Michigan Court of Appeals; Docket # 325606; Unpublished
Judges M.J. Kelly, Cavanagh, and Shapiro; Unanimous, Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion, the Court of Appeals held that State Farm was obligated to pay plaintiffs’ attorney fees pursuant to MCL 500.3148, because State Farm unreasonably refused to pay plaintiffs’ claim for physical therapy treatment after her auto accident. The Court of Appeals further held the trial court acted properly in refusing to substantially discount the attorney fees, because the jury had awarded plaintiffs only a fraction of the damages that it believed were owed.
Plaintiff sought PIP benefits from defendant State Farm after suffering injuries in an auto accident. Intervening plaintiff, Therapy First, provided plaintiff physical therapy services after the accident. State Farm paid benefits for a portion of plaintiff’s physical therapy treatment, but denied the remainder of plaintiff’s claims. Plaintiff filed suit seeking coverage, and a jury found that plaintiff incurred replacement services and that certain benefit payments were overdue. The jury also found that Therapy First incurred allowable expenses and that payment of those expenses was overdue. The trial court then awarded attorney fees to plaintiffs, holding that State Farm unreasonably delayed payment.
In State Farm’s first appeal, the Court of Appeals remanded the case, finding the trial court did not make specific findings as to whether State Farm’s decision to deny benefit payments was unreasonable under §3148. On remand, the trial court held that State Farm unreasonably refused to pay and unreasonably delayed payment.
State Farm appealed a second time, arguing that it was not liable for attorney fees under §3148 because its refusal to pay was reasonable. The Court of Appeals disagreed, finding the trial court properly ordered State Farm to pay attorney fees.
In making its decision, the Court of Appeals noted that State Farm emphasized it has a right to contest a claim without penalty when there is a reasonable dispute about a claim, and that it is not obligated to reconcile conflicting opinions. In this regard, the Court said it was for the trial court to determine the weight and credibility to be afforded the evidence and, in this case, the trial court did not believe State Farm’s claim representative’s assertion that she denied the claim because there was conflicting medical evidence. The Court concluded:
“The trial court did not improperly impose a duty on State Farm to resolve a purported conflict in the medical evidence. Because the medical reports were not inherently contradictory, the trial court could reasonably find that [the claim representative’s] stated ground for initially refusing to pay the claims was not worthy of belief. This Court defers to the trial court’s superior ability to judge the testimony and evidence. … [W]e are not left with the definite and firm conviction that the trial court erred when it found that State Farm’s decision to deny the claims at issue was unreasonable under the totality of the circumstances. … Consequently, we affirm the trial court’s decision to award attorney fees under MCL 500.3148(1).”
The Court of Appeals then turned to whether the amount of attorney fees was appropriate. In this regard, the Court noted the key question was whether the fee was reasonable under the totality of the circumstances, and pointed out the trial court correctly examined the fee factors in Wood v Detroit Auto Inter-Ins Exchange, 413 Mich 573 (1982).
Based on the foregoing, the Court of Appeals held that a trial court is not obligated to reduce a fee simply because the jury awards less than the plaintiff requested at trial. Rather, the Court said the relevant inquiry is whether the trial court abused its discretion when, after considering all the relevant factors, it determined that the particular fee awarded was reasonable.
Applying this standard to the present case, the Court of Appeals affirmed the fee amount, concluding the award fell within the range of reasonable and principled outcomes.
