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Marsack v Citizens Insurance Company and The Hospital Regional Medical Center; (COA-UNP, 12/6/1996; RB #1897)


Michigan Court of Appeals; Docket No. 190356; Unpublished  
Judges Bandstra, Neff, and Dodge; Unanimous; Per Curiam  
Official Michigan Reporter Citation:  Not Applicable; Link to Opinion alt   

Requirement That Benefits Were Unreasonably Delayed or Denied [§3148(1)]  
Calculating Attorney Fees Based on Contingent Fee [§3148]

Intervention by Service Providers and Third Party Payors in PIP Claims 
Release and Settlements 
Attorney Fee Liens   

In this unanimous per curiam unpublished Opinion, the Court of Appeals held that a hospital which was owed medical expenses covered under a no-fault policy was entitled to intervene in the case between the no-fault carrier and its insured.  

Plaintiff was injured when he was hit by a car insured by Citizens. Plaintiff was hospitalized for several months, incurring hospital bills totaling $173,000. Plaintiff had no automobile insurance on himself, and therefore, sought recovery of his medical expenses from Citizens Insurance, the insurer of the striking vehicle. Citizens denied plaintiffs claim on the grounds that plaintiff was attempting to commit suicide at the time of the accident, and therefore was disqualified from receiving benefits. 

}Plaintiff retained an attorney on a one-third contingent fee agreement to pursue his claim against Citizens for his benefits. An action was filed seeking those benefits, together with attorney fees, pursuant to §3148 of act which provides that an insurance company is liable for attorney fees where benefits are unreasonably delayed. The Hospital Regional Medical Center filed a motion to intervene in the case, alleging that it was owed over $166,000, that plaintiff was indigent, and that plaintiff was expected to obtain the payment of his medical expenses from Citizens which would be reduced by the one-third attorney fee, thereby depriving the hospital of collection of a significant portion of its bill. The hospital further argued that the one-third contingent fee agreement was unreasonable, and that the attorney should receive only the fair value of services rendered. The hospital was allowed to intervene for a period of three months, for the limited purpose of conducting discovery regarding whether the attorney's services were necessary to secure payment of PIP benefits.  

Subsequent to allowing the hospital to intervene, the case was mediated and both plaintiff and Citizens Insurance Company accepted the mediation evaluation. Plaintiff then filed a motion for summary disposition, arguing that the case had been mediated, that the hospital had never filed a motion to allow further intervention, and seeking an order permitting the one-third contingent fee to be paid from the PIP benefits. The hospital responded to the motion for summary disposition requesting that it be permitted to intervene further, and that a hearing be held to determine the appropriate attorney fee. The hospital further argued that there still remained questions of fact regarding whether the PIP benefits were unreasonably delayed (which would thus trigger §3148 requiring Citizens to pay the attorney fee), or whether the benefits were merely overdue, in which case a reasonable attorney fee would be deducted from the PIP benefits. The trial court held that the benefits were merely overdue, and that summary disposition was appropriate. The court granted plaintiffs motion for summary disposition, but failed to rule on the hospital's request to intervene.  

On appeal by the hospital, the Court of Appeals held that it had jurisdiction over the appeal, finding that the hospital was an "aggrieved party" within the meaning of MCLA 600.308. Since the PIP benefits Citizens agreed to pay would be diminished by the attorney fee, thereby reducing the amount of the hospital's recovery, the hospital had a sufficient interest in the matter to be entitled to bring this appeal.  

Finally, the Court of Appeals held that the trial court's grant of summary disposition was premature in that the hospital had not yet been permitted to intervene, and the trial court had not addressed those issues intended to be raised by the hospital regarding whether the benefits were merely overdue or whether or not they had been unreasonably delayed, thereby triggering §3148. Since genuine issues of fact remain in regard to whether plaintiffs attorney was entitled to an attorney fee pursuant to §3148(1), and, if so, the reasonableness of the one-third contingent fee and the appropriate source of that fee, these issues needed to be resolved by the trial court on remand.

Michigan auto accident attorney 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

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