Duty of Michigan Catastrophic Claims Association to pay "unreasonable" PIP expenses
In what may turn out to be a significant decision for Michigan residents and insurers, the 4-3 Engler majority decided a series of cases involving disputes between the MCCA and auto insurers on December 29. Three days before they lost their binding majority with the forced retirement of Cliff Taylor, the so-called Engler Justices held that the MCCA could refuse to reimburse insurers for PIP expenses that did not meet the statutory definition of "reasonable and necessary".
In a cogent and textual analysis written for the dissenting Justices, Justice Weaver rejected the "gang of four's reasoning". She pointed out that the MCCA is a statutory creation intended to reimburse insurers for the actual amount of PIP benefits paid above the MCCA threshold, and that the differences in statutory language between the MCCA's duty of payment and the insurers' duty of payment must be recognized.
Justice Weaver's opinion further recognized that given the composition of the MCCA (it is an association of the insurers, themselves, operated according to rules that they have devised), the majority's claim that its holding is necessary for cost containment is off-base and self-defeating. Requiring (or allowing) the MCCA to create an administration to double-check every PIP expense merely duplicates the cost of administering no fault PIP expenses.