Published: Jun 13, 2026
When Kerry Lynn Zielinski was rear-ended at a red light on January 21, 2021, nobody expected her insurer would eventually owe more than 26 times the original disputed amount.
That is exactly what happened. According to Insurance Business, the Michigan Court of Appeals affirmed a $315,605.35 judgment against Auto-Owners Insurance Company on June 11, 2026, most of it in no-fault attorney fees triggered by the insurer's timing missteps. The case is a sharp illustration of how no-fault attorney fees in Michigan can transform a modest medical dispute into a six-figure legal catastrophe for carriers, and a cautionary tale for policyholders and insurers alike. Insurance Business first reported the ruling on June 12, 2026.
A $11,797 Bill That Grew Into a $315,000 Judgment
Zielinski was struck from behind at a red light and later sought personal protection insurance (PIP) benefits from Auto-Owners to cover neck surgery she underwent in February 2022. The surgery bill came to $11,797.65.
Her medical background was anything but simple. The court noted a "lengthy, complicated, pre-accident medical history," and Auto-Owners itself conceded on appeal that she had "at least 116 surgeries since 2009 and no less than 19 spinal surgeries." That background handed the insurer a legitimate question: was the neck surgery treating a crash-related injury, or a pre-existing condition?
A jury ultimately sided with Zielinski. It found the neck-surgery bill reasonable, necessary, and overdue, while separately rejecting a claim tied to a back surgery. That split verdict mattered enormously. Once a Michigan no-fault jury declares benefits overdue, the door to attorney fees swings open, and there is no policy cap that closes it.
The final numbers tell the story: $11,797.65 in overdue benefits, $288,090.00 in attorney fees, and a total judgment of $315,605.35.
How Auto-Owners' Own Letters Sank Its Defense
The insurer received the surgery bill in April 2022. So far, a normal timeline.
Then came July 2022. Auto-Owners wrote to Medicare confirming that Zielinski had injured her neck in the crash and was treated for it. A near-identical letter followed in September 2022.
Only in October 2022 did the insurer engage Dr. Steven Kalkanis, who reviewed Zielinski's records without physically examining her. He found "simply no evidence" of accident-related injury. Auto-Owners relied on that opinion to deny the bills in November 2022.
The sequencing was fatal. The appeals court ruled that the Kalkanis review "does not retroactively create a factual uncertainty that clearly did not exist as early as July 2022." In other words, you cannot tell Medicare the injury is crash-related in July, do nothing for three months, then hire a doctor in October to say the opposite, and call the November denial reasonable.
What the insurer knew and communicated at the time payment was due is what the court measured.
Michigan's No-Fault Fee Trigger: Why Timing Is Everything
Michigan's no-fault act awards attorney fees when an insurer "unreasonably refused to pay the claim or unreasonably delayed in making proper payment." That language sounds flexible, but the courts have built a presumption around it.
Once benefits are overdue, the law presumes the refusal was unreasonable. The insurer then carries the burden of justifying the denial. Auto-Owners leaned heavily on the Kalkanis independent medical examination. The appeals court acknowledged the complexity of Zielinski's history but held that the IME came three months too late to do the legal work the insurer needed it to do.
Timing is the operative variable in Michigan auto insurance no-fault disputes. A record review commissioned after the insurer has already taken a contrary position in writing cannot retroactively establish a factual dispute. The position the carrier communicated to third parties, including Medicare, becomes part of the evidentiary record.
For Michigan policyholders, this legal structure is actually protective. If your insurer delays or denies PIP benefits without a timely, legitimate medical basis, attorney fees are not just possible; they are presumptively available.
From $50,000 Policy Cap to $288,090 in Attorney Fees
The fee award deserves its own focus because it dwarfed the underlying benefit by a ratio of more than 24 to 1.
The trial court set a $750 hourly rate for the lead attorneys. That figure was grounded in State Bar of Michigan survey data, and the court explained its reasoning: "very few" attorneys would be willing to take a case involving 19 pre-incident spine surgeries against a $50,000 insurance policy cap.
Here is how the numbers stack up:
| Overdue PIP benefit (neck surgery) | $11,797.65 |
| Attorney fees awarded | $288,090.00 |
| Total judgment | $315,605.35 |
| Auto-Owners policy cap | $50,000.00 |
| Fee award as multiple of policy cap | ~5.8x |
The $288,090 in fees exceeded the policy cap by nearly six times. That gap is not an accident of arithmetic. It reflects how Michigan's fee-shifting statute operates: the carrier's exposure to attorney fees is uncapped even when the underlying benefit claim is modest.
The Save Max Quote Index, drawn from 3.3 million+ real quote requests, consistently shows Michigan among the most expensive states for personal auto insurance, and cases like this one illustrate part of the structural reason why. When insurer conduct triggers uncapped fee awards, those systemic costs eventually travel back to premium pricing across the state.
What the Court Said About the Insurer's Conduct
The trial court's language was pointed. It described Auto-Owners' claims adjusters as "cavalier" and stated that it had "literally begged" defense counsel to settle the case within the $50,000 policy cap.
Those words did not appear in a vacuum. They reflected the court's view that the insurer had both the opportunity and the incentive to resolve a modest claim before attorney fees compounded and chose not to.
Auto-Owners also sought a new trial on the grounds that plaintiff's counsel had improperly told the jury that the other driver, Charles E. Watkins, was drunk. The appeals court agreed the references were erroneous. Watkins's possible intoxication was irrelevant to the PIP questions before the jury, since Watkins had already settled with Zielinski before trial and was not part of the no-fault case at all.
But the court found the error harmless. It pointed to the split verdict itself as evidence that the jury was capable of evaluating each claim independently, and it noted that the trial court had issued curative instructions. A curative instruction and a split verdict together persuaded the appeals court that the drunk-driver reference did not unfairly tip the outcome.
The insurer's second procedural argument, that plaintiff's attorneys were required to keep contemporaneous time records, also failed. Michigan law requires detailed billing documentation, the court said, but not real-time logging.
What this means for you
If you are a Michigan driver filing a PIP claim, document every communication your insurer sends and note the dates carefully. Request written explanations for any delay or denial promptly, and preserve them. If your insurer has already acknowledged the crash caused your injury in writing, a later denial based on a new medical review may be legally vulnerable. Consult a no-fault attorney before accepting a denial as final, because Michigan's fee-shifting statute means qualified counsel may take your case knowing the law rewards timely, successful claims.
Drivers in neighboring no-fault states should also understand how their own systems compare. Minnesota auto insurance and New Jersey auto insurance each carry their own PIP structures, and the rules governing benefit disputes and attorney fees differ meaningfully from Michigan's framework. Knowing your state's specific no-fault rules is not optional reading; it is financial self-defense.
The SMQI also shows that Michigan policyholders asking for PIP-inclusive quotes skew toward higher coverage tiers, likely reflecting awareness of exactly this kind of legal exposure on both sides of a claim.
FAQ
What triggers attorney fees in a Michigan no-fault case?
Under Michigan's no-fault act, attorney fees become available when an insurer "unreasonably refused to pay the claim or unreasonably delayed in making proper payment." Once a jury finds that benefits were overdue, the law presumes the refusal was unreasonable, shifting the burden to the insurer to justify its conduct.
Can a Michigan insurer deny PIP benefits based on an independent medical examination?
Yes, but the timing of that examination matters critically. The Zielinski case shows that an IME conducted after the insurer has already communicated a contrary position to third parties, such as Medicare, cannot retroactively establish a factual dispute that the court said "clearly did not exist as early as July 2022."
Is there a cap on attorney fees in Michigan no-fault cases?
No. The attorney fee award in this case reached $288,090.00, nearly six times the $50,000 policy cap on the underlying benefits. Michigan's fee-shifting provision is uncapped, which is why a modest disputed bill can generate a judgment that far exceeds what the policy itself would pay out.
Does Michigan no-fault cover surgeries for pre-existing conditions?
PIP benefits can cover treatment that is causally connected to a covered accident, even if the claimant has a complex prior medical history. In the Zielinski case, the jury found the neck surgery reasonable, necessary, and accident-related despite the claimant having undergone at least 116 surgeries since 2009.
What should I do if my Michigan PIP claim is denied?
Preserve all written communications from your insurer, including any letters sent to Medicare or other payers. Note the dates of every document and contact. The sequence of the insurer's own statements can be central evidence in a dispute, as it was in this case. Consulting a Michigan no-fault attorney promptly after a denial is advisable, since fee-shifting statutes create financial incentive structures that affect how cases are evaluated.
About Brooke Grissom
Brooke Grissom is an Independent Insurance Analyst at SaveMaxAuto, licensed in Property & Casualty and Health insurance. She covers data-driven market trends, cross-state premium comparisons, and carrier financial analysis. Read more from Brooke Grissom →
Edited by Kyle Greenwood.
Methodology
This article is grounded in the source linked above. SaveMaxAuto data points referenced here are drawn from the Save Max Quote Index (SMQI), a proprietary instrument reflecting 3,364,317 real consumer quote requests submitted to savemaxauto.com. State and carrier rankings reflect the lifetime dataset; year-over-year shifts reflect a rolling 12-month window. The index is refreshed monthly. External authority figures referenced (NAIC, NHTSA, state regulators) reflect the most recent public data releases available at time of writing.
Sources
- Primary source: Insurance Business, "Auto-Owners loses appeal over disputed bill, owes $315,000 no-fault judgment"