Michigan Court of Appeals; Docket No. 98373; Published
Judges Holbrook, Jr., Murphy, and Grathwohl; Unanimous; Per Curiam
Official Michigan Reporter Citation: 174 Mich App 692; Link to Opinion 
STATUTORY INDEXING:
Requirement That Benefits Were Unreasonably Delayed or Denied [§3148(1)]
Presumption of Unreasonableness [§3148]
Conduct Establishing Unreasonable Delay or Denial [§3148]
Bona Fide Factual Uncertainty / Statutory Construction Defense [§3148]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous, published per curiam Opinion, the Court of Appeals reversed and remanded a trial court finding regarding interest and attorney fees on delayed payment of no-fault first party benefits. The plaintiff was injured in a moped accident, and incurred allowable expenses exceeding $18,000. Plaintiff made timely application for benefits, and submitted proof that there was no insurance coverage for the moped and that the only other coverage was through a fleet insurance policy provided by Auto-Owners Insurance.
The defendant, Auto-Club, contended that payments should be made by the fleet coverage, and thus delayed from July 1985 until February 1986, in paying the hospital and other medical expenses. By the time of trial in December 1986, the only remaining unpaid expenses were replacement service charges for transporting plaintiff to his physical therapist. The trial court awarded these expenses, along with penalty interest in the amount of $386 and judgment interest. The trial court found that the delay in payment by defendant was "reasonable," with the exception of payment for the transportation expenses. An attorney fee of $300 was awarded for the delay in payment of the transportation expenses.
In reversing the trial court, the Court of Appeals held that where benefits are not paid within the statutory period, a rebuttable presumption of unreasonable refusal or undue delay arises. A dispute of priority among insurers will not excuse the delay in making payment. Bach v State Farm (Item No. 763).
In this case, the court held that there was no legitimate question of statutory construction, and the only reason for the delay was apparently a "dispute over priority between defendant and the fleet insurance carrier. The evidence below suggested that the defendants' reason for delaying payment was to prod plaintiff's attorney into withdrawing the lawsuit." On remand, the trial court was instructed to award a reasonable attorney fee to plaintiff.
The court also held that the penalty interest and judgment interest had not been calculated correctly, and remanded for proper calculation of interest.
