Ruben v Auto Club Group Insurance Company; (COA-UNP, 2/15/2005, RB #2527)


Michigan Court of Appeals; Docket #250895; Unpublished
Judges Murray, Meter and Owens; unanimous; per curiam
Official Michigan Reporter Citation: Not applicable, Link to Opinion courthouse graphic

Allowable Expenses: Reasonable Necessity Requirement [3107(1)(a)]

Injunctive and Equitable Relief in PIP Cases

In this unanimous unpublished per curiam opinion, the Court of Appeals upheld a jury verdict for plaintiff that found plaintiff’s medical charges reasonable and necessary through concepts of estoppel and waiver and rejected defendant’s argument that a JNOV should have been granted because plaintiff’s injury did not arise out of a motor vehicle accident. In upholding the jury verdict, the Court of Appeals determined that plaintiff provided sufficient evidence that he had reasonably relied upon defendant’s representation and admission that coverage would be provided, which representations were made to plaintiff before he obtained medical treatment. Moreover, the court found that not only did defendant respond in the affirmative to plaintiff’s assertion in his complaint that coverage existed, defendant’s internal claim diaries, which were admitted at trial, stated that coverage existed. It further found that plaintiff’s claim representative specifically told plaintiff there was coverage and some bills were actually paid. In this regard, the court said:

Viewing the evidence in the light most favorable to plaintiff, a reasonable juror could find that defendant, by its representations, admissions, or silence, intentionally or negligently induced plaintiff to believe coverage existed and that plaintiff justifiably relied and acted upon that belief. Plaintiff would be prejudiced if defendant could now change its position and deny coverage.”

The court also rejected defendant’s argument that estoppel should not apply because this is an insurance case and the doctrines of waiver and estoppel are limited in such circumstances. The court noted that although waiver and estoppel do not apply to expand coverage, that is not the situation in this case. In this regard, the court stated:

Here, it is not a party to the contract wishing to extend coverage beyond his original agreement. Instead, it is an intended third-party beneficiary relying on a contracting party’s statements regarding coverage. This is a distinct situation to which the general purpose of the rule for avoiding estoppel does not apply. . . . Despite defendant’s contention, sufficient evidence existed for reasonable jurors to differ on this issue. Plaintiff must merely offer evidence that it reasonably took ‘action of a definite and substantial character’ based on defendant’s promise. . . . Ruben specifically testified that he relied on defendant’s promises of coverage before treating the injured party. A reasonable inference from his testimony is that plaintiff would have treated the injured party without defendant’s coverage. This Court must affirm a verdict if reasonable inferences from the evidence supports it. . . . Therefore, the trial court properly denied JNOV.”