CPAN Applauds Supreme Court Decisions

on Auto No-Fault Cases

Lansing, MICH – On Saturday, July 31, the Michigan Supreme Court issued rulings on two vital cases involving Michigan’s auto insurance system. Through McCormick v. Carrier, the court corrected the highly controversial 2004 Kreiner decision; and in the case of UM Regents v. Titan Insurance Company, the court restored 30 years of law that was previously overturned by the 2006 Cameron decision.

In response to these landmark decisions, the Coalition Protecting Auto No-Fault (CPAN) has issued the following statements and case analysis from its legal counsel, George T. Sinas.

George T. Sinas regarding McCormick v. Carrier:

“The McCormick decision restores the rights of innocent victims to recover compensation for serious injuries caused by negligent and drunk drivers, by returning to the specific legal standards that were enacted by the Michigan Legislature when it passed the current law 15 years ago,” said Sinas. “In other words, this is not new law, but rather a return to the no-fault threshold passed by the Michigan Legislature in 1995. As such, McCormick has restored the delicate balance that is essential to preserve Michigan’s model no-fault system.”

Sinas on UM Regents v. Titan Insurance Company:

“By stopping insurance companies from denying healthcare expenses for children and the mentally disabled because legal action to enforce payment had not been filed within one year, the Michigan Supreme Court has restored 30 years of law that was previously discarded,” said Sinas. “In doing so, the Court has protected the rights of children and mentally incompetent adults and prevented insurance companies from shifting these costs onto the Michigan Medicaid program and taxpayers.”

Sinas is senior partner at the Sinas Dramis Law Firm in Lansing. He is the primary author of CPAN’s amicus brief to the Supreme Court on McCormick v. Carrier, argued the Kreiner v. Fischer case in the Court of Appeals, and authored the widely read case law annotation textbook commonly referred to as the "No-Fault Red Book" (formally entitled "Michigan No-Fault Auto Insurance Decisions"). Sinas is also Adjunct Professor of Law at the Michigan State University College of Law, where he teaches a course on the Michigan no-fault law.

McCormick v. Carrier Case Analysis:

       1.    The McCormick decision recognizes that the Kreiner decision, which it overruled, was nothing more than judge-made law that constituted a radical departure from the specific language and overall intent of the Michigan No-Fault Act.

        2.    It is reasonable to expect that this decision will actually reduce the number of lawsuits filed in circuit court for the reason that under the Kreiner decision, auto insurance companies were forcing victims to file lawsuits so they could defeat legitimate claims in court by imposing the draconian legal standards of the Kreiner case. Hopefully, this practice will end under McCormick, as insurance companies will now be forced to recognize legitimate claims and deal with innocent victims in a fair and just manner.

        3.    The McCormick decision should dramatically decrease the amount of appellate court litigation by returning Michigan to the stable and less litigious appellate court environment that existed prior to the Kreiner decision. In this regard, the majority opinion notes that in the nine years prior to Kreiner, there were less than 10 Court of Appeals cases per year dealing with the tort threshold. However, in the six years since Kreiner was decided, there have been over 250 Court of Appeals decisions! By rejecting the Kreiner standard, the amount of appellate court litigation should dramatically decrease, thereby saving tax dollars and freeing up Michigan appellate judges to address other important legal cases.

        4.    Any argument by the insurance industry that the McCormick decision will increase insurance premiums should be flatly rejected as untrue and fear-mongering. In this regard, auto liability insurance premiums typically represent only about 20% of a person’s total auto insurance premium. It is estimated that 50%-60% of the typical total auto insurance premium goes to pay for collision and comprehensive coverages. Moreover, during the repressive six-year Kreiner era, auto liability insurance premiums never went down, thus establishing the fact that there is little, if any, link between the interpretation of the Michigan auto tort threshold and the cost of liability insurance. Under McCormick, the insurance industry will be forced to return some of the staggering profits it made during the last six years to auto accident victims who have been paying premiums intended to benefit them, not fatten the bank accounts of auto insurers.

       5.     The McCormick decision clearly illustrates the unfairness and injustice created by the Kreiner decision for people like Mr. McCormick. Mr. McCormick sustained a severe fracture to his ankle when his leg was run over by a truck. He required two operations to repair his shattered ankle. He was off work for 19 months and when he returned, was not able to resume his normal job duties. Medical testimony established that his injury had caused the onset of degenerative arthritis in his ankle joint, which is only bound to get worse over time. Victims like Mr. McCormick had never been denied compensation during the 37-year history of the Michigan no-fault law until the Kreiner decision came down six years ago. After that, victims like Mr. McCormick were routinely denied the right to hold careless and drunk drivers accountable for injuries that significantly affected their quality of life. It is because of the unfairness of Kreiner for people like Mr. McCormick that the Kreiner decision had become universally condemned by almost all knowledgeable observers, except those associated with the auto insurance industry.

UM Regents v. Titan Insurance Company Case Analysis:

1. The UM Regents decision is great news for overburdened Michigan taxpayers and the Michigan health insurance system. In this case, the Supreme Court returned to the law that had been in effect for almost 30 years in Michigan which prohibited no-fault insurance companies from denying healthcare expenses for children and mentally incompetent adults simply because legal action to enforce payment of those expenses had not been filed within one year. In 2006, that long-standing protective rule was overturned by the Cameron decision. Cameron allowed insurance companies to deny payments of these expenses, thereby shifting the cost to the health insurance system or to the Michigan Medicaid program which is funded by tax dollars. The UM Regents case puts a stop to this "free ride for auto insurance companies" and places the obligation to pay for auto insurance medical care back where it belongs – on the shoulders of the auto insurance industry, which makes enormous profits collecting premiums for such claims and then gets to avoid its obligation to pay by hiding behind legal technicalities.

2. In the UM Regents decision, the Michigan Supreme Court recognized a fundamental concept of fairness and justice that had been completely disregarded by the Cameron case – that children and mentally incompetent persons do not have the same ability to enforce their legal rights as do able-bodied adults. That is why, for over 30 years, the Michigan appellate courts protected this class of vulnerable claimants from oppressive legal time limitations that could destroy their rights. The UM Regents case has restored these protections for children and mentally incompetent persons, thereby helping to make the playing field more level for such individuals.

3. Insurance companies can avoid any financial burden that might be imposed on them by the UM Regents case by simply dealing fairly and in good faith with accident victims. If insurance companies pay claims as they are required to by the Michigan no-fault law, then they will have no worries about old, unpaid claims coming back to haunt them. It is only when auto insurers ignore legitimate claims, cheat claimants, and otherwise seek to profit from the ignorance of the disadvantaged that they will have anything to fear by the UM Regents decision.

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CONTACT:

Josh Hovey, The Rossman Group

Ph: 517-487-9320 jhovey@rossmangroup.com

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