Bronson Health Care Group Inc v. Titan Insurance Company
314 Mich. App. 577
| Mich. Ct. App. | 2016Background
- On May 9, 2013 Amber French was injured in an auto accident; Bronson provided hospital care totaling $51,596.13.
- Bronson submitted three applications to the Michigan Assigned Claims Plan (MACP) in July–September 2013; the MACP assigned the claim to Titan on September 24, 2013.
- Titan received itemized bills, a UB04 form, medical records, and a police report the day the claim was assigned, but did not pay within 30 days.
- Titan paid the bill on or after August 4, 2014 after deposing French, but refused penalty interest and attorney fees.
- Bronson sued for unpaid no-fault benefits, penalty interest under MCL 500.3142, and attorney fees under MCL 600.2591; the trial court denied penalty interest and fees.
- The Court of Appeals reversed: it held Titan was liable for penalty interest because receipt of reasonable proof triggered the 30-day statutory payment period, and Titan’s defense was frivolous, warranting attorney fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Titan must pay penalty interest under MCL 500.3142(2) | Receipt of itemized bills and records constituted "reasonable proof" and started the 30-day clock; penalty interest is owed for delay | Assigned insurer may delay payment until it completes its own eligibility investigation of the claimant | Reversed: reasonable proof received by Titan triggered the 30-day period; insurer cannot delay payment pending its own eligibility inquiry |
| Whether Titan’s defense was frivolous under MCL 600.2591 | Titan’s position lacked arguable legal merit because precedent requires payment within 30 days after reasonable proof | Defense justified because Titan investigated claimant eligibility before paying | Reversed: Titan’s argument was devoid of arguable merit and therefore frivolous; remanded to calculate and award attorney fees |
Key Cases Cited
- Williams v AAA Michigan, 250 Mich App 249 (definition of "reasonable proof" and when 30-day period triggers)
- Cruz v State Farm Mut. Auto. Ins. Co., 466 Mich 588 (once insurer receives reasonable proof, benefits must be paid within 30 days)
- Roberts v Farmers Ins. Exch., 275 Mich App 58 (same 30-day overdue rule under MCL 500.3142)
- Regents of Univ. of Mich. v State Farm Mut. Ins. Co., 250 Mich App 719 (insurer liable for penalty interest without showing arbitrary delay)
- Bronson Methodist Hosp v Mich Assigned Claims Facility, 298 Mich App 192 (statutory interpretation reviewed de novo)
- Adamo Demolition Co v Dep’t of Treasury, 303 Mich App 356 (frivolous claim standard: devoid of arguable legal merit)
- 1300 LaFayette East Coop, Inc v Savoy, 284 Mich App 522 (trial court’s frivolousness findings reviewed for clear error)
- Book-Gilbert v Greenleaf, 302 Mich App 538 (courts may not read omitted requirements into statutes)