Michigan Court of Appeals; Docket No. 205153; Unpublished
Judges Hood, Holbrook, Jr., and Whitbeck; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Allowable Expenses: Incurred Expense Requirement [§3107(1)(a)]
Requirement That Benefits Were Overdue [§3148(1)]
Requirement That Benefits Were Unreasonably Delayed or Denied [§3148(1)]
TOPICAL INDEXING:
Not applicable
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion, the Court of Appeals reversed an award of attorney fees in favor of plaintiff conservator under section 3148 of the act, in a first-party PIP lawsuit brought by the plaintiff conservator to compel defendant insurer to pay for a piece of medical equipment that had been prescribed by the treating physician of plaintiff s ward, David Mantei. The piece of equipment, referred to as a Dynavox machine, was designed to help patients with severe speech deficits communicate with others. The Dynavox had been rented by defendant American Fellowship for David Mantai's trial use. David's medical providers recommended that the unit be purchased. Plaintiff conservator's counsel then filed suit against American Fellowship. Prior to filing suit, plaintiff conservator had not purchased or otherwise become liable for the expense of the Dynavox unit, nor had defendant American ever received an invoice or other document indicating that plaintiff conservator had incurred the expense of the unit. Moreover, plaintiff conservator did not actually receive the purchased Dynavox unit until after litigation had begun. After plaintiff conservator received the machine, an invoice was sent to defendant American Fellowship who paid for the machine after receiving additional documentation confirming David Mantei's need for the unit. The Court of Appeals reversed the trial court's award of attorney fees on the basis that "the Dynavox claim was not incurred by the conservator and did not become an allowable expense that rendered benefits payable under section 3107(l)(a) prior to defendant paying the Dynavox claim. Therefore, there were no overdue benefits upon which to base an award of attorney fees under section 3148(1)."
The Court of Appeals also held that an award of attorney fees was not proper because there was no evidence of an unreasonable delay in payment, as required by section 3148. The court rejected the concept that an insurance company unreasonably delays in making payment of a claim, simply because the benefits are paid after litigation has begun. Citing Shanafelt v Allstate Insurance Company [Item No. 1864], the court stated:
"It is well settled that when considering whether attorney fees are warranted under the no-fault act, the primary inquiry is not whether coverage is ultimately determined to exist, but whether the insurer^ initial refusal to pay was unreasonable.... The trial court presumably only considered the general language of section 3148(1) and failed to realize that basic to an award of attorney fees is an initial determination that the insurer's refusal to pay or delay in making payment was unreasonable."
Therefore, the award of attorney fees was reversed.
