Michigan Supreme Court Rules Tolling Amendment To One-Year-Back Rule Does Not Apply Retroactively to Pre-Amendment No-Fault Claims

Spine Specialists of Michigan PC v MemberSelect Insurance Company

• MSC Opinion Released: April 1, 2025 (Clement, C.J., Zahra, Bernstein, Cavanagh and Bolden, J.)

  • Concurrence: Welch, J.

  • Thomas, J. did not participate.

• MSC Docket No. 165445; COA Opinion 345 Mich App 405 (2023)

• Macomb County Circuit Court

Holding: The tolling amendment to the one-year-back rule in the no-fault act at MCL 500.3145 does not apply to claims for services which accrued before its effective date, even if a lawsuit was filed after its effective date.

Facts: Jerry Woods was injured in a motor vehicle accident on January 21, 2017. He was insured under a no-fault policy issued by Defendant MemberSelect Insurance Company. Plaintiff Spine Specialists of Michigan provided medical care to Woods with various dates of service between April 15, 2019 and May 6, 2019. Woods assigned his right to payment under his no-fault policy from Defendant to Plaintiff and Plaintiff filed a complaint seeking payment on September 21, 2020.

Defendant filed a motion for summary disposition, arguing that most of the claims were for services provided more than one year prior to the filing of the complaint, and therefore barred by MCL 500.3145, which prohibits recovery of PIP benefits to those occurring no more than one year before the action is filed. Defendant further argued that the recently amended tolling provision of MCL 500.3145, which tolls the one-year back rule during the time period between the submission of the claim and the insurer formally denies the claim, did not apply to claims incurred before June 11, 2019, the date on which the tolling provision of MCL 500.3145 became effective.

The trial court agreed and dismissed claims prior to the effective date of the amendment. On review, the Court of Appeals agreed, concluding that the tolling provision should not apply to claims which were incurred pre-amendment because under the no-fault act, PIP benefits accrue as each expense is “incurred” which occurs when treatment is received, not when payment is denied. However, on that same date, another panel of the Court of Appeals published an opinion that applied the tolling amendment to claims that accrued before the amendment’s effective date. Encompass Healthcare, PLLC v Citizens Ins Co, 344 Mich App 248; 998 NW2d 751 (2022). In Encompass, the panel did not expressly consider which version of the statute should apply, instead noting in a footnote that the amendment applied because Encompass filed their complaint after the effective date of the amendment. Id. at 252, n. 1.

On review by the Michigan Supreme Court, the considered whether the tolling amendment should be applied to underlying expenses which are the subject of complaints filed after its enactment, where those expenses were incurred before its enactment. The Court looked at the history of the one-year-back rule under the no-fault act and the legislature’s motivation underlying the amendment to provide tolling in certain circumstances. Recognizing that the one-year-back rule is a substantive provision that impacts substantive legal rights, the Court relied on its prior opinion in Andary v USAA Cas Ins Co, 512 Mich 207 (2023) that a claim for PIP benefits accrues at the moment medical services are rendered. As such, permitting application of the tolling amendment to claims which accrued before its effective date would “necessarily require retroactive application of the statute.”

The presumption is that statutes apply prospectively unless the legislature clearly indicates an intent for retroactive application. Lacking express language in the enactment, the Court reaffirmed the four principles announced in LaFontaine Saline, Inc v Chrysler Group, LLC, 496 Mich 26, 38-39 (2014) as a framework for assessing whether a modified statute applies retroactively:

In determining whether a law has retroactive effect, we keep four principles in mind. First, we consider whether there is specific language providing for retroactive application. Second, in some situations, a statute is not regarded as operating retroactively merely because it relates to an antecedent event. Third, in determining retroactivity, we must keep in mind that retroactive laws impair vested rights acquired under existing laws or create new obligations or duties with respect to transactions or considerations already past. Finally, a remedial or procedural act not affecting vested rights may be given retroactive effect where the injury or claim is antecedent to the enactment of the statute.

These factors are “better understood as discrete principles or considerations, each of which independently informs the retroactivity inquiry.”

Key Appellate Rulings

Application of the four LaFontaine factors continues to guide courts reviewing the retroactivity of legislation.

Looking to the tolling amendment, the Court concluded that no factor supported retroactivity. First, the legislation does not contain any language implicating retroactive application. The second LaFontaine factor did not warrant analysis by the Court “because it does not materially advance the retroactivity inquiry under these facts.” The third factor weighs against retroactivity: as it would impose these new obligations on actions taken (or not taken) under the previous legal framework” inasmuch as it now requires insurers to formally deny a claim, actions not required under the prior version of the statute. Finally, the fourth factor was deemed unnecessary to resolve since it “does not support retroactivity” in light of the lack of any textual indication of retroactive intent

Under the LaFontaine analysis, the tolling amendment to the one-year-back rule does not apply to claims which accrued before its effective date, even if a lawsuit was filed after its effective date.

In a concurring opinion, Justice Welch argued that while she agreed with the result, she did not join in the majority’s application of Andary. Justice Welch noted that the Andary ruling expressly rejected the argument that the majority now accepted; that the law in effect at the time of accrual defines the scope of the parties’ rights under a no-fault policy. Rather, under Andary, which was authored by Justice Welch, rights under the no-fault act are “vested” at the time of the time of the auto accident which triggered their right to coverage. While application of Andary under this analysis does not change the outcome, Justice Welch joined in the majority’s result, if not its reasoning.