Court Opinion

ID: 7959204
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:29:14.841235+00
Date Added: 2024-06-11T16:34:22.645107
License: Public Domain

T. M. Burns, P.J.
(dissenting). The majority stated that, "[t]he issue presented in this appeal is whether due process requires a judicial determination of fault prior to the assessment of insurance eligibility points for accidents in which the insured is found to be 'substantially at-fault’ by the insurer”. If that were the issue in this appeal, I would be inclined to agree with the majority. I believe the true issue in this appeal is whether the insured is entitled to notice and a fair determination of whether he is substantially at fault in an auto accident.
The majority finds that the procedures in the essential insurance act, MCL 500.2101 et seq.; MSA 24.12101 et seq., satisfy the requirements of due process of law without considering the portion of the act that the trial court found unconstitutional. The majority begins its analysis of the act with the procedures that are employed after the insured is notified that his insurance will not be renewed. The trial court, however, found that the provision of the act regarding the insurer’s determination of whether the insured is substantially at fault in an auto accident lacked sufficient safeguards to satisfy the requirements of due process of law.
In Mathews v Eldridge, 424 US 319, 348-349; 96 S Ct 893; 47 L Ed 2d 18 (1976), a case regarded as dispositive by the majority, the Supreme Court stated, "[t]he essence of due process is the requirement that 'a person in jeopardy of serious loss [be given] notice of the case against him and opportunity to meet it.’ Joint Anti-Fascist Comm v Mc-Grath, 341 US 171-172 [71 S Ct 624; 95 L Ed 817 *133(1951)] (Frankfurther, J., concurring)”. In Mathews, the Supreme Court found that due process did not require a full evidentiary hearing before social security disability benefits were terminated. The Supreme Court noted that the disability benefits recipient was notified of the procedures employed during the initial determination of whether the benefits should be terminated:
"The continuing-eligibility investigation is made by a state agency acting through a 'team’ consisting of a physician and a nonmedical person trained in disability evaluation. The agency periodically communicates with the disabled worker, usually my mail — in which case he is sent a detailed questionnaire — or by telephone, and requests information concerning his present condition, including current medical restrictions and sources of treatment, and any additional information that he considers relevant to his continued entitlement to benefits. CM § 6705.1; Disability Insurance State Manual (DISM) § 353.3 (TL No. 137, March 5, 1975).
"Information regarding the recipient’s current condition is also obtained from his sources of medical treatment. DISM § 353.4. If there is a conflict between the information provided by the beneficiary and that obtained from medical sources such as his physician, or between two sources of treatment, the agency may arrange for an examination by an independent consulting physician. Ibid. Whenever the agency’s tentative assessment of the beneficiary’s condition differs from his own assessment, the beneficiary is informed that benefits may be terminated, provided a summary of the evidence upon which the proposed determination to terminate is based, and alforded an opportunity to review the medical reports and other evidence in his case file. He also may respond in writing and submit additional evidence. Id., § 353.6.” 424 US 337-338. (Footnotes omitted.)
In the instant case, it is undisputed that plaintiffs received no notice from defendant that their *134coverage was in jeopardy. They received no notice of defendant’s ex parte determination of fault after each accident report. They received no notice that defendant was even engaging in such a determination. Plaintiffs were not given an opportunity to review the reports and other evidence used by defendant to reach its determination. "[FJairness can rarely be obtained by secret, one-sided determination of facts decisive of rights.” Westland Convalescent Center v Blue Cross & Blue Shield of Michigan, 414 Mich 247, 261; 324 NW2d 851 (1982), quoting Joint Anti-Fascist Refugee Committee v McGrath, 341 US 123, 170; 71 S Ct 624; 95 L Ed 817 (1951) (Frankfurther, J., concurring).
Considering defendant’s actions pursuant to the no-fault act, the trial court was entirely correct when it found " '[njotice’ as an element of due process, is completely absent in this case”. This lack of notice greatly prejudices insureds. The insured may have to wait up to three years after an accident before the insurer sends notice that it was determined that he was at fault. Records pertaining to the accident may have been lost, witnesses may have disappeared or forgotten the events, and physical evidence may have been lost. By delaying notice to the insured, the insurer substantially hampers the insured’s ability to challenge the initial determination in the post-termination proceedings on which the majority finds the act constitutional. Even if the insured has access to the evidence, his first confrontation with the trier of fact becomes an exercise in appellate advocacy, without the necessary prior "trial”.
Considering how easy it would be to give the insured notice of the initial determination of fault and to allow the introduction of evidence at this stage, the insurer’s actions pursuant to the no-*135fault act appear very suspicious. There is simply no good reason for denying the insured fair treatment.
Not only is the insured kept ignorant of the proceedings regarding the determination of fault, the insurer, itself, makes the determination. "A hearing before an unbiased and impartial decisions^maker is a basic requirement of due process.” Crampton v Dep’t of State, 395 Mich 347, 351; 235 NW2d 352 (1975). In Crampton, the Michigan Supreme Court reviewed several decisions by the United States Supreme Court and found four situations in which the potential bias of a decision-maker is so high as to be constitutionally impermissible; where the judge or decisionmaker:
"(1) has a pecuniary interest in the outcome;9
"(2) 'has been the target of personal abuse or criticism from the party before him’;10
"(3) is 'enmeshed in [other] matters involving petitioner * 11 or
"(4) might have prejudged the case because of prior participation as an accuser, investigator, fact finder, or initial decisionmaker.12
Only situation 2 is inapplicable to the present case. There can be no serious question that an insurer has a pecuniary interest in the outcome of its determination of fault in an accident involving one of its insureds. The insurer, a profit-making entity, is legitimately concerned with increasing *136the amount of premiums it receives. The fact that the insured may be required to procure insurance from another insurer does not change this result. Gibson v Berryhill, 411 US 564; 93 S Ct 1689; 36 L Ed 2d 488 (1973).
The defendant should also be disqualified from deciding the causation of accidents involving its insured because of its prior involvement with the insured. While the combination of its investigative and adjudicative functions alone does not constitute a due process violation, Withrow v Larkin, 421 US 35, 58; 95 S Ct 1456; 43 L Ed 2d 712 (1975), due process is denied if the initial determination forecloses fair and effective consideration at a subsequent hearing. The defendant is so enmeshed in matters involving plaintiff that it should not be constitutionally permitted to decide the causation of accidents involving plaintiff.
Another factor which displays the unconstitutionality of the insurer’s proceedings to determine whether the insured was substantially at fault in an auto accident is the total lack of standards employed by the insurer. Considering the fact that a full trial is deemed unnecessary, specific standards should be set forth to prevent arbitrary and unjust determinations.
During discovery for the present case, plaintiffs asked defendant:
"Is there written policy as to the criteria involved in determining substantial fault in automobile accidents? If so, please attach copies thereof to the answers to these interrogatories. If there is no written policy concerning the determination of fault in automobile accidents, please describe briefly said criteria.”
Defendant failed to provide any documentation *137establishing a standard for determining fault but replied as follows:
"Written underwriting rule provides that a substantially at-fault accident is one where the person’s action or inaction was more than 50% of the cause of the accident. In addition, our claim representatives know that fault means a lack of reasonable care under the accident circumstances.”
I consider the standard employed by the defendant totally unacceptable. The majority finds Mathews, supra, dispositive of this case. Mathews involved the cessation of social security disability benefits. The determination as to whether these benefits should continue is governed by extensive, well-documented federal regulations. The determination is also based upon independent medical reports which are supported by "medically acceptable clinical and laboratory diagnostic techniques”. 42 USC 423(d)(3). Defendant, however, makes its determination without the benefit of any independent advice and is free to determine the standard implied by "reasonable care under the accident circumstances”. In fact, the use of this "reasonable care” standard could theoretically result in a determination that both drivers involved in the accident were over 50% at fault since both drivers may be determined to have lacked "reasonable care under the accident circumstances”. There is no provision in the act or regulation to prevent this possibility. Also, if a driver changes insurance companies, the new insurer may determine that the driver was at fault in an accident in which the former insurer found the driver was not at fault.
The trial court considered all these factors and concluded that the provisions of the no-fault act which allowed the insurer to determine who is at *138fault in an accident are unconstitutional. The majority failed to review any of these factors and finds these provisions of the act constitutional. Considering that the insurer is allowed to arbitrarily determine fault in an accident without specific guidelines for making the determination and without giving any notice or opportunity to present evidence to the insured involved in the accident, I would find that the procedures employed by the insurer under the no-fault act denied the insured due process of law. Since I believe the act is clearly unconstitutional, I would affirm the judgment of the trial court.

"9 Ward v Monroeville, 409 US 57, 60; 93 S Ct 80; 34 L Ed 2d 267 (1972); Tumey v Ohio, supra; Gibson v Berryhill, supra.

"11 Johnson v Mississippi, 403 US 212, 215; 91 S Ct 1778; 29 L Ed 2d 423, 427 (1971).

"10 Withrow v Larkin, supra, p 47, fn 15.

"12 In re Murchison, supra; Goldberg v Kelly, 397 US 254, 271; 90 S Ct 1011; 25 L Ed 2d 287 (1970); Morrissey v Brewer, 408 US 471, 485-486; 92 S Ct 2593; 33 L Ed 2d 484, 497 (1972).” 395 Mich 351.