Michigan Court of Appeals; Docket #352768, 354682; Unpublished
Judges Riordan Krause, Markey, and Swartzle; Per Curiam
Official Michigan Reporter Citation: Not Applicable, Link to Opinion
STATUTORY INDEXING:
General / Miscellaneous [§3148]
Fraudulent Insurance Acts [§3173a]
TOPICAL INDEXING:
Not Applicable
SUMMARY:
In this unanimous unpublished per curiam decision, the Court of Appeals affirmed the trial court’s denial of Defendant Allstate Insurance Company’s (“Allstate”) motion for summary disposition, in which Allstate sought dismissal of Plaintiff Tracey Nickerson’s first-party action against it, as well as the trial court’s denial of Nickerson’s post-trial motion for attorney fees. In denying Allstate’s motion for summary disposition, the Court of Appeals held that a question of fact existed as to whether Nickerson had committed a fraudulent insurance act for purposes of MCL 500.3172, and whether, therefore, her claim for no-fault PIP benefits was barred in its entirety. In denying Nickerson’s post-trial motion for attorney fees, the Court of Appeals held that, based on the specific facts and circumstances of this case, Nickerson failed to file her motion within a “reasonable time.”
Reginald Mapp was seriously injured in a motor vehicle collision and thereafter received 24-hour attendant care from Nickerson, which care was provided by Nickerson in her personal capacity during the nighttime, and on behalf of HealthCall of Detroit, Inc. (“HealthCall”) during the daytime. Mapp was uninsured at the time of the collision, and thus Nickerson, his guardian, sought payment of no-fault PIP benefits for the attendant care she provided on Mapp’s behalf from the Michigan Assigned Claims Plan.
The MACP assigned her claim to Allstate, who initially declined to pay PIP benefits for any of the attendant care that was rendered to Mapp, but eventually settled with respect to the care provided during the daytime. Nickerson then filed a first-party action against Allstate seeking to recover payment of PIP benefits for the nighttime care she provided. Allstate moved for summary disposition, asserting that Nickerson had committed fraud based on isolated instances between 2016 and 2017, in which surveillance Allstate ordered revealed Mapp standing and walking around outside his house without supervision and performing various tasks and activities. Allstate argued that this evidence proved that Nickerson had committed a “fraudulent insurance act” for purposes of MCL 500.3173a, and that her entire claim for PIP Benefits through the MACP was therefore barred. Moreover, Allstate argued that the surveillance proved that Mapp did not require 24-hour attendant care. Ultimately, the trial court denied Allstate’s motion, “reasoning that the daytime surveillance perhaps showed that HealthCall committed a ‘fraudulent insurance act’ by not providing daytime attendant care, but that it did not show that [Nickerson] personally committed a “fraudulent insurance act,” i.e., that [Nickerson] did not provide nighttime attendant care.” The case proceeded to trial, after which the jury returned a verdict awarding Nickerson $247,728.06, comprised of unpaid allowable expenses and penalty interest. At a December 2019 hearing on Nickerson’s motion for entry of judgment, the trial court indicated that it was disinclined to enter judgment because it was still awaiting Nickerson’s request for attorney fees. Nickerson assured the trial court that her motion would be forthcoming in a matter of days, but she did not actually file her motion for several months. Based on this delay, the trial court denied eventual Nickerson’s request, finding that her motion was not filed within a “reasonable time.”
The Court of Appeals affirmed the trial court’s denial of Allstate’s motion for summary disposition regarding fraud. The Court observed that, in its motion, Allstate did not include all the billing statements submitted from HealthCall and Nickerson as evidence of fraud, but rather included only statements from select periods in August and November. During those select periods, there were only two instances of purported fraud: one in which Mapp was observed “ ‘standing/walking outside of house without supervision,’ ” and another, the same day, in which Mapp was “ ‘left home alone without supervision.’ ” The Court of Appeals held that such limited evidence was insufficient to show that HealthCall committed a “fraudulent insurance act” for purposes of MCL 500.3173a. Specifically, the Court of Appeals held that such evidence was insufficient to prove that Nickerson or HealthCall “ ‘[knew] that the statement contained false information’ ”—the fourth element in the five-step test for determining whether a claimant has committed a fraudulent insurance acts under MCL 500.3173a(2) set forth in Candler v Farm Bureau Mut Ins Co of Mich, 321 Mich App 772 (2017). The Court stated that, although “the term ‘attendant care’ suggests nonstop supervision, that is not practical,” and that “the fact that Mapp was observed on one instance ‘standing/walking outside of house without supervision’ does not mean that a HealthCall employee was not in the immediate vicinity or otherwise unavailable.” Furthermore, the Court held that such evidence did not satisfy the fifth element of the Candler test—that “ ‘the statement concern a fact or thing material to the claim’ ”—because “[t]his case concerned years of attendant care, and a single daytime instance of false billing on August 6, 2016, is not ‘material’ to the underlying claim.”
“The first three elements of Candler were unquestionably satisfied when plaintiff and HealthCall submitted billing statements for attendant-care reimbursement to defendant. With regard to the fourth element, however, defendant failed to show in its motion and accompanying brief for summary disposition that plaintiff or HealthCall 'must have known that the statement[s] contained false information.' Candler, 321 Mich App at 780. In this regard, it is important to note precisely what 'statements' were included with the motion for summary disposition. Defendant did not include all attendant-care billing statements from HealthCall and plaintiff for the period in question. Rather, defendant simply included the following billing statements: (1) from plaintiff personally, billings for the entire month of August 2016 and the entire month of January 2018; (2) from plaintiff on behalf of HealthCall, billings for August 1 to August 4, 2016, and for November 27 to November 30, 2017; and (3) from Wallace, billings for August 5 to August 7, 2016, and for November 24 to November 26, 2017. Because defendant only conducted daytime surveillance, any fraudulent statements must arise from the billing statements of HealthCall. Thus, for defendant to be entitled to summary disposition, it must have shown that HealthCall submitted fraudulent billings for the first week of August 2016 or the last week of November 2017. In other words, for example, because defendant failed to include the HealthCall billing statement for the first week of June 2017, the fact that Mapp was recorded walking unsupervised to a nearby liquor store on June 3, 2017, is irrelevant.
Defendant’s limited documentary submission is fatal to its appeal. The vast majority of the surveillance was conducted outside the first week of August 2016 or the last week of November 2017. For example, of the 11 instances on which Mapp was recorded walking unsupervised around the neighborhood, not a single instance occurred during the first week of August 2016 or the last week of November 2017. In the end, when the surveillance is limited to the first week of August 2016 and the last week of November 2017, defendant is only able to show that on one instance on August 6, 2016, Mapp was 'standing/walking outside of house without supervision' and that on another instance that same day, he was 'left home alone without supervision.' This is the limited evidence of fraudulent billing statements submitted by HealthCall.
In our view, such limited evidence is insufficient to show that HealthCall submitted knowingly false billing statements to defendant for the purposes of the fourth element of MCL 500.3173a. See Candler, 321 Mich App at 780. While the term 'attendant care' suggests nonstop supervision, that is not practical. It cannot be realistically disputed that, for example, a healthcare worker may briefly leave a patient unattended to use the bathroom or make a phone call. Thus, the fact that Mapp was observed on one instance 'standing/walking outside of house without supervision' does not mean that a HealthCall employee was not in the immediate vicinity or otherwise unavailable. Accordingly, that HealthCall billed defendant for attendant care during that time does not show that it submitted knowingly false information.
At most, the fact that HealthCall left Mapp 'home alone without supervision' on another single instance would perhaps suffice to satisfy the fourth element. However, that single instance, in our view, would not satisfy the fifth element, 'the statement concerned a fact or thing material to the claim.' See Candler, 321 Mich App at 780. This case concerned years of attendant care, and a single daytime instance of false billing on August 6, 2016, is not 'material' to the underlying claim for PIP benefits under the assigned claims plan. In contrast, Bahri v IDS Property Cas Ins Co, 308 Mich App 420; 864 NW2d 609 (2014), another case involving alleged insurance fraud, concerned 19 days of unprovided replacement services, see id. at 425, and Candler concerned three months of unprovided replacement services, see Candler, 321 Mich App at 776. Accordingly, we conclude that while HealthCall perhaps submitted a knowingly false billing statement to defendant with regard to the services allegedly provided on August 6, 2016, that knowingly false billing statement was not 'material to the claim' for the purposes of MCL 500.3173a.”
The Court of Appeals also affirmed the trial court’s denial of Nickerson’s request for attorney fees, observing preliminarily that neither MCL 500.3148 nor MCR 2.313 set forth a time period for filing a motion for attorney fees. Therefore, the Court noted that Nickerson needed only submit her request within a “reasonable time” given the particular facts and circumstances of this case. The particular facts of this case showed that Nickerson “inaccurately informed the trial court during the December 2019 hearing that the motion would be filed shortly,” thereby delaying entry of judgment for two months, after which Nickerson still did not file her motion for another six months. Accordingly, the Court of Appeals declined to overrule the trial court’s denial of Nickerson’s motion for abuse of discretion.
