Robert Seay v. 21st Century Insurance Company
333626
| Mich. Ct. App. | Oct 24, 2017Background
- Robert Seay sued 21st Century Insurance for unpaid no-fault (PIP) benefits after a motor-vehicle–related injury; Elite Chiropractic and Elite Health Centers intervened seeking payment for services they provided to Seay.
- At trial the court limited intervenor participation: Elite’s counsel could not deliver a separate opening statement and could not independently conduct full voir dire; counsel were to coordinate with Seay’s attorney.
- A juror was empaneled who later disclosed a potential bias and then, after overhearing comments about Seay’s treating doctor, was excused; the jury later returned a verdict of no cause of action (no PIP recovery).
- Elite objected to admission of an expert (Polly Swingle) because her written report was produced shortly before trial; Elite had not deposed her or invoked MCR 2.302 discovery protections.
- 21st Century sought case-evaluation sanctions under MCR 2.403(O) against Seay (both sides had rejected the case evaluation) and asked for attorney-fee sanctions under MCL 500.3148(2) against Elite for allegedly excessive/fraudulent bills; the trial court denied case-evaluation sanctions against Seay but awarded $25,000 under MCL 500.3148(2) against Elite.
- The Court of Appeals reviewed intervening-party procedural rights, expert-discovery rules, mandatory case-evaluation sanction rules, and the impact of the Michigan Supreme Court’s decision in Covenant on providers’ standing to sue insurers.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Elite was denied due process by limited voir dire and no separate opening statement | Elite: it had distinct interests and needed independent voir dire and opening to protect those interests | 21st Century: Elite shared Seay’s interest in obtaining PIP benefits; limits were reasonable and coordinated participation was permitted | Court: forfeited (no timely trial objection); on merits, no due-process violation — limits were permissible and not outcome-determinative (Covenant also holds providers lack independent cause of action) |
| Whether exclusion/admission of expert Swingle (because her report was produced shortly before trial) was error | Elite: late production of report prevented proper preparation and should have barred her testimony | 21st Century: expert identity and subject were disclosed; Elite did not depose Swingle or show substantial need/undue hardship; MCR does not always require a written report | Court: no abuse of discretion — Elite failed to use discovery tools or show substantial need; late report was not fatal |
| Whether 21st Century was entitled to mandatory case-evaluation sanctions after verdict favoring insurer (both parties had rejected evaluation) | 21st Century: verdict (no recovery) is more favorable than the evaluation for Seay; sanctions mandatory under MCR 2.403(O) | Seay/trial court: equitable concerns (Seay’s resources, claim value) counselled against sanctions | Court: reversal — mandatory sanctions should have been awarded to 21st Century; the trial court erred in denying them (no applicable exception) |
| Whether insurer could recover attorney-fee sanctions under MCL 500.3148(2) against Elite (intervenor-provider) for fraudulent/excessive claims | 21st Century: Elite’s bills lacked reasonable foundation; jury’s verdict supports award | Elite: lacked basis; not a proper claimant under no-fault statute | Court: reverse award — under Covenant providers are not claimants under no-fault and cannot be sanctioned under MCL 500.3148(2) as claimants; award against Elite was improper |
Key Cases Cited
- Polkton Charter Twp v. Pellegrom, 265 Mich. App. 88 (preservation and appellate review principles)
- Rivette v. Rose-Molina, 278 Mich. App. 327 (plain-error review of unpreserved issues)
- Smith v. Khouri, 481 Mich. 519 (case-evaluation sanctions standard)
- D'Alessandro Contracting Group, LLC v. Wright, 308 Mich. App. 71 (work-product protection for expert reports and waiver)
- Gentris v. State Farm Mut. Auto Ins. Co., 297 Mich. App. 354 (standards for MCL 500.3148(2) attorney-fee awards)