UNIVERSITY NEUROSURGICAL ASSOC V ALLSTATE INS CO
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STATE OF MICHIGAN
COURT OF APPEALS
ALTHEA BELL,
UNPUBLISHED
February 9, 2010
Plaintiff-Appellee,
and
TRAUMATIC BRAIN & CATASTROPHIC
INJURY, INC., and MEDICO
TRANSPORTATION, INC.,
Intervening Plaintiffs,1
v
No. 281138
Wayne Circuit Court
LC No. 04-432579-NF
ALLSTATE INSURANCE COMPANY,
Defendant-Appellant.
UNIVERSITY NEUROSURGICAL
ASSOCIATES,
Plaintiff-Appellee,
v
No. 281139
Wayne Circuit Court
LC No. 05-526161-NF
ALLSTATE INSURANCE COMPANY,
Defendant-Appellant.
Before: Wilder, P.J., and Cavanagh and Murray, JJ.
1
Intervening plaintiffs, Medico Transportation, Inc., and Traumatic Brain & Catastrophic Injury,
Inc., were dismissed from this action on October 13, 2005, and May 8, 2006, respectively. These
entities were plaintiff’s medical treaters. They are not involved in this appeal. All further
references to “plaintiffs” refer to plaintiff and University. Plaintiff, in the singular, refers to Bell.
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PER CURIAM.
In Docket Nos. 281138 and 281139, defendant, Allstate Insurance Company, appeals as
of right the trial court’s order denying its motion for attorney fees in this first-party no-fault
action. In Docket No. 281138, Allstate appeals the order as it relates to plaintiff, Althea Bell
(defendant’s insured); in Docket No. 281139, Allstate appeals the order as it relates to plaintiff,
University Neurological Associates (plaintiff’s treating clinic).2 We affirm in part and vacate
and remand in part.
Plaintiff has a 20-year history of problems with her low back. In 1987, she was involved
in an automobile accident, causing injury to her low back. As a result, plaintiff did not return to
work, and has not returned to any kind of work thereafter. In the early 1990s, plaintiff began to
receive Social Security disability payments.
Plaintiff testified at trial that she had fairly consistent low back pain after the 1987
accident, through the early 2000s. She regularly treated with various physicians, receiving
physical therapy and cortisone injections.
In 2001, plaintiff was involved in an automobile accident, in which she allegedly did not
suffer injury. At trial, plaintiff claimed that early 2003, she began to experience a good deal of
relief from her low back symptoms.
On October 13, 2003, plaintiff was involved in a third automobile accident, the first of
the two accidents at issue in the present dispute. Another vehicle collided with the rear end of
plaintiff’s vehicle. Plaintiff claimed that this accident injured her upper and lower back areas,
that these particular injuries from the 2003 accident caused her to have problems turning her
neck, and that this accident caused her to suffer other range of motion limitations as well as panic
attacks, all of which prevented her from driving.
On January 7, 2004, plaintiff was involved in a fourth automobile accident. An
ambulance took her to the hospital. Plaintiff testified that she felt pain all over her body,
especially in her neck, back, legs, arms, and hands. The hospital discharged her later the same
day, but she continued to receive treatment for neck and low back pain. Plaintiff claimed that the
2004 accident caused her injuries that prevented her from doing “any kind of activities.” At the
time of trial in 2007, plaintiff claimed that she was still unable to do basic household chores. In
February 2007, plaintiff underwent spinal fusion surgery. She testified that she continues to
receive physical therapy and other treatment to treat back and spine symptoms.
Plaintiff sought first-party no-fault coverage from Allstate, her auto insurance provider.
Plaintiff’s claim was with regard to both the 2003 and 2004 accidents and sought medical
expenses, attendant care and replacement services. Although Allstate initially paid a portion of
the claim, it eventually denied coverage, on the basis that there was insufficient evidence that
plaintiff’s injury and symptoms were caused by the 2003 and 2004 accidents.
2
These two cases were consolidated below for trial and on appeal.
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Plaintiff asserted that the injuries for which she was treated were caused by both the 2003
and 2004 accidents, and not by preexisting conditions and commenced this action, seeking
approximately $150,000 in medical expenses, approximately $60,000 in attendant care, and
approximately $24,000 in replacement services. In November 2005, University Neurosurgical
Associates filed its action against Allstate, alleging that it submitted reasonable proof of its
services to plaintiff, and that Allstate wrongly denied payment. The trial court consolidated the
two cases, and the matter went to trial.
There was conflicting evidence at trial regarding whether the treatments plaintiff
received, after the 2003 and 2004 accidents, were for injuries resulting from those accidents, or
were related to preexisting injuries. At the conclusion of the trial, the jury returned a verdict of
no cause of action in favor of Allstate.
Allstate then filed a motion for attorney fees under MCL 500.3148, arguing that the claim
was so excessive as to have no reasonable foundation, and that it was in some respects
fraudulent. The trial court denied the motion; rejecting Allstate’s argument that plaintiff’s claim
was so excessive as to have no reasonable foundation. The trial court did not decide the question
whether plaintiff’s claim was in some respect fraudulent. This appeal ensued.
The decision whether to award attorney fees pursuant to MCL 500.3148 of the no-fault
act is reviewed for clear error. Ivezaj v Auto Club, 275 Mich App 349, 352-353; 737 NW2d 807
(2007). MCL 500.3148(2) provides, in relevant part:
An insurer may be allowed by a court an award of a reasonable sum against a
claimant as an attorney’s fee for the insurer’s attorney in defense against a claim
that was in some respect fraudulent or so excessive as to have no reasonable
foundation.
As noted above, the trial court did not decide whether plaintiff’s claim was in some respect
fraudulent. For the reasons stated below, we conclude that (1) the trial court did not clearly err in
finding that plaintiff’s claim had a reasonable foundation, and (2) the trial court must, in the first
instance, decide the fact-oriented question of whether the claim was, in some respects,
fraudulent.
It was undisputed at trial that plaintiff has been suffering serious and chronic back pain
since her 1987 car accident. By the time of her 2003 car accident, she was already suffering
from disc herniation and degenerative disc disease. However, the fact that plaintiff was suffering
from back injuries at the time of her 2003 and 2004 accidents did not preclude a finding that the
2003 accident and/or the 2004 accident caused new back injuries, or aggravated the existing
ones. Indeed, Dr. Sophia Grias and Dr. Miguel Lis-Planells, employees of University who
treated plaintiff for years, testified that the 2003 accident and/or the 2004 accident aggravated
her back condition. Specifically, Dr. Lis-Planells opined that plaintiff’s 2003 accident
“significantly aggravated” her disc degeneration and disc herniation. Dr. Grias concurred that a
comparison of plaintiff’s pre-2003 accident medical records with her post-2004 accident medical
records demonstrated an aggravated back condition that she (Dr. Grias) believed was caused by
the 2003 accident and/or the 2004 accident.
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The opinions of Dr. Grias and Dr. Lis-Planells were grounded in fact. Both doctors
testified to reviewing some of plaintiff’s pre-2003 medical records. Although it is not clear how
many prior medical records they reviewed, or what records they failed to review, there is
insufficient evidence that the records they did review were so inadequate as to render the doctors
opinions, that the later accidents aggravated pre-existing conditions, lacking in reasonable
foundation for plaintiff’s claims. In addition to the doctors’ testimony at trial, plaintiff testified
that the 2003 accident and/or the 2004 accident aggravated her back condition, and limited her
activities. Considering the totality of the evidence, the trial court did not commit clear error in
finding that plaintiff’s claims were not so excessive as to lack reasonable foundation.
Next, whether plaintiff’s claims were “in some respect fraudulent,” MCL 500.3148, is a
fact-oriented question, because the elements of fraud include intent to deceive, among other factoriented elements. See Roberts v Saffell, 280 Mich App 397, 403; 760 NW2d 715, 719 (2008).3
The trial court is, relatively speaking, better equipped than we are to answer, in the first instance,
fact-oriented questions, especially ones involving intent (because, here, intent touches on
credibility).4 Because the trial court did not address the question whether plaintiff’s claims were
in some respect fraudulent, we vacate the trial court’s denial of Allstate’s motion for attorney
fees, and remand for a resolution of this issue.5
Affirmed in part, vacated and remanded in part. We do not retain jurisdiction. No
taxable costs pursuant to MCR 7.219, neither party having prevailed in full.
/s/ Kurtis T. Wilder
/s/ Mark J. Cavanagh
/s/ Christopher M. Murray
3
“To prove a claim of fraudulent misrepresentation, or common-law fraud, a plaintiff must
establish that: (1) the defendant made a material representation; (2) the representation was false;
(3) when the representation was made, the defendant knew that it was false, or made it
recklessly, without knowledge of its truth, and as a positive assertion; (4) the defendant made it
with the intention that the plaintiff should act upon it; (5) the plaintiff acted in reliance upon the
representation; and (6) the plaintiff thereby suffered injury.” Roberts, supra at 403 (emphasis
added).
4
We note that, under our Supreme Court’s precedent, a trial court’s decision about whether an
insurer acted reasonably, for purposes of a motion for attorney fees under MCL 500.3148,
involves a mixed question of law and fact: what constitutes reasonableness is a question of law,
but whether the insurer’s denial of benefits is reasonable under the particular facts of the case is a
question of fact. Moore v Secura Ins Co, 482 Mich 507, 516; 759 NW2d 833 (2008).
5
We note, without deciding this issue, that plaintiff conceded that her application to defendant
for no-fault benefits did contain some material false information, in that it denied that she had
previously received medical treatment for back, neck, and hand pain. According to plaintiff, her
doctor’s assistant completed that portion of the application. But plaintiff signed the application
(although she claimed that she did not recall seeing the false information, and denied personally
writing any false information), and the claim need only be “in some respects fraudulent . . . .”
MCL 500.3148(2) (emphasis added).
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