In Frankenmuth Ins. Co. v. L & KJ Enterprises, LLC, No. 366229 (Mich Ct App Nov 18, 2025), the Michigan Court of Appeals upheld the dismissal of an insurer's subrogation claim — but the real significance lies in what the Court did next.

Although bound by the 1993 Pezzani decision, which interprets MCL 500.3116(2) as barring insurers from pursuing nonmotorist tortfeasors, the panel openly stated that Pezzani was wrongly decided. The judges emphasized that §3116(2) was intended to govern reimbursement disputes between insurers and their insureds, not to strip insurers of the ability to pursue legitimate negligence claims against third parties like repair shops.

Because the panel believed the existing precedent distorts the statute and improperly extends the no-fault act beyond its intended scope, it formally requested a special conflict panel under MCR 7.215(J)(3) to reexamine Pezzani and determine whether it should remain controlling law.

This rare step signals that Michigan may soon clarify — or fundamentally reshape — the limits of insurer subrogation rights under the no-fault act, especially regarding claims against nonmotorist tortfeasors. In the meantime, Pezzani remains binding, but its future is now very much in question.

If you have questions or comments related to these issues, or any legal issues related to insurance, contracts, and similar matters, please contact Nicole G Bien at Kallas & Henk, PC to discuss in more detail.