What happened: Michigan’s appeals court wiped a no-fault case dismissal after the trial judge gave only 25 words of reasoning from the bench
Who’s involved: Auro Rehab Services LLC and Home-Owners Insurance Company
What’s at stake: Reimbursement for rehabilitation services to two motor vehicle accident claimants under Michigan’s no-fault act
Why it matters: Trial courts must weigh seven factors and consider lighter penalties before permanently dismissing a case for discovery failures
Where it stands: Dismissal wiped; case sent back to Wayne Circuit Court
It took just 25 words to dismiss a no-fault insurance case in Michigan. It took four pages to undo it.
Auro Rehab Services LLC had sued Home-Owners Insurance Company in Wayne Circuit Court in April 2024, seeking payment under the state’s no-fault act for rehab services it was providing to two people injured in a car accident.
By April 2025, the insurer asked the court to throw the case out. Its argument: Auro Rehab had never handed over its patients’ complete medical records and bills, and had gone quiet on requests to reschedule depositions - the sworn, recorded interviews - of two treatment providers.
Auro Rehab did not file a response. Its lawyer did not show up for the hearing.
The trial judge’s full ruling from the bench: “I’ve read your motion. There is no response. I’m gonna go ahead and grant it. Please e-file the order and I’ll sign it. Thank you.”
Case thrown out. Permanently.
The Michigan Court of Appeals, in an unpublished opinion issued November 9, 2026, said that was not nearly enough. The three-judge panel wiped the dismissal and sent the case back, finding the trial judge had overstepped.
The issue was not the result - the appeals court noted that the record appeared to support the insurer’s complaints about Auro Rehab’s discovery failures. The issue was the shortcut.
Michigan law says trial courts must weigh seven factors before imposing what the courts call a “drastic” step, including whether the failure was deliberate, whether a lighter penalty would do the job, and whether the other side was actually harmed. The trial court addressed none of them.
The appeals court also pointed out that the standard penalty for not responding to a motion or showing up for a hearing is costs - not a permanent case dismissal.
None of this lets Auro Rehab off the hook. The panel noted the provider had repeatedly failed to hand over records, ignored the insurer’s requests, and skipped the very hearing that ended its case. On remand, the trial court can still impose penalties - including dismissal - as long as it shows its working on the record.
No-fault provider disputes are a high-volume area for claims teams, and this ruling is a reminder that even a clear pattern of stonewalling does not guarantee a clean dismissal if the trial court does not walk through the required analysis.
The underlying payment claims have not been decided on their merits.
