Michigan Court of Appeals; Docket # 353114; Unpublished
Judges Letica, Gleicher, and O’Brien; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
Allowable Expenses: Reasonable Necessity Requirement [§3107(1)(a)]
Intervention by Service Providers and Third Party Payors in PIP Claims
In this unanimous unpublished per curiam opinion, the Court of Appeals reversed the trial court’s holding denying defendant’s motion for summary judgment on this issue of whether plaintiff was entitled to payment of PIP benefits under MCL 500.3107(1)(a). In doing so, the Court held that plaintiff failed to establish that its recreational therapy was reasonably necessary for the insured’s care, recovery, or rehabilitation.
This case arose from an automobile accident in which Denzel Harris suffered serious injuries. Defendant Zurich, as the insurer of first priority, provided first-party no-fault benefits to Harris and on Harris’s behalf. For several years, plaintiff provided recreational therapy to Harris. Consequently, plaintiff sought compensation from defendant under MCL 500.3107(1)(a), which provided for the payment of PIP benefits for “[a]llowable expenses consisting of reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery, or rehabilitation.” Zurich rejected plaintiff’s claims and plaintiff filed suit as a result. Zurich filed a motion for summary disposition, seeking dismissal under MCR 2.116(C)(10), in which the moving party must “present evidence to support its motion, and the court must consider that evidence ‘in the light most favorable to the nonmoving party to determine whether any genuine issue of material fact exists to warrant trial.’” The circuit court ultimately denied Zurich’s motion, finding there was a question of fact about whether the services satisfied MCL 500.3107(1)(a).
On appeal, the Court noted that Zurich presented “significant evidence” that the recreational therapy provided by plaintiff was “not reasonably necessary for Harris’s care, recovery, or rehabilitation,” because the goals of this therapy included “demonstat[ing] leisure independence” and “correct social etiquette.” In doing so, the Court noted that this evidence included the fact that Harris earned his driver’s license, independently took himself shopping, to work, and out with friends, lived in a rental home where he did his share of the housework, graduated from high school, maintained employment for several years – most recently working 30 hours per week as a busser at a restaurant – and wrote music and performed shows at bars. Further, the Court noted that Harris’s own words established that plaintiff’s recreational therapy was “not reasonably necessary to his care, recovery, or rehabilitation.” Additionally, Zurich had provided “six separate independent medical examinations conducted by three different physicians between 2014 and 2019, all declaring the services unnecessary.” Accordingly, the Court found that “[w]hen a party seeks summary disposition under MCR 2.116(C)(10), the other party cannot simply sit back and rely on the allegations in its complaint . . . [b]ut this is exactly what [plaintiff] did. The only evidence provided by plaintiff was prescriptions from Harris’s psychiatrist for recreational therapy. These prescriptions did not explain why such therapy was necessary, let alone reasonably necessary for Harris’s care, recovery, or rehabilitation.” Thus, the Court reversed the holding of the trial court and remanded for entry of judgment in favor of Zurich.