First-Party Litigation
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Chapter 6: First-Party Litigation
Robert E. Logeman, Logeman Iafrate & Logeman PC

2019 PA 21 and 22 substantially revised the Michigan No-Fault Act, MCL 500.3101 et seq., effective June 11, 2019. Changes to this resource are forthcoming.

Initial Client Meeting
Giving Notice of Claim
Hazards of Notice Provisions
Communicating with the Insurance Carrier
Settlement and Release
Recovering No-Fault Interest and Attorney Fees
Initial Pleadings
Discovery and Pretrial Strategy
Trial Strategy

I.   Overview

§6.1   After interviewing the client, identifying the insurer, and determining the types of first-party benefits that may be recoverable, an initial step in first-party litigation is providing notice to the insurer of a claim. The No-Fault Act has several different provisions relating to notice of claims: MCL 500.3141 specifies what is required for notice of loss but does not provide for sanctions against an insured who fails to give notice. Almost every no-fault carrier has its own application for benefits; submitting the form constitutes proper notice. MCL 500.3174 designates the required notice of claim through the assigned claims plan (which arises when no insurance is available to cover the claim or when no insurer can be identified). See §6.13 for further discussion of the notice requirements.

The most important notice provision is the statute of limitations section, MCL 500.3145. There is a one-year limitation of action unless the claimant gives the insurer written notice of the accident within one year of the accident or the insurer makes payment within one year. If the claimant gives the insurer written notice or the insurer makes a payment within one year, a suit can be started within one year of the most recent expense incurred. The plaintiff is barred from recovering no-fault benefits for any portion of the loss incurred more than one year before the date the suit was commenced; this is called the one-year-back rule. The statute of limitations may be tolled by certain circumstances, but the courts have refused to apply the tolling provisions to the one-year-back rule. See §§6.15–6.19.

Actual attorney fees may be recovered under MCL 500.3148(1) when a no-fault insurer fails to pay no-fault benefits or delays paying the benefits. As a prerequisite for an award of actual attorney fees, the claimant must demonstrate that the insurer has unreasonably refused to pay a claim or unreasonably delayed paying the claim when the benefits are overdue. Under MCL 500.3142(2), a benefit is overdue if it has not been paid within 30 days after reasonable proof has been supplied to the insurer. Thus, the claimant must establish that reasonable proof has been supplied, that 30 days have elapsed since the submission of the proof, and that the insurer refused to pay or has unreasonably delayed paying the claim. See §§6.31–6.34.

MCL 500.3142(3) provides that an overdue payment for first-party benefits bears simple interest at the rate of 12 percent per year. An overdue payment is one that is not paid within 30 days after an insurer receives reasonable proof of the claim. MCL 500.3142(2). See §6.30.

Unless the judgment is rendered on a written instrument evidencing indebtedness with a specified interest rate, interest on a judgment is calculated at the fluctuating six-month statutory interest rate. MCL 600.6013(7)–(8). Insurance and other contracts that do not evidence indebtedness and do not specify a rate of interest are not treated as written instruments. Some courts have combined the 12 percent interest rate in the No-Fault Act and the applicable interest rate in MCL 600.6013. See §6.30.

Plaintiff’s counsel should consider a number of factors when deciding whether to file a first-party lawsuit. The need for legal action may arise out of a factual dispute between the adjuster and the claimant regarding the amount of benefits owed, the need for those benefits, or whether the benefits are provided for by law. Litigation may be necessary when a medical examination scheduled by the no-fault insurer finds no continued disability or no necessity or relationship of medical care resulting in the termination of benefits. Other common reasons for litigation are factual disputes over the nature of the wage loss benefits that are due; what items may be deducted; how long the wage loss or other income item should be paid; and what medical care is accident-related, reasonable, or necessary. The suit may also be necessitated by the one-year-back rule in MCL 500.3145 and the need to file a suit to protect the claim while negotiations continue. Sometimes genuine issues of law, unresolved by the courts, require filing a suit to recover certain benefits.

As the defense counsel, you will often receive the no-fault first-party complaint the day before the answer is due. Generally the plaintiff’s counsel will agree to allow you to have a 30-day extension to file the answer. The extension should be confirmed by an agreement or a letter. The initial 30-day period is an extremely important time in which to identify the issues, pay undisputed claims, preserve any affirmative defenses, and initiate discovery. Independent medical examinations (IMEs), notices to produce, interrogatories, and, where appropriate, partial summary disposition on issues not reasonably in dispute will help the insurer tie down the benefits in dispute and identify the issues in the lawsuit.


1 The author wishes to thank Adrienne D. Logeman for her contributions to this chapter.

Forms and Exhibits

Form 6.01 No-Fault Intake Form
Form 6.02 No-Fault Checklist of Liability Theories and Required Notices (Plaintiff)
Form 6.03 No-Fault Document Discovery Checklist (Plaintiff)
Form 6.04 Tracking Sheet for New File
Form 6.05 Client Handout on Explanation of No-Fault Law
Form 6.06 Authorization to Disclose Health Information to Patient Advocate
Form 6.07 Authorization to Release Employment Information Relating to Accident
Form 6.08 Authorization to Release Internal Revenue Service Records
Form 6.09 Authorization to Release Social Security Information
Form 6.10 Authorization to Release Academic Information (with Parent-Guardian Authorization)
Form 6.11 Authorization to Release Financial Information
Form 6.12 Letter to Medical Records Librarian for Copies of Hospital Records
Form 6.13 Letter Requesting Medical Opinion of Attending Physician Regarding Injuries Sustained in Accident
Form 6.14 No-Fault Contingent Fee Agreement
Form 6.15 Optional Paragraphs for No-Fault Fee Agreement
Form 6.16 Fee Agreement -- No-Fault First-Party -- Hourly
Form 6.17 Application for Personal Injury Protection Benefits
Form 6.18 Reasonable Proof Letter (First-Party Claim)
Form 6.19 Consent Judgment
Form 6.20 First-Party No-Fault Complaint
Form 6.21 Answer to First-Party No-Fault Complaint
Form 6.22 Potential Interrogatories to Plaintiff (First-Party No-Fault Case)
Form 6.23 Potential Interrogatories to Plaintiff Medical Provider (First-Party No-Fault Case)
Form 6.24 Plaintiff's Potential Interrogatories and Requests to Produce to Insurer (First-Party No-Fault Case)
Form 6.25 Plaintiff's Potential Interrogatories and Notice to Produce to Individual Defendant (First-Party No-Fault Case)
Form 6.26 Plaintiff's Requests for Admissions (First-Party No-Fault Case)
Form 6.27 Defendant's Requests for Admissions (First-Party No-Fault Case)
Form 6.28 Plaintiff's Request for Production of Documents (First-Party No-Fault Case)
Form 6.29 Defendant's Request for Production of Documents (First-Party No-Fault Case)
Form 6.30 Offer of Judgment (First-Party No-Fault Case)
Form 6.31 M Civ JI 35.01--No-Fault First-Party Benefits Action: Explanation of Statute
Form 6.32 M Civ JI 35.02--No-Fault First-Party Benefits Action: Burden of Proof
Form 6.33 M Civ JI 35.03--No-Fault: Benefits from First-Party Actions
Form 6.34 M Civ JI 35.04--No-Fault First-Party Benefits Action: Statutory Interest
Form 6.35 M Civ JI 67.01--Form of Verdict: No-Fault First-Party Benefits Action
Exhibit 6.01 State Bar Ethics Opinion C-223
Exhibit 6.02 State Bar of Michigan’s Economics of Law Practice Attorney Income and Billing Rate Summary Report
Exhibit 6.03 Possible Affirmative Defenses in First-Party Cases
Exhibit 6.04 First-Party Benefits Action Introductory Directions to the Court