No Fault Update: 2019 Amendments Apply Prospectively

Case Name: Andary v. USAA Casualty Insurance Company et. al.

Court: Michigan Supreme Court

Issued: July 31, 2023

INTRODUCTION

On July 31, 2023, the Michigan Supreme Court issued its 5-2 decision Andary v. USAA Casualty Insurance Company et. al. The key issues addressed by the Court included whether the 2019 amendments to the Michigan No-Fault Act apply retroactively and whether prospective application of said amendments is constitutional. The Court held that the 2019 amendments to the Michigan No-Fault Act do not apply retroactively and that prospective application of the amendments (to insureds injured while covered by an insurance policy issued after June 11, 2019) is constitutional.

ANALYSIS

As it relates to the holding that the 2019 amendments to the No-Fault Act do not apply retroactively, the Court reasoned, consistent with prior precedent, that No-Fault Benefits are statutory and contractual in nature and that the scope of benefits under an insurance policy and rights and obligations of the insurer and insured vest at the time of an accident. Neither the insured nor the insurer can unilaterally change the terms of an insurance policy after an accident occurs. Further, the Court reasoned that the law in place at the time that a contract is formed necessarily becomes a part of the contract itself.

The Court analyzed the factors for retroactive application of a statute expressed in LaFontaine Saline, Inc. v. Chrysler Croup, LLC, 496 Mich. 26 (2014) and found that same favored prospective application of the 2019 amendments to the No-Fault Act.

Finally, the Plaintiffs challenged the constitutionality of the prospective application of the amendments to claims that accrue after the 2019 amendments to the Michigan No-Fault Act. The Court reasoned that the individual Plaintiffs did not have standing to bring this challenge as their claims were not subject to the amendments. Furthermore, the Court found that the provider Plaintiff did not have standing to pursue this challenge on behalf of nonparty past and future patients and medical providers. Furthermore, and substantively, the Court dismissed the provider Plaintiff's Equal Protection and Substantive Due Process claims because no fundamental right was affected by the amendments and that the amendments passed rational basis review.