COMMUNITY RESOURCE CONSULTANTS INC V STATE FARM MUT AUTO INS CO

 Annotate this Case
Download PDF
STATE OF MICHIGAN COURT OF APPEALS COMMUNITY RESOURCE CONSULTANTS, INC., UNPUBLISHED March 1, 2011 Plaintiff-Appellee, v No. 293932 Macomb Circuit Court LC No. 2004-002536-CK STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellant. Before: M.J. KELLY, P.J., and K.F. KELLY and BORRELLO, JJ. PER CURIAM. In this action, plaintiff Community Resource Consultants, Inc. sued defendant State Farm Mutual Automobile Insurance Company, seeking to recover payment for rehabilitation and/or case management services that plaintiff rendered to defendant’s insureds. Following a jury trial, the jury awarded plaintiff $205,649.52 for 14 of the 15 consolidated cases, plus penalty interest under the no-fault act, MCL 500.3142, in the amount of $24,681.94, for a total jury award of $230,331.46. The trial court awarded plaintiff $87,500 in attorney fees under MCR 2.403(O)(6)(b), $69,250 in attorney fees under MCL 500.3148(1) and costs of $490. A judgment entered July 10, 2007, awarded plaintiff $431,502.25, which included the jury award, attorney fees and costs, and post-judgment interest of $43,930.79. After the trial court granted defendant’s motion for judgment notwithstanding the verdict (JNOV) based on the one-yearback rule of MCL 500.3145(1), plaintiff appealed by leave granted, and this Court granted leave and reversed and remanded for entry of an order reinstating the July 10, 2007, judgment. Community Resource Consultants, Inc v State Farm Mut Auto Ins Co, unpublished opinion per curiam of the Court of Appeals, issued April 7, 2009 (Docket No. 281966). On July 7, 2009, the trial court entered an amended reinstated July 10, 2007, judgment in the amount of $469,924.12, which included the reinstated judgment amount of $431,502.25, plus interest of $38,421.87. Defendant now appeals as of right. For the reasons set forth in this opinion, we affirm. I. FACTS AND PROCEDURAL HISTORY This Court articulated most of the relevant facts and procedural history for this case when it granted plaintiff leave to appeal the trial court’s granting of defendant’s motion for JNOV based on the one-year-back rule: -1- Wilma Judkins, who was insured under a no-fault policy of insurance issued by defendant, suffered injuries in an automobile accident on December 28, 2000. After providing rehabilitative services or case management services to Judkins, plaintiff sued defendant for payment of the services. In its answer to plaintiff’s complaint, defendant asserted the one-year-back rule, MCL 500.3145(1), as an affirmative defense to plaintiff’s claim. The trial court subsequently consolidated the case with 14 other cases in which plaintiff sought payment from defendant for services rendered to defendant’s insureds. Plaintiff has asserted, and defendant does not contest, that the consolidated complaints requested $357,648.10 from defendant for services rendered to defendant’s insureds. An eight-day jury trial on the 15 consolidated cases commenced on August 29, 2006. After both parties completed their presentation of proofs, defendant raised the one-year-back rule in a discussion with the trial court and plaintiff in chambers. It then moved for a directed verdict on plaintiff’s claims for payment of services rendered more than one year before the filing of the complaints. The trial court took the motion under advisement, “but for the time being preclude[d] . . . defendant from referring” to the one-year-back rule. The trial court explained that defendant had not raised the one-year-back rule either during pretrial proceedings or trial and that, by only raising the issue after the proofs had been completed, defendant had denied plaintiff the “opportunity to rebut.” The jury returned verdicts in favor of plaintiff in 14 of the 15 cases, awarding plaintiff $205,649.52 for services rendered and $24,681.94 in statutory interest. The trial court entered judgment against defendant in the amount of $431,502.25, which included costs, fees, and interest. Defendant then moved for JNOV. It argued that, based on the Supreme Court’s decisions in Cameron v Auto Club Ins Ass’n, 476 Mich 55; 718 NW2d 784 (2006), and Devillers v Auto Club Ins Ass’n, 473 Mich 562; 702 NW2d 539 (2005), the trial court erred in submitting to the jury plaintiff’s bills for services rendered more than a year before the complaints were filed. The trial court granted the motion. It concluded that, because of the Cameron and Devillers decisions, plaintiff was precluded from recovering payment for services rendered more than one year before the complaints were filed and, therefore, it should have ruled as a matter of law that plaintiff was limited to recovering only those expenses incurred within one year of the filing of the complaints and so instructing the jury. The trial court further reasoned that plaintiff, by seeking damages to which it was not entitled, caused prejudice to defendant; plaintiff deprived defendant of a fair trial by exaggerating its claimed damages. The trial court believed that the amount of plaintiff’s claims for payment barred by the oneyear-back rule would be determinable by the proofs presented at trial, but if the parties were unable to agree on adjusted figures and a stipulated judgment, it ordered defendant to schedule an evidentiary hearing. Plaintiff applied for leave to appeal the trial court’s order granting JNOV. This Court granted the application. Comm Resource Consultants, Inc v State -2- Farm Mut Automobile Ins Co, unpublished order of the Court of Appeals, entered December 26, 2007 (Docket No. 281966). [Community Resource Consultants, Inc, slip op pp 1-2 (footnote omitted).] This Court reversed and reinstated the jury’s verdict, ruling that JNOV was not the proper method for the trial court to remedy its failure to enforce the one-year-back rule: In this case, the jury awarded plaintiff $205,649.52 for services rendered in 14 of the 15 cases. In moving for JNOV, defendant did not claim that the evidence presented to the jury, when viewed in the light most favorable to plaintiff, was insufficient to establish that plaintiff provided services worth $205,649.52 to defendant’s insureds for injuries arising out of automobile accidents. Rather, defendant argued that JNOV should be granted because the trial court submitted evidence for the jury’s consideration that was contrary to the Supreme Court’s decisions in Cameron and Devillers. The trial court granted JNOV on this basis. However, because there was no claim that the evidence submitted to the jury was insufficient to support the jury’s verdict, and because the trial court made no such finding, the trial court used an improper basis for granting JNOV. In other words, the trial court erred in granting defendant’s motion for JNOV because JNOV was not the proper method for the trial court to remedy its perceived legal error of failing to enforce the one-year-back rule. Any such error was an error of law, rather than an error in the sufficiency of the evidence. [Id., slip op p 3.] After this Court reversed and reinstated the jury’s verdict, the trial court entered an order reinstating the July 10, 2007, judgment, and adding $38,421.87 in interest. The trial court subsequently entered an amended order reinstating the judgment, which made no changes to the judgment, but added language stating that the order resolved all pending claims and closed the case. Defendant appeals as of right. II. ANALYSIS A. DIRECTED VERDICT Defendant argues that the trial court erred in denying its motion for directed verdict based on the one-year-back rule in MCL 500.3145(1). This Court reviews de novo the trial court’s decision on a motion for a directed verdict. Sniecinski v Blue Cross & Blue Shield of Michigan, 469 Mich 124, 131; 666 NW2d 186 (2003). With respect to the motion, the evidence and all legitimate inferences are examined in a light most favorable to the nonmoving party. Id. A directed verdict is only appropriate if there is no factual question on which reasonable jurors could differ. Zantel Marketing Agency v Whitesell Corp, 265 Mich App 559, 568; 696 NW2d 735 (2005). “A motion for directed verdict . . . should be granted only if the evidence viewed in this light fails to establish a claim as a matter of law.” Sniecinski, 469 Mich at 131. “Further, this Court recognizes the unique opportunity of the jury and the trial judge to observe witnesses and the fact-finder’s responsibility to determine the -3- credibility and weight of the testimony.” Wiley v Henry Ford Cottage Hosp, 257 Mich App 488, 491; 668 NW2d 402 (2003). As noted above, defendant moved for directed verdict orally after the parties had presented their proofs, arguing generally that the one-year-back rule of MCL 500.3145(1) precluded plaintiff’s recovery. The trial court took the matter under advisement, but precluded defendant from referring to the one-year-back rule. The trial court explained that defendant had failed to raise the one-year-back rule either during pretrial proceedings or at trial and that by raising the issue after the proofs had been completed, defendant had denied plaintiff the “opportunity to rebut.” The trial court did not come back and address defendant’s motion for directed verdict before the jury rendered its verdict, however; essentially, then, the trial court’s decision to take the matter under advisement and preclude defendant from referring to the oneyear-back rule was tantamount to a denial of defendant’s motion. The one-year-back provision of the no-fault act is contained in MCL 500.3145 and provides, in relevant part: (1) An action for recovery of personal protection insurance benefits payable under this chapter for accidental bodily injury may not be commenced later than 1 year after the date of the accident causing the injury unless written notice of injury as provided herein has been given to the insurer within 1 year after the accident or unless the insurer has previously made a payment of personal protection insurance benefits for the injury. If the notice has been given or a payment has been made, the action may be commenced at any time within 1 year after the most recent allowable expense, work loss or survivor’s loss has been incurred. However, the claimant may not recover benefits for any portion of the loss incurred more than 1 year before the date on which the action was commenced. . . . In Devillers v Auto Club Ins Ass’n, 473 Mich 562, 574; 702 NW2d 539 (2005), our Supreme Court held that MCL 500.3145(1) “limits recovery . . . to those losses incurred within the one year preceding the filing of the action.” (Emphasis in original). In our previous opinion in this case, we declined to address defendant’s argument that the trial court erred in denying its motion for directed verdict based on the one-year-back rule, stating: Although the parties present arguments regarding whether the trial court properly denied defendant’s motion for a directed verdict predicated on the oneyear-back rule, we decline to address the merits of the trial court’s decision. We do so because the record before us on the interlocutory appeal is insufficient to allow us to come to any conclusion that is not based on speculation and assumptions. Transcripts of the eight-day trial are not included in the record, nor are the exhibits that were admitted into evidence. Thus, for example, we do not know how the trial court directed the parties to bring and argue motions for directed verdict. We are also unable to evaluate whether the one-year-back rule can be applied with any certainty to the jury’s verdict, given that the jury did not -4- award plaintiff all of its requested damages. Nothing in this opinion shall be read to preclude defendant from arguing in an appeal as of right that the trial court erred in denying its motion for a directed verdict. [Community Resource Consultants, Inc, slip op p 4 n 2.] While defendant correctly asserts that based on the one-year-back rule, MCL 500.3145(1), plaintiff would not be entitled to payment for any losses incurred before the filing of the actions in this case, defendant fails to sufficiently argue this issue on appeal. For example, defendant does not specify in its appellate brief which of the 14 clients for which plaintiff was awarded damages incurred losses prior to the cut-off date for the one-year-back rule. Defendant also fails to articulate in its appellate brief specific dollar amounts for any losses that were allegedly incurred prior to the cut-off date for the one-year-back rule for any of these clients. Moreover, while the trial court consolidated the 15 cases, there were originally separate complaints filed with respect to each client, and defendant fails to inform this Court regarding the filing dates of the relevant complaints to enable this Court to determine a cut-off date regarding payment of benefits for each client in this case. Defendant has also failed to cite any trial testimony or explain how any documentary evidence submitted to the trial court that would establish that any of the losses of defendant’s insureds were incurred prior to the cut-off date. In sum, defendant has completely failed to argue how the facts or documentary evidence support its position, even if its statement of the law regarding the one-year-back rule is correct. “A party may not leave it to this Court to search for a factual basis to sustain or reject its position.” Great Lakes Div of Nat’l Steel Corp v Ecorse, 227 Mich App 379, 424; 576 NW2d 667 (1998). As our Supreme Court stated in Mitcham v Detroit, 355 Mich 182, 203; 94 NW2d 388 (1959): It is not enough for an appellant . . . simply to announce a position or assert an error and then leave it up to this Court to discover and rationalize the basis for his claim, or unravel and elaborate for him his arguments, and then search for authority either to sustain or reject his position. Furthermore, defendant’s conduct at trial also deprived the trial court of the opportunity to properly address its motion for directed verdict. As the trial court noted, defendant failed to raise the one-year-back rule during pretrial proceedings or during trial. Defendant could have raised the issue in a motion for summary disposition, with documentation to support the motion, but it did not do so. While defendant raised the one-year-back rule in its affirmative defenses, defendant concedes that it did not raise the issue again until after the parties had presented their proofs. Under MCR 2.507(B)(2), defendant had the burden of proving its affirmative defenses, but defendant did not present any evidence, either testimonial or documentary, regarding the one-year-back rule. Moreover, defendant’s motion for directed verdict also lacked specificity. Under MCR 2.515, a party “must state specific grounds in support of” a motion for a directed verdict. Garabedian v Beaumont Hosp, 208 Mich App 473, 476; 528 NW2d 809 (1995). We find that, under the facts of this case, defendant’s motion lacked sufficient specificity. Although defendant did file a written motion for directed verdict regarding exemplary damages and a written motion for directed verdict regarding an estoppel issue, his motion for directed verdict based on the one-year-back rule was oral, with no accompanying written motion. While defendant’s oral motion for directed verdict cited the one-year-back rule, it did not provide the trial court with any information regarding what clients’ claims were barred by the one-year-back rule and how much of those claims were barred. Furthermore, defendant did not specify that its -5- motion was actually a motion for partial directed verdict, thus implying that all of the charges were barred by the one-year-back rule, when that clearly is not the case. We acknowledge that there was documentary evidence, submitted by plaintiff at trial, that indicates that at least some of defendant’s clients’ losses may have been incurred prior to the cutoff date for the one-year-back rule. The first of the consolidated complaints that plaintiff filed in this case was the complaint related to Wilma Judkins, and that complaint was filed on June 17, 2004. Thus, it would appear that any costs incurred prior to June 17, 2003, for any of the clients would be banned by the one-year-back rule. Plaintiff submitted as an exhibit at trial copies of balance statements for case management services provided to defendant’s insureds. The statements contain information including the date of the service and the amount due for the service. Wilma Judkins’ statement includes charges for $150.15 on February 11, 2003, $3,045.00 on February 26, 2003, and $2,210.25 on February 26, 2003. Based on the date her complaint was filed, it appears that these charges should be precluded by the one-year-back rule. There are charges for several other clients that might possibly be outside the cut-off date for the one-year-back rule as well. For example, Florian Dedaj incurred charges on three separate dates in January 2003, for case management services totaling $11,954.25. In addition, the balance statements for other of defendant’s insureds also contain charges that appear to be incurred prior to or near the cut-off date for the one-year back rule, based on the date that Judkins’ complaint was filed. Again, however, without knowing the dates the various complaints were filed, it is impossible to determine the exact cut-off date for application of the one-year-back rule. In moving for directed verdict, defendant failed to cite this evidence and failed to specifically argue what portions of what claims were barred by the one-year-back rule. Application of the one-year-back rule was uniquely complicated in this case because of the large number of clients for which plaintiff sought reimbursement for case management services and the fact that there were separate complaints filed for each client, resulting in different cut-off dates for the various clients regarding application of the one-year-back rule. Under such circumstances, defendant had a duty, at a minimum, to specifically alert the trial court to the balance sheet evidence that plaintiff, not defendant, admitted at trial. Defendant’s oral motion for directed verdict, citing the one-year-back rule in general was not sufficiently specific in this case. Moreover, at the hearing on defendant’s motion for directed verdict, the trial court explicitly asked defense counsel for a written brief on the one-year-back rule; defense counsel indicated that it would provide a written brief, but it never did so. Defendant’s motion for directed verdict also lacked specificity regarding the amount of money that defendant asserted should have been precluded under the one-year-back rule. At various times, defendant argued at least three different total amounts that it asserts were barred by the one-year-back rule. At the hearing on defendant’s motion for directed verdict, defendant asserted that two different amounts, $92,262 and $96,229, were precluded by the one-year-back rule. Furthermore, in its motion for JNOV, defendant argued that the judgment should be reduced in the amount of $83,313.80 based on the one-year-back rule. In sum, for all the reasons cited above, we find that defendant failed to be sufficiently specific in articulating its grounds for directed verdict as required by MCR 2.515. Thus, the trial court did not err in denying defendant’s motion for directed verdict. At oral argument, defendant argued that it was entitled to a new trial on the issue of the one-year-back rule. We disagree. Because defendant failed to comply with MCR 2.515 in -6- moving for directed verdict, the trial court’s denial of defendant’s motion was not in error. Furthermore, “[a]n appellant cannot contribute to error by plan or design and then argue error on appeal.” Munson Med Ctr v Auto Club Ins Ass’n, 218 Mich App 375, 388; 554 NW2d 49 (1996). For all the reasons articulated above, any error in the trial court’s handling of the oneyear-back rule was largely due to defendant’s own failures. Defendant is not entitled to a new trial. B. RESPONSE TO DISSENT The dissent’s contention that our decision in this case amounts to a conclusion that defendant is equitably estopped from relying on the one-year-back rule mischaracterizes our holding in this case and ignores the fact that it is simply not clear that the jury actually awarded damages in violation of the one-year-back rule. In fact, with respect to most of defendant’s insureds, it is clear that the jury did not award damages in violation of the one-year-back rule because the dates the charges were incurred were not outside the one-year-back cutoff date (based on the filing date of Wilma Judkins’ complaint), and a comparison of the damages awarded by the jury for the individual insureds are consistent with the charges on the billing statements. The record is admittedly unclear regarding whether the one-year-back rule was violated with respect to the jury’s award of damages for one or two of defendant’s insureds in this case. However, defendant’s failure to adequately brief this issue on appeal prevents this Court from ascertaining with any degree of certainty whether a portion of the jury’s damages for certain insureds were awarded in violation of the one-year-back rule. It was the responsibility of defendant to demonstrate to this Court with some degree of certainty how the jury’s award was contrary to the one-year-back rule. In this case, defendant, despite having numerous opportunities before the trial court and this Court, has failed to do so. As a consequence, other than speculation, defendant has made no argument which could lead us to reverse a jury verdict that was arrived at by a fair and impartial jury. The dissent accuses the majority of evading or avoiding application of the one-year-back rule in this case and suggests that the majority fails to follow the mandate of MCL 500.3145(1), which clearly prevents plaintiff from recovering for any losses that were incurred more than one year preceding the commencement of the action. We concede to our dissenting colleague that this issue is unclear, which is precisely our point. Since it is unclear that such damages were improperly awarded in this case based on the jury’s verdict, as this Court previously stated regarding the applicability of the one-year-back rule to this case: it is impossible “to evaluate whether the one-year back rule can be applied with any certainty to the jury’s verdict, given that the jury did not award plaintiff all of its requested damages.” Community Resource Consultants, Inc, slip op p 4 n 2.1 Moreover, defendant claims in its brief on appeal that plaintiff sought to recover $90,000 in benefits that should have been precluded by the one-year-back rule. The jury awarded plaintiff $151,998.58 less in damages than those requested by plaintiff; thus, it is 1 The consolidated complaints in this case sought to recover $357,648.10 for services rendered to defendant’s insureds, but the jury only awarded plaintiff $205,649.52 for services rendered. -7- arguable and even plausible that the jury did not award any damages for losses that were incurred prior to the one-year-back cutoff date. At the very least, these figures further underscore the lack of certainty regarding whether the jury awarded any damages in violation of the one-year-back rule. In sum, given the jury’s verdict and defendant’s failure to demonstrate that any of the damages awarded to plaintiff were awarded in violation of the one-year-back rule, the dissent’s conclusion that the one-year-back rule was violated in this case is pure speculation. C. JUDGMENT NOTWITHSTANDING THE VERDICT Defendant argues that the trial court erred in denying its motion for JNOV because plaintiff did not present sufficient evidence that the expenses incurred for case management services for the majority of the clients at issue in this case were reasonably necessary because over 40 physicians were involved in treating the clients at issue in this case, and plaintiff only presented the testimony of two doctors and one neuropsychologist for all of the clients. This Court reviews de novo a trial court’s decision on a motion for JNOV. Prime Financial Services LLC v Vinton, 279 Mich App 245, 255; 761 NW2d 694 (2008). “When deciding a motion for JNOV, the trial court must view the evidence and all reasonable inferences in the light most favorable to the nonmoving party and determine whether the facts presented preclude judgment for the nonmoving party as a matter of law.” Merkur Steel Supply, Inc v Detroit, 261 Mich App 116, 123-124; 680 NW2d 485 (2004). A motion for JNOV should be granted only if the evidence viewed in this light fails to establish a claim as a matter of law. Sniecinski, 469 Mich at 131. MCL 500.3105(1) provides: “Under personal protection insurance an insurer is liable to pay benefits for accidental bodily injury arising out of the ownership, operation, maintenance or use of a motor vehicle as a motor vehicle, subject to the provisions of this chapter.” The specific requirements for medical benefits are governed by MCL 500.3107 and MCL 500.3157. MCL 500.3107(1)(a) provides that “personal protection insurance benefits are payable for . . . [a]llowable expenses consisting of all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery, or rehabilitation. . . .” MCL 500.3157 provides, in relevant part: A physician, hospital, clinic or other person or institution lawfully rendering treatment to an injured person for an accidental bodily injury covered by personal protection insurance, and a person or institution providing rehabilitative occupational training following the injury, may charge a reasonable amount for the products, services and accommodations rendered. . . . To establish that a no-fault insurer is liable to pay for a particular expense under personal injury protection coverage, an insured must show that (1) the expense was incurred by the insured, (2) the expense was for a product, service, or accommodation reasonably necessary for the injured person’s care, recovery, or rehabilitation, and (3) the amount of the expense was reasonable. Hamilton v AAA Michigan, 248 Mich App 535, 543; 639 NW2d 837 (2001). The plaintiff has the burden of proving the reasonableness and necessity of a particular expense. Id. at 543-544. The determination whether medical treatment expenses are reasonable and reasonably necessary is generally an issue of fact for the jury. Advocacy Org for Patients & -8- Providers v Auto Club Ins Ass’n, 257 Mich App 365, 380; 670 NW2d 569 (2003), aff’d 472 Mich 91 (2005). Defendant essentially argues on appeal that there was not sufficient evidence that the expenses incurred for case management services were reasonably necessary because over 40 physicians were involved in the treatment of the clients at issue in this case, and plaintiff only presented the testimony of two doctors and one neuropsychologist for all of the clients. In Kallabat v State Farm Mut Auto Ins Co, 256 Mich App 146; 662 NW2d 97 (2003), this Court rejected the argument that the no-fault act requires a plaintiff in an action for the payment of personal protection insurance benefits to offer direct evidence from a treating physician that the expenses incurred were both reasonable and reasonably necessary: At its core, defendant’s claim is that a plaintiff in an action under MCL 500.3107 must offer direct evidence from the treating physician that the expenses incurred were both reasonable and reasonably necessary in order for the plaintiff to prevail. We find no such requirement within the language of the statute, and we cannot find, and defendant does not cite, any binding precedent in this regard. Rather, as with any civil case, the jury is entitled to consider all the evidence introduced by the plaintiff to decide whether the plaintiff has proved by a preponderance of the evidence that the expenses were reasonable and necessary. M Civ JI 3.09. Thus, direct and circumstantial evidence, and permissible inferences therefrom, may be considered by the jury to determine whether there is sufficient proof that the expenses were both reasonable and necessary. . . . [Kallabat, 256 Mich App at 151-152 (emphasis in original).] In light of Kallabat, any argument that plaintiff failed to introduce sufficient evidence regarding the need for case management services for the clients at issue in this case because it failed to present medical testimony from each client’s treating physician is without merit. Moreover, there was sufficient evidence, direct or circumstantial, regarding the need for case management services for the clients at issue in this case. Defendant challenges the sufficiency of the evidence with respect to the following clients in this case: Wilma Judkins, Kimberly Verburg, Roger Teply, Florian Dedaj, Christopher English, Steven Grenier, Angelita Long, Hubert Taylor, Gail Waite and Debra Rogalski. We have carefully reviewed the evidence and conclude that in each of these cases, there was evidence that the client was involved in an accident, suffered injuries and had a need for case management services. In other words, there was sufficient evidence regarding the need for case management services for the clients at issue. The trial court did not err in denying defendant’s motion for JNOV on this basis. D. PENALTY INTEREST UNDER MCL 500.3142 Defendant argues that the trial court erred in denying its motion for JNOV because plaintiff did not provide “reasonable proof of the fact and of the amount of loss sustained” under MCL 500.3142(2) and the jury therefore should not have awarded plaintiff penalty interest under the statute. -9- We previously articulated the standard of review for a motion for JNOV. To the extent that this issue requires this Court to construe MCL 500.3142, this Court reviews de novo issues of statutory interpretation. Saffian v Simmons, 477 Mich 8, 12; 727 NW2d 132 (2007). The primary goal of statutory interpretation is to ascertain and give effect to the intent of the Legislature. Id. The jury awarded plaintiff $24,681.94 in penalty interest under MCL 500.3142. 500.3142 provides: MCL (1) Personal protection insurance benefits are payable as loss accrues. (2) 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. . . . (3) An overdue payment bears simple interest at the rate of 12% per annum. This statute is intended to penalize insurers that refuse to comply with the act’s goal of providing prompt reparation. Cruz v State Farm Mut Auto Ins Co, 466 Mich 588, 601-602; 648 NW2d 591 (2002). Interest under MCL 500.3142 “is awarded as a penalty for the insurer’s misconduct and is not intended to compensate the insured for damages.” Regents of the Univ of Michigan v State Farm Mut Ins Co, 250 Mich App 719, 735; 650 NW2d 129 (2002). “To recover interest, a plaintiff is not required to prove that the defendant acted arbitrarily or unreasonably delayed in payment of benefits. . . . Instead, the statute ‘only requires that the insured present the insurer with reasonable proof of loss. If the insurer does not pay the claim within 30 days after receiving this proof, it becomes liable for interest.’” Id., quoting Fortier v Aetna Casualty & Surety Co, 131 Mich App 784, 793; 346 NW2d 874 (1984). MCL 500.3142(2) “requires only reasonable proof of the amount of loss, not exact proof.” Williams v AAA Mich, 250 Mich App 249, 267; 646 NW2d 476 (2002) (emphasis in original). The evidence in this case provided reasonable proof of the fact of and the amount of the loss. At trial, Charles Roberts, plaintiff’s owner, testified that he believed the billing packets submitted by plaintiff to defendant for the clients constituted reasonable proof of the fact and amount of loss. These billing packets were admitted as exhibits at trial, and, Roberts testified regarding the contents. According to Roberts, the billing packets contained: “the invoice, that tells the, the gross amount that’s due. The statement of time and services details what we’ve done on, on a day by day, line item, by basis. And then the, the, the month end report is a summary.” In addition, the final balance statements for the clients were admitted as an exhibit at trial. Information on the final balance statements includes the date that services were provided, a description of the transaction, and the amount due. Viewing the evidence and all reasonable inferences therefrom in the light most favorable to plaintiff, as the nonmoving party, there was -10- reasonable proof of the loss. Merkur Steel Supply, Inc, 261 Mich App at 123-124. Thus, the trial court properly denied defendant’s motion for JNOV. Defendant argues that it repeatedly requested copies of plaintiff’s notes to support its billings and identify who performed the services for its clients, but that such notes were never forthcoming. As noted above, however, MCL 500.3142(2) “requires only reasonable proof of the amount of loss, not exact proof.” Williams, 250 Mich App at 267 (emphasis in original). Thus, the fact that the person who provided the services was not specifically identified in the billings does not affect plaintiff’s establishment of the proof of the loss. Defendant also argues that plaintiff double billed for one file. Even if this is true, an isolated billing problem does not negate plaintiff’s otherwise reasonable proof of the loss. Therefore, we hold that the trial court did not err in denying defendant’s motion for JNOV predicated on the jury’s award of penalty interest under MCL 500.3142(2) because the evidence, viewed in the light most favorable to plaintiff, provided reasonable proof of the fact of and the amount of the loss. E. ATTORNEY FEES UNDER MCL 500.3148(1) Defendant argues that the trial court erred in awarding plaintiff attorney fees under MCL 500.3148(1) because the legitimacy of plaintiff’s billings was uncertain and therefore defendant’s delay in making payment of the claims was reasonable. Our Supreme Court articulated the standard of review for a trial court’s award of attorney fees under MCL 500.3148(1) in Moore v Secura Ins, 482 Mich 507, 516; 759 NW2d 833 (2008): The Court reviews de novo issues of statutory interpretation. Saffian v Simmons, 477 Mich 8, 12; 727 NW2d 132 (2007). “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 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, 474 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 NW2d 472 (2008). An abuse of discretion occurs when the trial court’s decision is outside the range of reasonable and principled outcomes. Id. The trial court initially denied plaintiff’s request for attorney fees under MCL 500.3148(1), but ultimately awarded attorney fees to plaintiff in the amount of $69,250 “for Defendant’s unreasonable refusal to pay Plaintiff’s claim . . . .” The no-fault act provides for reasonable attorney fees when an insurer unreasonably withholds benefits: 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 -11- overdue. The attorney fee shall be a charge against the insurer in addition to the benefits recovered, if the Court finds that the insured unreasonably refused to pay the claim or unreasonably delayed in making proper payment. [MCL 500.3148(1) (emphasis added).] MCL 500.3148(1) establishes two prerequisites for the award of attorney fees. Moore, 482 Mich at 517. “First, the benefits must be overdue, meaning ‘not paid within 30 days after [the] insurer receives reasonable proof of the fact and of the amount of loss sustained.’” Id., quoting MCL 500.3142(2). “Second, in postjudgment proceedings, the trial court must find that the insurer ‘unreasonably refused to pay the claim or unreasonably delayed in making proper payment.’” Moore, 482 Mich at 517, quoting MCL 500.3148(1). “The purpose of the no-fault act’s attorney-fee penalty provision is to ensure prompt payment to the insured.” Ross v Auto Club Group, 481 Mich 1, 11; 748 NW2d 552 (2008). Therefore, when an insurer refuses or delays payment of PIP benefits, it has the burden of justifying its refusal or delay under MCL 500.3148(1). Id. “[A] delay is not unreasonable if it is based on a legitimate question of statutory construction, constitutional law, or factual uncertainty.” Attard v Citizens Ins Co of America, 237 Mich App 311, 317; 602 NW2d 633 (1999). The determinative factor “is not whether the insurer ultimately is held responsible for benefits, but whether its initial refusal to pay was unreasonable.” Ross, 481 Mich at 11. Citing Attard, defendant asserts that there was a factual uncertainty regarding plaintiff’s billings because plaintiff had engaged in double billing and billed defendant at case management rates for secretarial work and also because plaintiff failed to submit documentation or proof to sustain its claims. According to defendant, plaintiff engaged in double billing on the Missie Graham file. The jury did not award plaintiff any damages for plaintiff’s case management of Graham, however, so the jury appears to have resolved any factual uncertainty regarding the billing for Graham in defendant’s favor. Defendant also suggests that there was a factual uncertainty regarding plaintiff’s billings because time spent performing clerical functions should be billed at clerical rates whereas time spent performing professional functions should be billed at professional rates. Defendant’s argument in this regard is purely speculative, however, as defendant does not articulate any specific instances where such improper billing took place. Thus, defendant has failed to establish a legitimate factual uncertainty in this regard. Attard, 237 Mich App 11. Finally, as discussed previously in this opinion, plaintiff did submit sufficient documentation to sustain its claims. For all these reasons, we hold that defendant has failed to meet its burden to justify its refusal or delay in paying plaintiff by establishing a legitimate factual uncertainty. The trial court did not err in awarding plaintiff attorney fees in the amount of $69,250 under MCL 500.3148(1) because defendant failed to establish a legitimate factual uncertainty regarding plaintiff’s billings for the clients at issue in this case. -12- Affirmed. Plaintiff, being the prevailing party, may tax costs. MCR 7.219(F). /s/ Michael J. Kelly /s/ Stephen L. Borrello -13-

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.