Michigan Court of Appeals; Docket No. 64236
Judges Kelly, Shepherd, and Cooper; 2-1; Per Curiam
Official Michigan Reporter Citation: 137 Mich App 266; 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:
Not Applicable
CASE SUMMARY:
This 2-1 per curiam Opinion affirms a directed verdict in favor of plaintiff ordering defendant to pay $381 in medical expenses under §3107(a) of the Act and awarding attorney fees in favor of plaintiff under §3148 at the rate of $75 per hour for 95.5 hours of legal services rendered in obtaining recovery of the $381 medical expense.
Plaintiff sustained back injuries in an automobile accident which occurred in December of 1975. In 1976, the plaintiff underwent spinal surgery for removal of a ruptured disc. Plaintiff treated with her orthopedic surgeon until April of 1977, at which time the doctor released her from any further treatment because he could do nothing more to treat her continuing complaints of pain and discomfort Plaintiff then began treating with another orthopedic surgeon who testified that plaintiff was suffering from the residual effects of the automobile accident and surgery and that further medical treatment was reasonably necessary. Defendant refused to pay medical expenses incurred by plaintiff in treating with the second orthopedic surgeon (amounting to $381). Plaintiff sued defendant for recovery of these expenses and, in addition, included tort claims for intentional infliction of emotional distress and breach of fiduciary duty.
At trial, the trial court rendered a directed verdict in favor of plaintiff on her claim for medical expenses holding that no reasonable mind could differ that the medical expenses were reasonably necessary to plaintiffs recovery from the injuries sustained in the accident Defendant had offered no medical testimony to the contrary and based its denial of benefits on the fact that the accident had occurred two years prior to plaintiff's treatment with the second orthopedic surgeon and that the first specialist who terminated treatment was "very well qualified."
In addition to awarding directed verdict on the medical expenses, the trial court also found that defendant's refusal to pay the medical expenses was "unreasonable" and ordered defendant to pay attorney fees under §3148 at the rate of $75 per hour for 61 pre-trial hours and $150 per hour for 34.5 trial hours.
On appeal, the Court of Appeals affirmed the directed verdict for medical expenses noting that (1) defendant made no meaningful inquiries of the first physician regarding the reasonableness or unreasonableness of further treatment and (2) the fact that when plaintiff stopped seeing the first physician she was still experiencing pain as evidenced by his continued prescription of pain killing drugs. With respect to the timeliness of the subsequent medical treatments, the Court stated, "the fact that two years had elapsed since the accident, two years during which plaintiff received ongoing treatment for her injuries, and the fact that Dr. Posada [the first physician] terminated plaintiff’s treatment do not together create sufficient factual uncertainty to justify defendant's refusal pay plaintiff’s medical expenses."
With regard to the issue of attorney fees, the Court affirmed the trial court's finding that defendant's denial of benefits was "unreasonable." Among other things, the Court of Appeals noted that the trial court considered the six part test for an award of attorney fees set forth in Wood v DAIIE (item number 453), that the trial court had reviewed actual fee entries on a fee statement showing the amount of time spent on performing particular tasks, and that the trial court had excluded from the attorney fee award all hours spent pursuing plaintiff's ancillary tort claims. However, the Court of Appeals reversed as to the amount of the attorney fees on the basis that it did not believe that the attorney fee rate for trial time should be "double" the pre-trial rate of $75 per hour. Therefore, the Court reduced the amount of fees awarded to $75 per hour for all hours worked.
In affirming the attorney fee award, the Court rejected the defendant's claim that It was entitled to attorney fees for defending plaintiffs ancillary tort claims (intentional infliction of emotional distress and breach of fiduciary duty). The Court stated that §3148(2) does not entitle defendant to attorney fees for defending these issues because that provision only authorizes attorney fees in connection with defending claims for personal or property protection insurance benefits which are fraudulent, excessive or unreasonable. There was no evidence in the record to support defendant's contention that plaintiffs tort claims were of such a nature.
The Court also rejected defendant's argument that its offer of judgment for payment of medical expenses made pursuant to GCR 519 precluded an award of attorney fees. The Court noted that the attorney fees awarded to plaintiff under §3148 were part of the final judgment and therefore the final judgment was substantially in excess of the offer of judgment. Thus, GCR 519 did not preclude an award of attorney fees.
Judge Shepherd dissented from that aspect of the opinion which reduced the hourly rate for trial hours from $150 to $75 per hour. Judge Shepherd stated that while he is in no position to say that he would have granted such an amount, he did not believe the trial judge abused his discretion in awarding the higher figure for trial hours.
