Michigan Court of Appeals; Docket # 332143; Unpublished
Judges Gadola, Cavanagh and Swartzle; Unanimous, Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
12% Interest Penalty on Overdue Benefits – Nature and Scope [§3142(2) (3)]
One-Year Back Rule Limitation [§3145(1)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion involving a verdict of $490,800 for plaintiff on his claim for overdue attendant care benefits, the Court of Appeals held the trial court properly denied defendant-insurer’s motion for JNOV or new trial because:
- “unusual circumstances” existed that justified not strictly enforcing the one-year-back rule in MCL 500.3145, and
- sufficient evidence was presented to support plaintiff’s claim that attendant care benefits were overdue and, therefore, penalty interest under MCL 500.3142 was properly awarded.
Plaintiff was involved in a 2005 auto accident that rendered him wheelchair bound, disabled and in need of extensive medical treatment. Defendant-Auto Club Insurance Association was the insurer responsible for paying PIP benefits. In 2008, plaintiff filed his first lawsuit against Auto Club for unpaid benefits, including medical bills and attendant care services. This claim was settled and benefits were paid through November 2009. In September 2010, plaintiff filed a second lawsuit against Auto Club for outstanding PIP benefits, including attendant care services from December 1, 2009. The parties agreed to settle the matter through binding arbitration, and the case was dismissed with prejudice in May 2012. However, because the Michigan Catastrophic Claims Association (MCCA) refused to consent to arbitration, plaintiff moved to reinstate the case in October 2012. Plaintiff submitted a stipulation indicating that Auto Club agreed to reinstate the case. The trial court denied the motion to reinstate because the matter had been dismissed with prejudice and indicated that a new case had to be filed. On February 28, 2013, plaintiff brought the present (third) action for unpaid PIP benefits. Auto Club filed a motion in limine, arguing that plaintiff was barred by the one-year-back rule in §3145(1) from introducing evidence related to losses incurred prior to February 28, 2012 (one year before the date the third lawsuit was filed). Plaintiff responded, arguing that Auto Club waived or was equitably estopped from asserting the one-year-back defense because its actions had caused plaintiff’s noncompliance with the statute in the first place. The trial court denied Auto Club’s motion. Prior to trial, the PIP issues were resolved, except plaintiff’s claim for attendant care services. A jury then awarded plaintiff $490,800 in attendant care expenses, along with penalty interest of $153,424 under §3142 for overdue benefits. Thereafter, Auto Club filed a motion for JNOV or new trial, claiming there was insufficient evidence to support the jury’s finding that plaintiff was entitled to penalty interest. Auto Club further asserted the jury awarded benefits back to 2009, which violated the one-year-back rule. Plaintiff claimed, however, the verdict was fully supported by the evidence and that Auto Club either waived or was estopped from asserting the one-year-back defense. The trial court denied Auto Club’s motion for JNOV or new trial.
The Court of Appeals affirmed. In so ruling, the Court noted that while the one-year-back rule in §3145 must be enforced as written, the Michigan Supreme Court in Devillers v Auto Club Ins Ass’n, 473 Mich 562 (2005), recognized a “limited exception” to the rule’s application when there is a “sound basis” to invoke a court’s equitable power, such as when fraud, mutual mistake or “unusual circumstances” exist.
Applying Devillers to this case, the Court of Appeals said there was “no question” that “unusual circumstances” existed which supported not strictly enforcing the one-year-back rule. Finding that Auto Club was not entitled to a new trial, the Court said:
“Given that [Auto Club] stipulated to reopen the second lawsuit, and given that [Auto Club] was silent when the trial court and parties considered filing a third lawsuit instead of reopening the second lawsuit, we hold that a ‘pinpoint application’ of judicial equitable authority was appropriate here. Importantly, this ‘pinpoint application’ of equity is fully in-line with [Auto Club’s] reasonable expectations when it stipulated to reopen the second lawsuit. Accordingly, [Auto Club] is not entitled to a new trial because the trial court did not abuse its discretion when it denied [Auto Club’s] motion in limine which allowed the admission of evidence supporting the jury’s award of outstanding PIP benefits for losses that were incurred before February 28, 2012.”
The Court of Appeals continued by rejecting Auto Club’s argument that its motion for JNOV should have been granted. The Court noted that, under §3142, PIP benefits are considered “overdue” if not paid within 30 days after an insurer receives reasonable proof of the fact and of the amount of loss sustained. According to the Court:
“Here, plaintiff’s claim for attendant care services was the central focus of litigation in plaintiff’s first and second lawsuits, as well as in this third lawsuit. Thus, defendant’s argument that plaintiff failed to present ‘reasonable proof of the fact and of the amount of loss sustained’ is unclear. Essentially, from August 2008 until August 2015 when the six-day jury trial commenced, plaintiff’s claim for attendant care services has been in litigation and subject to extensive discovery. Legitimate inferences arising from the evidence presented at trial included that defendant had been in possession of medical records from at least four of plaintiff’s medical providers which indicated that plaintiff required 24-hour attendant care services; defendant also had disability slips from plaintiff’s treating physicians; and defendant had calendar affidavits compiled by plaintiff’s attendant care provider. … Moreover, according to plaintiff, while this third litigation was pending defendant sent plaintiff checks in payment for eight hours — rather than 24 hours — of attendant care services per day.”
Based on the foregoing, the Court of Appeals held that plaintiff presented sufficient evidence to support his claim that attendant care benefits were overdue. Thus, the trial court properly allowed the jury verdict to stand and correctly denied defendant’s motion for JNOV, the Court concluded.
