Ali v Meemic Ins Co (COA – UNP 7/20/2023; RB #4612)
Michigan Court of Appeals; Docket #360900; Unpublished
Judges Patel, Boonstra, and Rick; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEX:
Requirement That Benefits Were Unreasonably Delayed or Denied [§3148(1)]
TOPICAL INDEX:
Case Evaluation – Accept/Reject in PIP Cases
SUMMARY:
In this unanimous, unpublished, per curiam decision, the Court of Appeals vacated the trial court’s denial of Defendant Meemic Insurance Company’s (“Meemic”) post-judgment motion for case evaluation sanctions against Plaintiff Faiz Ali and affirmed the trial court’s denial of Ali’s request for attorney fees under MCL 500.3148(1). The Court of Appeals held that MCR 2.403(O)—which subsection was removed entirely from the Court Rules when they were amended in January 1, 2022—applied to Ali’s action, and that case evaluation sanctions should have been awarded in Meemic’s favor. The Court also held that the trial court did not err in denying Ali’s motion for attorney fees under MCL 500.3148(1).
Faiz Ali was injured in a motor vehicle accident in 2017. He received extensive treatment thereafter but was eventually cut off from PIP benefits by Meemic, his no-fault insurer, based on the results of an insurance medical examination. Ali filed suit against Meemic in 2018, claiming, among other benefits, over $100,000 in allowable expenses. In 2019, the parties underwent case evaluation, both subsequently rejecting the panel’s award of $45,000. The parties went to trial in June 2021, at the conclusion of which the jury awarded Ali $14,358.42 for unpaid allowable expenses, as well as penalty interest in the amount of $3,146.03. The trial court then granted Ali’s request for entry of judgment, denied his request for attorney fees, and directed him to prepare a judgment. After judgment was entered in January 2022, Meemic filed a motion for case evaluation sanctions under MCR 2.403(O), which subsection had, less than one month prior, been removed from the court rules altogether. The trial court denied Meemic’s motion, ruling that the amended version of the Court Rules applied.
The Court of Appeals reversed the trial court’s denial of Meemic’s motion for case evaluation sanctions, holding, first, that Meemic was entitled to case evaluation sanctions under the pre-amendment version of MCR 2.403. The Court observed that “the general rule when a court rule is amended is to ‘apply the newly adopted court rules to pending actions unless there is a reason to continue applying the old rules.’ ” In this case, “the entire case was essentially completed while the prior version of MCR 2.403(O) was in effect,” which, according to the Court, was a sufficient ‘reason’ to continue apply the pre-amendment version of the rule.
“We conclude, keeping in mind the requirement of restraint and the necessity of not reading the ‘injustice’ exception to MCR 1.102 too broadly, that the trial court erred by concluding that the current version of MCR 2.403 applied to defendant’s claim for case evaluation sanctions. The record shows that the entire case was essentially completed while the prior version of MCR 2.403(O) was in effect. Both parties conducted the entire litigation, including case evaluation, numerous facilitations, and a six-day jury trial, under the previous version of the rule that permitted case-evaluation sanctions. Indeed, the case evaluation—and the parties’ rejection of the resulting award—occurred more than two years before the new rule came into effect. The jury rendered its verdict nearly six months before the new rule came into effect, and the trial court ordered plaintiff to prepare a judgment for entry approximately five weeks before the effective date of MCR 2.403’s amendment. Yet, plaintiff never submitted a proposed judgment in its favor, ultimately requiring defendant to enter a proposed judgment against itself in order to proceed with its claim for case evaluation sanctions. Essentially, while defendant was waiting for plaintiff to comply with the trial court’s order directing him to prepare a judgment (to be entered in plaintiff’s favor), the court rule changed. Long before that change was adopted, both parties accepted the risk of case-evaluation sanctions by agreeing to a jury trial, and made their strategic decisions prior to and during litigation under the rubric of the prior version of the rule. Under these circumstances, it would have ‘operated unfairly’ for either of the parties to be denied case-evaluation sanctions merely because the ministerial act of entering a judgment on the verdict had not occurred before the rule change. Reitmeyer, 237 Mich App at 340. That is particularly true when, as here, there were delays in the entry of a judgment and in complying with the trial court’s directive to plaintiff (in advance of the change in the court rule) to submit a proposed judgment. Therefore, under these particular circumstances, we conclude that the trial court abused its discretion by holding that the current version of MCR 2.403(O) applied to defendant’s claim. Id. at 337. We vacate the trial court’s March 16, 2023 opinion and order and remand for consideration of defendant’s claim for case-evaluation sanctions under the prior version of MCR 2.403.”
The Court of Appeals held, second, that the trial court did not err in denying Ali’s request for attorney fees under MCL 500.3148(1). The Court noted that of the more than $100,000 Ali claimed in allowable expenses, the jury found only $14,358.42 to be valid; the Court also noted that Meemic’s denial was based on an insurance medical examination in which the examiner determined that Ali did not require extensive treatment. Since the jury’s verdict was seemingly in harmony with the examiner’s determination, the Court of Appeals agreed with the trial court that Meemic’s denial was not ‘unreasonable’ for purposes of MCL 500.3148(1).
“Plaintiff makes much of the fact that the jury found that the allowable expenses it did award were overdue, and that the jury found that plaintiff had not fraudulently represented his claims to defendant. However, the mere fact that benefit payments are overdue, while it entitles an insured to penalty interest, does not automatically entitle an insured to attorney fees; the delay in payment must still be found to have been unreasonable. See MCL 500.3148; 500.3142 (2); Moore, 482 Mich at 523. Moreover, the absence of fraud on the behalf of the insured does not in itself demonstrate that an insurer unreasonably denied or delayed payment—as noted, a bona fide factual uncertainty existed regarding the extent of plaintiff’s claims, the vast majority of which were either dismissed before trial or rejected by the jury. In light of the fact that the vast bulk of plaintiff’s claims were either dismissed before trial or not awarded by the jury verdict, and the existence of a bona-fide factual uncertainty, we conclude that the trial court did not abuse its discretion by refusing to award attorney fees, despite that fact that the jury did find a small portion of plaintiff’s claimed expenses to be allowable and overdue (and thus subject to penalty interest). Moore, 482 Mich at 525 (stating that ‘an insurer's initial refusal to pay benefits under Michigan's no-fault insurance statutes can be deemed reasonable even though it is later determined that the insurer was required to pay those benefits.’).”
