Michigan Court of Appeals; Docket #322565; Published
Judges Gadola, Jansen, and Beckering; Unanimous; Per Curiam
Official Michigan Reporter Citation: 312 Mich App 374 (2015); Link to Opinion 
On 5/25/2016, the Michigan Supreme Court directed the clerk to schedule mini-oral arguement on whether to grant the application for leave to appeal; Link to Order
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Uniform Trade Practices Act [UTPA – MCL 500.2001, et seq.]
Underinsured Motorist Benefits
CASE SUMMARY:
In this unanimous published per curiam Opinion, the Court of Appeals held that plaintiffs were not entitled to Uniform Trade Practices Act (UTPA) interest on an underinsured motorist claim, because the claim was reasonably in dispute within the meaning of MCL 500.2006(4).
Plaintiff in this case was the personal representative of George and Thelma Nickola, who were injured in an auto accident. Defendant MIC General Insurance was the Nickolas’ no-fault insurer and denied their claim for UIM benefits, alleging the threshold for noneconomic tort recovery under MCL 500.3135 could not be established. MIC then denied the Nickolas’ written arbitration demand, claiming that both parties had to agree to arbitrate. The reasons for MIC’s denial in the face of the policy’s arbitration clause were not clear from the record. The Nickolas brought a declaratory action and the trial court ordered arbitration. The Nickolas then filed a motion for sanctions and the trial court ordered the Nickolas to provide a list of costs and expenses, as well as attorney fees. For unexplained reasons, the case languished for six years, during which time the Nickolas died. Plaintiff was appointed PR of their estates. The case eventually arbitrated and the panel awarded $80,000 for George’s injuries and $33,000 for Thelma’s injuries. The trial court denied the plaintiff’s motion for sanctions and affirmed the arbitration award.
In considering whether plaintiff was entitled to UTPA interest, the Court of Appeals first validated the plaintiff’s right to pursue UTPA interest in a quasi-third-party tort claim against the insurer. The court clarified that, in this circumstance, the “reasonably in dispute” language in MCL 500.2006(4) applied.
The Court of Appeals then concluded that plaintiff’s UIM claim was reasonably disputed. In so finding, the court observed:
“[C]ontrary to plaintiff’s alternative contention on appeal, the claim in this case was reasonably in dispute. Even assuming plaintiff could establish a threshold injury, plaintiff’s UIM claim needed to show that the injuries suffered by George and Thelma exceeded the amount of the settlement with Smith. … Given George and Thelma’s respective ages, preexisting conditions, and the nature of the injuries alleged in this case, the amount of damages, if any, that they were entitled to beyond that received from Smith was a matter of reasonable dispute. Thus, the trial court did not err by denying penalty interest under MCL 500.2006(4).”
Regarding plaintiff’s request for sanctions under MCR 2.114, the Court of Appeals said:
“The trial court’s 2006 order … stated that ‘Plaintiff shall supply to the Court and to counsel for Defendant its list of costs and expenses, as well as attorney fees. Plaintiff never complied with that order. … Plaintiff’s failure to comply with that order, despite having years to do so, is tantamount to waiver of this issue. … Where plaintiff repeatedly failed to comply with the trial court’s order to provide documentation of his attorney fees for the pertinent time period, it is difficult to fault the trial court for failing to award those fees as a sanction under MCR 2.114. Indeed, plaintiff had over eight years to supply the requested fees, but never did so.”
In conclusion, the Court of Appeals declined to address the prejudgment interest issue, because judgment had not yet been entered on the arbitration award.
