ANTONINA JUZBA V STATE FARM MUTUAL AUTO INS CO
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STATE OF MICHIGAN
COURT OF APPEALS
ANTONINA JUZBA,
UNPUBLISHED
March 26, 2009
Plaintiff-Appellee,
v
No. 283820
Washtenaw Circuit Court
LC No. 06-001387-NF
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY,
Defendant-Appellant.
Before: Murphy, P.J., and Fitzgerald and Markey, JJ.
PER CURIAM.
Defendant State Farm Mutual Automobile Insurance Company appeals as of right the
order granting summary disposition pursuant to MCR 2.116(C)(7) in favor of plaintiff Antonina
Juzba, and entering judgment in favor of plaintiff in the amount of $173,703.461 in this action for
no-fault benefits under MCL 500.3107(1)(a) of the no-fault act, MCL 500.3101 et seq. We
affirm.
I
On July 12, 2002, plaintiff sustained injuries in an automobile accident. She was
discharged from the hospital to a residential brain injury rehabilitation institute. She spent three
months at Rainbow Rehabilitation Center before being transferred to the Ann Arbor
Rehabilitation Center (AARC). State Farm provided plaintiff’s no-fault automobile insurance,
and paid for her treatment at AARC until May 2004, when it discontinued payments to AARC.
Juzba thereafter filed suit, seeking recovery of allowable expenses incurred after May 2004. On
August 29, 2006, a jury returned a verdict in plaintiff’s favor, and a judgment was entered on the
verdict on October 27, 2006. The judgment stated in pertinent part:
1
The judgment consisted of $144,000 in “No-Fault benefits,” $7,650 in “No-Fault attorney fees
based on $300 per hour,” $10,375 in “No-Fault penalty interest,” and $11,678.46 in “RJA
Judgment interest.”
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THE JURY FOUND THAT the claimed products, services, and
accommodations were reasonably necessary for the Plaintiff’s care, recovery and
rehabilitation of an injury arising out of the use or operation of a motor vehicle as
a motor vehicle and are therefore recoverable allowable expenses as defined by
the Michigan No-Fault Act; and
THE JURY ALSO FOUND THAT the outstanding payments are
allowable expenses incurred between June, 2004, and June, 2006, inclusive, are
overdue as defined by the Michigan No-Fault Act, and that penalty interest of
12% per annum is therefore owned on these charges.
IT IS HEREBY ORDERED AND ADJUDGED THAT:
The claimed products, services, and accommodations were reasonably
necessary for the Plaintiff’s care, recovery and rehabilitation of an injury arising
out of the use or operation of a motor vehicle as a motor vehicle as are therefore
recoverable allowable expenses as defined by the Michigan No-Fault Act; and
The outstanding payments for allowable expenses incurred between June,
2004, through June, 2006, inclusive, are overdue as defined by the Michigan NoFault Act, and that penalty interest of 15% per annum is therefore owed on these
charges.
IT IS HEREBY ORDERED THAT:
JUDGMENT IS HEREBY ENTERED in favor of Plaintiff, Antonina
Juzba, and against Defendant, State Farm Mutual Automobile Insurance
Company, in the amount of $250,800.002 for allowable expenses claimed for the
period of June, 2004 through August 29, 2006, plus $29,928.00 in No-Fault
Penalty Interest on the allowable expenses claimed between June, 2004, and June,
2006, inclusive, pursuant to the Michigan No-Fault Act, said interest amount
being calculated as of August 29, 2006, and shall continue to accrue until
satisfied, plus any and all other recoverable Interest, Costs, Attorney Fees, and/or
Sanctions that the Plaintiff may be entitled to recover.
On December 8, 2006, plaintiff filed the complaint in the present action, alleging that
State Farm refused to pay for services provided by AARC as of September 1, 2006, just days
after the jury rendered its verdict in the first litigation. Plaintiff sought reimbursement for
services provided to her by AARC beginning in September 2006.
2
Before trial began, plaintiff filed a motion in limine addressing the reasonableness of the per
diem rate charged by AARC for its services. Based on concessions by State Farm’s agents, the
trial court ruled that the rate charged by AARC for its services to plaintiff was reasonable.
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On July 27, 2007, plaintiff filed a motion for summary disposition under MCR
2.116(C)(7), arguing that the factual issues on which plaintiff’s claim for no-fault benefits were
predicated had already been decided in the first litigation and, therefore, that collateral estoppel
barred relitigation of the issue of whether the services provided by AARC are reasonable and
necessary and, therefore, allowable expenses under the no-fault act. Plaintiff submitted with her
motion an affidavit signed by Dr. Terry Braciszewski, a licensed psychologist and the clinical
director of AARC. In that affidavit, Dr. Braciszewski stated that plaintiff has been a patient
participating in AARC’s semi-independent living program since November 2002. He also
detailed his familiarity with the issues involved in plaintiff’s first action against State Farm,
where he was one of plaintiff’s witnesses with respect to plaintiff’s “brain injury, causation and
treatment.” Dr. Braciszewski averred that neither plaintiff’s diagnosis nor her need for the
services being provided by AARC had changed since August 2006 when the jury rendered its
verdict.
On August 31, 2007, State Farm filed a response to plaintiff’s motion. State Farm
asserted that this particular no-fault matter was not previously litigated and that the judgment
rendered in plaintiff’s favor only covered expenses between June 2004 and June 2006. State
Farm also asserted that the alleged treatment provided by AARC since the jury verdict are
separate and distinct services and that the reasonableness and necessity of services incurred since
that time are not issues that were decided by the jury in the previous suit. State Farm urged the
trial court to deny plaintiff’s motion for summary disposition “as there is a genuine issue of
material fact relative to the alleged treatment provided to the Plaintiff by Ann Arbor
Rehabilitation Center following the jury verdict of August 29, 2006.”
On September 7, 2007, the trial court held a hearing on plaintiff’s motion. The court
noted that a jury had previously concluded that plaintiff suffered injuries as a result of the
automobile accident, that she needed treatment, and that the treatment provided by AARC was
reasonable and necessary. The court then stated to defense counsel:
. . . you’re the same insurer. We had a whole trial, a jury heard all those
arguments. They made this determination. She has a brain injury, she has a
policy of insurance with you, she needs this treatment, it’s reasonable and
necessary, and it’s overdue. And you paid it. And, now you’ve stopped paying
again. What is different, other than you want another bite at the apple?
Defense counsel responded that the issue was whether the continuing treatment provided to
plaintiff by AARC was reasonable and necessary given the fact that there had been no
therapeutic change in plaintiff’s condition in over two years. Defense counsel stated:
And, the problem that you have is, nobody in my experience, even with a
traumatic brain injury, gets the same treatment for two and a half years or
(indiscernible) infinitum without any progress at all. And, when you’re
confronted with an affidavit this early in this particular proceeding that says
nothing’s change, the question then – the question is, why has nothing changed?
The trial court granted plaintiff’s motion, stating:
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I – I think that – I think that what your insurer should do is what the jury
found that you should do. And, that’s to pay on the contract for these expenses
that she’s incurred as a result of the automobile accident; end of story.
II
State Farm argues that the trial court erred by relying on the judgment in the prior
litigation to establish a future claim for no-fault benefits. This Court reviews de novo a trial
court's decision to grant summary disposition pursuant to MCR 2.116(C)(7). Davis v Detroit,
269 Mich App 376, 378; 711 NW2d 462 (2006).
Summary disposition is proper under MCR 2.116(C)(7) when “[t]he claim is barred
because of release, payment, prior judgment, immunity granted by law, statute of limitations,
statute of frauds, an agreement to arbitrate, infancy or other disability of the moving party, or
assignment or other disposition of the claim before commencement of the action.” A defendant
who files a motion for summary disposition under MCR 2.116(C)(7) may (but is not required to)
file supportive material such as affidavits, depositions, admissions, or other documentary
evidence. MCR 2.116(G)(3); Patterson v Kleiman, 447 Mich 429, 432; 526 NW2d 879 (1994).
If such documentation is submitted, the court must consider it. MCR 2.116(G)(5). If no such
documentation is submitted, the court must review the plaintiff ’s complaint, accepting its wellpleaded allegations as true and construing them in a light most favorable to the plaintiff.
Whether a party is collaterally estopped from challenging an issue addressed in a prior
proceeding involves a question of law, which is reviewed de novo. Horn v Dep't of Corrections,
216 Mich App 58, 62; 548 NW2d 660 (1996).
Here, plaintiff moved for summary disposition on the ground that the doctrine of
collateral estoppel barred defendant from litigating the reasonableness and necessity of the
services provided by AARC specifically. The doctrine of collateral estoppel is intended to
relieve parties of the costs and vexation of multiple lawsuits, conserve judicial resources, and
encourage reliance on adjudication by preventing inconsistent decisions. Monat v State Farm Ins
Co, 469 Mich 679, 692-693; 677 NW2d 843 (2004). Collateral estoppel precludes relitigation of
an issue in a subsequent, different case between the same parties if the prior action resulted in a
valid final judgment and the issue was actually and necessarily determined in the prior matter.
Id. To be necessarily determined in the first action, the issue must have been essential to the
resulting judgment. Bd of Co Rd Comm’rs for the Co of Eaton v Schultz, 205 Mich App 371,
377; 521 NW2d 847 (1994). The ultimate issue in the second case must be the same as that in
the first proceeding. Detroit v Qualls, 434 Mich 340, 357; 454 NW2d 374 (1990). The doctrine
requires that the same parties must have had a full opportunity to litigate the issue in the prior
proceeding, and there must be mutuality of estoppel. Monat, supra at 692-693; Nummer v Dep't
of Treasury, 448 Mich 534, 542; 533 NW2d 250 (1995).
This case is essentially a continuation of an established lawsuit. Both cases involve the
same parties, same medical provider, and same expense once again being denied by State Farm.
A review of plaintiff's claims in both the first action and the instant action reveals that they are
based on the same factual allegations. In the first action, the parties actually litigated and the
jury actually determined the issues of the nature and extent of plaintiff’s injuries. The jury
determined that plaintiff had a brain injury and that she needed treatment. The jury in the first
action also determined that the treatment provided by AARC was reasonable and necessary, and
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decided the issue of damages for allowable expenses for claims up until the time of the verdict.
Determination of these issues was essential to resolution of plaintiff’s claim for no-fault benefits,
and the issues decided by the jury are issues necessary for plaintiff to prevail on her claim here.
The present lawsuit is seeking further benefit installments for the same benefits and the same
medical expenses at issue in the first lawsuit. The expense not being paid is for treatment at
AARC, the same facility providing the same care. There are no new causes of action or theories
plead, and the case involves the same defendant cutting off the same benefits litigated
previously.3
Although the jury made no determination regarding the reasonableness and necessity of
future benefits, plaintiff attached to her motion for summary disposition the affidavit of Dr. Terry
Braciszewski, who averred that neither plaintiff’s diagnosis nor her need for the services being
provided by AARC had changed since the jury rendered its verdict in August 2006. Despite the
passage of nearly 9 months between the times plaintiff filed this action and when she filed her
motion for summary disposition, State Farm apparently failed to engage in discovery to support
its position that the treatment being provided by AARC is no longer reasonable and necessary.
State Farm failed to submit any documentary evidence with its reply to plaintiff’s motion for
summary disposition to contradict Dr. Braciszewski’s averments in his affidavit. Under these
circumstances, where a jury previously determined the necessity and reasonableness of plaintiff’s
treatment, where plaintiff presented an affidavit to establish the continued necessity and
reasonableness of the treatment, and where State Farm failed to present documentary evidence to
contradict plaintiff’s documentary evidence, the trial court properly granted summary disposition
in favor of plaintiff under MCR 2.116(C)(7).4
III
State Farm argues that the trial court erred by awarding plaintiff attorney fees pursuant to
MCL 500.3148 because a legitimate question existed regarding State Farm’s liability to pay
benefits and, therefore, it did not unreasonably refuse to pay benefits. “The trial court's decision
about whether the insurer acted reasonably involves a mixed question of law and fact. Moore v
Secura Ins, 482 Mich 507, 516; 759 NW2d 833 (2008). What constitutes reasonableness is a
question of law, but whether the defendant's denial of benefits is reasonable under the particular
facts of the case is a question of fact.” Ross v Auto Club Group, 481 Mich 1, 7; 748 NW2d 552
(2008). This Court reviews de novo questions of law, but we review findings of fact for clear
error. Id. “A decision is clearly erroneous when ‘the reviewing court is left with a definite and
firm conviction that a mistake has been made.’ ” Id., quoting Kitchen v Kitchen, 465 Mich 654,
661-662; 641 NW2d 245 (2002). Moreover, we review a trial court's award of attorney fees and
costs for an abuse of discretion. Smith v Khouri, 481 Mich 519, 526, 751 N.W.2d 472 (2008).
3
Mutuality of estoppel exists because the party invoking collateral estoppel, plaintiff, would
have been bound by an adverse decision.
4
State Farm might have avoided summary disposition by submitting documentary evidence to
contradict the documentary evidence in support of plaintiff’s claim regarding the necessity and
reasonableness of plaintiff’s continued treatment at AARC.
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MCL 500.3148(1) provides:
An attorney is entitled to a reasonable fee for advising and representing a
claimant in an action for personal or property protection insurance benefits which
are overdue. The attorney's fee shall be a charge against the insurer in addition to
the benefits recovered, if the court finds that the insurer unreasonably refused to
pay the claim or unreasonably delayed in making proper payment.
Additionally, § 3142 of the no-fault act, MCL 500.3142(2), provides, in pertinent part:
Personal protection insurance benefits are overdue if not paid within 30
days after an insurer receives reasonable proof of the fact and of the amount of
loss sustained. If reasonable proof is not supplied as to the entire claim, the
amount supported by reasonable proof is overdue if not paid within 30 days after
the proof is received by the insurer. Any part of the remainder of the claim that is
later supported by reasonable proof is overdue if not paid within 30 days after the
proof is received by the insurer.
“The purpose of the [§ 3148] penalty provision is to ensure prompt payment to the insured.”
McKelvie v Auto Club Ins Ass'n, 203 Mich App 331, 335; 512 NW2d 74 (1994). Accordingly,
“[o]verdue benefits give rise to a rebuttable presumption of unreasonable refusal or undue
delay.” Moore, supra at 199. However, “[i]f the insurer's refusal or delay in payment is the
product of a legitimate question of statutory construction, constitutional law, or a bona fide
factual uncertainty, the refusal or delay will not be found unreasonable.” Id. (citation omitted).
“When an insurer refuses to make or delays in making payment, a rebuttable presumption arises
that places the burden on the insurer to justify the refusal or delay.” Attard v Citizens Ins Co of
America, 237 Mich App311, 317; 602 NW2d 633 (1999). The relevant inquiry “is not whether
coverage is ultimately determined to exist, but whether the insurer's initial refusal to pay was
reasonable.” Shanafelt v Allstate Ins Co, 217 Mich App 625, 635; 552 NW2d 671 (1996). The
reasonableness of the delay or refusal is to be assessed as of the time the decision is made. Ivezaj
v Auto Club Ins Ass'n, 275 Mich App 349, 354; 737 NW2d 807 (2007).
At the time State Farm made the decision not to pay for plaintiff’s continued treatment at
AARC, a jury had already determined that treatment at AARC was reasonably necessary for
plaintiff’s care, recovery and rehabilitation of an injury arising out of the use or operation of a
motor vehicle. Even though State Farm asserted that it questioned the continued necessity and
reasonableness of the treatment being provided by AARC, State Farm failed to establish the
existence of a bona fide legal or factual dispute. Under the circumstances presented here, the
trial court did not clearly err in finding that State Farm unreasonably refused to continue to pay
benefits for a treatment that a jury had found to be reasonably necessary, and did not abuse its
discretion by awarding plaintiff attorney fees and costs.
Affirmed.
/s/ William B. Murphy
/s/ E. Thomas Fitzgerald
/s/ Jane E. Markey
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