Zielinski v. Auto-Owners Insurance Company

By Pratheep Sevanthinathan, Esq. The Seva Law Firm

Case: Zielinski v. Auto-Owners Insurance Company, No. 371692 (Mich. Ct. App. June 11, 2026) (Published)

Court: Michigan Court of Appeals

Panel: Bazzi, P.J., and Rick and Maldonado, JJ. Decision: Affirmed

Lower Court: Wayne Circuit Court, Case No. 22-000435-NI

Read the full opinion here (https://www.courts.michigan.gov/49cd8e/siteassets/case-documents/uploads/opinions/final/coa/20260611_c371692_52_371692.opn.pdf)

1. Introduction

In a published decision that reinforces the no-fault act’s core promise of prompt payment, the Michigan Court of Appeals has affirmed a trial court’s award of attorney fees, penalty interest, and overdue PIP benefits in favor of plaintiff Kerry Lynn Zielinski. In Zielinski v. Auto-Owners Insurance Company, the Court held that an insurer cannot rely on an independent record review obtained months after denying a claim to retroactively create a “legitimate factual uncertainty” that did not exist at the time payment was due. The Court also rejected Auto-Owners’ argument that plaintiff’s counsel’s isolated references to the other driver’s intoxication during closing arguments warranted a new trial, and upheld the trial court’s determination that a $750 hourly rate for attorney fees was reasonable under the Pirgu framework. Because this is a published opinion, it carries binding precedential authority.

2. Facts

On January 21, 2021, Kerry Lynn Zielinski was stopped at a red light when she was rear-ended by another driver, Charles E. Watkins, at approximately 45 miles per hour. The force of the collision pushed her car into the vehicle stopped in front of her. Zielinski was taken by ambulance to the emergency room, reporting a slipped disc in her neck. Auto-Owners, her insurance company, noted that she also suffered whiplash, a concussion, and other injuries. To complicate matters further, Zielinski contracted a life-threatening bacterial infection shortly after the accident that took months to manage.

Zielinski also had a significant pre-accident medical history, including 19 prior spinal surgeries. Her pain management physician, Dr. Ayman Tarabishy, described her as “a lot more fragile and susceptible” than a person with a healthy spine. After recovering from the infection, Zielinski was referred to Dr. Christopher Elia, who began treating her in December 2021 for neck pain and cervical myelopathy — spinal cord damage. Dr. Elia acknowledged Zielinski’s extensive surgical history but opined that her current neck pain was related to the January 2021 accident, and that the neck surgery he performed in February 2022 was necessary to treat injuries from the crash.

In April 2022, Auto-Owners received the medical bill from Michigan Head and Spine Institute for the neck surgery. In July 2022, Auto-Owners wrote to Medicare acknowledging that Zielinski had injured her neck in the accident and was treated for that injury. Auto-Owners sent a nearly identical letter in September 2022. Despite these acknowledgments, Auto-Owners then engaged Dr. Steven Kalkanis to perform an independent record review. Dr. Kalkanis — who never actually examined Zielinski — concluded in October 2022 that there was “simply no evidence” that she suffered any spinal injury from the accident. Based on this review, Auto-Owners denied Zielinski’s bills in November 2023.

At a two-day trial, the jury found that Zielinski sustained accidental bodily injury from the motor vehicle accident and that her neck surgery bill from Michigan Head and Spine Institute was a reasonable, necessary, and overdue allowable expense. However, the jury rejected the claim for a separate low-back surgery performed in October 2023 — a nuanced verdict that demonstrated careful, dispassionate deliberation.

The trial court awarded Zielinski $11,797.65 in overdue allowable expense benefits, $1,547.65 in pre-judgment interest, $2,798.40 in penalty interest under MCL 500.3142, $11,371.65 in taxable costs, and $288,090.00 in attorney fees under MCL 500.3148, for a total judgment of $315,605.35.

3. Issues

Auto-Owners raised three arguments on appeal:

1. New trial based on attorney misconduct: Whether plaintiff’s counsel’s references to the other driver’s intoxication during closing arguments prejudiced the jury and the trial court, requiring a new trial.
2. Unreasonable refusal to pay: Whether Auto-Owners’ refusal to pay the neck surgery bill was reasonable, such that attorney fees under MCL 500.3148(1) were inappropriate — particularly because Dr. Kalkanis’ record review allegedly created a legitimate factual uncertainty.
3. Reasonableness of attorney fees: Whether the trial court’s determination that $750 per hour was a reasonable rate, and its acceptance of plaintiff’s counsel’s non-contemporaneous time records, constituted an abuse of discretion.

4. Holding

The Court of Appeals affirmed on all issues.

On the new trial request, the Court acknowledged that plaintiff’s counsel’s references to Watkins’ drunkenness were erroneous — the other driver’s intoxication was irrelevant to the PIP issues at trial and constituted inadmissible evidence. However, the Court found the error was harmless. The jury’s split verdict — awarding the neck surgery claim while denying the back surgery claim — demonstrated that the jury was not inflamed by bias but rather carefully weighed the evidence. The trial court’s standard curative instructions, which directed the jury not to let sympathy influence its decision and to evaluate the evidence without bias, were sufficient to mitigate any prejudicial effect. The Court also found that plaintiff’s counsel’s isolated comments did not constitute “a deliberate course of conduct aimed at preventing a fair and impartial trial.”

On the unreasonableness of Auto-Owners’ refusal, the Court applied the well-established framework from Moore v. Secura Insurance and Brown v. Home-Owners Insurance Co. Under MCL 500.3148(1), once a jury determines that benefits are overdue, a rebuttable presumption arises that the insurer’s refusal was unreasonable, and the insurer bears the burden of justifying the delay. The Court found that Auto-Owners failed to carry this burden. Critically, the Court emphasized that the relevant circumstances are those that existed at the time the bill was due — not months later. Auto-Owners received the neck surgery bill in April 2022 and by July 2022 had written to Medicare acknowledging that Zielinski’s neck injury was related to the accident. Dr. Kalkanis’ record review was not conducted until October 2022 — three months after Auto-Owners had already acknowledged the connection between the accident and the injury. The Court held that the record review “does not retroactively create a factual uncertainty that clearly did not exist as early as July 2022.”

On the attorney fee amount, the Court upheld the $750 hourly rate, finding the trial court properly followed the Pirgu v. United Services Auto Association three-step framework. The trial court considered the Economics of Law Practice Survey, the complexity of the case (19 prior spinal surgeries, life-threatening infection, a $50,000 policy cap that few attorneys would litigate to trial), the results obtained, and the experience and reputation of plaintiff’s counsel. The Court also rejected Auto-Owners’ argument that time records must be kept contemporaneously, finding no authority requiring such a practice — so long as the claimed hours are supported by affidavits, testimony, and detailed records.

5. Conclusion

The Court of Appeals affirmed the trial court’s judgment in its entirety, upholding the award of $11,797.65 in overdue PIP benefits, pre-judgment interest, penalty interest, taxable costs, and $288,090.00 in attorney fees. The total judgment of $315,605.35 stands. As a published opinion, Zielinski v. Auto-Owners is now binding precedent in Michigan.

6. What Does This Mean for Our Clients?

This published decision carries significant implications for anyone dealing with an insurance company that is delaying or denying payment of no-fault benefits. Here is what you need to know:

An insurer cannot use a late-obtained record review to justify an earlier unreasonable denial. This is the most important takeaway from the case. Auto-Owners acknowledged in writing — twice — that Zielinski’s neck injury was related to the accident, then hired a doctor to review records and say it was not. The Court made clear that the reasonableness of a denial is judged based on the circumstances at the time payment was due, not based on evidence the insurer generated after the fact. If your insurance company acknowledged your injury and then changed its story after hiring its own doctor, this case is directly on point.

Your pre-existing medical history does not give your insurer a free pass to deny claims. Zielinski had 19 prior spinal surgeries. Auto-Owners pointed to this history as a reason to deny her claim. The jury and the court rejected this argument because her treating physicians testified that her current condition was related to the accident. Under Michigan’s no-fault act, insurers must “take their opposing client as they receive them.” If you had prior injuries or surgeries, your insurer still owes you benefits for injuries caused or aggravated by a new accident.

Attorney fees can be substantial when an insurer unreasonably refuses to pay. The $288,090 fee award — on a claim where the overdue benefits were $11,797.65 — underscores that MCL 500.3148 is designed to penalize insurers who force claimants into litigation over claims that should have been paid. The no-fault act creates “steep penalties” against insurers that drag their feet, and this case is a powerful example.

You do not need to accept an “independent” medical examination at face value. The Court noted — citing Micheli v. Michigan Auto Insurance Placement Facility — that the term “independent medical examination” is a “euphemistic term of art” because the examination is “entirely selected and paid for by an insurance company, rendering the ‘independence’ of the examination somewhat questionable.” If your insurer denied your claim based on an IME, remember that the IME doctor’s opinion is not the final word.

Isolated errors at trial do not automatically warrant a new trial. Auto-Owners tried to overturn the entire verdict because plaintiff’s counsel mentioned the other driver’s intoxication — a fact that was irrelevant to the PIP issues. The Court found the error harmless, particularly because the jury’s split verdict showed careful deliberation, not emotional bias. This is a reminder that courts look at the overall fairness of the trial, not isolated moments.

If your insurance company has delayed or denied your no-fault benefits — especially after initially acknowledging your injuries — contact The Seva Law Firm. We fight these battles every day, and published decisions like Zielinski v. Auto-Owners give us powerful tools to hold insurers accountable.

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.