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A Better Partnership
March 17, 2016

COA: Delay of personal protection benefits improper where reasonable proof has been provided

In Bronson Health Care Grp., Inc. v. Titan Ins. Co., No. 324847, an automobile accident left a passenger of a vehicle severely injured, prompting plaintiff Bronson Health Care Group, Inc. to charge over $50,000 for her medical care.  Bronson submitted applications under the Michigan Assigned Claims Plan (MACP) for benefits relating to its treatment of the injured passenger.  MACP denied those applications because there was no information in those applications regarding whether the owner of the vehicle had automobile insurance for the vehicle.  Bronson responded by submitting a third application for benefits indicating that neither the owner nor the passengers of the vehicle had automobile insurance on the date of the accident.  Ultimately, Bronson’s claim for benefits was assigned to Titan.  Titan received itemized statements regarding Bronson’s charges for the medical care it provided to the passenger, a “UB04 form,” medical records, and a police reported regarding the accident.  Although Titan received this information on September 24, 2013, it did not issue payment to Bronson within 30 days as required under the no-fault act, MCL § 500.3142(2).  Bronson filed a complaint against Titan, alleging that it was owed payment of no-fault medical benefits from Titan, penalty interest on the unpaid charges until they were paid in full, and attorney fees.
Titan argued that it had no obligation to pay benefits on behalf of the passenger until it was demonstrated that the passenger was eligible to obtain those benefits.  The trial court agreed.  However, the Court of Appeals found that Michigan courts have repeatedly construed MCL 500.3142(2) in accordance with its plain language.  That is, MCL 500.3142(2) requires reasonable proof of the fact and of the amount of loss sustained and does not allow an assigned insurer additional time beyond the statutory 30 days to conduct its own investigation regarding the eligibility of the claimant to receive benefits.  In this case, the Court of Appeals concluded that the documents that Titan received from Bronson provided reasonable proof that the passenger was in an automobile accident, injured, sustained significant medical bills for her care and treatment, and that neither she, the driver, nor the vehicle owner were covered by insurance.
Accordingly, the Court of Appeals held that the trial court erred in concluding that Titan’s initial position that the passenger might be ineligible for assigned-claim benefits justified its failure to comply with MCL 500.3142(2).

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