United States 6th Circuit Court of Appeals; Docket Nos. 09-2055/2113; Published
Judges Martin and Griffin; unanimous opinion by Judge Griffin
Official Federal Court Citation: Forthcoming; Link to Opinion
STATUTORY INDEXING:
Allowable Expenses: Incurred Expense Requirement [§3107(1)(a)]
Insurer’s Right to Penalty Attorney Fees for Fraudulent / Excessive Claims [§3148(2)]
TOPICAL INDEXING:
Not applicable
In this 2-0, published opinion written by Judge Griffin, the 6th Circuit affirmed the United States District Court for the Eastern District of Michigan’s denial of the plaintiffs' motion for a new trial following a verdict in State Farm’s favor regarding whether State Farm was liable to pay certain family-provided attendant care services to the plaintiff. The 6th Circuit also affirmed the district court’s denial of State Farm’s request for attorney fees with respect to the attendant care claims at issue. Furthermore, the 6th Circuit determined that because a final order had not been entered regarding discovery sanctions, the 6th Circuit lacked appellate jurisdiction to address the plaintiffs' argument that the trial court erred in not awarding these discovery sanctions to the plaintiffs.
There were several plaintiffs involved in this lawsuit against State Farm. All plaintiffs sought recovery of attendant care services rendered to them in relation to the brain injuries they sustained in the same subject motor vehicle accident. Preceding the lawsuit, State Farm denied payment of attendant care services to the plaintiffs on the basis that the plaintiffs had not provided sufficient documentation that the claims for attendant care were acutally incurred. State Farm also disputed the hourly rate at which the plaintiffs were seeking payment of the attendant care services. Therefore, the plaintiffs filed this lawsuit and the case was ultimately tried before a jury in the United States District Court, Eastern District of Michigan.
The jury rendered a verdict in favor of State Farm, finding that the plaintiffs had failed to prove that expenses were incurred. Following the verdict, the plaintiffs filed a motion for a new trial on the basis that the verdict was against the weight of the evidence regarding whether charges were incurred for the attendant care services at issue. The district court denied plaintiffs’ motion.
In affirming the district court’s denial of the plaintiffs’ motion for a new trial, the 6th Circuit first recognized that because this case was in federal court based on diversity jurisdiction, Michigan state law, i.e., the substantive law of the forum state, applied. The court then recognized that under the Michigan No-Fault Act, a person pursuing a claim for no-fault benefits must show by a preponderance of the evidence that the expense was actually incurred. The court further reasoned that the question of whether an expense has been incurred is typically a question of fact for the jury. The court concluded that it was certainly reasonable for the jury to conclude that the plaintiffs’ failure to produce detailed documentation of the attendant care services constituted a failure to prove that the expenses were actually incurred. In reaching this holding, the court rejected the plaintiffs’ argument that State Farm misled the jury to believe that Michigan law required the plaintiffs to put forth detailed documentation in support of their attendant care claims. The court rejected this argument on the basis that the district court properly instructed the jury that it was in their power to decide whether the plaintiffs had provided sufficient proof that the expenses were incurred, and that there was nothing erroneous about the trial court allowing State Farm to argue its position that the plaintiff had not met their burden to prove that expenses were incurred. The court explained its reasoning as follows:
“Plaintiffs alternatively contend that the jury’s verdict was nonsensical because the jury answered “No” on the verdict form to the question: “Were allowable expenses incurred by or on behalf of the Plaintiff arising out of the accidental bodily injury caused by the automobile accident[?]” According to plaintiffs, the answer defies the evidence because there was not even a dispute that at least some expenses had been incurred and State Farm had maintained only that benefits over and beyond that for which it had already paid were not incurred. Therefore, plaintiffs argue, it was entirely unreasonable for the jury to conclude that no expenses had been incurred. But that is not what the jury said in its verdict, and plaintiffs’ overly literal reading of the verdict form is not well-taken. The trial concerned only whether plaintiffs had incurred additional expenses not already compensated by State Farm, benefits which it owed to plaintiffs. The district court’s instructions made the jury’s duty clear. See Santos v. Posadas De Puerto Rico Assocs., Inc., 452 F.3d 59, 65 (1st Cir. 2006) (noting that a verdict form must be reviewed together with the jury instructions to determine whether it contained any error). The court gave the following instruction: “If you decide no-fault benefits are owed to the Plaintiffs, you are instructed to award the benefits that have not already been paid by the Defendant as follows[.]” (Emphases added.) Plaintiffs’ counsel emphasized this fact when he suggested to the jurors how they should complete the verdict forms, telling them to subtract from the total value of benefits it found were owed the amount the evidence showed State Farm had already paid. Furthermore, plaintiffs, who proposed (over the objection of State Farm) the very verdict form they now challenge, offer no reason for including the first question on the form if “Yes” was the only answer the jury reasonably could have given. By answering “No” to the question, the jury clearly agreed with State Farm that the plaintiffs failed to prove by a preponderance of the evidence that additional expenses had been incurred. As we stated earlier, that was not an unreasonable answer.
The district court did not abuse its discretion in denying plaintiffs’ motion for a new trial.”
The court affirmed the district court’s denial of State Farm’s motion for attorney fees on the basis that it was not clearly erroneous for the district court to determine that the plaintiffs’ claims for attendant care services were not fraudulent or excessive to warrant the imposition of attorney fee sanctions under MCL 500.3148(2). The court concluded that the record did not irrefutably demonstrate that the plaintiffs did not pay the caregivers for the services at issue and, further, there was a legitimate issue regarding the hourly rate that should be paid for these services.
With respect to the arguments raised by the plaintiffs regarding the district court’s failure to impose sanctions against State Farm for violating the district court’s discovery orders, the court concluded that it lacked jurisdiction to hear these issues on the basis the district court had not issued a final order regarding these sanctions.
