Michigan Court of Appeals; Docket # 329270; Unpublished
Judges Gleicher, Murray and Fort Hood; Unanimous, Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Allowable Expenses: Reasonable Charge Requirement [§3107(1)(a)]
TOPICAL INDEXING:
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion, the Court of Appeals held the trial court properly denied Auto Owners’ motion for judgment notwithstanding the verdict (JNOV) because it presented insufficient evidence that plaintiffs had engaged in fraud when making a claim for first-party no-fault benefits. In so holding, the Court rejected Auto Owners’ argument that, pursuant to Bahri v IDS Property Casualty Ins Co, 308 Mich App 420 (2014), fraud is established “as a matter of law” when surveillance video shows a claimant ably performing tasks for which the claimant sought replacement services.
The Court further held the trial court did not abuse its discretion by allowing the jury to determine the “reasonableness” of certain medical expenses under MCL 500.3107(1)(a).
Auto Owners argued the trial court should have granted its motion for JNOV because the evidence showed that plaintiffs had fraudulently made a claim for PIP benefits. Specifically, Auto Owners cited discrepancies in plaintiff-Patrice Smith’s insurance application related to her address and employment status, and asserted that plaintiffs had submitted forms for replacement services where, on the same days that claims were made for such services, plaintiffs were observed via video surveillance engaging in activities such as driving, cleaning, shopping and caring for children.
Rejecting Auto Owners’ argument, the Court of Appeals said:
“While defendant points to the surveillance evidence as proof that plaintiffs engaged in fraud, this evidence, construed in plaintiffs’ favor, does not conclusively establish that the replacement services statements plaintiffs submitted were fraudulent. The replacement services forms consisted of a calendar grid within which a claimant could circle various activities that were performed by others for the claimant’s benefit. There is a key identifying several activities for which an individual might require assistance. On the days that Smith was surveilled, she was observed conducting daily activities such as driving, going to a restaurant, and visiting a medical facility and various stores. For the same days on the replacement services form, Smith stated that she needed assistance with dusting, laundry, dishes, meal preparation, grooming, and ‘other.’ In her own handwriting, Smith noted that ‘other’ referred to the care of her three children, including taking them to and from school, feeding them, and helping them dress. Of particular note, Smith did not state on the replacement services claim forms that she required assistance driving or shopping on the days she was surveilled. Smith further explained at trial that as a single parent and the primary caregiver of her children, there were occasions when she had to drive, even while in pain, in order to take her children to school and to attend her physician-prescribed physical therapy. Notably, the surveillance investigator observed Smith moving slowly, shopping for a back brace, remaining in the car while sending her children into a store on an errand, and driving herself to a medical facility. On the basis of this evidence, reasonable minds could differ regarding whether plaintiffs committed fraud related to their application for no-fault benefits. Where ‘reasonable jurors could have honestly reached different conclusions, the jury verdict must stand.’”
The Court further found “unpersuasive” Auto Owners’ argument that Bahri stood for the proposition that fraud is established “as a matter of law” when surveillance video shows a claimant ably performing tasks for which the claimant sought replacement services. The Court stated:
“[W]e note that the Bahri case came to this Court following the trial court’s grant of the defendant’s motion for summary disposition. … Conversely, in this case, defendant’s claims on appeal arise in the context of challenging the trial court’s decision on a motion seeking JNOV following a five-day jury trial. Further, as noted above, in determining whether the trial court correctly denied defendant’s motion for JNOV, we construe the record evidence in plaintiffs’ favor, and where reasonable minds could differ, the jury verdict should be left undisturbed. … Finally, the types of inconsistencies established by the surveillance evidence in Bahri are not present in the instant case. Therefore, we conclude that defendant’s reliance on Bahri is not persuasive, and the trial court properly denied defendant’s motion for JNOV.”
The Court of Appeals also rejected Auto Owners’ claim that the trial court abused its discretion by admitting certain medical billing records into evidence, claiming the reasonableness of those expenses had not been established. Auto Owners argued that, pursuant to Bronson Methodist Hospital v Auto-Owners Ins Co, 295 Mich App 431 (2012), the only method by which a plaintiff can establish the reasonableness of a medical charge is to compare that charge to the wholesale cost the provider paid to the seller of the product. According to Auto Owners, because one of plaintiffs’ medical providers, Dr. Nazih Iskander, failed to produce records establishing his wholesale costs, plaintiffs could not establish the reasonableness of the charges. The Court disagreed and said:
“[O]ur close reading of Bronson demonstrates that it does not stand for the narrow proposition of law that defendant asserts. … In admitting the evidence of the charges for medical services and products provided to plaintiffs over defense counsel’s objection, the trial court reasoned that the reasonableness of the charges for the medical services and products provided to plaintiffs was properly left to the trier of fact. The trial court’s determination was congruent with established case law, and both [providers] presented the jury with sufficient evidence to consider whether the medical expenses were reasonable. Moreover, defense counsel was afforded the opportunity to cross-examine the witnesses regarding the reasonableness of the charges for medical services and products provided to plaintiffs. Accordingly, the trial court’s determination to allow the evidence fell within the range of reasonable and principled outcomes, and we discern no abuse of discretion.”
The Court further explained: “Dr. Iskander was not a party to the litigation, and the court rules do not provide the trial court with authority to sanction plaintiff for Dr. Iskander’s non-compliance with a subpoena.”
