Michigan Court of Appeals; Docket # 324670; Unpublished
Judges Sawyer, Hoekstra and Gleicher; Unanimous, Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Majority Opinion 
STATUTORY INDEXING:
Requirement That Benefits Were Overdue [§3148(1)]
Requirement That Benefits Were Unreasonably Delayed or Denied [§3148(1)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion involving penalty attorney fees under MCL 500.3148(1), the Court of Appeals held that the "law of the case doctrine" did not apply to bar an award of attorney fees to plaintiff and her medical provider, because the prior appellate decision in the case did not determine whether the State Farm's initial refusal to pay the claim was in fact unreasonable.
Plaintiff sustained a closed head injury in an auto accident, and defendant State Farm was plaintiff's no-fault insurer. After paying plaintiff $53,000 in PIP benefits, which included her medical bills, attendant care, replacement services and wage loss, State Farm stopped paying benefits. Plaintiff brought an action for additional PIP benefits. McLaren Regional Medical Center then intervened as a plaintiff, seeking coverage of various unpaid medical bills. Following a jury trial, plaintiff was awarded $8,012.80, an amount that was apparently significantly less than what she had requested. Further, the jury did not award anything related to any other category of claimed expenses, and the jury also determined that none of the claimed benefits were overdue. Following the verdict, plaintiff filed a motion for JNOV or new trial, claiming the verdict was against the great weight of the evidence and was inconsistent, which the trial court denied. Given the result at trial, State Farm filed a motion for attorney fees under §3148(2), which was denied by the trial court.
In the first appeal, the Court of Appeals affirmed the trial court's ruling, finding the jury verdict was not against the great weight of the evidence and was not inconsistent. The Court further held that State Farm did not meet the threshold for awarding attorney fees to an insurer under §3148(2). The Court reasoned that plaintiff's claim was not unreasonable or fraudulent and that, although the jury verdict was small compared to what was sought, plaintiff's claim was not unreasonable or excessive.
In the present appeal, State Farm challenged the award of attorney fees to plaintiff and McLaren under §3148(1), which provides that an attorney is entitled to a reasonable fee in an action for personal or property protection insurance benefits that are overdue. Therefore, the issue was whether State Farm unreasonably refused or unreasonably delayed payment.
State Farm argued the law of the case doctrine barred an award of attorney fees under §3148(1) because the Court of Appeals' discussion of the conflicting medical evidence in its first Blacksher opinion established that a "bona fide question of factual uncertainty existed." Therefore, State Farm claimed it was reasonable for it to not pay plaintiff's claim or delay making any payment.
The Court of Appeals disagreed with State Farm and said:
"This Court's prior opinion did not decide whether State Farm's initial refusal to pay the claimed expenses was unreasonable. That is, this Court did not address whether State Farm had a reasonable basis for its refusal to pay the claim at the time the claim was first submitted. ... Instead, this Court's prior opinion noted the conflicting medical evidence at trial and concluded that the claim was not so excessive as to lack a reasonable foundation and that the verdict was not inconsistent or against the great weight of the evidence. This Court did not discuss which, if any, of the evidence supporting State Farm's position at trial was available to State Farm when it initially refused to pay or delayed making proper payment. Because this Court's prior opinion did not decide the question under MCL 500.3148(1) that is presented in this appeal, the law of the case doctrine is inapplicable."
State Farm further challenged the attorney fee award on the ground that the trial court erred by not focusing on the facts surrounding the disputed expenses and, instead, relying on the jury verdict. The Court of Appeals again disagreed and noted that, while the trial court initially failed to make the requisite factual findings to establish that State Farm's refusal to pay no-fault expenses was unreasonable, the matter was remanded twice to give the trial court an opportunity to place its findings on the record. According to the Court:
"After the second remand, the trial court fully stated its reasons on the record. Having reviewed the trial court's opinion, we are satisfied with its explanation. Accordingly, we affirm the trial court's grant of attorney fees."
The Court of Appeals also rejected State Farm's challenge to the award of costs to plaintiff and McLaren as "prevailing parties" under MCR 2.625(A)(1). In this regard, the Court said:
"The jury awarded only $8,012.80 to McLaren as the amount of allowable expenses that State Farm had not already paid. The fact that the jury did not award the full amount of damages that Blacksher sought does not preclude designating Blacksher as a prevailing party. ... Although McLaren intervened in this case, Blacksher litigated the claim as well, including before McLaren intervened. And Blacksher would have owed to McLaren the $8,012.80 awarded in the verdict if the jury had not made that award. Thus, Blacksher's position improved as a result of the litigation. ... On the entire record, we conclude that Blacksher was appropriately deemed a prevailing party."
In conclusion, the Court of Appeals further held that the costs award to plaintiff included items for which there was no statutory authority to tax costs, and also found that the award of costs to McLaren included uncollectable consultation or contractor fees.
Accordingly, the Court of Appeals affirmed in part, reversed in part and remanded the case for further proceedings.
