Michigan Court of Appeals; Docket No. 45634; Published
Judges Bashara, Riley, and Quinnell; Per Curiam
Official Michigan Reporter Citation: 99 Mich App. 701; Link to Opinion
12% Interest Penalty on Overdue Benefits – Nature and Scope [§3142(2), (3)]
Interest Penalty Additive to Judgment Interest [§3142]
Requirement That Benefits Were Unreasonably Delayed or Denied [§3148(1)]
Bona Fide Factual Uncertainty / Statutory Construction Defense [§3148]
In this per curiam Opinion, the Court of Appeals made several significant holdings:
1. In light of the fact that the no-fault statute only provides for two possible penalties for an insurer's wrongful failure to pay no-fault benefits (attorney fees pursuant to §3148 and/or 12 percent interest pursuant to §3142) it was error for the trial court to award additional damages for mental anguish.
2. It was permissible for the trial court to award six percent judgment interest under the RJA in addition to the 12 percent penalty interest under §3142 of the No-Fault Act In ruling that this "double interest" is recoverable, the Court stated, "The purpose of the six percent interest statute is to compensate the prevailing party for the expenses incurred in bringing an action and for the delay in receiving money damages. . . .The 12 percent interest is intended to penalize the recalcitrant insurer rather than compensate the claimant... we do not consider these statutes to be mutually exclusive. Therefore, the trial court correctly ordered both the six percent and the 12 percent interest."
3. In order to recover an attorney fee under §3148 of the Act, the insurer must unreasonably refuse or unreasonably delay in making proper payment. The Court held "there is no unreasonable delay if the insurer demonstrates a legitimate question of statutory construction, constitutional law, or even a bonafide factual uncertainty."