Michigan Court of Appeals; Docket #285755; Unpublished
Judges Murray, Markey, and Borrello; unanimous; per curiam
Official Michigan Reporter Citation: Not applicable, Link to Opinion 
STATUTORY INDEXING:
Allowable Expenses: Reasonable Necessity Requirement [3107(1)(a)]
12% Interest Penalty on Overdue Benefits – Nature and Scope [3142(2)(3)]
Requirement That Benefits Were Unreasonably Delayed or Denied [3148(1)]
TOPICAL INDEXING:
Not applicable
CASE SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals reversed the trial court Order to the extent that its attorney fee award was based on MCR 2.403(O)(6)(d), because the court failed to properly address the required factors. However, it determined the trial court properly awarded plaintiff interest under MCL 500.3142(2) and (3) on overdue medical benefits even though plaintiff failed to amend his interrogatory answers to include his medical bills. In addition, the court affirmed the trial court’s decision to reduce plaintiff’s requested attorney fees from $149,572 to $70,300.
In finding that plaintiff was entitled to payment for overdue medical benefits and attorney fees, even though the medical benefits were paid before trial began, the court found that they were overdue under MCL 500.3142, which provides that an insurer must pay penalty interest if it fails to pay personal protection insurance benefits within 30 days after receiving reasonable proof of the fact and the amount of the loss. In addition, the court affirmed the attorney fee award under MCL 500.3148, finding that defendant’s denial of benefits was unreasonable. In so finding, the court noted that the medical bills for plaintiff’s knee surgery were submitted on November 28, 2006. The bills were not paid until November 2007. Therefore, they were overdue. As to defendant’s argument that the award for interest and attorney fees was improper because plaintiff’s complaint sought only work loss and replacement service benefits, and plaintiff did not indicate that he was seeking payment for medical services in his interrogatory answers or deposition, the court noted that plaintiff’s complaint expressly indicated that his expenses were not limited to wage loss and replacement services. Instead, the complaint included a provision for “any other allowable expenses under the Michigan No-Fault Act.” In addition, the complaint sought penalty interest and attorney fees for overdue benefits. Therefore, the court concluded that the complaint gave defendant sufficient notice of the nature and claims plaintiff was seeking. As to plaintiff’s interrogatory answers and deposition, at the time they were submitted and made, the payment for medical services regarding plaintiff’s injury were not yet overdue. In this regard, the court stated:
“Here, according to defendant’s ‘Explanation and Review’ of benefits, medical bills relating primarily to plaintiff’s knee surgery were submitted to defendant on November 28, 2006. As these bills were not paid until November 2007, they were ‘overdue.’. . .
Defendant also contends that summary disposition was improper because for two reasons it was not on notice that medical expenses were part of the litigation: (1) plaintiff’s complaint sought only work loss and replacement services benefits and (2) plaintiff indicated in both his interrogatory answers and deposition that medical benefits were not part of the lawsuit. . . .
In this case, the complaint alleges that plaintiff suffered injuries in a motorcycle accident and sought damages for benefits under the no-fault act. Although the complaint specifically requests payment for wage loss and substituted service, the complaint expressly indicates that plaintiff’s expenses are not limited to wage loss and substituted service, but also include ‘[a]ny other allowable expenses under the Michigan No-Fault Act.’ The complaint also seeks penalty interest and attorney fees for ‘overdue’ benefits. Notably, MCL 500.3107 provides as allowable PIP benefits ‘all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery, or rehabilitation.’ In light of this, we conclude that the complaint sufficiently gave defendant notice of the nature of the claims such that seeking penalty interest and attorney fees for ‘overdue’ medical benefits was appropriate.
With respect to plaintiff’s interrogatory answers and deposition, plaintiff notes that his assertions that medical bills were not a part of this lawsuit were true at the time they were answered. And indeed, while plaintiff’s knee surgery occurred November 18, 2006, defendant’s ‘Explanation[s] of Review’ of the claims were dated from March 12, 2007, to November 15, 2007. This is significant as plaintiff had already answered his interrogatories on September 26, 2006, and was not deposed until February 7, 2007.”
(emphasis in original)
The court then addressed plaintiff’s argument that the court improperly reduced its requested attorney fees. In this case, plaintiff sought attorney fees in the amount of $149,572. The trial court, however, awarded $70,300. In reducing the award, the trial court stated on the record that it considered each of the factors outlined in Wood v Detroit Automobile Inter-Ins Exch, 413 Mich 573, 588; 321 NW2d 653 (1982). In addition, the court noted that the case was not complex considering the number of witnesses and the small amount of discovery, and stated that the case could have been tried in one or two days by one attorney. The court also noted that plaintiff’s lead attorney was highly experienced, but noted that considering his experience, each of the other attorneys should have been paid out of his own fee, they should not have individually billed. As to expenses that were incurred, the court stated that some of the bills caused it “concern” and were “questionable.” Considering the trial court’s careful and thoughtful explanation, the Court of Appeals found no abuse of discretion. In this regard, the court stated:
“In the instant case, plaintiff requested $149,572 in attorney fees. This request included the billable hours and rates of the attorneys as follows: Mr. Nolan billed 248 hours at $350 per hour; Mr. Villas billed 124 hours at $350 per hour; and Mr. Graham billed 113.5 hours at $165 per hour. The trial court, however, awarded Nolan 248 hours at $250 per hour; Villas 13.9 hours at $150 per hour; and Graham 61.4 hours at $100 per hour, for a total award of $70,300. It cannot be said that this award fell outside the range of reasonable and principled outcomes.
Indeed, the trial court not only expressly stated on the record that it considered each of the Wood factors, but the court’s comments clearly indicate that these factors guided its calculus in determining a reasonable amount of fees. Specifically, the court observed that the case was not complex in light of the number of witnesses and the small amount of discovery and could have been tried in one or two days by one attorney. The court also acknowledged the experience of plaintiff’s lead attorney, but noted that in light of that experience, he should have paid for the other attorneys out of his own fee. Regarding the expenses incurred, the court elaborated that particular bills submitted caused ‘concern’ and were ‘questionable,’ including the billing before the retainer agreement was signed, billing plaintiff for multiple attorneys for conferences, and charging $10,625 for three and a half hours of trial and $455 for 1.3 hours to draft letters. It was after this explanation that the court reduced the hourly rates and rendered its detailed review of the specific hours for which no fees would be awarded. In light of the trial court’s thoughtful and careful explanations, we find no abuse of discretion.”
