Michigan Court of Appeals; Docket No. 152272; Published
Judges Hood, Marilyn Kelly, and Martlew; 2-1 (with Judge Kelly Dissenting); Opinion by Judge Hood
Official Michigan Reporter Citation: 208 Mich App 97; Link to Opinion 
STATUTORY INDEXING:
Allowable Expenses: Incurred Expense Requirement [§3107(1)(a)]
Requirement That Benefits Were Overdue [§3148(1)]
TOPICAL INDEXING:
Legislative Purpose and Intent
CASE SUMMARY:
In this 2-1 published Opinion by Judge Hood (Judge Kelly dissenting), the Court of Appeals reversed the trial court decision awarding plaintiff costs and attorney fees of $13,317.39 as mediation sanctions and as attorney fees under §3148 of the no-fault act.
The plaintiff sustained facial injuries when her head and face struck the side passenger window during a collision, causing multiple lacerations to her face.
Plaintiff sued defendant Auto Club seeking medical, work loss and replacement service expenses, together with $4,950 as an allowable expense for "future plastic surgery."
The evidence at trial was that a plastic surgeon had examined plaintiff and offered the opinion that reconstructive surgery could be performed for approximately $4,900. Testimony also indicated that plaintiffs regularly treating plastic surgeon felt that reconstructive or plastic surgery could alter or camouflage scarring caused by lacerations, but could not erase the scarring totally. Plaintiffs regularly treating plastic surgeon also felt that it was necessary to wait approximately one year to determine whether or not reconstructive surgery could be successful in reducing the scarring.
Following a jury trial, the jury determined that plaintiff was not entitled to any of her accrued allowable expenses or work loss damages, but the jury did award plaintiff $4,950 as an allowable expense for future plastic surgery. On motion by plaintiff, the trial court then awarded costs and attorney fees against defendant pursuant to both the mediation sanctions rule and the provisions of §3148.
In reversing the trial court determination, the Court of Appeals held that the claim of entitlement to compensation for "future plastic surgery" was never submitted to mediation, and those claims which were submitted to mediation did not result in a jury verdict in plaintiffs favor. Therefore, plaintiff was not entitled to mediation sanctions for prevailing on the future damage claim. Further, the court held that the award of $4,950 was in the nature of a "declaratory judgment" which provided that defendant would be liable for that amount "when the same have been incurred by plaintiff." The court relied upon its previous holding in Kondratek v Auto Club Insurance Association, 163 Mich App 634 (1987) in finding that inclusion of "future expenses" contained in a declaratory judgment were not proper for purposes of computing mediation sanctions.
The court also reversed the trial court finding that plaintiff was entitled to attorney fees under §3148(1) of the no-fault act for unreasonable refusal or delay in making proper payments. The court felt that this case presents a legitimate or bona fide question of factual uncertainty with regard to the necessity of the future medical expense of reconstructive surgery. Plaintiffs regularly treating physician was of the opinion that plaintiffs scars would not be improved by plastic surgery. Although the defendant would be responsible for the cost of such plastic surgery in the future in accordance with the jury's verdict, this finding was not determinative as to plaintiffs entitlement to attorney fees.
In her dissent, Judge Kelly would affirm the trial court holding on the basis that it was not "clearly erroneous." In the instant case, two physicians, plaintiffs regular plastic surgeon and a plastic surgeon whom plaintiff consulted held differing views on whether future plastic surgery would improve her appearance. Defendant did not seek a second medical opinion, but adopted the one more favorable to it. Judge Kelly would hold that defendant's decision to deny payment for medical benefits without ascertaining the true situation, given contradictory reports, makes this case similar to Nelson v DAIIE, 137 Mich App 226 (1984) and Liddell v DAIIE, 102 Mich App 636 (1981). In those cases, the trial court determinations were upheld as "not clearly erroneous" where benefits were denied and the insurance company involved did not seek further information to clarify contradictory medical reports. A ruling that allows the insurance company to refuse further payment and await the court's resolution wherever one of several physicians concludes that additional treatment is not required would be contrary to the underlying purpose and policy of the no-fault act.
