Michigan Court of Appeals; Docket #283820; Unpublished
Judges Murphy, Fitzgerald, and Markey; unanimous; per curiam
Official Michigan Reporter Citation: Not applicable, Link to Opinion 
STATUTORY INDEXING:
Requirement that Benefits Were Unreasonably Delayed or Denied [3148(1)]
TOPICAL INDEXING:
Collateral Estoppel and Res Judicata
CASE SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals affirmed the trial court holding that plaintiff was entitled to summary disposition under MCR 2.116(C)(7), finding that where the issue of whether plaintiff’s care was reasonable and necessary was previously litigated, involved the same parties and same medical provider, and where defendant State Farm failed to show any change in circumstances, plaintiff was entitled to summary disposition based on collateral estoppel. In addition, the Court of Appeals found that plaintiff was properly awarded attorney fees under the no-fault penalty provision of MCL 500.3148, where State Farm’s refusal to continue to pay benefits was unreasonable.
The plaintiff in this case sustained brain injuries in a motor vehicle accident that occurred on July 12, 2002. Upon discharge from the hospital, she was admitted to a residential brain injury rehabilitation institute where she stayed for three months. From there, she was transferred to the Ann Arbor Rehabilitation Center (AARC). Defendant State Farm paid for her treatment at AARC until May 2004. Plaintiff filed suit and, on August 29, 2006, a jury found for plaintiff and a judgment was entered on October 27, 2006. On December 8, 2006, plaintiff filed the present action claiming State Farm refused to pay for services provided by AARC beginning September 1, 2006, just days after the jury returned its verdict in the earlier action.
Plaintiff moved for summary disposition under MCR 2.116(C)(7), arguing that collateral estoppel barred relitigation of the issues of whether the services provided by AARC were reasonable and necessary and, therefore, allowable expenses under the No-Fault Act. In support of her motion, plaintiff presented an affidavit by her treating physician in which he averred that her condition had not changed since the earlier action. After the hearing on the motion, defendant responded that the issue of whether the treatment was reasonable and necessary was not barred by collateral estoppel because the passage of time had created an additional factor that should be considered. According to State Farm, since plaintiff’s condition had not changed, and since she had been receiving the same treatment for two and one-half years, the treatment must be ineffective. The trial court denied the motion, stating that “what your insurer should do is what the jury found that you should do. And, that’s to pay on the contract for these expenses that she’s incurred as a result of the automobile accident; end of story.”
In affirming, the Court of Appeals noted that the doctrine of collateral estoppel is intended to relieve parties of the costs and vexation of multiple lawsuits, conserve judicial resources, and encourage reliance on adjudication by preventing inconsistent decisions. In addition, it precludes relitigation of an issue in another case against the same parties if the earlier action resulted in a valid final judgment and the issue was actually and necessarily resolved in the earlier matter. The court determined that this action was essentially a continuation of the earlier lawsuit. The court explained that the earlier action involved the same parties, the same medical service provider, and the same expense. In addition, plaintiff’s claims in both actions were the same and the issue was actually litigated and resolved in the earlier action. Further, the jury found that plaintiff had a brain injury, and that the care she was receiving was reasonable and necessary, and a verdict on the issue was entered. The court then stated that although the jury did not make a finding regarding plaintiff’s future care, plaintiff’s treating physician averred that her condition had not changed and, despite the opportunity to do so, defendant failed to show that the care plaintiff was receiving was not reasonable or necessary. Therefore, the court determined that under these circumstances, the trial court did not err when it granted plaintiff’s motion for summary disposition based on MCR 2.116(C)(7). In this regard, the court stated:
“This case is essentially a continuation of an established lawsuit. Both cases involve the same parties, same medical provider, and same expense once again being denied by State Farm. A review of plaintiff’s claims in both the first action and the instant action reveals that they are based on the same factual allegations. In the first action, the parties actually litigated and the jury actually determined the issues of the nature and extent of plaintiff’s injuries. The jury determined that plaintiff had a brain injury and that she needed treatment. The jury in the first action also determined that the treatment provided by AARC was reasonable and necessary, and decided the issue of damages for allowable expenses for claims up until the time of the verdict. . . .
Although the jury made no determination regarding the reasonableness and necessity of future benefits, plaintiff attached to her motion for summary disposition the affidavit of Dr. Terry Braciszewski, who averred that neither plaintiff’s diagnosis nor her need for the services being provided by AARC had changed since the jury rendered its verdict in August 2006. . . . Under these circumstances, where a jury previously determined the necessity and reasonableness of plaintiff’s treatment, where plaintiff presented an affidavit to establish the continued necessity and reasonableness of the treatment, and where State Farm failed to present documentary evidence to contradict plaintiff’s documentary evidence, the trial court properly granted summary disposition in favor of plaintiff under MCR 2.116(C)(7).”
Finally, the Court of Appeals affirmed the attorney fee award under §3148, finding that State Farm’s refusal to continue paying benefits was unreasonable considering that shortly before it discontinued paying benefits, a jury had found that the same treatment was reasonable and necessary for the plaintiff’s care and rehabilitation. Furthermore, State Farm failed to establish the existence of a bona fide legal factual dispute by providing evidence to support its claim that continued treatment was not reasonable or necessary. In this regard, the court stated:
“At the time State Farm made the decision not to pay for plaintiff’s continued treatment at AARC, a jury had already determined that treatment at AARC was reasonably necessary for plaintiff’s care, recovery and rehabilitation of an injury arising out of the use or operation of a motor vehicle. Even though State Farm asserted that it questioned the continued necessity and reasonableness of the treatment being provided by AARC, State Farm failed to establish the existence of a bona fide legal or factual dispute. Under the circumstances presented here, the trial court did not clearly err in finding that State Farm unreasonably refused to continue to pay benefits for a treatment that a jury had found to be reasonably necessary, and did not abuse its discretion by awarding plaintiff attorney fees and costs.”
