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Court reviews verdict against Allstate for refusing to pay no fault PIP benefits

Robert Mason suffered knee and back injuries when his car was rear-ended by a third-party. He was driving a leased car titled to Chrysler but subject to a lease exceeding 30 days.  Chrysler insured the car and added the cost to his lease, however, the Chrysler insurance didn't conform to Michigan's No Fault law because it purported to subordinate the Chrysler insurance to any other coverage in Mason's household.

When Mason sought PIP benefits from the other household insurer, Allstate, it delayed for two years in paying for knee surgery and stopped all payments related to Mason's back injury and care.  It argued that Chrysler's coverage should be first priority, and refused to pay even though longstanding Michigan law holds that an insurer must pay PIP benefits where there is a priority dispute and seek recoupment from the other involved insurer(s).

The case was ultimately tried to a jury which awarded to Mason about one-half of the remaining dollar amounts owed to Mason after it paid extensive medical billings on the eve of trial.  The judge then awarded Mason's attorneys' fees, holding that Allstate's delay in payment was unreasonable.  Allstate appealed both the verdict and the fee award.

The Court of Appeals ruled that Chrysler's insurance policy violated Michigan's No Fault law, making it and Allstate equally obligated to pay PIP benefits; therefore, Allstate was entitled to recoup one half of its PIP obligation.  The Court rejected Allstate's arguments about the adequacy of Mason's evidence, however, concluding that Mason was not required to document each and every minute of replacement domestic services provided.  It also concluded that his evidence regarding medical mileage was sufficient to support the jury verdict.

The Court found minor evidentiary and instructional errors but noted that they did not influence the verdict or meet the "substantial" test for overturning the result.  The Court did remand the award of attorneys' fees to the lower court, requiring the Court to hold an evidentiary hearing to determine precisely what fees should be awarded.

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Traverse City, Michigan 49684
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