The No-Fault Act (NFA); Designating the appropriate payees for first-party no-fault benefits; Equitable apportionment pursuant to MCL 500.3112; Michigan Head & Spine Inst, PC v Nationwide Mut Fire Ins Co

The court concluded that the trial court’s decision as to the appropriate payees and apportionment of the first-party no-fault benefits at issue here was based on premises that were recently expressly rejected in Michigan Head & Spine. Plaintiff was seriously injured in a motor vehicle accident in 2021. She received medical care for weeks as a patient of interested party-medical provider (DMC). She appealed “the trial court’s orders directing that nearly the entire amount of $250,000 in allowable expenses available under the” NFA must be disbursed to DMC. She argued that the trial court erred in “failing to designate the appropriate payees to receive first-party no-fault benefits, and . . . by failing to make an equitable apportionment, contemplated by MCL 500.3112, of the limited benefits available for allowable expenses among those entitled to benefits.” The court first found that “the trial court erred by dictating that the six-figure Medicaid lien was part of plaintiff’s third-party claim. Indeed, a solid argument was made to the trial court that the Medicaid lien should have been elevated in priority above the DMC claim to the entire $250,000 in first-party benefits for allowable expenses, and the trial court at first took that position, but later retracted that determination.” In addition, the court found that “the process of equitable apportionment under MCL 500.3112 was pretermitted by the trial court’s reliance on the first-in, first-out method for allocating the $250,000 in benefits that were available.” The trial court deemed “that approach necessary, which contravened” the court’s conclusion in Michigan Head & Spine “that the statutory language affords significant discretion to trial courts in that regard.” Given the discrepancies between the court’s rulings in Michigan Head & Spine “and the trial court’s approach to the $250,000 in allowable expense benefits,” the court vacated the trial court’s orders and remanded “for further consideration under the principles enunciated in Michigan Head & Spine.”