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Shanafelt v Allstate Insurance Company; (COA-PUB, 7/23/1996; RB #1864)

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Michigan Court of Appeals; Docket No. 186268; Published  
Judges O'Connell, Sawyer, and Corsiglia; Unanimous; Opinion by Judge O’Connell  
Official Michigan Reporter Citation:  217 Mich App 625; Link to Opinion alt   


STATUTORY INDEXING:   
Exclusion for Vehicles Considered Parked [§3106(1)]  
Exception for Entering Into or Alighting From [§3106(1)(c)]  
Bona Fide Factual Uncertainty / Statutory Construction Defense [§3148]    
Coordination with Other Health and Accident Medical Insurance [§3109a]   
Duplicate Recovery [§3109a]  
12% Interest Penalty on Overdue Benefits – Nature and Scope [§3142(2), (3)]  
Interest Penalty Additive to Judgment Interest [§3142]

TOPICAL INDEXING:  
Civil Judgments and Interest (MCL 600.6013)   


CASE SUMMARY:   
In this unanimous published Opinion by Judge O'Connell, the Court of Appeals addressed issues dealing with the parked vehicle exclusion under §3106(1), double recovery in cases involving uncoordinated no-fault insurance and health insurance, and awards of attorney fees and interest.  

With regard to the parked vehicle exclusion, the Court of Appeals affirmed summary disposition in favor of plaintiff, thus finding that plaintiffs injury satisfied the provisions of §3106(1)(c) which permits recovery of benefits where the injury is sustained by a person while occupying, entering into, or alighting from a parked vehicle. In this case, the plaintiff was injured after she and her husband left a restaurant. Plaintiff’s husband instructed the plaintiff to wait on the sidewalk while he retrieved their truck from the parking lot. He drove the truck to the curb, put the vehicle in park, and then exited the truck to assist plaintiff. Plaintiff, however, did not wait for her husband's assistance. Rather, she placed her hand on the truck door, opened the door, and took a small step toward the truck. The ground was icy under plaintiffs feet and she slipped and fell, severely injuring her leg. The court found that this injury clearly satisfied the entering into provisions of §3106(1)(c). The court noted that the parties did not dispute that the vehicle was "parked," thus activating the provisions of §3106(1). The court also noted that in order for a claimant to recover benefits under this provision, a claimant must show that an exception to the parked vehicle exclusion applies and that the injury arose out of the use of a motor vehicle as a motor vehicle. The court found that the plaintiff easily satisfied both of these requirements. Therefore, the circuit court was clearly correct in granting summary disposition in favor of plaintiff on this issue. 

The Court of Appeals also affirmed the trial court's award of attorney fees under §3148 of the statute. The court held that a circuit court's decision to award attorney fees is, in general, discretionary, and that "A court abuses that discretion only when the result so violates fact and logic that it constitutes perversity of will, defiance of judgment or the exercise of passion or bias.... In short, an abuse of discretion may properly be found only where the court acts in a most injudicious fashion." The court went on to note that an award of attorney fees is generally not proper where there is a legitimate question of statutory construction, constitutional law, or factual uncertainty. The court found none of these to exist in this case. The facts were very clear and stipulated to by the parties. In addition, "the governing precedent" regarding §3106(1)(c) was also very clear. Therefore, the trial court did not commit abuse of discretion in awarding attorney fees.  

The Court of Appeals also rejected defendant Allstate's argument that plaintiff was precluded from double recovery by the Supreme Court's decision in Smith v Physicians Health Plan, Inc. (Item No. 1686). In this case, as in Smith, the plaintiff had a noncoordinated no-fault policy and a coordinated health insurance policy. However, in the case at bar, the plaintiffs health insurer paid all of the benefits and did not assert enforcement of the coordination provision. In light of the fact that plaintiff’s no-fault automobile policy with defendant was uncoordinated, defendant was obligated to pay benefits without regard to what the health insurer paid or did not pay. The court specifically rejected defendant's argument that Smith v Physicians Health Plan, Inc. stands for the proposition that double recovery is precluded where the plaintiff has a noncoordinated no-fault policy and a coordinated health policy. Smith only stands for the proposition that the coordination provisions in the health insurance policy will be enforced — not that double recovery is ipso facto precluded. The Court of Appeals also rejected the argument that double recovery was precluded because plaintiff did not "incur" the expense because her health insurance company paid it. The court stated that this is not the proper meaning or application of the concept of "incur" as that phrase is used in §3107(1 Xa) of the statute. With regard to the meaning of "incurred," the court noted:

"The primary definition of the word 'incur' is to 'become liable for.' Obviously, plaintiff became liable for her medical expenses when she accepted medical treatment. The fact that plaintiff had contracted with a health insurance company to compensate her for her medical expenses, or to pay directly the health care provider on her behalf, does not alter the fact that she was obligated to pay those expenses. Therefore, one may not reasonably maintain that plaintiff did not incur expenses."

 Finally, the court held that the plaintiff was entitled to recover interest under the RJA civil judgment interest provisions of MCLA 600.6013, as well as the no-fault statutory interest provisions of §3142. The court held that plaintiff’s right to RJA interest was not defeated by virtue of the fact that plaintiffs medical expenses were paid by her health insurer. Payment by the health insurer did not cut off the liability of defendant no-fault insurer to pay statutory interest. Likewise, no-fault interest under §3142 is due where defendant does not pay a claim within 30 days of reasonable proof of a fact in the amount of the loss. Thus, interest was due under this provision as well.  


Lansing car accident lawyer Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit SinasDramis.com.

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