Michigan Court of Appeals; Docket #319454; Published
Judges Saad, Owens, and K.F. Kelly; Unanimous; Opinion by Judge Saad
Official Michigan Reporter Citation: 309 Mich App 387; Link to Opinion 
STATUTORY INDEXING:
Allowable Expenses for Products and Medical Equipment [§3107(1)(a)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous published Opinion written by Judge Saad, the Court of Appeals held that a no-fault insurer was not responsible for payment of medical expenses of which it had been informed after entering into a settlement agreement with the claimant, because the settlement did not involve any fraud, mutual mistake, or duress.
Plaintiff sustained injuries in two car accidents and settled a PIP claim with her insurer, defendant Progressive Insurance. The settlement provided that all PIP benefits incurred as of Nov. 5, 2013, were settled in exchange for $78,000 and also provided a waiver of all future claims. Several days after the agreement was executed, plaintiff received an outstanding medical bill for more than $28,000. Plaintiff then sought to have the universal settlement agreement voided, claiming there was a unilateral mistake of fact because she was unaware of the outstanding bill at the time she agreed to the settlement. The trial court ruled the settlement did not include the medical bill, and the invoice had to be pursued through separate litigation. Otherwise, the trial court found the settlement agreement was in “full force and effect” and was a “final agreement.”
The Court of Appeals reversed, finding the trial court erred in holding that the $28,942 medical bill was not included in the settlement agreement.
In so holding, the Court of Appeals applied basic contract principles. The court emphasized that settlement agreements cannot be modified except for fraud, mutual mistake, or duress, and that none of these applied in this case. The court said:
“Here, the parties agreed to a settlement in a series of clear, unambiguous e-mails exchanged on November 5, 2013, which state that the settlement included all PIP ‘benefits [incurred] to date.’ Plaintiff incurred the $28,942 expense … in May 2013, when she had shoulder surgery at Synergy’s facilities. The cost of using Synergy’s facilities for plaintiff’s shoulder surgery is a PIP benefit. Synergy’s invoice for $28,942 is thus included in the November 5, 2013 settlement, which, again, encompassed all PIP benefits incurred to date. The trial court therefore erred when it held that the $28,942 was not a part of the settlement agreement, and that plaintiff could pursue this sum through separate litigation against Progressive.”
The Court of Appeals noted that plaintiff did not allege fraud or duress in her complaint. And while it appeared that plaintiff argued mutual mistake (claiming she did not know about the outstanding $28,000 medical bill), the court said this argument was “without merit.” The court reasoned:
“This assertion is not a ‘mutual mistake’ for two reasons: (1) Progressive supposedly had knowledge of the alleged ‘mistake,’ meaning that it cannot be ‘mutual’; and (2) plaintiff’s lack of knowledge of the $28,942 Synergy billing cannot be a ‘mistake’ in the context of the settlement agreement’s plain terms. Moreover, the fact that she and her lawyer knew of the charge for the surgery undermines any claim of mistake about related charges.”
In conclusion, the Court of Appeals emphasized the responsibilities of plaintiffs’ and defense counsel during the settlement process. The court said:
“Before a plaintiff settles a case for all charges incurred to date, it is incumbent upon the plaintiff’s attorney to ensure that he and his client consider all possible claims, so that the client makes an informed settlement. It is the lawyer’s professional duty to ensure that his client is fully advised and aware of all the ramifications of such a settlement. And here, this means that plaintiff’s trial attorney should have advised her that the settlement at issue wiped the slate clean before November 5, 2013. This professional obligation is the core duty of the plaintiff’s lawyer — not the opposing party or its counsel. If the plaintiff’s lawyer fails to fulfill this obligation — and does not ensure that he and his client consider all possible claims before signing a settlement agreement — the lawyer cannot shift this responsibility to the opposing party or opposing counsel. To do so would ignore the nature of contested litigation and the adversarial process, as well as the obligations of opposing counsel, which entail zealous representation of his client, not consideration of whether the plaintiff has thought of all the possible implications of a settlement agreement.”
Accordingly, the Court of Appeals remanded the case for entry of an order to enforce the settlement agreement.
