Michigan Court of Appeals; Docket # 325873; Unpublished
Judges Owens, Borrello and Stephens; Unanimous, Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Allowable Expenses: Reasonable Charge Requirement [§3107(1)(a)]
Requirement That Benefits Were Unreasonably Delayed or Denied [§3148(1)]
Penalty Attorney Fees for Service Providers [§3148]
Providers Entitled to Charge Reasonable Amount for Services [§3157]
Providers May Not Charge No-Fault Insurers More Than Uninsured Patients [§3157]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion involving plaintiff-service provider’s claim for payment of MRI bills, the Court of Appeals held the circuit court erred in reversing a district court jury verdict in favor of plaintiff, on the ground that plaintiff had failed to establish the “customariness” of the MRI charges. In so holding, the Court found that customariness was not a contested issue at trial and, by failing to argue the customariness issue at the trial court level, defendant Farmers Insurance waived the issue and contributed to the error it alleged on appeal.
Aretha Robinson sought medical treatment from Dr. Tete Oniang’o, her physician, after being involved in a car accident. Dr. Oniang’o ordered MRIs of Robinson’s right shoulder and lumbar spine. The MRIs were performed at plaintiff’s facility. Plaintiff then billed defendant Farmers Insurance Exchange, Robinson’s no-fault insurer, $9,900 for both MRIs. Farmers denied the claim and plaintiff sued in district court to collect payment. At trial in district court, plaintiff’s medical director testified as to how the MRI charge was established, and also testified as to the amount charged by other MRI facilities. A district court jury returned a verdict for plaintiff. The district court then denied Farmers’ motion for JNOV and awarded plaintiff attorney fees under MCL 500.3148(1). On appeal, the circuit court reversed, finding that plaintiff failed to establish its burden of proof regarding the “customariness” of the MRI charges.
The Court of Appeals affirmed in part and reversed in part.
“Customariness” of Charges
Regarding the “customariness” of plaintiff’s charges, the Court of Appeals noted that plaintiff claimed this was an affirmative defense and Farmers waived the issue by not briefing it in the circuit court, not arguing it in the district court and not raising it during oral arguments in either court.
Citing MCL 500.3107(a) and MCL 500.3157, the Court of Appeals said:
“’[Plaintiff] bears the burden of proving both the reasonableness and the customariness of its charges ….’ Thus, plaintiff’s contention that customariness is an affirmative defense is not supported by case law. In fact, our Supreme Court and this Court have both held that plaintiff bears the burden of proving both reasonableness and the customariness of the charges. Accordingly, the circuit court did not err when it concluded that plaintiff had the burden of proof on this issue. However, such a finding does not end our inquiry. Although plaintiff had the burden of proving the customariness of its charges, the circuit court erred by reversing on the ground that plaintiff failed to establish its burden.”
The district court jury was not instructed on the customariness issue, the Court of Appeals explained, and defense counsel had indicated he was satisfied with the jury instructions. Further, the Court pointed out that Farmers did not raise the customariness issue until its motion for JNOV and, even then, it did not argue that plaintiff failed to show that its charges were the same as those in cases not involving insurance. The Court observed:
“Rather, … it was the circuit court that first focused on the insurance comparison. Moreover, at the time that defendant filed its motion for JNOV, the issue was already waived. We therefore conclude following our review of the record that customariness was not a contested issue at trial and by failing to contest the issue at trial, defendant invited or contributed to the error it now alleges. Accordingly, the circuit court erred by reversing on the ground that plaintiff failed to establish the customariness of the charges.”
Alternative Grounds
The Court of Appeals further rejected Farmers’ argument that the circuit court’s ruling should be affirmed because:
• Dr. Oniang’o’s discovery-only deposition was improperly presented to the jury;
• Dr. Oniang’o was not qualified to offer an expert opinion and, without his testimony, plaintiff could not meet its burden of proof;
• plaintiff failed to establish that the MRI services were actually incurred; and
• plaintiff failed to establish that the MRI charges were reasonable.
Regarding Dr. Oniang’o’s deposition, the Court of Appeals said there is not a “blanket prohibition” on using discovery-only depositions at trial. According to the Court, no court rule expressly excludes from trial depositions that are noticed for discovery-only purposes. In addition, the Court said the circuit court properly found that Dr. Oniang’o was unavailable under MRE 804(a)(5) and that Farmers had a sufficient opportunity to depose the doctor.
Regarding Dr. Oniang’o’s qualifications, the Court of Appeals emphasized that plaintiff did not seek to qualify the doctor as an expert at trial, and Farmers did not argue that the doctor’s testimony should be excluded because he was not an expert. The Court further pointed out that Dr. Oniang’o was an MD who specialized in non-surgical trauma and was Robinson’s treating physician. Accordingly, viewing the evidence in a light most favorable to plaintiff, the Court concluded the jury could find the MRIs were reasonable and necessary.
Regarding whether the MRI services were actually incurred, the Court of Appeals held the evidence (testimony, the MRI results and the MRI bills) established the services were, indeed, incurred.
Regarding whether the MRI charges were reasonable, the Court of Appeals held the jury could find the charges were reasonable based on the testimony of plaintiff’s medical director. “And even if there was no evidence of plaintiff’s customary charge, … defendant waived the customariness issue,” the Court stated.
Attorney Fees
Plaintiff claimed the circuit court erred in reversing the award of attorney fees under MCL 500.3148, based on the customariness issue. The Court of Appeals held that while the circuit court did err in this regard, there were other reasons to affirm the denial of fees. The Court held:
“Defendant does not dispute that the benefits were not paid within 30 days and, thus, were overdue. However, defendant argues that its refusal to pay was reasonable. The district court found that the jury had determined that defendant should not have denied the claim and, therefore, it concluded that plaintiff was entitled to attorney fees. … [T]he district court clearly erred by relying solely on the jury’s verdict and, instead, was required to consider whether there were bona fide factual uncertainties. … We conclude as a matter of law that defendant satisfied its burden of establishing that its refusal to pay plaintiff was based on bona fide and legitimate factual uncertainties. … Thus, although the circuit court reversed based on its erroneous ruling on the customariness issue, its decision to reverse the award of attorney fees was proper because defendant’s refusal to pay was not unreasonable.”
