Michigan Court of Appeals; Docket No. 136378; Published
Judges Brennan, Reilly, and Danhof; Unanimous; Per Curiam
Official Michigan Reporter Citation: 203 Mich App 331; Link to Opinion 
STATUTORY INDEXING:
Requirement That Benefits Were Unreasonably Delayed or Denied [§3148(1)]
Presumption of Unreasonableness [§3148]
Bona Fide Factual Uncertainty / Statutory Construction Defense [§3148]
TOPICAL INDEXING:
Civil Judgments and Interest (MCL 600.6013)
CASE SUMMARY:
In this per curiam published Opinion, the Court of Appeals upheld an award of attorney fees under §3148 for delay/denial of no-fault benefits to the injured plaintiff, and also upheld the decision of the trial court to pay RJA statutory interest under MCLA 600.6013 to commence only from the date that the denial in payment of no-fault benefits began, rather than from the date of filing of the original complaint.
Plaintiff sustained injuries in an automobile accident resulting in quadriplegia. He required rehabilitation services which he obtained from Professional Rehabilitation Associates (PRA). He also required 24-hour a day home care services. Although Auto Club paid for plaintiffs medical and home care costs, it did not pay for PRA's services, nor did it pay for a specially equipped van recommended by PRA. For these refusals to pay, plaintiff commenced an action against Auto Club in February 1987. In August 1988, Auto Club reduced its reimbursement for plaintiffs nursing and home care to payment for 8 hours instead of 24 hours per day. In response to this, plaintiff amended his complaint to include a claim seeking recovery of the full 24-hour per day home care, as well as payment of some additional incidental expenses including an experimental home therapy treatment unit At trial, the jury found Auto Club liable for the rehabilitation costs, nursing and home care expenses, and for certain of the expenses related to the experimental home treatment.
After trial, the trial judge awarded interest on the unpaid nursing and home care expenses. However, he rejected plaintiffs argument that the interest should be calculated as of the date of the original complaint, and instead, ordered that interest under MCLA 600.6013 commenced from the date that Auto Club commenced its delay in payment of the full 24-hour per day home care. The trial court also awarded attorney fees under §3148(1) based upon Auto Club's unreasonable failure to pay PRA s expenses, the experimental home treatment expense, and the full nursing and home care expenses.
With regard to the attorney fee award, the court held that the trial court did not clearly err in awarding these attorney fees. A refusal or delay in payment by an insurer will not be found unreasonable under the no-fault act where it is the product of a legitimate question of statutory construction, constitutional law, or a bona fide factual uncertainty. Under the authority of Bloemsma v Auto-Club, 174 Mich App 692 (1989), however, the Court of Appeals held that where there is a delay or refusal to pay benefits, a "rebuttal presumption arises of unreasonableness" such that the insurer has the burden to justify the refusal or delay.
The court held that the trial judge could reasonably have concluded that Auto Club made a policy decision to disallow any payment to PRA without separately evaluating the reasonable necessity of some of the services provided by PRA. The trial court found that this "blanket denial" of all payment to PRA was unreasonable. The Court of Appeals agreed with the trial judge that the fact that PRA provided some services which Auto Club may have had a bona fide reason for disputing does not justify making no payment.
With regard to the reduction from 24 hours to 8 hours per day of home care, the court held that the record showed that there was no basis for reducing coverage for daily care from 24 hours. With regard to the expenses for the experimental home therapy unit, the Court of Appeals held that this was a close call, but that the trial court did not clearly err in finding Auto Club's refusal to pay unreasonable.
With regard to the issue of commencement of interest, the Court of Appeals affirmed the trial court decision to award interest only from the date that the denial began, rather than from the earlier date of filing of the original lawsuit The Court of Appeals held that if it were clear in this case that the plaintiffs entitlement to interest related to a claim that was stated in the original complaint then the court would award interest as of the original filing of the lawsuit However, since the reduction in home care benefits occurred more than two years following the original filing of the lawsuit the Court of Appeals did not feel it was appropriate to award interest on a claim which did not arise until well after the original complaint was plead. On this basis, the Court of Appeals decision with regard to RJA interest was affirmed.
