own interest by wealthy Enron-like profit-mongers.

       

       

Record Profits for Michigan Insurers

         A recent analysis of the financial reports from AAA, Allstate and State Farm (these three insurers account for about 45 percent of Michigan auto insurance premiums) documented that they have made record profits since 2002.  Even accounting  for losses caused by Hurricane Katrina, these companies have earned record profits and created record levels of reserves.  This performance is consistent with record after-tax profits in the industry generally:  the industry reported profits in 2006 of 63 billion dollars--which was fifty percent above 2005's record profit of 43 billion dollars. 

          The Auto Insurance Report, a respected industry commentator, explained that the Michigan insurers are "significantly" more profitable than their reported loss ratios would indicate; and other industry investment organs have described Michigan insurers' profits as "eye-popping" or "the second-highest of a generation".  As the Auto Insurance Report described the situation:  "Everyone, and we mean everyone, made money..."  For the decade ending in 2002, [this would be measuring performance prior to the full impact of "reform"], AIR estimated that Michigan auto insurers earned a profit on net-worth that was approximately 25 percent higher than auto insurers nationwide.  These profits will rise in 2007 and in the future as Michigan apparently has the lowest loss-to-premium ratio in the industry and that ratio is declining on an annual basis as "reforms" reduce the number of viable claims. 

            AAA, the best indicator of Michigan's auto insurance performance, had a loss ratio (earned premiums to defense costs) of eight percent:  "lower than virtually all insurers doing business on a national level".  In fact, in Michigan these premium dollars are so lucrative that the only area of increased expense is marketing.  Michigan insurers are willing to spend one-third of their premium dollar on agents' commissions and underwriting expenses in order to compete to attract these low-payout premiums.

          AAA, which writes 80+ percent of its business in Michigan, doubled its annual profits in the past five years (from 50.9 million in 2002 to 104.2 million in 2006) and increased its surplus from 915 million dollars to $1.534 billion by the end of 2006.  Allstate and State Farm, which conduct substantial business in other states, reported similar profits and surpluses. 

          These record profits originate substantially from automobile liability coverage.   Auto insurance accounts for about forty percent of all property and casualty insurance. While liability coverage constitutes only between 15 and 16 percent of the total cost of Michigan No Fault coverage, it is highly lucrative.  About fifty percent of the cost of coverage is for physical damage to property.  The remaining one-third of the Michigan auto premium dollar goes to no fault coverage (which primarily covers medical expense). 

          Analysis of the claims incurred or paid, when compared with premiums collected, shows that premiums collected for liability coverage are "excessive" and are a primary source of the documented profits.  Premiums collected for this coverage exceed the dollars paid out and disproportionately support profits and other coverages.  While it is clear that Michigan insurers make a significant profit on liability coverage and property coverage, it is impossible to evaluate the propriety of the final component of no fault premiums--no fault medical profits, because all Michigan insurers must contribute to the catastrophic claims fund which is operated by a board of insurance representatives:  this board has refused to release its actuarial or reserve calculations to the public and denies that it is subject to the Freedom of Information Act.  The catastrophic claims fund that sets and collects these premiums is the same entity that was embarrassed into returning excessive premiums ($180 per car) to Michigan rate-payers in 1998.

          Since liability coverage constitutes only fifteen percent of total Michigan auto premiums, if half of all existing liability claims were eliminated it would reduce the cost of auto insurance by only about seven percent.  Nevertheless, when insurers talk about the cost of coverage and "reform", liability and trial lawyers are the only topics they discuss:  where "liability" was once associated with "safety" and "accountability", it has now been purposely equated in the public's mind with frivolous greed.

         Investigation of these profit figures and claims information make clear that Michigan citizens have been duped into giving away their rights when victimized, not to save on insurance premiums, but rather to enhance the profit potential of large insurance corporations.  If insurance or tort "reforms" and profits were monitored by the State and actually translated into a reduced cost of using the roads, we could say that a legitimate public policy choice ( cheap transportation over reparations for injury) had been made.  As matters stand, however, we merely have one more example of ordinary people being taxed through auto insurance to support big business profits.

The Supreme Court and "independent medical examinations"

    This week the conservative four-member majority of Michigan's Supreme Court issued a new ruling on independent medical examinations (IME's).  It was presented with a controversy regarding an examination scheduled by State Farm.  State Farm had set the examination with a doctor whom it consulted regularly, and who had previously violated the attorney-client privilege during examinations by inquiring into the insured's conversations with her attorney.

          The IME came up in the context of litigation over personal injury protection (PIP) benefits sought by the insured after a motor vehicle collision.  State Farm had denied payment and the insured had initiated suit.  After suit was started State Farm compelled the insured to attend the IME at its' doctor's office.  Faced with the history of inappropriate questioning by this doctor, the trial judge relied upon the Court Rule governing IMEs in personal injury litigation to impose certain conditions upon the examination.  State Farm did not claim that the conditions were unreasonable:  it claimed and "unconditional right" to an examination...without regard to "good cause".  It maintained that the Court Rule regarding IMEs in litigation should not apply to a no fault insurance claimant and that the only requirements should be those contained in the parties' insurance contract.  The trial judge and the Court of Appeals rejected this claim and ruled that all IMEs are subject to the court rule.

          The four members of the Supreme Court who have been regularly criticized for pandering to the insurance industry overturned the lower courts' rulings and held that State Farm was not required to meet the conditions imposed by the trial court.  The four members suggested that the rights of the no fault insured were limited to the insurance policy and two limited provisions in the no fault act.  It held that no fault insureds don't enjoy the normal court rule protections incorporated into personal injury actions.

          The insurance-oriented majority held that "physicians are presumed to be bound by the methodologies of ther profession and by principles of professional integrity" and that until an insured submits to the court demonstrable evidence to rebut this presumption, a court may not impose conditions on the conduct of a no fault IME.

          As a result of the Court's decision, fewer insureds will have the protections which were assumed to apply to IMEs and insurance-retained physicians will be entitled to stretch the envelope in their dealings with injured victims.  We believe, along with the majority of judges who considered this issue (3 in the Supreme Court, two in the Court of Appeals and one in the trial court) that there was no rational or statutory basis to deny the carefully considered court rule protection framework to all injury claimants.  The protections in the Court Rule impose basic obligations such as requiring the IME insurer to provide a copy of the resulting report to the victim.

The Drunk Driver's Relief Act

       The No Fault act makes an at-fault driver responsible for any "serious" injuries he causes.  For many years, the meaning of this threshold requirement was simple:  jurors had to consider the facts of the injury and damages and decide whether it was "serious" in normal parlance.  As most people now know, in the Kreiner case the conservative majority of the Supreme Court re-intrepreted "serious" to require that the injured person's injuries have a "life-altering" impact.  They also stated that the life-altering impact cannot be based on pain and can only be based upon physician limitations and restrictions.

           There have been many notorious and senseless pro-insurance and anti-victim decisions since Kreiner.  A teen-aged girl's closed head injury that necessitated  missing a full year of school was deemed "not serious".  A neck injury that caused a herniated disc, dangerous surgery, several months of missed work and nagging permanent pain "was not a serious impairment".  Several victims with  serious limb or facial fractures, torn knee ligaments, ruptured discs, and other colloquially "serious" injuries have been denied compensation, despite permanent restrictions on work activities and hours (even to the extent of being limited to working 24 hours per week), total loss of recreational activities, and doctor-confirmed lifetime pain problems.

        The latest of these extreme decisions releasing a careless driver's insurance from paying compensation , involved a man who suffered a torn rotator cuff and other injuries in a high-speed collision when the at-fault blew a red light at an intersection.  The victim, Herbert Jurnikian, made a fairly prompt recovery form injuries to his knees, hands, and neck, but his torn rotator cuff turned out to be intractable. 

          His family doctor wouldn't approve the recommended surgical repair because of his age and pre-existing emphysema, so Mr. Jurnikian was forced to live with chronic, severe pain in the shoulder.  He had attended literally dozens of physical therapy sessions over more than a year.  The therapists recorded that he could not do any pushing, pulling, lifting, carrying or heavy work involving his shoulder.   He could not even shoot pool without experiencing pain, and often required help with dressing and bathing.

          Despite the fact that he endured severe pain with virtually all activities that was so severe his doctors would have liked to operate to give him some relief, two judges of the Court of Appeals ruled that "reasonable minds could not conclude" that he had suffered "a serious impairment of bodily function."  These two judges thought the issue was so clear that they did not even allow Mr. Jernukian's attorneys to participate in Oral Argument on appeal.  One would think that with the threshold for liability claims raised this high, all Michigan residents should have seen a significant reduction in our no fault insurance premiums:  has your insurance gone down in the past few years?

The Michigan Courts punish patience

  In an update to the "one year back" rule debate, on May 24 the Court of Appeals reluctantly denied the Henry Ford Health System's right to collect for $130,000.00 in care it provided to a badly injured young girl after a car accident.  Henry Ford provided the care in 2004 and Traverlers Insurance did not deny the claim until May of 2005.  When the conservative majority of the Michigan Supreme Court decided Devilliers v. Auto Club, holding patients and providers to one year in which to sue, (and overturning 19 years of previous practice), the Henry Ford system had only one day in which to sue Travelers.  The Appellate Court judges determined that the Supreme Court left them no alternative but to deny Henry Ford's legitimate claim as a result of this "loophole" or technicality, despite its unfairness.

This is just one of many recent Michigan decisions which punish a party with a legitimate claim for its exercise of patience in negotiating with insurers prior to filing suit.  Unfortunately, a majority of the Michigan Supreme Court is willing to punish potential litigants who have patiently attempted to negotiate rather than jumping to litigation, despite paying lip-service to a desire to make the courts less crowded, more efficient, less expensive and more "fair".

Deadlines to Sue

      One of the many "reform" decisions issued recently by the Michigan Supreme Court addressed the issue of how long an injured person, or people providing services to the person, can delay before filing suit against an auto insurer for PIP benefits [PIP benefits are medical expenses and three years of lost wages or domestic services, payable normally by the injured person's own insurance].  From the 1970s when Michigan's No Fault Act was adopted, the Supreme Court had consistently held that the injured person, or a service provider, could delay suit until the auto insurer actually denied the benefit claim in writing.  This approach made sense, since it encouraged the parties to negotiate claims without litigation and it allowed unsophisticated consumers the opportunity to manage claims themselves, without fear of inadvertently losing the right to enforce their rights.

         The arch conservative Michigan Supreme Court majority decided to overturn this rule, however, and reversed 19 years of law that had appeared to be expressly resolved and stable.  It held that the injured person, or persons providing services to the injured person, must sue within one year of incurring the original expense, or lose their claim.  It also held that insurers who negotiate through this deadline are not estopped to raise the deadline to deny the claimant the right to sue.  It also applied this deadline to infants and incompetent persons, and denied them the protections of extended deadlines that the Legislature had previously established in the Revised Judicature Act.  In other words, it took away all the established exceptions and protections and instituted a hard-line one year statute of limitations protecting auto insurers from PIP lawsuits.  Unfortunately, most citizens are unaware of this one-year deadline, or of the fact that if a provider's bill is not paid by the first anniversary, and no suit is filed, the billing may become an obligation of the family.

          Since this change in interpretation came as a surprise to most claimants and medical providers, it caught many flat-footed, holding claims that were legitimate but had not been placed in suit while the parties were negotiating compromises.  Under the existing rules, the claimants and their service providers would have enjoyed the right to exhaust negotiations and then sue within a year if no satisfactory compromise could be reached.  The Supreme Court overturned that right and also made its decision retroactive, so that people who had patiently attempted to negotiate without rushing to Court were punished by the complete denial of their [now stale] claims.  We can't imagine how many millions of dollars this dropped in to the laps of auto insurers in Michigan, in one fell swoop.

          While conservative "reformers" have paid lip service to reducing the amount of litigation and the need for families to aggressively protect their rights by hiring lawyers and involving the courts, this decision helps to demonstrate the real goal of "insurance reform":  preserving and enhancing the profit margin of Michigan's insurers.  No wonder they were willing to contribute heavily to the Justices' re-election campaigns.

          The message for families with a severely injured loved one is also clear:  consult with a knowledgeable person to confirm your rights and don't trust or rely upon an insurance representative.  While some insurance adjusters and case managers are honest, dedicated and decent, many are not; and families have too much at risk to rely upon their [conflicted] advice exclusively.  Most experienced attorneys will consult with a family for free, and capable attorneys can be hired on an hourly or contingent fee basis, depending on what is best for the family, to provide knowledge and guidance.