Introduction

This decision addresses a recurring and high‑stakes question under Michigan’s no‑fault insurance scheme: whether the 2019 legislative amendment adding a tolling provision to the “one‑year‑back rule” in MCL 500.3145 applies retroactively to personal protection insurance (PIP) claims that had already begun to accrue when the amendment took effect on June 11, 2019. The dispute arose after Spine Specialists of Michigan, a medical provider proceeding via an assignment of benefits from the insured (Jeremy Woods), sued MemberSelect Insurance for unpaid PIP benefits associated with services rendered in 2019.

The key issue was whether the new tolling provision in MCL 500.3145(3)—which tolls the one‑year‑back period from the date of a “specific claim for payment” until the insurer “formally denies” the claim (subject to “reasonable diligence”)—could be invoked to save claims that began accruing before June 11, 2019. The trial court barred claims for services provided before June 11, 2019 but allowed others; the Court of Appeals affirmed in relevant part. The Supreme Court granted argument on whether the Court of Appeals was correct to hold that tolling under subsection (3) does not apply to claims that accrued before the amendment’s effective date.

The Michigan Supreme Court holds that the tolling provision is not retroactive. Because PIP claims accrue when medical expenses are incurred, the amendment applies only to PIP expenses incurred on or after June 11, 2019. In this case, the provider’s claims were barred by the one‑year‑back rule. The Court also clarifies how Michigan’s retroactivity framework (LaFontaine) operates and underscores that labeling an amendment “immediate effect” does not convey retroactive intent.

Summary of the Opinion

• Holding: MCL 500.3145(3) does not apply retroactively to causes of action that began to accrue before June 11, 2019. The tolling provision operates prospectively only.
• Accrual: A PIP claim accrues when the expense is “incurred,” i.e., when the medical service is rendered and liability to pay attaches (MCL 500.3110(4)).
• Substantive change: The tolling provision imposes a new substantive duty on insurers—formal denial is required to end tolling—and therefore cannot apply to pre‑amendment accrued claims absent clear legislative direction.
• Textual anchor: The 2019 amendment was given “immediate effect,” but this signifies prompt enactment only; it is not a signal of retroactivity.
• Outcome: The Court of Appeals is affirmed. In this case, the provider’s claims were barred by the one‑year‑back rule because tolling under MCL 500.3145(3) was unavailable.
• Concurrence: Justice Welch agreed with the result but wrote separately to emphasize that under Andary v. USAA, rights and duties under no‑fault contracts vest at the time of the crash. She viewed the majority’s reliance on the accrual date as in tension with Andary’s vesting analysis, though it did not alter the outcome here.

Detailed Analysis

A. Precedents and Authorities Cited

• Statutory framework:
  • MCL 500.3145 (one‑year‑back rule; amended by 2019 PA 21 to add subsection (3) tolling from “specific claim” to “formal denial,” constrained by “reasonable diligence”).
  • MCL 500.3110(4): PIP benefits accrue “as the allowable expense, work loss or survivor’s loss is incurred,” not on the accident date.
  • MCL 500.3142: 30‑day “overdue” rule upon receipt of reasonable proof of loss (distinct from a duty to “formally deny”).
  • MCL 500.3148: Attorney-fee exposure for untimely payment without reasonable foundation (pre‑2019 context made “formal denial” a best practice, not a statutory duty).
• One‑year‑back rule’s purpose and operation:
  • Joseph v. ACIA (2012): The one‑year‑back rule is a damages‑limiting provision integral to the no‑fault system; it protects fiscal integrity by capping recovery to losses within one year before suit.
  • Lewis v. DAIIE (1986): Pre‑Devillers judicial tolling once recognized.
  • Devillers v. ACIA (2005): Overruled Lewis; judicial tolling removed until the Legislature reinstated statutory tolling in 2019 via MCL 500.3145(3).
• Accrual and “incurred”:
  • Proudfoot v. State Farm (2003): To “incur” means to become liable or subject to payment, especially due to one’s own actions.
  • Community Resource Consultants v. Progressive (2008): Liability generally arises once services are rendered.
  • Bronson Health Care Group v. USAA (2020): An expense is incurred when an agreement to pay is executed and treatment is received.
• Retroactivity framework (LaFontaine principles):
  • LaFontaine Saline, Inc. v. Chrysler Group (2014): Four guiding principles: explicit retroactivity; relation to antecedent events; impairment of vested rights or creation of new duties for past transactions; remedial/procedural statutes not affecting vested rights may apply retroactively.
  • Johnson v. Pastoriza (2012), Buhl v. Oak Park (2021), McLain v. Diocese of Lansing (2024): Statutes are presumed prospective; “immediate effect” ≠ retroactivity; clear textual command or necessary implication is required to overcome the presumption.
  • Frank W. Lynch, Brewer, Selk, Elezovic, Jesperson: Emphasize textual clarity for retroactivity and interpretive discipline.
  • Downriver Plaza; GM v. Romein; In re Certified Questions: Retroactivity can upset settled expectations and impose unfair burdens on past conduct.
• Andary v. USAA (2023): The Court held that for pre‑2019 accidents, insureds retained vested contractual/statutory rights to uncapped PIP benefits; legislative caps did not retroactively diminish those vested rights. In this case, Andary is cited for accrual principles, and Justice Welch reads Andary to require a vesting‑at‑crash analysis, not accrual‑date control, to choose governing law.
• Encompass Healthcare v. Citizens (COA 2022): A footnoted statement suggesting the new one‑year‑back rule governs suits filed after the amendment. The Supreme Court’s decision here clarifies that the controlling law is not determined by the filing date alone and places clear limits on Encompass’s reach.

B. The Court’s Legal Reasoning

1. Accrual controls whether applying the new tolling would be retroactive.

   The Court reaffirms that PIP claims accrue as each expense is incurred (MCL 500.3110(4)). For expenses incurred in April and May 2019, the claim accrued before the June 11, 2019 amendment. Applying the post‑amendment tolling to those expenses would necessarily be retroactive.

2. The tolling provision is substantive because it creates a new duty.

   Subsection (3) changes the landscape by requiring a “formal denial” to stop tolling. Before 2019, after Devillers, insurers had no such legal duty, and could rely on the unoiled one‑year‑back cap without issuing a formal denial. The amendment thus imposes a new obligation with substantive effect (increasing potential liability), and the Legislature did not state any intent to impose that duty on past transactions or claims.

3. LaFontaine principles guide the retroactivity analysis, and any one principle can be dispositive.
   • First principle (express retroactivity): No explicit retroactivity in the amendment. “Immediate effect” is not retroactivity; it only accelerates the effective date.
   • Third principle (new duties/obligations for past transactions): Retroactive enforcement would impose a new duty (formal denial) on insurers for conduct that predated the amendment and reconfigure exposure for previously completed claim‑handling—disfavored under LaFontaine.
   • Second and fourth principles: Not necessary to decide here; the Court emphasizes that LaFontaine’s “factors” are discrete considerations, not a balancing test.
4. “Curative” label argument rejected.

   Even if the Legislature intended to “restore” a version of tolling after Devillers, that intent does not itself prove retroactive application. As Buhl teaches, “curative” enactments are not automatically retroactive.

5. Resulting application in this case.

   Because tolling cannot be applied to claims that accrued before June 11, 2019, the provider’s claims in this action were governed by the pre‑amendment one‑year‑back rule and were time‑barred to the extent they fell outside the permissible recovery window. The Court of Appeals is affirmed.

C. The Concurrence (Justice Welch): Vesting at Crash vs. Accrual at Expense

Justice Welch agreed with the judgment but underscored a conceptual difference. In her view, Andary teaches that rights and duties under a no‑fault policy vest at the time of the crash, and that law governs unless the Legislature clearly makes a change retrospective. While the majority quotes Andary for the proposition that specific PIP payment claims accrue when expenses are incurred, Justice Welch cautions that this does not mean the law at the time of accrual of each invoice defines the parties’ rights; rather, Andary treats the crash as the vesting event for the scope of benefits and defenses. Applying Andary’s vesting logic here still leads to the same bottom line: pre‑2019 crashes keep pre‑2019 defenses (including the absence of statutory tolling) unless the Legislature clearly indicates otherwise.

D. Impact and Forward‑Looking Consequences

• Immediate doctrinal clarification:
  • Prospective‑only: MCL 500.3145(3)’s tolling is available only for expenses that accrue on or after June 11, 2019.
  • Filing date alone does not control: A complaint filed after the amendment’s effective date does not by itself bring pre‑amendment accrued claims within subsection (3).
  • One‑year‑back remains a strict damages cap: Absent tolling, recovery is limited to items incurred within one year before suit is commenced.
• Claim‑handling protocols post‑2019: Insurers must maintain formal denial procedures for post‑June 11, 2019 claims to end tolling; failure to do so can expand recoverable windows. For pre‑amendment accrued claims, no retroactive duty to have issued formal denials exists.
• Provider and claimant strategies:
  • Track by date of service: Each PIP expense has its own accrual date. Providers must calendar one‑year‑back deadlines tied to each service date, and understand that the new tolling regime applies only to services incurred on or after June 11, 2019.
  • Document claim and denial milestones: For post‑June 11, 2019 services, tolling hinges on the date of a specific claim for payment and the date of formal denial, plus “reasonable diligence.”
  • Mixed‑era claims: Where a case spans pre‑ and post‑June 11, 2019 services, courts will have to apply different regimes line‑by‑line. The opinion emphasizes per‑expense accrual, signaling that tolling can apply to post‑amendment expenses even if earlier expenses in the same action are governed by pre‑amendment law.
• Litigation posture: Expect more summary disposition motions hinging on precise accrual dates, proof of “specific claim” submission, sufficiency and timing of “formal denial,” and the claimant’s “reasonable diligence.” Encompass’s footnoted suggestion that filing after the amendment triggers the new regime is no longer tenable.
• Legislative signal: The Court again invites precision: If the Legislature wants retroactive effect—especially where new duties expand liability—it must say so expressly or by necessary implication.

Complex Concepts, Simplified

• One‑year‑back rule (MCL 500.3145(2)): A damages cap that limits recovery to losses incurred within the year before the lawsuit is filed. It does not bar the entire action; it limits the recoverable window.
• Tolling (MCL 500.3145(3)): For post‑June 11, 2019 expenses, the one‑year‑back period is paused from when a “specific claim for payment” is made until the insurer “formally denies” it, provided the claimant pursues the claim with reasonable diligence.
• Accrual vs. commencement:
  • Accrual: When the right to payment arises; for PIP, when the expense is incurred (date of service), not the accident date.
  • Commencement: When the lawsuit is filed. The one‑year‑back rule looks back one year from this date to determine what is recoverable.
• “Immediate effect” vs. retroactivity: “Immediate effect” means the statute becomes effective right away rather than after 90 days. It does not mean the statute applies to pre‑effective‑date transactions or claims without an express or necessarily implied retroactivity directive.
• Vested rights vs. new duties: Retroactive laws are disfavored when they impair vested rights or impose new obligations on past conduct. Here, the new duty to “formally deny” was significant; imposing it on pre‑amendment claims would rewrite past claim‑handling requirements.
• Assignment of benefits (AOB): A provider stands in the insured’s shoes. Assignment transfers the right to pursue payment but does not change accrual dates or expand substantive rights beyond those the insured had.

Procedural and Factual Highlights

• Accident: January 21, 2017 (pre‑amendment crash).
• Key services rendered: April 15, 2019; April 20, 2019 (major spinal surgery); May 6, 2019.
• Complaint filed: September 21, 2020.
• Trial court: Barred pre‑June 11, 2019 claims under one‑year‑back; denied summary disposition as to other items (dispute centered on the new tolling provision).
• Court of Appeals: Affirmed the key ruling that tolling did not apply because PIP accrual occurs when expenses are incurred.
• Supreme Court: Affirmed; MCL 500.3145(3) applies prospectively only and did not save the provider’s claims in this action.

Note: The opinion repeatedly stresses that accrual is per expense (per date of service). Practitioners should therefore expect courts to parse mixed claims chronologically and apply the pre‑ or post‑2019 regime as appropriate to each line item.

Key Takeaways

• MCL 500.3145(3)’s tolling is not retroactive. It applies only to PIP expenses incurred on or after June 11, 2019.
• Accrual for PIP occurs when an expense is incurred (treatment rendered), not at accident or denial.
• “Immediate effect” does not equal “retroactive application.” Clear text is required for retroactivity.
• The 2019 amendment created a new duty for insurers to formally deny a claim to end tolling—this is a substantive change and cannot be imposed on pre‑amendment accrued claims absent clear legislative command.
• Andary’s vesting analysis remains important; Justice Welch highlights potential tension between “vesting at crash” and “accrual at expense,” though both paths yielded the same result here.
• Providers and counsel must carefully calendar one‑year‑back deadlines by date of service and, for post‑June 11, 2019 claims, meticulously document claim submission, formal denial, and diligence to preserve tolling.

Conclusion

Spine Specialists v. MemberSelect is a clarifying decision at the intersection of accrual, damages limitation, and legislative retroactivity. The Michigan Supreme Court holds that the 2019 tolling provision in MCL 500.3145(3) is prospective only and cannot be invoked to salvage PIP claims that accrued before June 11, 2019. In doing so, the Court reaffirms core no‑fault principles: PIP accrues as expenses are incurred; the one‑year‑back rule operates as a strict damages cap; and retroactivity requires a clear textual mandate, especially where an amendment introduces a new duty with substantive liability consequences. Justice Welch’s concurrence preserves Andary’s vesting‑at‑crash framework as a parallel path to the same destination.

Going forward, insurers must continue to implement formal denial protocols for post‑June 2019 claims to manage tolling exposure, while providers must prosecute claims with precision around dates of service, claim submission, and formal denials. The decision curtails any reliance on the filing date or generalized “curative” rationales to extend the new tolling regime to earlier‑accrued claims, bringing welcome certainty to mixed‑era PIP litigation in Michigan.