Michigan Court of Appeals; Docket #359631; Unpublished
Judges Kelly, Boonstra, and Redford; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
Release and Settlements
In this unanimous, unpublished, per curiam decision, the Court of Appeals affirmed in part, and vacated in part, the trial court’s order granting Plaintiff AdvisaCare Healthcare Solutions, Inc.’s (“AdvisaCare”) motion to re-open its case against Defendant Progressive Marathon Insurance Company (“Progressive”). The parties reached a settlement in AdvisaCare’s action for No-Fault PIP benefits, after which they executed a settlement agreement which explicitly provided that certain charges for medical equipment would be excluded from the settlement amount because Progressive had already agreed to pay them. The settlement agreement also said that any disputes regarding the terms of the agreement would remain within the trial court’s jurisdiction under the established case number. AdvisaCare later claimed that Progressive did not pay six of the equipment charges specified in the settlement agreement (Progressive presented evidence that it had, in fact, paid four of the charges), and thus the trial court granted AdvisaCare’s motion to have the case re-opened, and ordered Progressive to pay for all six equipment charges, as well as attorney fees under MCL 500.3148(1). The Court of Appeals held that the trial court did not err in reopening the case, but that it could not order Progressive to issue duplicate payments on the four charges it had already paid. The Court also vacated the trial court’s award of attorney fees, and remanded to the trial court to recalculate the amount in light of its holdings.
A minor was injured in a motor vehicle accident, and Progressive insured his father. The minor received treatment from AdvisaCare, and AdvisaCare later filed suit against Progressive for unpaid PIP benefits related to products and treatment provided to the minor. The parties ultimately settled the case, entering into a settlement agreement which provided that, ‘The [redacted settlement amount] does not include past due supply/equipment charges for which Progressive has already agreed to make voluntary payments to ADVISACARE, but, upon information and belief, have not been paid to date (or which may have been partially paid or paid during the course of the parties finalizing the terms of this release).’ The agreement then listed numerous invoice numbers comprising said “charges.” The agreement also provided that Progressive would pay the minor’s attendant care at a specified rate through June 30, 2021, and that if any disputes regarding terms of the agreement arose in the future, they would ‘remain within the jurisdiction of Kent County Circuit Court through case No. 18-10464-NF.’
More than a year after the parties stipulated to dismissal, AdvisaCare filed a ‘Motion to Re-Open Case and Order Requiring Settlement and Other Payments By Defendant Progressive,’ in which it alleged (1) that Progressive failed to pay six of the invoice numbers identified in the settlement agreement, and (2) that Progressive failed to pay for the minor’s attendant care at the agreed-upon rate through the end of July 2021, which Progressive’s attorney confirmed in an email that it would do. In response, Progressive argued that AdvisaCare could not seek to reopen the case and enforce payment because the six invoices at issue and the agreement to pay attendant care beyond June 30, 2021 were not a part of the settlement, and that AdvisaCare must file a new lawsuit over those charges. The trial court disagreed, granting AdvisaCare’s motion and ordering Progressive to pay attorney fees under MCL 500.3148(1). On motion for reconsideration, Progressive presented evidence that it had fully paid four of the invoices at issue, partially paid another, and that AdvisaCare had never submitted the sixth; however, the trial court denied the motion.
The Court of Appeals affirmed in part, and vacated in part, the trial court’s order granting AdvisaCare’s motion to reopen the case. First, the Court held that it was proper for the trial court to have reopened the case because the six invoices were part of the terms of the settlement agreement, and because the agreement made clear that any disputes over its terms would be litigated under the existing case number.
“With regard to the 2019 invoices, although defendant argues that they were specifically excluded from the settlement agreement, the language of the agreement shows that the exclusion was from the lump settlement amount paid by defendant under the agreement, and that the reason for the exclusion was that defendant ‘had already agreed to make voluntary payments’ for those specific invoices (and may have already partially paid them). Consequently, the payment of the invoices was part of the settlement agreement even though the amount was not included within the settlement amount. Finally, the settlement agreement provided that any disputes regarding the terms of the settlement agreement would be litigated in the trial court under the existing case number.”
Next, the Court held that Progressive could not be ordered by the trial court to issue duplicative payments for any of the six invoices at issue, but that it could order Progressive to pay the two invoices that were either unpaid or only partially paid. As for the two that were either unpaid or only partially paid, the Court noted that if Progressive wanted to take issue with those invoices, it should not have signed a settlement agreement saying that it had agreed to pay them.
“The trial court ordered defendant to ‘fully pay’ the 2019 invoices. At the risk of sounding reductive, invoices that have already been fully paid have been fully paid; the indebtedness represented by them has been satisfied and no payments remain due on them. Id. at 47 (defining ‘due’ as ‘owed, owing, owing and unpaid, remaining unpaid, an indebtedness,’). To the extent that defendant has already fully paid any specific invoice, the trial court lacked the authority to order defendant to pay those invoices a second time. It is axiomatic in law that, although there may be multiple judgments, there may only be one full satisfaction of a claim. See Hanley v Mazda Motor Corp, 239 Mich App 596, 601; 609 NW2d 203 (2000). Therefore, we must vacate the trial court’s order to the extent it may be interpreted as obligating defendant to pay the 2019 invoices regardless of their status as paid, partially paid, or unpaid.
We disagree, however, with defendant’s assertion that it is permitted at this point not to pay or to partially pay any of the 2019 invoices. Defendant argues that it ‘never received’ invoice 55429; however, defendant was sufficiently aware of its existence to refer to it by invoice number in the settlement agreement entered into at the beginning of 2020. Similarly, defendant argues that it ‘partially paid’ invoice 40546 in May 2019 but denied the remaining portion because plaintiff had failed to submit the bill within one year of service as required by the no-fault act. However, if it was defendant’s position in May 2019 that it did not owe any further amounts on invoice 40546 because the remainder of the charges were invalid under the no-fault act, one might have expected that fact to have been reflected in the settlement agreement. Instead, the agreement could be read as reflecting defendant’s agreement that it had paid or would pay that invoice as part of the overall settlement negotiation between the parties; plaintiff may well have relied on this agreement in agreeing to exclude the invoices from the lump settlement calculation. At this late hour, defendant should be estopped from flyspecking the 2019 invoices, on equitable grounds if nothing else.”
As for the issue of the July 2021 attendant care payments, the Court held that that issue was moot because, before oral argument, Defendant paid the July 2021 charges at the agreed-upon rate, so as to avoid having to litigate those charges anew and pay a even higher rate, potentially, pursuant to Andary v USAA Cas Ins Co, ___ Mich App ___ (2022), which was decided before oral argument as well.
The Court of Appeals then vacated the trial court’s award of attorney fees and penalty interest, and remanded for a proper calculation in light of its holdings.
“The trial court’s order directed defendant to pay ‘$6,036.12 in penalty interest through September 31, 2021’ on the 2019 invoices, and additionally ordered defendant to pay plaintiff’s attorney fees in the amount of $4,918.75. The penalty interest amount, being premised on all six 2019 invoices being unpaid, must be vacated in accordance with our remand on that issue. However, defendant does owe penalty interest on any of those invoices that were untimely paid or partially paid. Further, because it is unclear whether the attorney-fee award was based, in whole or in part, on the allegedly unpaid 2019 invoices, that amount must also be vacated. Regarding the July 2021 charges, plaintiff did not specifically request an award of attorney fees from the trial court on that issue, and there is no indication that the trial court based its attorney-fee award, in whole or in part, on that issue. Therefore, the simplest course of action, and the one we adopt, is to vacate the awards of penalty interest and attorney fees in their entirety. On remand, if plaintiff wishes to do so, it may bring a motion for penalty interest and attorney fees concerning the 2019 invoices that were actually unpaid, untimely paid, or partially paid,3 as well as present any argument concerning its entitlement to attorney fees relating to the July 2021 charges. Defendant would, at that point, be entitled to contest the reasonableness of the rates and amount of hours billed in the usual manner. See Smith v Khouri, 481 Mich 519, 530-534; 751 NW2d 472 (2008).”