Michigan Court of Appeals; Docket No. 63243; Published
Judges Danhof, Allen, and Hansen; Unanimous; Per Curiam
Official Michigan Reporter Citation: 129 Mich 211; Link to Opinion 
STATUTORY INDEXING:
Requirement That Benefits Were Unreasonably Delayed or Denied [§3148(1)]
Conduct Establishing Unreasonable Delay or Denial [§3148]
Calculating Attorney Fees Not Based on Contingent Fee [§3148]
TOPICAL INDEXING:
Extra Contractual / Mental Anguish Damages
CASE SUMMARY:
In this unanimous per curiam Opinion, the Court of Appeals made the following holdings. First, relying on the Supreme Court's opinion in Kewin v Massachusetts Mutual (item number 338) and other Court of Appeals decisions, the Court held that mental anguish damages were not recoverable in a cause of action for breach of a no-fault insurance contract. The Court held that no-fault contracts are "commercial contracts involving nothing more than a promise to pay a sum of money upon the happening of certain contingencies, breach of which cannot give rise to a claim for damages for mental anguish." The Court went on to say that a "plaintiff’s remedy for its insurer's bad faith refusal to perform a no-fault insurance contract is limited to recovery of actual attorney fees and interest as-provided in §3148 and §3142."
Second, the Court ruled that plaintiff’s tort claim for intentional infliction of emotional distress should have been dismissed by summary judgment in favor of defendant for the reason that plaintiff alleged no more than a failure of defendant to discharge its contractual obligations under the no-fault act. The Court held that an insurance company is not liable for intentional infliction of emotional distress where they do no more than "insist upon legal rights in a permissible way," even though such insistence is certain to cause emotional distress. The Court stated, "while plaintiff alleges extreme and outrageous and reckless conduct, the conduct complained of in paragraph five, i.e. requests for verification of services, falls far short of the conduct which is considered tortiously outrageous."
Third, the Court upheld the trial court's ruling that plaintiff was entitled to recover attorney fees under §3148 of the Act for that portion of plaintiff’s claim which dealt with defendant's refusal to pay replacement service expenses in the amount of $20 per day. In affirming the finding of an "unreasonable refusal or delay," the Court noted that prior to trial defendant had clearly considered the amount of $15 per day a reasonable amount with respect to the value of the replacement service claim but failed to pay the $15 per day until almost five and a half months after it rejected the claim for $20 per day. The Court stated, "thus defendant did not have good cause to delay in making payments of at least $15 per day."
Fourth, even though affirming the propriety of an award of attorney fees on the replacement service expense claim, the Court vacated the trial court's actual award of attorney fee for the reason that the trial court did not consider, on the record, any of the six factors adopted by the Supreme Court in Wood v DAIIE (item number 535) for determining the reasonableness of attorney fees. In remanding the case for evidentiary hearing on the attorney fees, the Court commented that it questioned whether or not plaintiff’s counsel had accurately segregated time spent on the intentional infliction of emotional distress claim from the time submitted to the Court regarding the replacement services claim. The Court also said that while not determinative, the contingent fee agreement between plaintiff and plaintiff’s attorney should have been considered in determining the reasonableness of the fee.
