Michigan Court of Appeals; Docket #357702; Unpublished
Judges Kelly, Murray, and Borrello; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
In this unanimous, unpublished, per curiam decision, the Court of Appeals reversed the trial court’s summary disposition order dismissing Plaintiff William Jones’s first-party action against Defendant Farm Bureau Mutual Insurance Company of Michigan (“Farm Bureau”). The Court of Appeals held that Farm Bureau—the servicing insurer assigned Jones’s claim for no-fault PIP benefits related to the subject crash by the Michigan Automobile Insurance Placement Facility ("MAIPF")—could not deny Jones’s claim based solely on his failure to cooperate with the MAIPF’s eligibility determination. MCL 500.3173a(1) only allows a servicing insurer to ‘suspend benefits’ until a claimant either begins cooperating or resumes cooperating.
William Jones was injured in a car crash while traveling as a passenger in his friend’s vehicle. Neither he nor his friend had automobile insurance, and the driver of the other vehicle involved in the crash could not be identified. Jones applied for PIP benefits related to his injuries from the MAIPF, but after several months in which the MAIPF failed to assign his claim, Jones filed the underlying first-party action, seeking to compel the MAIPF to do so. The MAIPF eventually assigned his claim to Farm Bureau, but after several more months of partial or nonpayments of his allowable expenses by Farm Bureau Jones substituted Farm Bureau as the defendant in this case. While Jones’s case was pending, Farm Bureau subpoenaed him for a deposition and a defense medical examination (DME). Jones did not present for either, and when a Farm Bureau investigator contacted him, he was uncooperative and even informed the investigator that he no longer desired to pursue a claim for PIP benefits. Based on this statement and Jones’s failure to present for the deposition and DME, Farm Bureau denied his claim for benefits altogether, then moved for summary disposition in his first-party action, which the trial court granted.
The Court of Appeals ultimately reversed the trial court’s summary disposition order, but first rejected Jones’s argument that MCL 500.3173a(2) only requires a claimant cooperate with the MAIPF, not with a servicing insurer. The Court quoted MCL 500.3173a(3)—providing that the MAIPF ‘may perform its function and responsibilities . . . directly or through an insurer assigned by the [MAIPF] to administer the claim on behalf of the [MAIPF]’—in support of its holding that Jones was required to cooperate both with the MAIPF and Farm Bureau in its investigation of his claim.
“The language in the first sentence requires cooperation with the MAIPF, but does not indicate that cooperation with a servicing insurer is also mandatory. However, when interpreting a statute, ‘statutory provisions are not to be read in isolation; rather, context matters, and thus statutory provisions are to be read as a whole.’ Robinson v City of Lansing, 486 Mich 1, 15, 782 NW2d 171 (2010). Plaintiffs’ interpretation requires this Court to overlook that, under MCL 500.3173a(3), the MAIPF ‘may perform its functions and responsibilities under this section and the assigned claims plan directly or through an insurer assigned by the [MAIPF] to administer the claim on behalf of the [MAIPF].’ (Emphasis added). We conclude that, reading the statute as a whole, the duty to cooperate stated in subsection (2) requires a claimant or an individual making a claim through or on behalf of a claimant to cooperate with the servicing insurer when that insurer is indirectly carrying out the MAIPF’s functions and responsibilities.”
Despite Jones’s noncooperation, the Court held that Farm Bureau could not deny his claim in its entirety as a consequence. MCL 500.3173a(1) provides only that an insurer may suspend benefits until a claimant cooperates or resumes cooperation; it cannot deny the claim altogether based on noncooperation.
“The suspension of benefits is separate and distinct from the denial of a claim. In the first sentence of MCL 500.3173a(1), the Legislature mandates that the MAIPF ‘deny a claim that the [MAIPF] determines is ineligible under this chapter or the assigned claims plan.’ In the third sentence, the Legislature mandates that the MAIPF ‘promptly notify in writing the claimant and any person that submitted a claim through or on behalf of a claimant of a denial and the reasons for the denial.’ Id. But the second sentence only permits the MAIPF to suspend benefits if a claimant fails to cooperate under MCL 500.3173a(2) and the suspension of benefits may only continue until the MAIPF determines that the claimant ‘cooperates or resumes cooperation.’ See also Roberts v Farmers Ins Exch, 275 Mich App 58, 68-69; 737 NW2d 332 (2000) (indicating that it is proper for an insurer to suspend benefits if a claimant repeatedly fails to comply with his or her statutory duty to submit to medical examinations). Here, rather than suspend Jones’s benefits, Farm Bureau sent a letter denying his claim. Because that sanction for failure to cooperate is contrary to the statutory language, the denial was improper. Moreover, because Jones’s claim was improperly denied, the trial court erred by granting summary disposition under MCR 2.116(C)(10).”