Michigan Court of Appeals; Docket No. 119004; Unpublished
Judges Murphy, Holbrook, and Maher; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Requirement That Benefits Were Unreasonably Delayed or Denied [§3148(1)]
Presumption of Unreasonableness [§3148]
Calculating Attorney Fees Not Based on Contingent Fee [§3148]
General / Miscellaneous [§3148]
TOPICAL INDEXING:
Attorney Fee Liens
CASE SUMMARY:
In this per curiam Opinion, the Court of Appeals rendered several significant holdings regarding the recovery of attorney fees under §3148 of the statute. First, the court held that the claimant's attorney is a proper party to maintain a lawsuit against a no-fault insurer for attorney fees under §3148. Consequently, when an attorney is retained to represent a claimant to recover no-fault benefits and, as a result of the labor of the attorney, benefits are paid and the attorney is then discharged by the claimant without paying the attorney's fee, the attorney may sue the no-fault insurer directly to recover the attorney fee, if the attorney placed the insurer on notice of an attorney lien on the benefits prior to the time they were paid. It is then for the court to decide whether or not the payment of benefits to the claimant was unreasonably denied or unreasonably delayed. This is a function for the trial court, not the trier of fact.
Second, the court affirmed its earlier holding in Conway v Continental Insurance Company (Item No. 1327) that where payment is not made within 30 days after proof of loss is provided, such action gives rise to a rebuttable presumption of undue delay for purposes of §3148. If there is a factual dispute with regard to unreasonable delay, it is for the trial judge, not the jury, to resolve.
Third, the court held that Michigan recognizes a common law attorney’s lien on a judgment or fund resulting from an attorney's services and that the recovery of no-fault PIP benefits constitutes a fund to which such a lien would apply.
Fourth, in determining the amount of an attorney fee to award under §3148, the court held that it is proper to base the award on a one-third contingent fee agreement provided that the trial court considers the six factors articulated by the Supreme Court in Wood v DAIIE (Item No. 535) regarding the reasonableness of an attorney fee. The trial court is not limited to these factors, but they must be considered. A trial court's finding of reasonableness based upon this six-part test will only be reversed if there is an abuse of discretion. In this case, the majority found that there was an abuse of discretion because the trial judge based the award of attorney fees solely on the contingent fee agreement without considering any of the other factors. The court noted, "Although the contingent fee agreement may certainly be considered as a factor in determining the reasonableness of the fee, it is not in and of itself determinative." The court further stated that where an attorney is retained under a contingent fee agreement and then subsequently withdraws or is wrongfully discharged, the attorney fee is to be determined based upon quantum meruit and not the contingent fee agreement.
Judge Murphy concurred in part and dissented in part. He wished to emphasize the fact that when the trial court makes a new determination on remand concerning the amount of the attorney fee, the trial court is free to award plaintiff a one-third contingent fee after applying the six-part test. Judge Murphy was of the further opinion that the record in this case supported the fact that the trial court did in fact consider the six factors prior to making a finding on the amount of the attorney fee.
