DANIEL BAMM V FARM BUREAU MUTUAL INS CO
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STATE OF MICHIGAN
COURT OF APPEALS
DANIEL BAMM,
UNPUBLISHED
July 23, 2009
Plaintiff-Appellee,
v
FARM BUREAU
COMPANY,
MUTUAL
INSURANCE
No. 278856
Washtenaw Circuit Court
LC No. 05-000209-NF
Defendant-Appellant.
Before: Wilder, P.J., and Jansen and Owens, JJ.
WILDER, J., (dissenting).
Defendant appeals as of right an order granting plaintiff attorney fees following a jury
trial. This personal protection insurance case arose under Michigan’s no-fault act, after
plaintiff’s involvement in an automobile accident in April 2004. Defendant argues that the trial
court clearly erred in awarding attorneys’ fees to plaintiff, because any delay in paying benefits
to the plaintiff arose from a legitimate factual dispute regarding whether plaintiff’s post-accident
back injury symptoms were caused by the accident, or may have been natural degenerative
changes from his significant pre-accident back problems. I agree with the defendant’s
arguments, and therefore respectfully dissent.
MCL 500.3142 provides that “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.” “Attorney fees are payable only on overdue benefits for which the insurer has
unreasonably refused to pay or unreasonably delayed in paying.” Prousfoor v State Farm Mut
Ins Co, 469 Mich 476, 485; 673 NW2d 739 (2003); Beach v State Farm Mut Auto Ins Co, 216
Mich App. 612, 628; 550 NW2d 580 (1996).
“The trial court’s decision about whether the insurer acted reasonably involves a mixed
question of law and fact. What constitutes reasonableness is a question of law, but whether the
defendant’s denial or benefits is reasonable under the particular facts of the case is a question of
fact.” Moore v Secura Ins, 482 Mich 507, 516; 759 NW2d 833 (2008) (internal quotation marks
and citation omitted). We review questions of law, such as statutory interpretation, de novo, but
review findings of fact for clear error. Id. Further, we review the amount of a trial court’s award
of attorney fees and costs for an abuse of discretion. Id., citing Smith v Khouri, 481 Mich 519,
526; 751 NW2d 472 (2008).
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While acknowledging that defendant had reason to “carefully evaluate plaintiff’s medical
records to determine if his current back problems were caused by the [April 2004 automobile]
accident or if they predated it,” the majority nevertheless concludes, first, that defendant
unreasonably delayed in obtaining plaintiff’s medical records and, second, that based on the
reports of plaintiff’s initial treating physicians, defendant had “more than reasonable proof” to
support plaintiff’s claim. On the basis of these findings, the majority further concludes that the
defendant has, therefore, failed to overcome the rebuttable presumption that its delay and
ultimate refusal to pay was unreasonable. I disagree with the majority’s characterization of the
record.
The accident occurred on April 12, 2004. According to defendants activity log, on
September 21, 2004, five months post-accident, plaintiff’s girlfriend, Laurie Bedore (whose car
plaintiff was driving, and under whose policy he would make a claim), first spoke with
defendant’s claim representative, Karen Phillipich, regarding the accident. There is no evidence
that plaintiff, or his girlfriend, ever contacted defendant before September 21, 2004. According
to the activity log, in the September 21, 2004, conversation, Bedore told Phillipich that plaintiff
was her boyfriend, and a resident of her household. Bedore also told Phillipich that, before the
accident, plaintiff was treating with Dr. Siddiqui for a herniated disk in his back, sustained as a
result of a work injury. Thus, in the initial report of the accident, the circumstances as reported
to defendant immediately raised a potential question of injury causation. Accordingly, Phillipich
told Bedore that before defendant could pay personal protection insurance benefits, she,
Phillipich, would need to determine whether plaintiff suffered a new injury in the April
automobile accident.
About one week later, on October 1, 2004, Phillipich spoke with plaintiff directly on the
telephone. Plaintiff reiterated that he had had a previous low back injury (a herniated disc), and
had treated with Dr. Kotecha before the accident. He also told Phillipich that he had had
physical therapy before the accident. Plaintiff said that, after the April automobile accident, he
felt pain all day, and treated with Dr. Siddiqui. Not until a full three weeks later, on October 22,
2004, did defendant receive plaintiff’s application for personal protection insurance coverage. In
the application, plaintiff claimed that the “accident caused me to thrust forward and made a pop
sound in my lower back.”
Two weeks later, on November 5, 2004, defendant requested the medical records from
Dr. Siddiqui of the Center for Family Health. On November 10, 2004, Phillipich received a
telephone call from plaintiff. Plaintiff related that, before the accident, on November 3, 2004, he
had undergone a magnetic resonance imaging (MRI), and that the results had shown a multitude
of conditions in the lumbar spine, including a disc herniation at L4-L5.
On November 17, 2004, Phillipich sent plaintiff a letter stating that defendant was
investigating the claim because defendant had not yet been able to obtain documentation to
establish that the injuries claimed were related to the April automobile accident. The letter
requested “[d]ocumentation to support proof of residency on” the date of the accident; and
“[c]omplete name, [a]ddress and phone numbers of all medical facilities that you have treated
with for five years preceding the accident.” Finally, the letter concluded: “Based on the above,
Farm Bureau is denying your Personal Injury Benefits at this time . . . . Please provide the
requested documentation to expedite the process.” At trial, Phillipich testified that she sent this
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denial letter because on November 17, 2004, she still did not have plaintiff’s medical records to
verify that the claimed injury was a result of the MVA.
Phillipich testified at trial that after sending the denial letter to plaintiff, she received a
letter from plaintiff’s attorney, dated November 15, 2004 (two days before Phillipich’s denial
letter). With plaintiff’s counsel’s letter were two MRI reports. One report concerned an MRI of
plaintiff’s back after he suffered a lifting injury at work, and was prepared on June 20, 2003, well
before the accident. This MRI revealed degenerating discs at L3-4, L4-5, and L5-S1, and further
indicated (1) left foraminal disc herniation at L5-S1, with impingement on the left L5 nerve root;
and (2) protruding disc material at the L3-4 and L4-5 levels. The second MRI report was dated
November 3, 2004, six months after the April automobile accident, and revealed (1) degenerative
changes in the low lumbar spine, notably from L3-4 through L5-S1; (2) mild spinal stenosis at
L3-4 and L4-5; (3) moderate neutral foraminal narrowing on the right at L4-5, and on the left at
L5-S1; (4) a small disc herniation along the left posterior disc at L4-5; (5) a small amount of
extruded disc material extending inferiorly from the disc along the left posterior aspect of L5; (6)
extension of herniated disc toward the medial margin of the left L4-5 neural foramen; and (7)
asymmetric compromise of the left lateral recess containing the L5 nerve root at the level of the
L4-5 disc.
Phillipich testified that, after reviewing these MRI films, she recognized that the new
MRI showed a new disc herniation at L4-5, but still wanted to obtain all of plaintiff’s medical
records, both before and after the accident, before making any further determination regarding
the claim. On November 21, 2004, Phillipich responded to plaintiff’s counsel’s letter. In this
letter, Phillipich directed plaintiff’s counsel to her denial letter sent to plaintiff. Phillipich
testified that when she sent this letter to plaintiff’s counsel, she was waiting for the records from
the Center for Family Health concerning Dr. Siddiqui’s treatment of plaintiff.
While Phillipich was waiting for Dr. Siddiqui’s records, on November 22, 2004, plaintiff
faxed to Phillipich a list of his medical providers before and after the April 2004 automobile
accident. On December 5, 2004, Defendant sent affidavits to obtain the medical records from
Dr. Siddiqui, Dr. Kotecha, Northwest Chiropractic, and Dr. Chodoroff of Chelsea Back Care.
The following day, defendant received Dr. Chodoroff’s records. Dr. Chodoroff had not
examined plaintiff until seven months after the accident (November 9, 2004). Dr. Chodoroff’s
chart indicated that plaintiff was moving an entertainment center, and injured his back, feeling a
pop (the same description plaintiff used concerning the injury he alleged occurred during the
April automobile accident). Dr. Chodoroff’s report indicated that, after the lifting injury,
plaintiff experienced persistent pain, and developed left lower-extremity pain; that plaintiff
sought treatment with Dr. Siddiqui; that an MRI revealed protruding discs at L3-4 and L4-5, with
a foraminal disc herniation on the left at L5-S1; that Dr. Kotecha performed three lumbar
epidural steroid injections, and physical therapy was done for three weeks. Dr. Chodoroff’s
report referenced a mid-June 2004 motor vehicle accident. Dr. Chodoroff concluded that he did
not have medical records to corroborate plaintiff’s history, beyond the imaging studies he
referenced. Phillipich testified at trial that Dr. Chodoroff’s report gave her one more reason to
doubt whether plaintiff’s claimed medical expenses were related to an April 2004 automobile
accident.
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On January 14, 2005, Phillipich left plaintiff a voicemail, indicating that she had not yet
received medical records from Dr. Siddiqui, Dr. Kotecha, and Northwest Chiropractic, and that,
without those records, the investigation was still ongoing. Later in January 2005, defendant
received Dr. Kotecha’s medical records, according to Phillipich’s trial testimony. These records
indicated that Dr. Kotecha treated plaintiff after the 2003 work injury. In September, October
and November of 2003, Dr. Kotecha performed lumbar epidural steroid blocks on plaintiff.
After the first injection, plaintiff told Dr. Kotecha that it helped to alleviate the pain. But after
the last injection, plaintiff told Dr. Kotecha that the injection did not help as much, and that he
wished to proceed with surgery.
The records further revealed that plaintiff was scheduled to have surgery on January 29,
2004 (2 ½ months before the automobile accident at issue here). Dr. Kotecha had planned to
perform an L4-L5 decompression, with pedicle screw fixation of L4 to S1, and cage fixation at
L5-L1, but plaintiff failed to appear for the surgery, claiming that he had the flu.
In March 2005, defendant was still waiting for medical records from Dr. Siddiqui and
Northwest Chiropractic, according to the activity log. Plaintiff then commenced this action.
Plaintiff began treating with Dr. Jon Wardner in May 2005. On June 7, 2005, Dr.
Wardner wrote plaintiff’s counsel a letter, opining that the April 2004 automobile accident was a
significant cause of the changes seen on the second MRI. Defendant then requested an IME. On
August 30, 2005, Dr. Phillip Friedman examined plaintiff. In his initial report, Dr. Friedman was
inconclusive, but he requested a side-by-side review of the MRIs. When this side-by-side review
was completed, Dr. Friedman concluded that the evidence did not support any causal relationship
between the disc herniation, and the April 2004 automobile accident. Dr. Friedman further
concluded that, if plaintiff had surgery for his low back, it would be the exact same surgery as
the one Dr. Kotecha was scheduled to perform at the end of January 2004, shortly before the
automobile accident. Following receipt of and based on Dr. Friedman’s report, defendant issued
a final denial of plaintiff’s claim.
I would conclude that this chronology, rather than demonstrating “more than reasonable
proof” that plaintiff’s injury was due to the April 2004 automobile accident, raised significant
questions about the causation of plaintiff’s back injury, and justified further inquiry by
defendant. The record demonstrates that defendant exercised prudence in its investigation, and
promptly responded to every communication from plaintiff or plaintiff’s representatives. Dr.
Kotecha’s records, not received until January 2005, validated defendant’s initial concern, derived
from the oral representations of Bedore and plaintiff about plaintiff’s treatment with Dr.
Siddiqui, that plaintiff’s back injury may not have been caused by the automobile accident but
instead predated the accident. Especially because Dr. Kotecha’s records show that plaintiff had a
pre-existing back injury that required surgery, in my judgment, defendant was entitled to receive
Dr. Siddiqui’s records before it can be considered to have unduly delayed in responding to
plaintiff’s claim, since plaintiff told defendant that he treated with Dr. Siddiqui immediately
following the April 2004 automobile accident. Importantly, Dr. Siddiqui’s records, which were
not received until after this action was commenced, contained no mention of an automobile
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accident until just before plaintiff filed his claim with defendant, despite the fact that plaintiff
treated with Dr. Siddiqui at the Center for Family Health on three different occasions after the
April 2004 automobile accident.1
Thus, contrary to the majority’s conclusion, the fact that plaintiff’s attorney gave
defendant proof that plaintiff suffered a new herniation after his June 2003 MRI report is not
proof that the herniation was caused by the April 2004 automobile accident. Defendant was
entitled to gather relevant medical records to address the legitimate question of causation,
particularly when those records show inconsistencies in what plaintiff reported to his treating
physicians about the cause of his back injuries (it is apparent that the back injury plaintiff
reported to Dr. Chodoroff was suffered when he was moving an entertainment center would not
be covered by PIP benefits).
Additionally, as noted by defendant in arguing below that it had a reasonable basis to
deny plaintiff’s claim, the jury’s verdict validated the caution with which it approached the
evaluation of plaintiff’s claim by awarding plaintiff only a fraction of the wage loss he sought2
and limiting defendant’s obligation to pay for plaintiff’s future medical care to surgery only (i.e.,
no future coverage for doctor’s visits, physical therapy, wage loss, aide care or evaluations). The
jury’s rejection of 85% of plaintiff’s wage loss claim, and its limitation of plaintiff’s future
medical coverage to the cost of the surgery only, highlights that there was, in fact, a bona fide
question pursued by the defendant about the causation of plaintiff’s back injury.
Given the evident inconsistencies between plaintiff’s claim of injury as the result of the
April 2004 automobile accident, and plaintiff’s medical records which revealed that he had a
significant back injury before the accident that required surgery and a post-accident back injury
resulting from moving his entertainment center, and that he failed for 6 months to even mention
the automobile accident to his primary treating physician, I would conclude that, pursuant to
Moore, supra at 522, defendant acted reasonably given the existing bona fide factual dispute of
causation by continuing to gather all of plaintiff’s medical records and by seeking an IME before
ultimately denying plaintiff’s claim. As such, I would reverse and hold that the trial court’s
finding that defendant unreasonably delayed or denied payment, although it had not received the
records of the physician with whom plaintiff claimed to treat immediately after the accident, was
clear error.
/s/ Kurtis T. Wilder
1
Moreover, as noted by defendant’s counsel, Dr. Chodoroff’s records show that plaintiff
identified the wrong date as the date of the accident.
2
Plaintiff sought $66,164 in wage loss, and the jury awarded him only $10,000.
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