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No Fault PIP claim dismissed because injury victim's notice was inadequate; court also addresses sanctions and providers' licenses

Jory Magness sued Frankenmuth Mutual and the Auto Club to collect PIP benefits arising out of his head injury.  The appellate court did not explain why both insurers were involved.  In any event, Auto Club was dismissed from the case because the trial judge concluded that Magness did not provide it with the required statutory written notice of injury within one year.  Although Auto Club had received telephone notice of the claim, had obtained a police report, and had interviewed Magness's mother over the phone, it argued that none of these activities were sufficient to fulfill Magness's statutory duty to provide notice. 

The Appellate Court disagreed with the Auto Club's argument that the computer entry generated by its adjuster after interviewing Magness's mother did not consitute written notice.  The Auto Club maintained that the victim must generate the written notice; the Court pointed out that under existing case law the victim may rely upon an agent to reduce his claim to writing.  Nevertheless, the Court upheld the dismissal of the Auto Club, finding that Magness's mother did not provide adequate notice of a "brain injury."

The Court then addressed the PIP claim against Frankenmuth, which had argued that it did not owe PIP benefits because Magness's claim: a) should have been dismissed for failure to comply with discovery orders; and b) could not properly include benefits from an unlicensed psychiatric provider.  With regard to the discovery sanction, the appellate court agreed with the trial court that dismissal was too severe a sanction where Magness had been forced to pay court costs and fees to the insurer for discovery abuse. With regard to the question of provider licensure, the Court noted that under pre-existing case law, the lower court was required to review the individual services provided to Magness and to determine which services did, and which did not, require licensure.

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Traverse City, Michigan 49684
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