Michigan Court of Appeals; Docket #308359; Unpublished
Judges Jansen, K.F. Kelly, and Servitto; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Allowable Expenses for Attendant Care [§3107(1)(a)]
Insurer’s Right to Penalty Attorney Fees for Fraudulent/Excessive Claims [§3148(2)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous per curiam unpublished Opinion dealing with jury instructions, the Court of Appeals issued three separate rulings: 1) the trial court properly denied giving a standard jury instruction on the common-law tort of fraud because this case was not a tort action; 2) the trial court correctly refused to give the jury an instruction on penalty attorney fees under MCL 500.3148(2) because the court, not the jury, determines whether such fees are appropriate; and 3) the insurer was entitled to a special jury instruction on fraudulent insurance claims because the insurer had asserted fraud as an affirmative defense and testimony conflicted about whether the insured had submitted an excessive claim.
Plaintiff was injured in a car accident and brought a claim against defendant, his no-fault insurer, for PIP benefits. Defendant raised fraud as an affirmative defense, and asked the trial court to give the jury a fraud instruction concerning plaintiff’s claim for benefits. The trial court denied defendant’s request and the jury returned a verdict for plaintiff. Plaintiff filed a motion for attorney fees, which the trial court granted.
Regarding the standard jury instruction on the tort of fraud, the Court of Appeals said the trial court did not err by refusing to give the jury a modified version of M Civ JI 128.01. This case was not a tort action where damages were being sought for fraud, the court said, and so the standard jury instruction was inapplicable.
As for the award of penalty attorney fees under §3148(2), which allows an insurer to recover fees if an insured’s claim is fraudulent or excessive, the Court of Appeals said the trial court properly refused to instruct the jury in this regard. The proposed jury instruction said:
“The defendant in this matter may be allowed an award of a reasonable sum against a claimant as an attorney fee for the insurer’s attorney in defense against a claim that was in some respect fraudulent or so excessive as to have no reasonable foundation. If you find that Dorian Carter submitted a claim that was so excessive or fraudulent as to lack a reasonable foundation, you may find that Liberty Mutual Group is entitled to an award.”
The Court of Appeals explained that §3148(2) says it is in the court’s discretion whether to award a reasonable fee. The court said:
“Because whether attorney fees may be awarded under the statute is for the court, not the jury, to resolve, defendant was not entitled to the special proposed jury instruction. The trial court thus did not err in declining to give this instruction.”
Regarding the special instruction on fraudulent insurance claims, the Court of Appeals said there was sufficient evidence to justify this instruction because testimony conflicted about whether plaintiff had submitted a claim that was excessive and whether he engaged in fraudulent conduct. The court said:
“[T]he issue of whether plaintiff submitted fraudulent claims to plaintiff should have been presented to the jury on the verdict form. … Again, because defendant presented fraud as an affirmative defense and the evidence at trial supported the defense, a question of fact concerning whether plaintiff submitted fraudulent claims for benefits to defendant was created and this issue should have been submitted to the jury.”
Therefore, the appeals court said the following jury instruction on fraud should have been given:
“If you find that Plaintiff submitted a claim that is in some respect so excessive as to have no reasonable foundation, you may find that Plaintiff submitted a fraudulent claim to Defendant.”
Accordingly, the Court of Appeals vacated the jury verdict and remanded the case for a new trial. Because the verdict was vacated, the court also vacated the award of attorney fees under §3148(2).
