Health Care Lawyer Blog

However, the McCormick Court ruled that Kreiner was wrongly decided because it departed from the plain language of MCL 500.3135. In overruling Kreiner, Justice Cavanaugh, writing for the majority, set out that:

The serious impairment analysis is inherently fact- and circumstance- specific and must be conducted on a case-by-case basis. As stated in the Kreiner dissent, “[t]he Legislature recognized that what is important to one is not important to all[;] a brief impairment may be devastating whereas a near permanent impairment may have little effect.” Kreiner, 471 Mich at 145 (CAVANAGH, J., dissenting). As such, the analysis does not “lend itself to any bright-line rule or imposition of [a] nonexhaustive list of factors,” particularly where there is no basis in the statute for such factors. Id. Accordingly, because “[t]he Legislature avoided drawing lines in the sand . . . so must we.” Id.

To begin with, the court should determine whether there is a factual dispute regarding the nature and the extent of the person’s injuries, and, if so, whether the dispute is material to determining whether the serious impairment of body function threshold is met. MCL 500.3135(2)(a)(i) and (ii)27 If there is no factual dispute, or no material factual dispute, then whether the threshold is met is a question of law for the court. Id.

If the court may decide the issue as a matter of law, it should next determine
whether the serious impairment threshold has been crossed. The unambiguous language
of MCL 500.3135(7) provides three prongs that are necessary to establish a “serious
impairment of body function”: (1) an objectively manifested impairment (observable or
perceivable from actual symptoms or conditions) (2) of an important body function (a
body function of value, significance, or consequence to the injured person) that (3)
affects the person’s general ability to lead his or her normal life (influences some of the
plaintiff’s capacity to live in his or her normal manner of living).

Legal Analysis

Editor’s Note: The below assessment of McCormick was written by FHWN partner David L. Haron, and does not necessarily represent the opinions of other attorneys at FHWN.

The McCormick opinion sparked outcry from insurance companies, who claim it will result in more lawsuits and higher insurance premiums for drivers. However, plaintiff’s lawyers believe that it will return Michigan to the middle-ground of consumer protection laws.

It is reasonable to expect that this decision will actually reduce the number of lawsuits filed in circuit court for the reason that under the Kreiner decision, auto insurance companies were forcing victims to file lawsuits so they could defeat legitimate claims in court by imposing the draconian legal standards of the Kreiner case. Hopefully, this practice will end under McCormick, as insurance companies will now be forced to recognize legitimate claims and deal with innocent victims in a fair and just manner.

The McCormick decision should dramatically decrease the amount of appellate court litigation by returning Michigan to the stable and less litigious appellate court environment that existed prior to the Kreiner decision. In this regard, the majority opinion notes that in the nine years prior to Kreiner, there were less than 10 Court of Appeals cases per year dealing with the tort threshold. However, in the nine years since Kreiner was decided, there have been over 250 Court of Appeals decisions! By rejecting the Kreiner standard, the amount of appellate court litigation should dramatically decrease, thereby saving tax dollars and freeing up Michigan appellate judges to address other important legal issues.

Any argument by the insurance industry that the McCormick decision will increase insurance premiums should be flatly rejected as untrue and fear-mongering. In this regard, auto liability insurance premiums typically represent only about 20% of a person’s total auto insurance premium. It is estimated that 50%-60% of the typical total auto insurance premium goes to pay for collision and comprehensive coverages. Moreover, during the repressive six-year Kreiner era, auto liability insurance premiums never went down, thus establishing the fact that there is little, if any, link between the interpretation of the Michigan auto tort threshold and the cost of liability insurance. Under McCormick, the insurance industry will be forced to return some of the staggering profits it made during the last six years to auto accident victims who have been paying premiums intended to benefit them, not fatten the bank accounts of auto insurers.

The McCormick decision clearly illustrates the unfairness and injustice created by the Kreiner decision for people like Mr. McCormick. Mr. McCormick sustained a severe fracture to his ankle when his leg was run over by a truck. He required two operations to repair his shattered ankle. He was off work for 19 months and when he returned, was not able to resume his normal job duties. Medical testimony established that his injury had caused the onset of degenerative arthritis in his ankle joint, which is only bound to get worse over time. Victims like Mr. McCormick had never been denied compensation during the 37-year history of the Michigan no-fault law until the Kreiner decision came down six years ago. After that, victims like Mr. McCormick were routinely denied the right to hold careless and drunk drivers accountable for injuries that significantly affected their quality of life. It is because of the unfairness of Kreiner for people like Mr. McCormick that the Kreiner decision had become universally condemned by almost all knowledgeable observers, except those associated with the auto insurance industry.