KALAMAZOO (LN) — The Michigan Court of Appeals reversed summary disposition for Progressive Michigan Insurance Co. and Progressive Marathon Insurance Co., holding that exhausted PIP limits on a high-priority insurer do not bar recovery from a lower-priority insurer with higher coverage.
The court applied its recent decision in Mary Free Bed Rehab Hosp v Esurance Prop & Cas Co, which established that the no-fault act’s priority rules do not categorically prevent claimants from accessing additional benefits when the first insurer’s policy caps out.
The dispute arose from a July 2022 motorcycle accident in Kalamazoo involving Nicholas Deanda and a vehicle driven by Diane Pickin. Deanda died from his injuries at Bronson Methodist Hospital.
At the time of the crash, Pickin’s vehicle was insured by Geico Indemnity Co., which carried a capped PIP medical benefit limit of $0.25 million, minus a $500 deductible. Deanda held his own no-fault policy with Progressive that provided unlimited PIP coverage for his two motor vehicles.
Bronson Health Care Group Inc., the plaintiff, sought to recover $0.51 million in medical charges from both Geico and Progressive.
Geico paid Bronson $0.25 million by November 2022, exhausting its policy limits. Approximately $0.26 million in allowable expenses remained unpaid.
Bronson sought payment of the remaining balance from Progressive. Progressive denied the claim, arguing it was not the highest-priority insurer under MCL 500.3114 and therefore bore no responsibility to pay benefits once the primary insurer had paid its share.
The trial court granted Progressive’s motion for summary disposition, agreeing that the no-fault act does not permit recovery from a lower-priority insurer once a higher-priority insurer has paid benefits, even if those limits are exhausted.
The Court of Appeals disagreed, noting that the no-fault act distinguishes between entitlement to benefits and the priority among insurers responsible for payment.
The panel cited Mary Free Bed, a 2026 unpublished opinion, which addressed the precise question of whether a claimant can seek additional benefits from a lower-priority insurer after a higher-priority insurer’s capped coverage is depleted.
In Mary Free Bed, the Court of Appeals held that the 2019 amendments to the no-fault act, which introduced capped PIP coverage options, created scenarios where primary benefits might be insufficient. The court concluded that the statutory scheme does not preclude recovery from a lower-priority insurer whose policy provides higher available coverage.
"The resolution of this appeal turns on the proper application of the no-fault act," the per curiam opinion stated. "The act distinguishes between entitlement to benefits and priority among insurers responsible for payment."
The Court of Appeals ruled that under Mary Free Bed, the fact that Progressive was lower in the order of priority did not preclude recovery after Geico’s higher-priority policy was exhausted.
"Because the material facts are undisputed and plaintiff is entitled to judgment as a matter of law under the controlling precedent of Mary Free Bed, the trial court erred by granting summary disposition in favor of defendants," the court said.
The case is remanded for further proceedings. Issues regarding penalty interest and attorney fees are left for the trial court to consider.
Geico was subsequently dismissed with prejudice by stipulation of the parties.
The panel consisted of Presiding Judge Christopher M. Murray and Judges James Robert Redford and Michelle M. Rick.