*1
Moore
v Secura Ins
MOORE v SECURA INSURANCE
Argued
30, 2008.
Docket No. 135028.
October
2008. Decided December
brought
Hattie and James Moore
an action in the Genesee Circuit
against
Insurance, seeking
Court
Secura
no-fault insurance ben-
(hereafter
injuries
by
efits for
plaintiff)
sustained
Hattie Moore
in
plaintiff
an
application
automobile accident. The
had filed an
for
seeking
benefits,
benefits with the
personal
work-loss
(PIP)
protection
benefits,
insurance
and uninsured motorist ben-
pain
suffering.
efits for
paid
and
The defendant had
work-loss and
injury
approximately
year
benefits for
one
until a doctor retained
by
independent
the defendant to conduct an
medical examination
(IME)
plaintiffs injuries
by
concluded that the
caused
the accident
remaining injuries
had healed and that her
by
were caused
preexisting
jury
plaintiff
conditions. The
awarded the
in
damages
claim, $42,755
noneconomic
for the uninsured motorist
unpaid
claim,
work-loss for the
penalty
$98.71
PIP
and
court,
interest
for overdue work-loss benefits. The
Thomas L.
Brown, J., granted
attorney
and,
the
motion for
fees
pursuant
500.3148,
plaintiff $79,415
to MCL
awarded the
attorney fees and
appealed, alleging
costs. The defendant
that the
trial court
grant
erred both in
attorney
its decision to
fees and
regard
costs and with
to the amount awarded. The Court of
Appeals,
(Wilder, PJ., dissenting),
Sawyer
and
JJ.
affirmed
Davis,
the trial court’s conclusion that the denial of benefits was unrea-
inquiry beyond
sonable because the defendant made no
opinion
IME,
of the doctor who conducted the
and therefore held
that the conditions for an
fee award under MCL 500.3148
were
jury
satisfied because the
found that at least some of the
payments
benefit
were
rejected
overdue. The Court
the defen-
dant’s claim that
only
portion
was entitled
to the
directly
securing
penalty
attributable to
(2007).
App
interest award.
Supreme
Court
argument
ordered
grant
and heard oral
on whether to
the defen-
application
peremptory
dant’s
or take other
action.
4. An
initial refusal to
no-fault benefits can be
insurer’s
deemed reasonable even it is later determined that the insurer
However,
imply
required
those benefits.
this does not
pay no-fault insurance
that an insurer’s initial refusal to
benefits
unreasonable,
though
can be deemed
even
it is later determined
If
that the insurer did not owe those benefits.
an insurer does not
benefits,
purposes
then
cannot be overdue for
owe
benefits
determining
may'be
whether
awarded.
proceedings.
and remanded for further
Reversed
*3
joined by
dissenting,
Justice
Justice
would
Kelly,
Weaver,
attorney
affirm trial
court’s award of
fees
its determina-
unreasonable, stating
tion that the defendant’s behavior was
majority opinion improperly
judgment
substituted its
for that
ignored the
of
of the trial court and
deferential standards
review
applicable in this case. She also would not overrule Liddell.
Cavanagh
participate
Justice
did not
because of a familial relation-
ship with counsel for Secura Insurance.
—
—
— Payment
Independent
1. Insurance
No-Fault
of Claims
Medical
Examinations.
statutorily required
opinions
An
to reconcile the
of its
insurer is not
treating physician
independent medical examiner and an insured’s
(MCL500.3142[2],
refusing
before
work-loss benefits
500.3148[1]).
—
—
—
Delay
Payment
Attorney
2. Insurance
of Claims
Fees.
No-Fault
pay no-fault insurance benefits cannot
An insurer’s initial refusal to
attorney
purposes
awarding
if
of
be deemed unreasonable
required
the insurer was not
it is later determined that
(MCL 500.3148[1]).
benefits
those
Garan Lucow Diesel), and Peter L. for the defendant. case, In this J. we consider assessment
CORRIGAN, fees for “overdue” benefits under Michi gan’s seq. no-fault insurance statutes. MCL 500.3101 et statutes, personal protection Under these insurance statutory provide: provisions seq. The relevant of MCL 500.3101 et MCL 500.3142: (1) protection payable Personal insurance benefits are as loss
accrues. (2) protection are Personal insurance benefits overdue not days paid proof within 30 after an insurer receives reasonable proof the fact and If of the amount of loss sustained. reasonable is claim, supplied supported by as to the entire the amount days proof paid reasonable is overdue if not within 30 after the proof by Any part received insurer. of the remainder of the by supported proof claim that is later reasonable is overdue if not days paid within 30 after the is received the insurer. For purpose calculating the extent to which benefits are over- due, payment shall be treated as made on the date a draft other or placed valid instrument was the United States mail addressed, properly postpaid or, envelope, posted, if not so on the delivery. date of (3) payment simple An overdue bears interest at the rate of per 12% annum.
MCL 500.3148: (1) advising An is entitled to a reasonable fee for representing personal property a claimant in an action for protection attorney’s insurance benefits which are overdue. The charge against fee shall be a the insurer in addition to the benefits *4 recovered, unreasonably if the court finds that the insurer refused pay unreasonably delayed making proper the claim or in payment. Moore v Secura Ins Opinion op the Court pay become “overdue” when an insurer fails to benefits insurer receives reasonable days “within 30 after an of the fact and of the amount of loss sustained.” attorney “An is entitled to a reason- fee for and a claimant in an advising representing able action for . . insurance benefits personal. protection 500.3148(1). Moreover, which are overdue.” MCL “the attorney’s fee a the insurer ... if charge against shall be unreasonably the court finds that the insurer refused to unreasonably delayed making the claim or Therefore, proper payment.” Id. whether a claimant’s as an insurer qualify benefits overdue whether unreasonably refused or delayed making payment determine a claimant’s receive may attorney fees. case,
In this a jury awarded $42,755 in damages unpaid noneconomic work loss after defendant stopped paying per- benefits insurer protection sonal insurance benefits. The also in penalty interest for overdue work loss benefits. The trial court granted plaintiffs motion for attorney costs, fees and and the Court of Appeals affirmed.
Because the Court of erred in its interpreta- 500.3148, tion of MCL 500.3142 and MCL we reverse. (2) may An insurer be an allowed court award of a against attorney’s sum reasonable a claimant as an fee for the against insurer’s defense a claim that was in some respect fraudulent or so excessive as to have no reasonable personal property protection foundation. To the extent insurance benefits are then due or thereafter come due to the resulting injury claimant because of loss from the on which the based, may against claim is such a fee be treated as an offset such also, benefits; judgment may against be entered the claimant for any way against amount of a fee awarded him and not offset in this paid. or otherwise *5 482 MICH507
Opinion op the Court plaintiff only pen- Because the awarded interest and failed to award interest on the alty penalty benefits, in unpaid work loss we qualify conclude that those benefits do not as overdue 500.3142(2). to MCL also conclude that pursuant We the discontinuation of benefits was reason- plaintiffs plaintiff able under MCL Because offered no additional reasons to the unreasonableness support benefits, of defendant’s refusal to is not plaintiff Moreover, reject entitled to fees. we the Court erroneous statement that an insurer’s initial to pay refusal no-fault insurance benefits can be though deemed unreasonable even it is later deter- mined that the required insurer was not those benefits.
I. FACTS AND PROCEDURAL HISTORY 27, 2000, On September a truck struck pickup passenger side of Hattie plaintiff Moore’s automobile she driving while on 1-475 in Genesee County. accident, Because of the fractured plaintiff right her knee, causing chip. accident, a bone Before the plaintiff knees, had suffered from osteoarthritis in both and she by had been treated an orthopedic surgeon, Dr. Norman According Walter, 1999, Walter. to Dr. in November accident, months before the he discussed knee replace- surgery injection ment plaintiff. treatments with accident, After the plaintiff could not return to her regular as a employment began custodian. Defendant paying plaintiff work loss and other no-fault benefits in December 2000. Defendant first paid plaintiff De- however, cember 2000. Because of a computer glitch, did not make its next payment trial, until March 2001. Before the defendant rectified error, paying plaintiff its the omitted payments as well Moore v Secura
Opinion the Court owed. interest that defendant the 12 percent as right surgery plaintiffs on Dr. Walter recommended On injury caused the accident. repair knee to 2001, Xeller, orthope- second 22, Dr. Charles January medical evalu- independent dic an surgeon, performed (IME) Dr. request. defendant’s at ation required knee sur- right Xeller agreed 26, January on 2001. performed Dr. Walter gery, which off work and remained Following surgery, plaintiff In Dr. Walter. March continued treatment with *6 a nurse case man- Schingeck, defendant retained Dan could return to work. ager, plaintiff to evaluate whether 30, 2001. Schingeck August met with Dr. Walter on that meeting, opined plaintiff After their Dr. Walter employ- able to return to her normal would never be reflect a custodian. Dr. Walter’s records do not ment as inability to work to her plaintiffs whether he attributed osteoarthri- injuries preexisting or her accident-related tis. loss and other
Defendant continued to work a second until Dr. Xeller performed no-fault benefits IME, 25, Dr. IME on 2001. After the second September In for defendant. page report Xeller a seven prepared plaintiff Dr. that did not need report, opined his Xeller orthopedic complaints for her related further treatment Rather, had plaintiff to the accident. he concluded that knees that both degeneration severe osteoarthritic had not accident, and that the accident predated Dr. underlying osteoarthritis. plaintiffs exacerbated plaintiff could return work Xeller determined climbing, walking no on including, “no with restrictions walk- kneeling squatting, no or limited ground, uneven Xeller Additionally, Dr. lifting.” and no overhead ing, replace- needed a total left knee plaintiff opined in the replacement knee right and a total possibly ment future. Mich 507 Opinion of the Court
In November plain- defendant discontinued tiffs no-fault benefits because reasonable longer claim no existed on the basis of Dr. suit, report. Xeller’s Plaintiff filed seeking first-party no-fault benefits from defendant. Plaintiff and her husband filed seeking also a second suit uninsured motorist benefits from defendant. trial, plaintiff $96,000
At sought approximately benefits, $21,000 work loss for household or replace- services, $11,000 ment and more than in penalty inter- $42,755 est. The jury awarded in work loss benefits, damages no for household replacement services, and in penalty interest for overdue payments. Plaintiff filed postjudgment motion for no-fault fees and costs under MCL 500.3148(1). After a hearing to determine fees costs, the trial court the full amount $79,415. that she requested,
Defendant both the trial court’s appealed decision to grant attorney costs and the amount of attor- ney fees and costs awarded to In plaintiff. a divided opinion, the Court of Appeals affirmed the trial court’s award of in attorney fees and costs.2 Relying on a definition of unreasonableness from Liddell v Detroit *7 Exch, Automobile Inter-Ins 102 App 650; Mich 302 (1981), NW2d 260 the Court concluded that “the trial court found properly the denial of benefits here unrea- sonable where defendant inquiry beyond made no of its IME opinion own doctor.”3 Court held that the insurer owed overdue benefits and that the plaintiff satisfied conditions for attorney fees when “it
2
Ins,
195;
App
Moore v Secura
Court benefits were that plaintiffs reasoned Judge WILDER therefore, had no claim for and, not overdue language of unambiguous “[u]nder 500.3148(1).”7 Moreover, concluded Judge WILDER inter- that, jury’s award given $98.71 unreason- that defendant est, necessarily it determined week of work loss delayed one ably payment had that, my “[i]n stated WILDER further Judge benefits.8 fees and costs view, of the part no collecting this case was attributable benefit, paid benefit was because that overdue overdue Therefore, Judge WILDER would litigation.”9 long before a matter of law the trial court erred as have held “that fees, did not because the granting attorney Defendant plaintiff.”10 benefits to the award overdue this Court. We appeal for leave to applied then and di- application argument oral on scheduled to address: parties rected the 4 Id.
5 Id. at 203-204.
6 Id. at 205. at Id. 208-209.
8 Id. at 209.
214.
Id. at
at 215.
Id.
*8
Opinion op the Court
(1)
“overdue,”
whether
benefits at
issue were
(2)
500.3148(1), 500.3142(2);
whether defendant
“unreasonably
unreasonably
refused to
the claim or
delayed making proper
500.3148(1);
payment,” MCL
(3) assuming
unreasonably
pay,
refused to
but
assuming
only portion
also
sought
of the benefits
500.3148(1)
“overdue,”
and awarded were
whether MCL
permits recovery
sought
of
fees for all benefits
(4)
recovered;
whether
the Court of
suggesting
possible
erred in
that “it is . . .
for an insurer
refuse to
benefits even
the insurer
Ins,
is later deemed not liable
[Moore
for them.”
v Secura
(2008).]
II. STANDARD OF REVIEW
statutory
The Court reviews de novo issues of
interpretation.
Simmons,
v
8, 12;
477 Mich
Saffian
(2007).
Opinion Court III. LEGAL ANALYSIS A. OVERDUE BENEFITS *9 is to statutes, goal our primary interpreting “When v Nastal Legislature.” intent of the effect to the give Inc, 471 Mich Investigations, & Assoc Henderson language of the 1 We review 720; 691 NW2d Legislature used give itself and words statute “If the statu- ordinary meaning. Id. common and their presume we must unambiguous, tory language clearly it ex- meaning intended the Legislature required is neither further construction pressed Id. permitted.” nor 500.3148(1) for prerequisites
MCL
establishes two
be
First, the benefits must
fees.
the award
after
overdue,
days
[the]
“not
within 30
meaning
paid
fact and of the
proof
reasonable
of the
insurer receives
500.3142(2). Second, in
MCL
amount of loss sustained.”
find
trial court must
postjudgment proceedings,
the claim
“unreasonably
refused to
that the insurer
making
payment.”
in
unreasonably delayed
proper
or
500.3148(1).
in
Therefore,
the words
assigning
their common and
and MCL 500.3148
MCL 500.3142
on
only
meaning, “attorney
payable
fees are
ordinary
unreason-
the insurer has
benefits for which
overdue
in
delayed
paying.”
ably
refused
476, 485;
Co, 469 Mich
v
Farm Mut Ins
State
Proudfoot
omitted).
(2003) (emphasis
673 NW2d
jurors
instructed
case, the verdict form
In this
date
from the
per
interest
annum
“12 percent
award
contrast,
In
overdue.”
or loss became
expense
that the
jurors
directed
simply
instructions
jury
the trial court’s
indication that
with no
interest
percent
to award
Moreover,
be
annum.”
“per
interest should
percent
if
jury instructed the
specifically
the trial court
The jury’s
decisions to
award
benefits,
unpaid work loss
but
interest,
seems inconsistent because
had
jury
determined that
the work loss benefits owed were
overdue,
then the
instructions mandated that
it
12 percent penalty
award
interest
the full
on
amount
benefits,
required
overdue
as
by MCL
This
jury’s verdict, however,
Court will
uphold
where
“
interpretation
‘there is an
of the evidence that pro-
*10
”
a logical
vides
for the
of
explanation
findings
the jury.’
Unlimited, Inc,
31-32;
Bean v
24,
Directions
462 Mich
(2000),
B. UNREASONABLE REFUSAL OR DELAY 500.3148(1) provides in relevant part, “[t]he attorney’s fee shall be a charge against the insurer in addition to recovered, the benefits if the court finds that the insurer unreasonably to pay the claim or refused ” delayed making proper payment. The Court of Appeals recognized that an insurer’s refusal to “ pay benefits is not unreasonable ‘[i]f the insurer’s refusal delay in payment product legiti- of a mate question of statutory construction, constitutional ”13 law, or a bona fide factual uncertainty.’ The Court traced its definition of Liddell, “unreasonableness” at supra which the Court affirmed under MCL 500.3148 “on the basis of the refusal of the defendant insurer to reconcile opinion of one doctor that the plaintiffs injuries from an accident no longer precluded him from employment with the contradictory opinions of the plaintiffs treating physicians.”14 Com- paring the facts of this case to Liddell, the facts of 13Moore, supra 199, quoting Beach, supra at at 629.
14 Moore, supra at 200. *12 Moore v Secura Opinion the Court of in- Liddell, defendant “[h]ere, inas reasoned, Court without loss benefits work plaintiffs terminated surer independent of its opinions reconcile attempting treating physicians.” plaintiffs and examiner medical circum- these concluded, “[u]nder Appeals The Court of that finding clearly err did not stances, trial court ben- terminated defendant . .”15 efits . . In of Liddell. analysis Appeals of the Court reject
We clearly did not a trial court held that Liddell, the Court unreasonable conduct an insurer’s it found err when physi- to contact” attempt “did not the insurer where way other “or some opinions conflicting cians with of in the face situation the true ascertain attempt language plain in the Nothing contradictory reports.”16 an insurer to however, 500.3148(1), requires MCL of Moreover, noth- opinions. medical conflicting reconcile an insurer requires in the statute implicit otherwise ing Therefore, in opinions. medical competing to reconcile MCL language plain with accordance Liddell. 500.3148(1), overrule we the trial affirming erred Appeals The Court of knew that other that, because finding court’s “incum- case, it was in plaintiffs involved doctors were doctor defendant’s beyond” go the carrier to upon bent sought have insurer “could the defendant the draconian exercising before further information injured.”17 who is benefits for one of critical termination language plain misconstrued Court of 500.3148(1) additional thereby imposed estab- already duties those beyond duties on insurers statutes. We insurance no-fault Michigan’s lished at 201. Id. 16 Liddell, supra at 651. 17 Moore, supra at 200. 482 MICH Opinion of the Court
acknowledge that the trial court’s decision about reasonably presents whether an acted insurer mixed question fact.18 of law and We hold that the trial court here erred as a matter of law.
The plain of MCL 500.3101 et language seq. does not an impose independent duty “go on insurers to beyond” opinion medical their and the IMEs physicians Instead, physicians perform. those “[t]he determi- native factor in inquiry our is not whether the insurer *13 ultimately responsible benefits, is held for but whether its initial to pay refusal was unreasonable.”19 To deter- mine whether initial the refusal to was unreason- able, give the trial court must the unambiguous effect to 500.3148(1) language of MCL re- quires trial court in a engage fact-specific inquiry to determine whether “the insurer unreason- ably refused the claim to or delayed in making proper payment.”
We an conclude that insurer need not resort to a “tie breaker” to conflicting reports, resolve medical but we note that an insurer acts at its own risk in terminating benefits the face of conflicting medical reports.20 Here, however, defendant’s decision to seek out another physician prepare yet another IME in order to reconcile the conflicting opinions of Dr. Walter and Dr. Xeller was not unreasonable under the fact-specific 500.3142(2) inquiry by MCL mandated 500.3148. MCL “ provides in part: relevant proof [i]f reasonable is not (“What Ross, supra question at 7 constitutes reasonableness is a law, but whether the defendant’s denial of benefits is reasonable under fact.”). particular question facts of the case is a 19Id. at 11. (“Accordingly, delay places Id. an insurer’s refusal or a burden on the justify delay. insurer to by its refusal or can The insurer meet this burden showing delay product legitimate question that the or refusal is the of a statutory construction, law, uncertainty.”) constitutional or factual Moore v Secura Opinion of the Court claim, supported to the entire amount as supplied days paid if not within by proof reasonable is overdue plain the insurer.” Under by is received proof after statute, the claimant shoulders of the language entire proof of her reasonable supply initial burden some thereof. claim, portion reasonable for insurer evidence, such claimant provides When the as evidence well as must evaluate that evidence then a rea- making before the insurer’s doctor supplied the ben- regarding provide decision whether to sonable sought. efits defen- that the reject the trial court’s conclusion
We doctor or must defendant’s “go beyond” dant insurer erred Court of Appeals IME. We hold that unrea- ruling trial that defendant affirming the court’s the un- terminated benefits. Under sonably 500.3148(1) and MCL of MCL ambiguous language 500.3142(2), plain- decision to defendant’s discontinue uncertainty in light legitimate tiffs benefits of a factual reasonable. ATTORNEY FEES C. this Court held Proudfoot, In at supra on fees are overdue benefits “attorney payable *14 unreasonably pay to or insurer refused which the has omitted.) delayed in unreasonably paying.” (Emphasis 500.3148(1) at- provides part, “[t]he relevant against insurer charge shall torney’s fee be recovered, if finds that the court addition to the benefits to claim or refused unreasonably the insurer delayed making proper payment.” $822.52, only one case, the found that In this benefits, were work loss plaintiffs unpaid week of en- be Generally, attorney would plaintiffs overdue. those overdue attorney fees incurred collect titled to 482 MICH507 Opinion of the Court Here, however, benefits. plaintiffs before suit went to trial, defendant already had paid plaintiff for $822.52 one week of work loss benefits and all other payments that defendant owed aas result of the computer glitch. Because did not any attribute of the $79,415 the trial court awarded her in attorney fees and costs to collecting overdue work loss ben- efits, plaintiff is not entitled fees.
Moreover, because, above, as shown defendant did not unreasonably refuse to benefits, work loss plaintiff is not entitled to attorney fees incurred to collect the jury. Our review of the lower court record reveals proffered only one reason that defendant’s refusal to pay benefits 500.3148(1). was unreasonable under MCL Specifically, during the hearing on plaintiffs motion fees, plaintiffs counsel argued that defendant unrea- sonably discontinued benefits solely because of defen- dant’s reliance on the second IME performed by Dr. Xeller. Related to his broader argument, plaintiffs counsel faulted defendant for not sharing Dr. Xeller’s IME plaintiffs with other physicians, not asking plain- tiffs other physicians if they agreed with Dr. Xeller’s IME, second and not educating themselves about os- teoarthritis. To further buttress argument, his plain- tiff s counsel relied on Liddell for the proposition that defendant must reasonably evaluate medical condition.
As previously discussed, however, defendant’s reli- ance on Dr. Xeller’s second IME was not unreasonable under plain language of MCL Forcing defendant to “go beyond” what the unambiguous statu- tory language mandates would effectively require it to shoulder plaintiffs initial burden pursuant to MCL 500.3142(2). Further, this Court already has concluded *15 525 v Secura Moore Opinion the Court of and, Liddell misconstrued Appeals the Court that therefore, reading inappli- of Liddell is that Court’s Liddell Moreover, had not overruled even if we cable. we note that defendant case were applicable, and the in that than the insurer significantly did more here and hir- separate two IMEs case, including requesting investigate plain- case to whether manager a nurse ing return to tiff could work. the any did not attribute
Because fees and trial her court awarded that loss collecting overdue work to the $822.52 costs interest jury’s as determined benefits no in the lower award, and because there is evidence that refusal to benefits pay record defendant’s court unreasonable, attor- any is not entitled to was fees under MCL ney
D. OF LAW ERRONEOUS STATEMENT on majority by relying The Court of erred 97; Ass’n, v McCarthy App Auto Club Ins (1994), ... is proposition “[i]t NW2d for to pay for an insurer to refuse possible even the is later deemed not liable benefits insurer In actuality, McCarthy them.”21 Court addressed that “the proposition, namely, inquiry scope inverse is not whether the insurer [MCL 500.3148] under given held for a but ultimately responsible expense, pay its initial to expense whether refusal at Otherwise McCarthy, supra unreasonable.” 105. under stated, insurer’s initial refusal to benefits pay an deemed Michigan’s no-fault insurance statutes can be later that the though reasonable even it is determined required those benefits. insurer was [21] Moore, supra at citing McCarthy, supra at 105. MICH 507 Opinion op the Court
We recently proposition expressed affirmed an insurer’s refusal McCarthy initial no- *16 fault benefits can be deemed reasonable even if it is later determined that the required insurer was to pay Ross, those supra benefits. at 11. This Court’s state- in ment Ross and the in Court’s statement McCarthy, however, do not us to that the permit assume inverse proposition expressed by as the Court of Appeals is similarly Nothing jurisprudence correct. our suggests that an pay insurer’s initial refusal to no-fault insur- unreasonable, ance benefits can be deemed even though it is later determined that the did insurer not owe those benefits. The of Appeals proposition Court effectively penalizes an pay insurer for to refusing benefits that the insurer had no obligation contrast, to In pay. we conclude that if insurer benefits, an does not owe then Therefore, benefits cannot be overdue. before a court may attorney fees, award overdue, benefits must be an insurer have must refused to pay the claim or delayed payment.
Accordingly, reject the Appeals we Court of statement that “it is . .. for an possible insurer to unreasonably refuse to pay benefits even if the insurer later deemed not Moore, liable for them.” at 204. supra
IV CONCLUSION If an payment qualify overdue, insurer’s does not as attorney may claimant’s not receive attorney fees under Michigan’s no-fault insurance statutes. MCL case, 500.3101 et In this seq. of Appeals Court failed give to clearly effect to the expressed intent of the Legislature in MCL 500.3142 and MCL 500.3148. Be- cause only $98.71 interest and to failed award penalty interest on the $42,755 that benefits, it awarded work unpaid loss Moore v Secura Opinion by Dissenting Kelly, J. as overdue qualify do not those benefits conclude that we 500.3142(2). Moreover, act defendant’s to MCL pursuant did not constitute discontinuing plaintiff’s benefits or unreasonable pay to unreasonable refusal either an no offered Because delay under the unreasonableness support reasons to additional is not entitled benefits, plaintiff to pay defendant’s refusal of Appeals the Court Finally, reject we attorney fees. to initial refusal that an insurer’s statement erroneous deemed unreason- benefits can be insurance no-fault insurer determined that it is later though even able those benefits. required Court of reverse the Accordingly, we our consistent with proceedings for further remand opinion. *17 Young MArkman, JJ., concurred
TAYLOR, C.J., and J. Corrigan, with of a familial
CAVANAGH, J., participate did not because Insurance. counsel Secura relationship with majority from the I dissent (dissenting). J. KELLY, I judgment. Appeals the Court of reversing opinion correctly analyzed Court of hold that the would majority I believe that involved. also the issues for that of judgment its substitutes opinion improperly standards ignores the deferential the trial court uphold here. I would therefore applicable review and its determina- trial court’s award Fi- unreasonable. behavior was tion that defendant’s Detroit Automobile overrule Liddell v nally, I would not Exch.1 Inter-Ins Exch, 636; App Automobile Inter-Ins Liddell v Detroit
NW2d 482 MICH507 Dissenting Opinion by J. Kelly,
FACTS AND PROCEDURAL HISTORY 2000, In September plaintiff Hattie Moore’s automo- bile was struck while she driving on 1-475 County. Genesee Plaintiffs right knee was fractured the accident. She was unable to return to her custodial job. Defendant, plaintiffs insurer, no-fault began pay- ing her work loss benefits and other no-fault benefits in December 2000.
Both before and accident, after the plaintiff received treatment from an orthopedic surgeon, Dr. Norman Walter. She had originally sought treatment from Dr. Walter for osteoarthritis both knees. Following accident, Dr. Walter recommended surgery on plaintiffs right repair knee to the injury caused by the accident. At request, defendant’s Dr. Xeller, Charles also an orthopedic surgeon, also plaintiff. examined Xeller, Dr. in his independent (IME), medical examination agreed with the need for surgery. Dr. operated Walter on plaintiffs right knee on January 2001.
Plaintiff remained unable to return to work after the surgery and continued to treat with Dr. Walter. Defen- dant meanwhile retained Dan Schingeck, a nurse case manager, to explore whether could return to Schingeck work. met with Dr. Walter in August 2001. Some time after that meeting, Dr. Walter expressed his opinion that plaintiff would never be able to return to her normal employment. unclear, It is however, whether Dr. Walter formed that opinion because injuries of the plaintiff suffered in the automobile accident or because osteoarthritis.
Dr. Xeller performed a second IME plaintiff at defendant’s request on September 2001. This report stated that plaintiff no longer required any treatment for her orthopedic injuries sustained in the accident. The report further concluded plaintiff signifi- had 529 Moore v Secura Opinion by Dissenting Kelly, J. had knees that both deterioration cant osteoarthritic Dr. Xeller opined the accident. not been exacerbated activities. restricted work could return to plaintiff IME, defendant second basis of Dr. Xeller’s On the Plaintiff then benefits. no-fault plaintiff’s terminated no-fault benefits. seeking first-party a lawsuit filed unin- seeking Plaintiff a second lawsuit later added The cases were from defendant. motorist benefits sured in June 2005. jury, before a together tried $42,755 in loss work awarded The $50,000 in interest, benefits, uninsured mo- related to losses noneconomic entered, filed judgment After torist claim. MCL and costs under attorney fees a motion for argument on the judge trial heard oral The Following hearing ultimately granted it. motion and $79,415 in was awarded judge, plaintiff another before costs. attorney fees and fees only the award appealed
Defendant in a divided The Court of affirmed and costs. in this appeal leave to sought and defendant opinion,2 application.3 on the argument scheduled oral Court. We
ANALYSIS
A.
BENEFITS
OVERDUE
500.3148(1), attorney
may
be
Under
(1)
property
personal
“in an action for
are
benefits which
overdue”
insurance
protection
(2)
“unreasonably
refused to
the insurer
when
unreasonably delayed making proper pay-
claim or
were “overdue”
finding
that benefits
jury’s
ment.”
(2007).
Ins,
195;
App
NW2d 38
Mich
Moore v Secura
Ins,
will be “there is an interpretation of the evidence that provides logical explanation for the findings jury.”4 case, of the In this majority the upholds jury’s the finding that some benefits were overdue. However, it then extrapolates from the amount of penalty interest awarded that “the jury declined to $42,755 award on the interest in unpaid work loss benefits that it plaintiff.”5 Instead, the majority concludes that jury the found ”6 “only one week of work loss benefits was overdue. The (1) majority then opines the jury attributed this overdue week of work loss benefits to benefits paid late before trial to a computer (2) glitch, $42,755 “that the in work loss benefits was not overdue at the time of Therefore, the trial.”7 the majority asserts that $42,755 “the in work loss benefits overdue under plain the meaning of MCL 500.3142 and MCL 500.3148.”8
The majority cannot claim to have insight into the minds of the jurors this Any analysis case. of the jury’s conclusions must be based on the record. mind,
With that it should that, be noted majority fails to reference the parts of the jury verdict form where was specifically asked these ques- tions:
QUESTION NO. 1: Did Hattie Moore sustain work loss
arising
bodily injury
out of the accidental
she sustained in
September 27,
2000 motor vehicle accident?
4 Granger
Corp,
1, 7;
v
basis of reject about I it from the outset. 8 Ante at 520. y 531 Moore Secura Dissenting Opinion by J. Kelly, (Work work the loss income loss consists from of of during years three performed plaintiff would have first plaintiff had not been the accident the date after computed percent 85 injured. are at Work-loss benefits income, they may not exceed the plaintiff’s gross but loss of 1, $3,898.00 per 30-day period October sum from — 30, 2001, and, $4,027 per 30-day period September from 2002, 1, 30, and, per September October — 30, September 30-day period October from — *20 [sic], years may they payable beyond three the nor be after bodily injury.) accidental date of no) Y_(yes A. or Answer: your “yes,” is the amount of work B. If answer is what owed, (include only work loss not
loss to Hattie Moore defendant)? already hy paid $ 42 K.
Answer: QUESTION payment any NO. 3: of the ex- Was for Moore was penses [sic] or losses to which the Hattie entitled overdue? expense paid (Payment an or loss is overdue it is not for days within 30 receives reasonable after amount the claim. An overdue claim and the fact of 12 percent per at the rate annum bears interest from overdue.) expense or loss becomes date the no) Y_(yes
A. Answer: or “yes,” amount of your If what is the B. answer (include to Hattie Moore on overdue benefits interest owed defendant)? already paid hy interest 98.00 $ Answer: an answer to the first provides
The verdict form jury was entitled payment plaintiff to which the inquiry: was Therefore, contrary to yes. answered jury overdue? that conclusion, the verdict establishes majority’s Mich Dissenting Opinion by Kelly, J. this lawsuit was “an action for personal property insurance benefits are protection which overdue.” $11,000 Defendant is correct in penalty over interest would have been the appropriate amount of interest had the found the entire however, in benefits I Again, overdue. would decline to speculate about the reasons the size jury’s for of the noted, award. As the Court of majority filed “applications an of benefits” form with defendant December 2000 and employer provided employment indicating plaintiff wage information s his- tory. A jury may reasonable have found that those proofs established that some portion work loss ben- efits was overdue.9
I acknowledge majority identifies a logical explanation the amount of the penalty interest Nonetheless, award. the majority reaches this conclu- sion speculating jury’s about the rationale for award- ing a dollar amount that neither party suggested was correct. Unlike the I majority, decline to substitute my judgment jury, for that of the definitively which found that some payment was “overdue.”10
Finally, the majority’s citation of Beach v Farm State Mut Automobile Ins Co11as consistent with its decision Beach, here is In misplaced. jury the awarded no penalty plaintiff. interest to the right- The trial court 9 Oddly, majority “uphold[ing]” jury’s asserts that it is verdict. But, contrary majority’s assertion, to the nowhere in the record is it apparent jury only that “the decided that one week of work loss benefits Rather, was overdue.” Ante at 519. majority arrives at this conclusion speculative jury “may after a series of remarks about what the have arriving concluded” in at its verdict. 10 Appeals majority noted, jury As the Court of “[t]he is the finder of fact, Moore, supra second-guess and we will not it.” at 202. 11 Co, Beach v State Farm Mut Automobile Ins 612; App 216 Mich 550 (1996). NW2d 580 533 Moore v Secura Dissenting Opinion Kelly, J. that, fully given concluded interest penalty awarded, must jury have concluded that the no- Also, fault benefits at issue were not overdue. fees could not awarded. be easily distinguishable,
Beach is as noted in her brief, because the Court Beach had no need to speculate why jury about how or had awarded interest. penalty jury penalty interest, The in Beach awarded no precluding finding both a that benefits were overdue and an award of case, In conversely, majority *22 507 Dissenting Opinion by Kelly, J. and would not overrule disagree majority I with the Liddell. Moreover, agree majority’s I with the cannot of law the trial court erred as a matter conclusion that refusal to benefits to concluding that defendant’s was unreasonable. case, certainly I that it possible In this believe factual determined that no bona fide judge the trial exists on the record uncertainty Ample existed. evidence First, did not this conclusion. defendant even support medical of the competing opinions to reconcile the attempt importantly, IME and doctors. More did not doctors with the results of the provide plaintiffs IME their medical opinions. that conflicted with majority’s “plain meaning” declaration that 500.3142(2)15 500.3148(1)16 a provides of MCL and MCL provides: MCL 500.3142 (1) protection payable benefits are as loss Personal insurance accrues. (2) paid protection if Personal insurance benefits are overdue not days proof within 30 after an insurer receives reasonable of the fact proof and of the amount of loss sustained. If reasonable is not claim, supplied supported by as to the entire the amount reasonable proof paid days proof if is overdue not within 30 after the is received by Any part the insurer. of the remainder of the claim that is later supported by proof paid days reasonable is overdue not within 30 purpose after the is received the insurer. For the of calculat- overdue, ing payment the extent to which benefits are shall be treated placed as made on the date a draft or other valid instrument was addressed, or, properly postpaid envelope, the United States mail in a posted, delivery. if not so on the date of (3) payment simple An at the rate of overdue bears interest per 12% annum. provides, part: MCL 500.3148 in relevant (1) advising An is entitled to a reasonable fee for representing personal property protec- in an claimant action Moore v Secura Ins Dissenting Opinion by Kelly, J. *23 Liddell basis for overruling unavailing. appar- As is statutes, ent they from the text of these are entirely here, parties silent on the circumstances where the have conflicting opinions.17 medical
Notably, requires only the statute “reasonable proof” of the claim and the plaintiffs amount of loss sustained in order unpaid Contrary to make benefits overdue. to that, I submit under majority, plain meaning of proof,” “reasonable the medical opinion plaintiffs of doctor meets that standard.
A lay dictionary defines “reasonable” as “agreeable reason; logical.”18 to or accord with “Proof” is defined as “1. evidence sufficient thing to establish a as true or (injudicial believable.... 5. evidence proceedings) seems to substantiate or corroborate a or charge alle- gation.”19 attorney’s
tion insurance benefits which are overdue.The
fee shall be
charge against
recovered,
a
insurer
addition to the benefits
pay
the court findsthat the insurer
refused to
the claim
unreasonably delayed making proper payment.
or
17
majority rejects
“[n]othing
plain
Liddell because
in the
500.3148(1)
language
requires
of MCL
. . .
an insurer to reconcile
conflicting
opinions.”
argument
medical
Ante at 521. This
makes little
500.3148(1)
given
language
sense
that no
in either MCL 500.3142 or
requires
anything
an insurer to do
other than
benefits within 30
days
Otherwise,
from the claimant.
the benefits are deemed
3148(1).
“overdue” and the
§
insurer is liable for
fees under
proof,” nothing
Aside from the term “reasonable
in either statute
burdens,
evidentiary
any guidance
discusses
offers
for what consti
proof,”
provides any
tutes “reasonable
edification on the issues
fact,
majority
before us in this
In
case.
it is the
that writes words into
by requiring
provide
the statute
claimants to
more than “reasonable
proof”
conflicting
regarding
when there is
evidence
the cause of
injuries.
given
startling
majority’s
claimant’s
This outcome is
oft-repeated
unambiguous
mantra that
statutes must be enforced as
See,
Services,
e.g.,
Inc,
304, 312;
written.
Koontz v Ameritech
Mich
(2002).
In this it was plaintiffs opinion that the medical judge to conclude plaintiffs to establish sufficiently “logical” doctor was Therefore, the trial claim “as true or believable.” refusal benefits that defendant’s judge’s finding 500.3142(2) does not under MCL was unreasonable clear error. constitute if, performed doctor
However, after defendant’s even conclusion, conflicting plaintiffs yielded the IME that proof” no sufficed as “reasonable opinion longer doctor’s termi- claim, may immediately insurer Rather, attempt that does not nate benefits. an before ter- conflicting opinions credible medical reconcile unreasonably.20 minating benefits acts *24 in have least, the this case should At of the new contra- treating physicians alerted plaintiffs plaintiff This would have allowed an dictory opinion. satisfy additional to the to submit opportunity 500.3142(2). In in MCL proof” “reasonable threshold view, not be able to create a bona an insurer should my reject to uncertainty by choosing plaintiffs fide factual on its doctor’s opinion rely solely doctor’s credible medical To allow insurers to “independent report.” the terminate benefits on this basis alone contradicts be “bona uncertainty that the factual requirement fide.” 20 recognize majority supposedly this view for I that criticizes already beyond “impos[ing] those duties additional duties on insurers Michigan’s Ante at 521. established in no-fault insurance statutes.” However, requirement previously, is consistent as stated I believe this Moreover, plain meaning proof.” of “reasonable I note that in
with the immediately requirement puts practice, insurers on notice that this information, contradictory terminating benefits in the face of medical action, contrast, any probably By “unreasonable.” without further requirement majority’s impose rule does not such a but leaves an insurer conflicting terminating benefits in the face of “act[] at its own risk majoriiy’s analysis reports.” to me that the medical Ante at 522. It seems twisting in the wind. leaves insurers Moore v Secura Ins Dissenting Opinion by J. Kelly, that, I overruled, further conclude even if Liddell is I would reach the same result because defendant “unrea- sonably delayed making proper payment” under 500.3148(1). I would so hold because defendant failed pay plaintiff monies it knew were owed consid- ering computer glitch that had delayed payment. Defendant conceded that the payment covering De- cember 2000 to March 2001 was overdue and that it “admittedly owed” percent penalty interest 500.3142(3). payment that late under MCL Defen- dant’s failure to pay penalty interest it acknowl- edged was owed to constitutes an unreasonable delay in making “proper payment” under MCL Nothing statutory language re- “proper payment” stricts to overdue benefits. Legislature’s decision to allow fee awards where “the insurer unreasonably refused to the claim or unreasonably delayed in making proper payment” preference demonstrates a (1) recover fees in the following circumstances: (2) if insurers all, refuse to pay claim at (3) if they unreasonably delay claim, paying the they unreasonably delay in paying the proper amount of Here, the claim. because defendant conceded that penalty interest was owed on the overdue payment, it was unreasonable for it pay plaintiff not to proper amount of that claim. The proper amount was the overdue plus percent benefits penalty interest.
I therefore conclude that judge the trial did not *25 clearly err holding that defendant’s refusal to benefits was unreasonable.
C. ATTORNEY FEES Because I believe that the trial court did clearly (1) err by concluding that some benefits were overdue 482 MICH507 Opinion by Dissenting Kelly, J. (2) unrea- to the claim was defendant’s refusal trial court did not sonable, conclude that the I further $79,415 in awarding plaintiff in abuse its discretion argu- in I no merit defendant’s attorney fees. also see fees, that, attorney is entitled ment even directly attributable portion she recover may overdue benefits. securing Exch,21 the Automobile Inter-Ins In Cole v Detroit should have that the trial court defendant asserted of time portion claim for fees on based its of the attorney expended pursuit rejected posi this Appeals claim. The Court of denied Cole and relies on Proud rejects tion. Defendant here arguing v Farm Mut Ins Co22 State Proudfoot foot effectively overruled Cole. supports argument its an award of attor- This Court reversed Proudfoot yet overdue because ney fees for benefits that were not argues Defendant they yet had not been incurred. incorrectly in this case distin- Appeals the Court of there because the benefits at issue guished Proudfoot incurred, at issue yet had not been whereas the benefits here incurred. were
However,
majority
Court of
this
as the
held,
defendant’s
support
position
case
there is no
inquiry
of the statute. The critical
plain language
may
be
determining
when
whether
maintaining
“an
awarded is whether
insurance
personal
property protection
action for
benefits which are overdue.”23
Exch,
603, 613-614;
v
Automobile Inter-Ins
App
Cole Detroit
137 Mich
(1984).
D. PUBLIC POLICY AND THE NO-FAULT ACT I Finally, my note that dissent is consistent with the purpose of the no-fault act.24 majority’s The opinion, by contrast, Legislature’s undermines the provid- intent of ing injured parties adequate and prompt reparation from insurers. I fear majority that the opinion provides opportunity further for insurers to abruptly deny claims by holding plaintiffs a higher standard than “reasonable proof” requirement of MCL
CONCLUSION I dissent majority’s from the decision to reverse the trial court’s award of attorney plaintiff. fees to Court of Appeals decision should be affirmed.
WEAVER, J.,
KELLY,
concurred with
J.
24 See, e.g.,
Attorney General,
554, 578-579;
Shavers v
(1978),
“goal
NW2d 72
which observed that the
of the no-fault insurance
system
provide
assured,
[is] to
victims of motor vehicle accidents
ad
equate,
prompt reparation
for certain economic losses.”
Wilder notes
his
is 12
of
represents
delayed
the one week of
work loss benefits for
plaintiff
Moore,
provided
proof.
supra
which
reasonable
at 209.
v Secura
Moore
Opinion of the Court
s
plaintiff
one week of
of
exactly
percent
represents
at
calculated
benefits,
loss
which
work
one week of
decided that
Thus,
jury
$822.52.
there is an
Because
was overdue.
work loss benefits
logical
a
provides
of the evidence
interpretation
verdict,
uphold
we
it.
jury’s
explanation
500.3148(1)
attorney
that an
further provides
in an
a claimant
representing
receive fees for
may only
In MCL
are overdue.”
for “benefits which
action
ben-
that overdue
500.3142(2),
Legislature explains
days after an
“not
within 30
paid
are those benefits
efits
receives reasonable
insurer
of
fact
500.3142(2)
Neither MCL
loss sustained.”
amount of
500.3148(1)
recovery
permits
nor MCL
in which a court awarded
for actions
fees
or,
stated
reasonably
dispute,
that were
benefits
yet
overdue.
differently, benefits
slightly
Judge
consistent with
being
In addition to
WlLDER’s
another Court
dissent,12
view coincides with
our
award
a
refused to
decision
which
Appeals
overdue
benefits were not
interest because
Automo-
v
Farm Mut
500.3142. Beach State
under MCL
(1996). In
612;
Notes
fees.
this
notes
awarded,
the amount of
interest
then makes a
guesses
series of
about the
I
jury’s intent. would adhere to
the clear
on the jury
answer
verdict form: the
concluded that benefits were overdue.
B. UNREASONABLEREFUSAL OR DELAY
An
insurer’s refusal to
benefits is not unreason-
able
it
“the product
legitimate question
when
of a
statutory construction,
law,
constitutional
or a bona
uncertainty.”12
fide factual
application
trial court’s
of that standard
the particular
facts of the case is
majority
reviewed
clear error.13 The
concludes that
defendant’s refusal to
benefits in this case was the
product
legitimate
of a
factual
and there-
uncertainty
fore was reasonable. In the
process,
majority over-
Liddell,
Liddell,
In
rules
the Court of
supra.
upheld the trial court’s determination that an insurer
acted
because it did not attempt
to con-
tact physicians
conflicting opinions
with
or reconcile
contradictory
reports.14
medical
(1987).
Co,
51, 66;
v
Gobler Auto-Owners Ins
Mich