August 5, 2026
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Sabeen
Labser PLC v. Farmers Insurance Exchange: Court of Appeals Holds That Healthcare Providers Cannot Recover PIP Benefits When the Injured Person Was the Constructive Owner of an Uninsured Vehicle
By Pratheep Sevanthinathan, Esq. The Seva Law Firm
Case: Labser PLC v. Farmers Insurance Exchange, No. 373765 (Mich. Ct. App. Aug. 5, 2026) (Published)
Court: Michigan Court of Appeals
Panel: Patel, P.J., and Swartzle and Mariani, JJ.
Decision: Affirmed — Authored by Mariani, J.
Lower Court: Oakland Circuit Court, Case No. 2023-201239-NF
- Introduction
The Michigan Court of Appeals has issued a published opinion in Labser PLC v. Farmers Insurance Exchange that will have significant implications for healthcare providers seeking to recover no-fault PIP benefits for treating patients who were driving uninsured vehicles. The Court held that when an injured person is a “constructive owner” of an uninsured vehicle — meaning they used the vehicle in ways that comport with ownership even though the title was in someone else’s name — that person is disqualified from PIP benefits under MCL 500.3113(b). More importantly, the Court held that healthcare providers who treated that person cannot use the direct cause of action under MCL 500.3112 to independently recover PIP benefits either. This decision limits the scope of the Court of Appeals’ earlier ruling in Mota-Peguero v. Falls Lake National Insurance Co. and clarifies that a provider’s direct cause of action is not a workaround when the injured person’s claim is barred by the no-fault act itself.
- Facts
Joshua Simpson was injured in a motor vehicle collision in May 2023. At the time, he was driving a vehicle purchased by his live-in girlfriend, Kiera Burgos, less than two weeks earlier. The vehicle was uninsured and titled to Burgos. Simpson, Burgos, and their infant son were all in the vehicle at the time of the crash.
Although the car was technically in Burgos’s name, the evidence overwhelmingly showed that Simpson was using it as his own. Simpson was the primary driver. He had access to the keys — keeping the primary key in his pocket and the spare in his bedroom drawer. He put gas in the vehicle and contributed money toward its maintenance. He did not need to ask Burgos for permission to drive it. Burgos did not even have a driver’s license at the time of purchase, and the two had agreed that Simpson would be the primary user. After the collision, Simpson arranged for the vehicle to be towed and later sold it for scrap.
Plaintiffs Labser PLC and Northland Radiology provided medical treatment to Simpson after the crash. Since there was no applicable insurance policy, Simpson’s claim was assigned to Farmers Insurance Exchange through the Michigan Assigned Claims Plan (MACP). Farmers denied payment, and the providers sued — both as Simpson’s assignees and via the direct cause of action for healthcare providers under MCL 500.3112.
- Issues
Two key issues were before the Court:
First, was Simpson a “constructive owner” of the uninsured vehicle within the meaning of MCL 500.3101(3)(l)(i), even though the vehicle was titled to Burgos and Simpson had only been using it for less than two weeks?
Second, even if Simpson was disqualified from PIP benefits as an uninsured owner, could the healthcare providers still independently recover PIP benefits under the direct cause of action established by MCL 500.3112 and the Court of Appeals’ decision in Mota-Peguero?
- Holding
The Court of Appeals affirmed summary disposition in favor of Farmers on both issues.
On the ownership question, the Court held that Simpson was a constructive owner of the vehicle under MCL 500.3101(3)(l)(i). The Court reaffirmed that constructive ownership does not require actual use for more than 30 days — it requires only that the person’s right to use the vehicle would continue for more than 30 days. Citing the Michigan Supreme Court’s decisions in Twichel v. MIC General Insurance Corp. and the recent Abdulla v. Progressive Southeastern Insurance Co. (2026), the Court emphasized that ownership “prioritizes function over form” and focuses on whether the person’s usage pattern is “possessory or proprietary in a manner that comports with ownership.”
The Court rejected the providers’ arguments that Simpson could not be an owner because: (1) he had used the vehicle for less than 30 days — the focus is on the right to use, not actual duration of use; (2) he did not have exclusive use — more than one person can be an “owner” under the statute; and (3) there was no written agreement — neither the statute nor Twichel requires one.
On the provider’s direct action, the Court distinguished Mota-Peguero and held that the providers could not recover PIP benefits independently. The Court reasoned that Mota-Peguero involved rescission of an existing insurance policy, where the equities had to be balanced between the insurer and an innocent third-party provider. Here, there was no insurance policy at all — the vehicle was simply uninsured. The Court then turned to the statutory text: MCL 500.3112 allows providers to make a direct claim for “overdue benefits payable for charges for . . . treatment to an injured person for an accidental bodily injury covered by personal protection insurance.” Since Simpson’s injuries were not “covered by personal protection insurance” — because he was an owner of an uninsured vehicle under MCL 500.3113(b) — the providers did not fall within the scope of MCL 500.3112.
- Conclusion
The Court of Appeals affirmed the trial court’s grant of summary disposition in favor of Farmers Insurance Exchange. Simpson was a constructive owner of the uninsured vehicle, which disqualified him from PIP benefits. The healthcare providers’ direct cause of action under MCL 500.3112 could not save their claims because the underlying injuries were not “covered by personal protection insurance” in the first place. The decision is published and carries binding precedential authority.
- What Does This Mean for Our Clients?
This decision has important implications for both accident victims and the healthcare providers who treat them.
If you are driving someone else’s vehicle regularly, you may be considered its “owner” under Michigan no-fault law. It does not matter that the title is in someone else’s name. If you are the primary driver, have unrestricted access to the keys, contribute to the vehicle’s expenses, and do not need permission to drive it, the Court will likely find that you are a constructive owner. And if that vehicle is uninsured, you may be completely barred from receiving PIP benefits — even through the Assigned Claims Plan.
The 30-day period in the statute does not mean you have to have driven the car for 30 days. The Court confirmed that the statutory test is about the nature of your right to use the vehicle, not the actual duration of your use. If the arrangement shows that your use would have continued beyond 30 days, that is sufficient. Simpson had only been using the car for about two weeks, and the Court still found him to be an owner.
Healthcare providers should be aware that treating an uninsured vehicle owner may mean the provider has no avenue for PIP recovery. The Mota-Peguero decision gave providers an independent right to pursue claims even when an insurer tried to rescind a policy. But Labser clarifies that this independent right has limits — it only applies when the injured person’s treatment was for injuries “covered by personal protection insurance.” If the injured person was driving an uninsured vehicle they effectively owned, there is no coverage for the provider to claim against.
Make sure every vehicle you regularly use is insured. This case is a stark reminder of the consequences of driving an uninsured vehicle in Michigan. Even though the vehicle was titled to someone else, Simpson’s regular use made him an owner — and the lack of insurance meant that neither he nor his healthcare providers could recover PIP benefits. If you are using a family member’s or partner’s car on a regular basis, confirm that the vehicle is properly insured and that you are listed as a driver on the policy.
If you have been in a motor vehicle accident and your insurer or the Assigned Claims Plan is denying your PIP benefits based on ownership or insurance status, contact The Seva Law Firm. These cases are highly fact-specific, and the law in this area is evolving rapidly. We can review your situation and determine the best path forward.
Pratheep Sevanthinathan is the owner and managing attorney of The Seva Law Firm, located at 100 W. Big Beaver Rd, Suite 500, Troy, MI 48084. He can be reached at (248) 385-5704.
This article is for informational purposes only and does not constitute legal advice. Every case is different, and past results do not guarantee future outcomes.