Michigan Court of Appeals; Docket #336952; Unpublished
Judges Kelly, Jansen, and Meter; per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Reasonable Proof Requirement [§3142(2)]
Requirement That Benefits Were Unreasonably Delayed or Denied [§3148(1)]
TOPICAL INDEXING:
CASE SUMMARY:
In this unpublished per curiam opinion, the Michigan Court of Appeals examined sections 500 31481(1) and 3142(2) of the Michigan no-fault statute. Regarding the issue of “reasonable proof of loss,” the Court upheld the trial court after finding that plaintiff did not initially prove that her neck injury was related to her automobile accident. An independent medical examination (IME) was indeed necessary because plaintiff did not meet her burden of proof. With respect to attorney fees, the Court reversed and remanded the matter to the trial court to determine whether defendant’s delay in issuing medical payment(s) was reasonable.
Plaintiff, Suzanne Beaudoin, broke her back in a 1998 car accident. In 2008, plaintiff saw a physician, who stated that plaintiff’s neck pain was likely related to the accident but offered no conclusive statements of causation. Plaintiff made no neck related claims from 2008 to 2014, but the adjuster’s case file contained a 2014 note from the pain management clinic, which stated that she had been experiencing neck pain for years. In addition, a 2015 medical report alluded to the car accident as being a possible cause for plaintiff’s hunched back. Plaintiff contended that this constituted “reasonable notice” to defendant that her neck injury was related to the car accident.
Defendant, Michigan Property & Casualty Guaranty Association, stipulated to the 1998 car accident and properly paid medical bills related to plaintiff’s back injury for many years. Nonetheless, it denied medical claims related to plaintiff’s neck and made these payments only after obtaining an IME.
Plaintiff petitioned for attorney fees based on defendant’s unreasonable delay. The trial court found that plaintiff had not submitted “reasonable proof of loss” and determined she was not entitled to attorney fees because defendant did not unreasonably delay payment. Defendant argued, and the trial court agreed, that the IME report offered sufficient proof. Therefore, payment did not become due until after defendant independently investigated plaintiff’s injury and verified her alleged loss.
The issue before the Court of Appeals was whether plaintiff timely submitted reasonable proof of loss prior to the date of the (IME). MCL 500.3142(2) states 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. 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. For the purpose of calculating the extent to which benefits are overdue, payment shall be treated as made on the date a draft or other valid instrument was [mailed, or] . . . on the date of delivery.
Michigan Supreme Court jurisprudence makes clear that plaintiff carried the burden of proving the entirety of her claim, “or reasonable proof of some portion thereof.” Roberts v Farmers Ins Exchange, 275 Mich App 58, 67 (2008). Defendant insurance company was required to evaluate all evidence, including “evidence supplied by the insurer’s doctor before making a reasonable decision regarding whether to provide the benefits sought.”
The Court rejected plaintiff’s subjective complaints of neck pain and submissions of outstanding bills as reasonable proof of a related injury. It did not regard the cursory physicians’ statements from 2014 and 2015 as reasonable proof of loss because neither claim was substantiated. Taken together, mere expressions of possible relatedness did not satisfy plaintiff’s obligation to provide reasonable proof of loss, particularly when several years had elapsed between the medical notes and plaintiff’s submission of claims. And claims neither prove loss nor medical injury. The Court held that “the trial court did not clearly err in concluding that defendant did not obtain reasonable proof of loss until it received the IME report.”
It is not reasonable to expect that defendant would have “taken plaintiff’s word” for the explanation of her neck pain, however, when plaintiff is not trained in medicine; the claims adjuster . . . reasonably interpreted this statement as a “claim,” not as proof of loss. In addition, to the extent plaintiff is attempting to argue that the bills submitted by the treatment providers were proof of loss, this is not tenable; the bills, like plaintiff’s statement, were part of the claim for loss but did not reasonably establish a causal link between the accident and the neck issues.
Next, plaintiff contended that defendant did not timely pay all medical bills even after the IME report provided adequate proof of loss. Defendant argued that payment was timely because it began paying providers within 30 days of receiving the report. MCL 500.3142(2) states 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. . . . For the purpose of calculating the extent to which benefits are overdue, payment shall be treated as made on the date a draft or other valid instrument was placed in the United States mail in a properly addressed, postpaid envelope, or, if not so posted, on the date of delivery.
The Court applied the clear language of the statute and calculated that defendant paid at least one medical facility more than thirty days after the “trigger date.” Relatedly, plaintiff’s attorney represented plaintiff in at least one action during the period in which the bill(s) became overdue. With respect to attorney fees, MCL 500.3148(1) states:
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 overdue. The attorney’s fee shall be a charge against the insurer in addition to the benefits recovered, if the court finds that the insurer unreasonably refused to pay the claim or unreasonably delayed in making proper payment.
While the Court found a delay, it declined to state whether it was unreasonable and instead remanded the matter to the trial court.
[T]he question becomes whether defendant “unreasonably delayed in making proper payment[.]” It is entirely possible that any delay was not unreasonable and was attributable to the bill-review process[,] . . . but this Court is not in the position to decide this matter. We thus reverse the trial court’s findings in part and remand this case for further proceedings.
