Michigan Court of Appeals; Docket # 328006; Unpublished
Judges Jansen, K.F. Kelly and O'Brien; Unanimous, Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Penalty Attorney Fees - Requirement That Benefits Were Overdue [§3148(1)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion involving plaintiff's claim for alleged overdue PIP benefits, the Court of Appeals vacated the trial court's award of penalty attorney fees for plaintiff pursuant to MCL 500.3148(1), because defendant no-fault insurer did not act unreasonably when it denied plaintiff's PIP claim.
Plaintiff complained of neck and back pain after being involved in an August 2013 auto accident and was taken to the hospital, where his x-rays were negative. Plaintiff was diagnosed with "cervical and lumbar strain," given pain medication and discharged. Plaintiff then presented to another hospital on the same day, where he was diagnosed with a concussion, given pain medication and discharged. The day after the accident, plaintiff began treating with Dr. Frederick Lewerenz, who referred plaintiff to Dr. Won Chae. Dr. Chae took x-rays of plaintiff's lumbosacral spine and elbows, and the x-rays were negative. Despite the negative x-rays, Dr. Lewerenz concluded that plaintiff was "totally disabled" from returning to work for 30 days and that plaintiff required assistance for eight hours each day, seven days a week, for activities like walking, washing dishes and driving. Defendant Farm Bureau General Insurance was plaintiff's no-fault insurance carrier and, during this time, began paying PIP benefits to plaintiff. In November 2013, Dr. Lewerenz concluded that plaintiff remained disabled and could not return to work for another 30 days. Plaintiff then underwent further testing by another doctor and all x-rays were again negative. At this time, Farm Bureau requested that plaintiff undergo an independent medical exam (IME) by Dr. Oney-Marlow, who concluded that plaintiff had suffered a cervical and lumbar strain, and that he needed no further treatment or assistance at home. Dr. Lewerenz then sent plaintiff for more tests by another doctor in January 2014. That doctor documented various injuries, including disc bulges, nerve root compressions and neural foraminal narrowing, which Dr. Lewerenz indicated required various types of treatment. Dr. Oney-Marlow, who had conducted the IME, reviewed plaintiff's case again and concluded that the injuries discovered in January 2014 were not caused by the August 2013 auto accident. At this time, Farm Bureau had paid more than $73,000 in PIP benefits to plaintiff, and stopped paying benefits. Plaintiff brought this action seeking PIP benefits. Farm Bureau was allowed to amend its complaint to include a claim for fraud, based on social media posts showing plaintiff being at an event called "Mud Jam." A jury returned a verdict for plaintiff and he was awarded $25,016.75 in allowable expenses, $25,7752.80 for work loss and $2,815.66 for overdue PIP benefits. Plaintiff filed a motion for attorney fees under MCL 500.3148, costs under MCL 600.2401 and prejudgment interest under MCL 600.6013. The trial court granted plaintiff's motion, awarding $65,947.50 in attorney fees, $2,158.75 in costs and $1,329.52 in prejudgment interest.
The Court of Appeals vacated the attorney fee award. In so holding, the Court noted that §3148(1) establishes two prerequisites for fees: 1) the benefits must be overdue, which means "not paid within 30 days after the insurer receives reasonable proof of the fact and of the amount of loss sustained" and 2) the insurer must have "unreasonably refused to pay the claim or unreasonably delayed in making proper payment."
Specifically, the Court of Appeals disagreed with the trial court's finding that Farm Bureau's refusal to pay plaintiff PIP benefits was unreasonable. The Court said:
"[W]e conclude that the circuit court's attorney-fee award was based on factual findings that were clearly erroneous. In essence, the circuit court concluded that Dr. Oney-Marlow's opinion was unbelievable. However, Michigan law is clear in this regard — an insurer is not required to reconcile competing or conflicting medical opinions. ... Rather, an insurer is required to 'evaluate [the] evidence as well as evidence supplied by the insurer's doctor before making a reasonable decision regarding whether to provide the benefits sought.'"
The Court of Appeals explained that Farm Bureau relied on Dr. Oney-Marlow's opinion that plaintiff suffered a cervical and lumbar strain and that this conclusion, along with the conflicting results from the exams performed by other doctors, created a reasonable basis to deny plaintiff's claim for attorney fees. The Court stated:
"While it is certainly apparent that the circuit court was not a fan of Dr. Oney-Marlow, its feelings in this regard are not objectively supported by the record. Instead, the record reflects sufficient conflicting medical documentation to support Farm Bureau's decision to deny plaintiff's claim. Thus, the circuit court clearly erred in finding Farm Bureau's denial unreasonable and, therefore, abused its discretion in awarding plaintiff attorney fees."
