Michigan Court of Appeals; Docket #298650; Unpublished
Judges Wilder, Cavanagh, and Donofrio; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not applicable; Link to Opinion
STATUTORY INDEXING:
Allowable Expenses for Attendant Care [§3107(1)(a)]
Allowable Expenses: Incurred Expense Requirement [§3107(1)(a)]
Insurer’s Right to Penalty Attorney Fees for Fraudulent / Excessive Claims [§3148(2)]
Conduct Establishing Unreasonable Delay or Denial
Obligation of Claimant to Submit to Physician Examination
TOPICAL INDEXING:
Not applicable
In this unanimous unpublished per curiam Opinion, the Michigan Court of Appeals decided a number of no-fault issues, as well as evidentiary issues. With regard to the no-fault issues, the Court of Appeals upheld that trial court’s determination that the plaintiff has put forth sufficient proof that the attendant care services at issue were rendered and the associated charges were incurred. The Court of Appeals also found that the trial court did not abuse its discretion in denying attorney fees to both the plaintiff and the no-fault insurer.
The injured person in this case, Trina Richard, was hit by a motor vehicle on October 1, 1991 when she was 16-years-old. It was clear at the time of the collision that she was injured. Allstate Insurance Company was the no-fault insurer responsible to provide her no-fault benefits. Ms. Richard claimed a minimal amount of benefits following the accident. However, from 1993 until 2005, Ms. Richard did not receive any treatment for her head, neck, or back injuries related to the accident. Beginning in 2005, Ms. Richard again began treating for her injuries. She was evaluated by a number of medical providers. Ms. Richard sought payment from Allstate for the treatment she received. Furthermore, she also sought payment for attendant care that some of her treating physicians determined were reasonably necessary for her care, recovery, and/or rehabilitation.
With regard to Allstate’s argument that there was insufficient evidence to show Ms. Richard actually received any attendant care services, the Court of Appeals agreed with the trial court that the testimony of Ms. Richard’s husband constituted it sufficient proof for the jury to conclude that attendant care services were actually rendered to Ms. Richard. In this regard, the Court of Appeals held:
“Defendant maintains that there was insufficient evidence to show that plaintiff actually received any attendant-care services. However, defendant’s brief on appeal fails to reference the testimony of plaintiff’s husband, Anthony Montgomery, which was introduced via deposition. Montgomery recounted providing care to plaintiff related to her condition, which included cooking, caring for their child, leaving daily reminders, and helping her with her medication. Therefore, viewing this evidence in a light most favorable to plaintiff, the nonmoving party, a jury could have concluded that Montgomery actually provided attendant-care services to plaintiff.”
The Court of Appeals also agreed with the trial court that there was sufficient proof for the jury to conclude that expenses were “incurred” for the attendant care services provided to Ms. Richard. In reaching this holding, the Court of Appeals recognized that under Manley v DAIIE, 425 Mich 140 (1986), the Supreme Court held that, “in so far as nurse’s aides are concerned [the insurer] is not obligated to pay any amount except upon submission of evidence that services were actually rendered and of the actual cost expended.” However, the Court of Appeals noted that there is nothing in the Manley opinion that suggests immediate family members are required to submit a formal bill in order for their services to be “incurred.” The court further recognized that under the Supreme Court’s holding in Burris v Allstate Ins Co, 480 Mich 1081 (2008), “incurring” an expense simply means that “the attendant care providers expected compensation for their services.” Therefore, the Court reasoned that under Burris, all that is necessary is that the provider is expected to be compensated. The Court reasoned that since Ms. Richard testified that she told the caregivers she intended to compensate them and that Ms. Richard’s caregiver discussed with her the possibility of being paid, it was reasonable for the jury to conclude that the providers had formed an expectation of payment for their services. In this regard, the court held:
“Therefore, defendant’s position that attendant-care services must be billed in order to be recoverable is not supported by case law. As the Burris Court explained, all that is necessary is that the providers expected to be compensated. Id. at 1081. Here, plaintiff testified that she communicated with the caregivers that she intended to compensate them. Furthermore, Montgomery testified that, although no specific dollar amounts were discussed, he talked to plaintiff about getting paid at the prevailing rate. Hence, when viewing plaintiff’s testimony and Montgomery’s testimony in a light most favorable to plaintiff, a jury could have inferred that at least some caregivers expected to be compensated for their services.”
The Court of Appeals further rejected Allstate’s argument that the trial court abused its discretion when it denied Allstate’s request for attorney fees under MCL 500.3148(2). In rejecting Allstate’s argument, the Court of Appeals recognized that the mere fact that an ultimate jury award is much less than what a plaintiff claims can be relevant to whether the initial claim was fraudulent or excessive, but it is not dispositive. Based on this principle, the Court reasoned that the fact Ms. Richard only recovered approximately $40,000 for her attendant care claim, for which she initially demanded $6 million, was evidence that the initial claim may have been excessive. However, the Court reasoned that despite this evidence, the trial court did not abuse its discretion in determining that under MCL 500.3148(2), Ms. Richard’s claim was not “fraudulent or so excessive as to have no reasonable foundation.”
The Court of Appeals also rejected Ms. Richard’s argument that the trial court erred in denying her request for attorney fees under MCL 500.3148(1). In rejecting Ms. Richard’s argument, the Court recognized that under the Supreme Court’s holding in Ross v Auto Club Group, 481 Mich 1 (2008), the fundamental question in determining whether Allstate’s refusal to pay was unreasonable under MCL 500.3148(1) was not dependent on whether Allstate was ultimately held responsible for the benefits, but whether Allstate’s initial refusal to pay the claim was reasonable. The Court further recognized that under the Supreme Court’s holding in Moore v Secura Ins Co, 482 Mich 507 (2006), a refusal to pay benefits is not unreasonable if it is based on a bona fide factual uncertainty. Based on these principles, the Court of Appeals found that the trial court did not abuse its discretion in denying Ms. Richard’s claim for attorney fees because there was a bona fide factual uncertainty regarding the authenticity of the claim based on the fact that Allstate’s doctor determined that Ms. Richard’s was exaggerating her symptoms and that she never provided Allstate with any medical authorizations at the time of her claim to allow Allstate to obtain any additional medical information from Ms. Richard. In this regard, the court held:
“In sum, the trial court did not clearly err when it determined that defendant’s denial of plaintiff’s claim was reasonable under the circumstances. Defendant was presented with a claim for benefits for an accident that occurred 14 years earlier, when there were no other claims during this intervening period. Then, after defendant requested that plaintiff submit to an examination, defendant was informed by Dr. Fergison that plaintiff’s results were consistent with one who was exaggerating her symptoms. All of these facts combined with the fact that plaintiff never provided a signed medical record authorization created a bona fide factual uncertainty regarding the authenticity of the claim. Thus, we are not left with a definite and firm conviction that the trial court erred. Consequently, the trial court did not abuse its discretion when it denied plaintiff’s request for attorney fees.”
The Court of Appeals further explained that Ms. Richard’s reliance on the case of Tinnin v Farmers Ins Exch, 287 Mich App 511 (2010) was misplaced. The Court explained that in Tinnin, the insurer failed to clarify the results of its physician report that did not specifically address whether it was reasonable for the insurer to obtain the treatment in question and, further, that the physician in Tinnin testified that he believed it was reasonable for the insurer to continue to receive the treatment on an as-needed basis. The Court reasoned that the situation in this case was distinguishable on the grounds that the Allstate’s expert never agreed that Ms. Richard’s condition was related to the injuries she sustained in the subject accident, nor did it agree that Ms. Richard’s required the medical and attendant care services at issue. Furthermore, Allstate’s expert found that Ms. Richard’s testing results were consistent with one who was exaggerating or malingering her symptoms. Therefore, the court found that the adjuster in this case was not acting in the same unreasonable manner as the adjuster in Tinnin. In this regard, the Court held:
"Contrary to plaintiff’s assertion, Dr. Fergison’s true opinion was not “the opposite” of what the claims adjuster thought the report read. Essentially, the claims adjuster interpreted the report as stating that plaintiff was exaggerating, malingering, or had a pre-existing condition, while Dr. Fergison merely stated that plaintiff’s results were consistent with one who was exaggerating, malingering, or had a pre-existing condition. The difference between these two views is slight. Therefore, Tinnin is not persuasive for plaintiff’s position. It is important to note that defendant was skeptical of plaintiff’s claim for benefits because this claim came after a 12-year period in which plaintiff had no claims whatsoever related to the accident. Thus, when the claims adjuster saw Dr. Fergison’s report, it reinforced the belief that plaintiff’s current claim was not related to the 1991 accident.”
The Court further rejected Ms. Richard’s argument based on the unpublished Opinion in Spencer v State Farm Mut Auto Ins Co, on the basis that Spencer was based on the principle that an insurer is unreasonable when it fails to attempt to reconcile conflicting opinions or make an inquiry beyond its own IME opinion, which principle was explicitly overruled by the Supreme Court in Moore v Secura Ins Co.
Lastly, the Court of Appeals rejected Ms. Richard’s argument that Allstate acted unreasonably because it relied upon an IME report from a psychologist, as opposed to a physician. In making this argument, Ms. Richard argued that MCL 500.3151, a no-fault insurer is only entitled to request an IME from a physician. In rejecting this argument, the Court of Appeals recognized that it may have been prudent for Ms. Richard’s to object to the IME based upon the fact that it was being performed by a psychologist, as opposed to a physician. However, the fact Ms. Richard’s did not object to the IME did not make it unreasonable for Allstate to rely upon the IME report in denying Ms. Richard’s claim for benefits. In this regard, the Court held:
“However, plaintiff is reading more into the statute than there is. The purpose of the statute is apparent from the plain and ordinary meaning of the words. The statute simply mandates that a person who seeks PIP benefits “shall submit to mental or physical examination by physicians.” This statute does not speak to or limit which evaluations an insurer can rely on in making its determinations. Thus, under MCL 500.3151, plaintiff may have been rightfully able to decline the examination with Dr. Fergison since he was not a physician. See People v Beckley, 434 Mich 691, 728; 456 NW2d 391 (1990) (recognizing that psychologists are different than physicians), citing People v LaLone, 432 Mich 103, 109; 437 NW2d 611 (1989); see also MCL 600.2157 (identifying physician-patient privilege) and MCL 333.18237 (identifying psychologist-patient privilege). However, plaintiff did not object and instead proceeded with the examination. There is nothing inherently unreasonable about relying on a psychological report when the insured is complaining of psychological problems. In fact, plaintiff relied on an evaluation and report done by Dr. Applebaum, also a psychologist, in support of her case.”
