Minnesota Court of Appeals Clarifies Application of Effective Date of January 2015 No-Fault Act Maximum Weekly Benefits Amendments

In an unpublished case decided April 17, 2017, the Minnesota Court of Appeals clarified that individuals entitled to no-fault economic-loss benefits after January 1, 2015 are entitled to the amended maximum of $500 per week rather than the previous maximum of $250 regardless of which version of the statute was in effect when the individual signed their policy. Platz v. Progressive Direct Insurance, 27-CV-16-1500 (Minn. Ct. App. Apr. 17, 2017); Minn. Stat. § 65B.44 subd. 3(a) (2014).

On December 24, 2014, Pamela Sue Platz was injured in an automobile accident and received five months of income-loss benefits under her no-fault insurance policy. See Platz at 1. One week later, on Jan. 1, 2015, an amendment to Minnesota's No-Fault Automobile Insurance Act became effective, raising the maximum weekly income-loss benefit amount from $250 to $500.  Progressive Direct Insurance, Platz's insurer, provided her with income-loss benefits of $250 per week.

Platz petitioned for no-fault arbitration, arguing that she was entitled to benefits of $500 per week as of Jan. 1, 2015. The arbitrator disagreed, finding that Platz's insurance policy is “governed by the law in effect when the policy was issued, and that the amendment to the no-fault act does not apply to claims arising from accidents that occurred before January 1, 2015.” Id. at 2.

In February 2016, Platz brought action in district court seeking to “partially vacate or modify the arbitrator's award,” arguing that the arbitrator had “erroneously interpreted the no-fault act by ruling that she was not entitled to $500 per week . . . after January 1, 2015.” Id. at 3. The district court, reviewing the issue de novo, agreed with the findings of the arbitrator and denied Platz's motion. Platz appealed.

The appellate court reversed, relying primarily on Hoben v. City of Minneapolis, 324, N.W.2d 161 (Minn. 1982). In Hoben, the court held that “Basic economic loss benefits are payable monthly as loss accrues. Loss accrues not when injury occurs, but as income loss . . . is incurred. Under the statute economic loss benefits are payable as the loss occurs, not when the injury occurs.” Id. at 163 (citing Minn. Stat. § 65B.54, subd. 1 (1980)).

Applying Hoben, the court concluded that the amended maximum of $500 applied to any income loss benefits Platz was entitled to have paid out after January 1, 2015 and that therefore, the district court had “erred by denying Platz's motion to partially vacate or modify the arbitrator's award.”