Healthcare Providers Cannot Circumvent Eligibility Requirements Of No-Fault Act By Invoking Their Direct Cause Of Action Under MCL 500.3112
Labser PLC and Northland Radiology, Inc. v Farmers Insurance Exchange
Opinion Published: August 5, 2026 (Mariani, J. (opinion); Patel, P.J., and Swartzle, JJ., concurring)
COA Docket No. 373765
Oakland Circuit Court
Holding: A healthcare provider that treats an injured person for an accidental bodily injury is not entitled to recover no-fault personal protection insurance (PIP) benefits under MCL 500.3112 when the injured person is an "owner" of an uninsured motor vehicle under MCL 500.3101(3)(l)(i) and therefore ineligible to receive PIP benefits under MCL 500.3113(b). Although MCL 500.3112 affords providers a direct cause of action against an insurer to recover PIP benefits, that statutory right does not extend to treatment of injuries that the no-fault act has expressly disqualified from coverage.
Facts: Joshua Simpson was injured in a May 2023 motor vehicle collision while driving an uninsured vehicle titled to his live-in girlfriend, Kiera Burgos, which she had purchased less than two weeks prior. Simpson, Burgos, and their infant son were in the vehicle. Plaintiffs Labser PLC and Northland Radiology, Inc., healthcare providers who treated Simpson for his injuries, sought to recover PIP benefits through the Michigan Assigned Claims Plan (MACP). Defendant Farmers Insurance Exchange, assigned Simpson's claim, denied payment, asserting Simpson was an owner of the vehicle and therefore ineligible for PIP benefits.
Key Appellate Rulings:
Ownership can be found based on a "regular pattern of unsupervised usage" of a vehicle, and no written agreement is required. The focus is on the nature of the person's right to use the vehicle and whether that right will remain in effect for more than 30 days---not whether the person actually used the vehicle for that length of time.
The Court of Appeals affirmed the trial court's grant of summary disposition finding no genuine issue of material fact that Simpson constituted an "owner" of the vehicle. The "owner" definition in MCL 500.3101(3)(l)(i) encompasses "a person renting a motor vehicle or having the use of a motor vehicle, under a lease or otherwise, for a period that is greater than 30 days." This definition reflects a broad, functional approach that "prioritizes function over form" and ensures that those who routinely possess and use vehicles in a proprietary manner maintain insurance.
Here, the undisputed facts demonstrated Simpson had a regular pattern of unsupervised use: he listed himself as an owner on the PIP application, was the primary driver, had unrestricted access to the keys, put gas in the vehicle, contributed to maintenance, and did not need permission to use it. Following the collision, Simpson arranged and managed towing and the vehicle's sale for scrap. These facts supported Simpson's status as a constructive owner, regardless of the vehicle's two-week acquisition date or the absence of a formal written agreement.
Healthcare providers cannot recover PIP benefits under MCL 500.3112 for treatment of injuries that the no-fault act has expressly disqualified from coverage.
Although MCL 500.3112 affords healthcare providers their own direct cause of action to recover PIP benefits, that statute does not create an avenue to recover benefits for treatment of injuries that the no-fault act has expressly disqualified from coverage. MCL 500.3112 permits a provider to make a direct claim "to recover overdue benefits payable for charges for products, services, or accommodations provided to an injured person" for accidental bodily injuries "covered by personal protection insurance."
The statute specifically requires that the provider treat an injured person for "an accidental bodily injury covered by personal protection insurance." Since Simpson's injuries were not covered by personal protection insurance (because he was an owner of an uninsured vehicle), the plaintiffs did not render treatment for a covered injury. Accordingly, plaintiffs could not maintain their direct claim under MCL 500.3112.
The Court of Appeals rejected plaintiffs' reliance on Mota-Peguero v Falls Lake Nat'l Ins Co, 350 Mich App 692 (2024), which held that a provider may bring a direct action when an insurer rescinds an insurance policy. The court found Mota-Peguero inapplicable because that case involved the rescission of an existing insurance policy, whereas here there was no insurance policy at issue at the time of the collision. Mota-Peguero's holding regarding the balancing of equities in rescission cases did not extend to situations where no coverage existed at all.
