Michigan Court of Appeals; Docket No. 132584; Unpublished
Judges Doctoroff, Michael J. Kelly, and Tyner; ________; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
12% Interest Penalty on Overdue Benefits – Nature And Scope [§3142(2), (3)]
Requirement That Benefits Were Unreasonably Delayed or Denied [§3148(1)]
Penalty Attorney Fees and Other Court Rule Sanctions [§3148]
General / Miscellaneous [§3159]
TOPICAL INDEXING:
Civil Judgments and Interest (MCL 600.6013)
Evidentiary Issues
CASE SUMMARY:
In this unpublished per curiam decision, the Court of Appeals upheld an award of penalty interest and attorney fees in a suit involving no-fault first party benefits.
Plaintiff sustained serious injuries in a motorcycle accident that occurred in April, 1987. Prior to the accident, he had been employed at Ford Motor Company, but had been disabled due to back pain from a work-related injury. At the time of the accident, plaintiff had been receiving workers' compensation benefits. In October, 1987, however, some five months after the accident, plaintiff was offered a position with Ford Motor Company that he could have performed with his work-related disabilities, but was unable to take the job because of his motorcycle accident injuries. The defendant no-fault insurer refused to pay work loss benefits, claiming that the work loss was not due to the motorcycle accident injuries. In addition, plaintiff had submitted charges for medical treatment for allowable expense benefits. Shortly thereafter, defendant hired an auditor to review the claim for medical charges. However, the claim was not paid until over seven months from the date of submission.
Plaintiff filed suit seeking work loss and allowable expenses benefits. After plaintiff prevailed at trial, defendant insurer appealed. The Court of Appeals addressed several issues in its opinion.
The trial court gave the jury an instruction providing that once an insured proves that the reasonableness and necessity of an allowable expense, the insurer is responsible for no-fault penalty interest, regardless of whether the insurer acts in good faith. The court rejected defendant's claim that the challenged instruction misstated the plaintiff’s duty to prove defendant's liability for allowable expenses.
The defendant also challenged a jury instruction given by the court, sua sponte, of defendant insurer's right to discovery concerning an injured person's earnings, history, condition and treatment under §3159. While defendant's "discovery" rights were not at issue in this case, the Court of Appeals found the trial court's instruction in this regard to constitute harmless error.
Defendant also claimed that the trial court erred in refusing to make a workers' compensation offset against plaintiffs work loss benefits, notwithstanding the fact that plaintiffs employer had terminated the workers' compensation payments. The court held that the plaintiff had no duty to contest or appeal his employer's decision to terminate workers' compensation benefits. The Court of Appeals also found that there was sufficient evidence to support plaintiff’s contention that the work loss was directly attributable to the motorcycle accident.
The Court of Appeals upheld an award of pre-judgment interest under the Revised Judicature Act, including interest on the amount of all claims from the date the complaint was filed, even though some of the claims were not due until a time period after the date the complaint had been filed. The Court of Appeals also upheld an award of attorney fees under §3148 of the No-Fault Act, finding that it was not clearly erroneous for the trial court to conclude that the denial of benefits was unreasonable. With respect to the allowable expenses, the defendant's auditor admitted that the audit of the medical charges could have been completed based solely upon the materials submitted by plaintiff, rather than those materials obtained by the auditor, and the court found this sufficient to justify the trial court's award of attorney fees.
Finally, the Court of Appeals held that the trial court properly awarded double attorney fees under both the mediation rules and the No-Fault Act The court found that double attorney fees is permissible under two provisions of law where each provision serves an independent purpose. Here, the mediation attorney fee sanction imposes the burden of litigation costs upon the party who insists upon trial by rejecting a mediation award, whereas the No-Fault Act sanction provisions are designed to encourage no-fault insurers to pay proper claims for PIP benefits in a timely manner.
