Court: Michigan Teen Should Have Gone to Assigned Claims Plan

A Michigan teenager hit and injured by a U.S Postal Service truck while riding her bike has been denied benefits under a U.S. Court of Appeals ruling. The court ruled that her source of relief was not the courts but the state’s Assigned Claims Plan, a remedy she should have pursued before the one-year statute of limitations ran out.

According to the court, Michigan’s No-Fault Act, through the Federal Tort Claims Act, governed the case of Joelle Premo, who in 2006, when she was 19 years old, was struck by a USPS truck and injured while riding her bicycle through a cross walk. She suffered multiple leg, ankle and foot fractures that required surgery.

Premo did not own an automobile and thus did not have automobile insurance. Consequently, she was unable to claim insurance benefits from her own insurance company.

Her counsel contacted the USPS to file a claim for insurance benefits, pursuant to the Michigan no-fault automobile insurance statute. But the USPS declined Premo’s claim, noting that it is exempt from state vehicle insurance statutes.

Premo’s lawyers then sought recovery under the Federal Tort Claims Act, which provides a means of pursuing a claim against the federal government based on the negligence of one of its agencies or employees.

The FTCA denied Premo’s claim because it said there was no evidence that the federal employee driving the truck was negligent.

After that, Premo did not subsequently apply for insurance benefits with Michigan’s Assigned Claims Plan.

Instead she went to court with a claim. A district court found that Michigan’s no-fault law did apply to her FTCA claim against the government and ruled that she was entitled to the $34,768.62 in economic damages from the government but not interest and attorneys’ fees. Both the plaintiff and the U.S. government appealed.

The government’s position was that the determination regarding Premo’s claim turned on state law, which, in this case happened to be the no-fault act. Under the no-fault law, a person can collect personal injury protection or PIP benefits “without regard to fault.” Michigan law imposes strict liability for economic damages in motor vehicle accident cases. Thus even the federal government can be held liable without a finding of fault.

But if no PIP benefits are available from an insurer– which was the case with both Premo and the USPS– the Michigan no-fault statute directs that the injured party can obtain PIP benefits through the Assigned Claims Plan as long as benefits are sought within the one-year statute of limitations.

Michigan established the Assigned Claims Plan in 1973. Any person (Michigan resident or not) who is injured in an accident in Michigan and who has no insurance to pay the resulting bills is eligible for benefits under this plan. Claimants may be reimbursed for charges for medical care, recovery and rehabilitation; lost wages for up to three years after the accident; and up to $20 a day for such services as transportation, home maintenance and other tasks the victim cannot perform because of the injury. The plan does not cover property damage claims.