Michigan Court of Appeals; Docket No. 46368; Published
Judges Maher, Bronson, and Quinn; Unanimous
Official Michigan Reporter Citation: 102 Mich App 636; Link to Opinion
Interest Penalty on Attorney Fee Sanctions [§3142]
One-Year Notice Rule Limitation [§3145(1)]
Requirement That Benefits Were Unreasonably Delayed or Denied [§3148(1)]
Conduct Establishing Unreasonable Delay or Denial [§3148]
Calculating Attorney Fees Based on Contingent Fee [§3148]
Penalty Interest on Penalty Attorney Fees [§3148]
Extra Contractual / Mental Anguish Damages
In this Opinion by Judge Maher, the Court of Appeals held as follows:
1. In light of the Supreme Court's recent opinion in Kewin v Massachusetts Mutual (a non-no-fault case) this panel of the Court of Appeals held that a contract for no-fault insurance benefits is not a contract of mental concern and solicitude. On the contrary, it is a pecuniary contract requiring the insurance company to pay a certain sum upon the occurrence of a specified event As such, plaintiff is not permitted to recover mental anguish or emotional distress damages for a breach of the contract.
2. Where the no-fault insurance company failed to take any steps to contact treating physicians to reconcile conflicting medical reports regarding disability, the trial court's finding of an unreasonable refusal to pay benefits under §3148 of the statute was not erroneous. Therefore, attorney fees were properly awarded to plaintiff.
3. In computing attorney fees under §3148 of the statute, the trial court erred by basing the amount of the attorney fees awarded to the plaintiff solely on the contingent fee contract where there was no showing of the actual services performed by plaintiff’s attorney. The Court held that "absent a legislative pronouncement on the determination of reasonableness," we would adhere to the guideline enumerated in Crawley v Schick, 48 Mich App 728 (1973), as follows:
There is no precise formula for computing the reasonableness of an attorney's fee. However, among the facts to be taken into consideration in determining the reasonableness of a fee include, but are not limited to, the following: (1) the professional standing and experience of the attorney; (2) the skill, time and labor involved; (3) the amount in question and the results achieved; (4) the difficulty of the case; (5) the expenses incurred; and (6) the nature and length of the professional relationship with the client'
While the provisions of a contingent fee agreement may be considered as one factor in determining the reasonableness of a fee, it is not by itself determinative."
4. The 12 percent interest provisions of §3142 do not apply to the award of attorney fees. Therefore, when the trial court determines the amount of the attorney fee, it should limit the interest on the attorney fee award to 6 percent
5. The plaintiff is not barred by the one year statute of limitations back rule set forth in §3145 of the Act, where the plaintiff initiated the action in Common Pleas Court and then consolidated that action with a Circuit Court action with the consent of defense councel.