Commentary: Legal Remedy May Be Essential, Lifesaving Tool In No-Fault Cases

Since controversial amendments to Michigan’s Auto No-Fault Insurance Act relating to price caps and hourly restrictions went into effect on July 2, 2021, the downstream impact has been dramatic.

While consumers and healthcare institutions have been negatively impacted, those most affected are the most vulnerable: individuals who have suffered a catastrophic injury in an automobile accident. For these accident victims who often require specialized and life-sustaining care — and for their families, who often help provide that care and bear much of the financial burden — the ongoing attempts by some insurance companies to limit reimbursement for their critical care is quite literally a matter of life and death.

From insurance company-imposed limitations of 56 reimbursable hours of weekly attendant care, to misleading messaging aimed at pushing patients and families into unfavorable contracts for dramatically reduced compensation, the aftermath of the No-Fault changes has been tragically predictable. Patients and their families have faced new legal and financial pressures as insurers look to capitalize on what they apparently view as a golden opportunity to reduce their reimbursement obligations.

In the face of this new treacherous regulatory regime and confusing legal landscape, accident victims and their families should be aware of a piece of hopeful news, as the issuance of a preliminary injunction in a case could have broader legal implications going forward.

The case, Buller v. Titan Insurance Co., involves a client asking for injunctive relief, requesting the court to preserve status quo insurance benefits during the pendency of ongoing litigation in order to ensure continuity of care. The client — a bedbound high-level quadriplegic who requires life-sustaining 24-hour skilled home-based care — had recently seen the insurance company (the defendant in this case) reduce his payments. Not coincidentally, that reduction went into effect on July 2, 2021. As his attorneys, we maintained that the insurance company misapplied
a new provision in the revised No-Fault law to Mr. Buller’s claim, resulting in a payment decrease of 45%.

The request for a preliminary injunction was designed to ensure that the plaintiff would be able to continue to receive the critical care he required to survive while the lawsuit is pending. The filing maintained that it would be
otherwise impossible for the plaintiff, a quadriplegic, to continue to obtain that care on reduced payments.

The legal threshold for preliminary injunctions is purposefully high. In determining whether a preliminary injunction should be granted, the court, in its sound discretion, considers the following factors:
1. The likelihood that the party seeking the injunction will prevail on the merits.
2. The danger that the party seeking the injunction would suffer irreparable harm if the injunction were not issued.
3. The risk that the party seeking the injunction would be harmed more by the absence of an injunction than the opposing party would be by the granting of relief.
4. The harm to the public interest if the injunction is issued.

Regarding the first point, the filing outlined the specific manner in which the No-Fault amendments were being misapplied in this case. The filing maintained that there is no need to decide any complex constitutional claims: simply that the defendant was misinterpreting the law as written.

Point two was relatively cut and dry simply because the plaintiff’s life was at risk — obviously meeting the definition of irreparable harm.

In the case of point number three, the filing pointed out not only that a serious risk to health and safety outweighs possible economic harm, but because insurance companies reimburse patients from duly paid premiums and because any payments made in a No-Fault case are returned from the Michigan Catastrophic Claims Association, there was no harm to the insurance company defendant.

And lastly, there would be no harm to the public interest, because “both the public interest in protecting human life and the purpose of the No-Fault Act to provide victims of motor vehicle accidents with assured, adequate, and prompt payment of certain economic losses supports the issuance of the injunction” sought by the plaintiff.

Injunctive relief is not a common remedy. In fact, it is considered to be an extraordinary remedy — a tool of last resort. But in cases involving individuals who received homebased/attendant care and find their benefits drastically reduced, it may be the best or only way forward. A preliminary injunction in cases like this simply asks a judge to return the parties to status quo until trial, and to not cause a seriously injured person to suffer because of a legal dispute. Because the potential damage to the injured person in cases like this is so great, and the damage to the insurance company is so comparably low, this is a valuable tool for accident survivors who find themselves in a similarly precarious situation.

The practical problem is that the prospect of such relief tends to make judges nervous, and human nature is such that declining to grant a preliminary injunction is often the path of least resistance. Another issue is that proving the likelihood of success on the merits can be subjective — and asking a judge to evaluate the long-term prospects of a case that has just been filed, without the benefit of discovery, based essentially on initial pleadings alone, isn’t always easy. Defendants are likely to throw as much dirt against the wall in an attempt to make such cases seem murkier and more complicated than they often are. Seasoned judges who take the time to look closely at each case are invaluable.

Because it has bearing on point number one listed above, the final outcome of this case could provide an important ray of hope for accident victims whose insurance companies lower their benefits. In the law, as in so many walks of life, success breeds success. While this may or may not ultimately be a legal precedent, it does provide an outcome that attorneys can point to in order to bolster their claims and provide other judges with justification to rule in their favor on this issue.

As noted above, the impact of the No-Fault amendments has been far-reaching, and has had a significant impact on access to care, not just for accident survivors, but for healthcare providers. One of the largest rehabilitative care agencies in the state recently announced that they will no longer be taking cases resulting from auto injury accidents because the reimbursement structure is simply insufficient to be sustainable. Accident survivors who have suffered catastrophic injuries and require specialized care to maintain their quality of life — and, in many cases, to simply stay alive — will continue to find new challenges to their ability to pay for the care. The hope is that this case will make overcoming those challenges a little easier in the future

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