Opinion
No. 342945
02-14-2019
PRISCILLA GOLDNER, Plaintiff-Appellant, v. AUTO-OWNERS INSURANCE COMPANY, Defendant-Appellee.
If this opinion indicates that it is "FOR PUBLICATION," it is subject to revision until final publication in the Michigan Appeals Reports. UNPUBLISHED Berrien Circuit Court
LC No. 15-000245-NF Before: METER, P.J., and SAWYER and CAMERON, JJ. PER CURIAM.
Plaintiff, Priscilla Goldner, appeals a March 12, 2018 trial court order awarding defendant, Auto-Owners Insurance Company, case evaluation sanctions and denying plaintiff's motion for attorney fees. We affirm.
Plaintiff has appealed the trial court's judgment of no cause of action in Docket No. 339126, which has been submitted with the instant appeal. --------
In 2006, plaintiff suffered serious injuries when a vehicle ran her over multiple times, causing severe damage to her spine. At the time of the incident, plaintiff had a no-fault insurance policy issued by defendant. Defendant stopped paying PIP benefits in 2015 due to suspicious activity involving, inter alia, attendant care benefits. On July 8, 2016, the case was submitted to case evaluation, and a panel recommended an award of $60,000. Neither party replied to the award, and the case proceeded to a jury trial. The jury returned a no cause of action verdict, and the trial court entered a judgment of no cause of action. Thereafter, defendant filed a motion for case evaluation sanctions, requesting $11,825.41 in costs and $47,543 in attorney fees. Plaintiff filed her own motion for attorney fees, requesting $244,000. Eventually, on March 12, 2018, the trial court entered an opinion and order awarding defendants $43,034 in attorney fees as case evaluation sanctions, stating defendant was to receive a lesser award than requested for its abuse of discovery and its payment of medical bills during the time of the case evaluations. The trial court denied plaintiff's request for attorney fees.
I. CASE EVALUATION SANCTIONS
Plaintiff argues that the trial court erred in awarding defendant case evaluation sanctions that included attorney fees and costs.
A trial court's decision to award case evaluation sanctions involves a question of law that this Court reviews de novo while the award of attorney fees and costs is reviewed for an abuse of discretion. Smith v Khouri, 481 Mich 519, 526; 751 NW2d 472 (2008). Factual findings related to the award are reviewed for clear error. Reed v Reed, 265 Mich App 131, 164; 693 NW2d 825 (2005).
In a civil action, a trial court may submit the case to evaluation. MCR 2.403(A)(1). The parties must accept or reject the evaluation within 28 days after service of the evaluation, and failure to respond constitutes a rejection. MCR 2.403(L)(1); Peterson v Fertel, 283 Mich App 232, 234 n 1; 770 NW2d 47 (2009). If a party rejects an evaluation, that party is subject to sanctions if he or she fails to improve their position at trial. Elia v Hazen, 242 Mich App 374, 378; 619 NW2d 1 (2000). Specifically, MCR 2.403(O) provides in relevant part as follows:
(1) If a party has rejected an evaluation and the action proceeds to verdict, that party must pay the opposing party's actual costs unless the verdict is more favorable to the rejecting party than the case evaluation. However, if the opposing party has also rejected the evaluation, a party is entitled to costs only if the verdict is more favorable to that party than the case evaluation.
* * *
(6) For the purpose of this rule, actual costs are
(a) those costs taxable in any civil action, and
(b) a reasonable attorney fee based on a reasonable hourly or daily rate as determined by the trial judge for services necessitated by the rejection of the case evaluation, which may include legal services provided by attorneys representing themselves or the entity for whom they work, including the time and labor of any legal assistant as defined by MCR 2.626.
Sanctions under MCR 2.403(O) are mandatory. Cusumano v Velger, 264 Mich App 234, 235; 690 NW2d 309 (2004). In the event that a party is entitled to case evaluation sanctions, the burden of establishing the reasonableness of attorney fees is on the party seeking the award. Khouri, 481 Mich at 528-529. In awarding attorney fees, a trial court must "consider the totality of special circumstances applicable to the case at hand." Id. at 529.
In this case, plaintiff does not dispute that the case was submitted to case evaluation on July 8, 2016, and that the panel returned an evaluation of $60,000 in favor of plaintiff. Plaintiff also does not dispute that neither party replied to the award. Plaintiff's failure to reply to the award amounted to a rejection of the evaluation. See Peterson, 283 Mich App at 234 n 1. In addition, plaintiff failed to improve her position at trial. The trial court dismissed some of plaintiff's claims when it granted defendant's motion for a directed verdict. The jury then returned a verdict of no cause of action in favor of defendant on the remaining claims. Therefore, plaintiff cannot reasonably contend that she improved her position at trial, and case evaluation sanctions were mandatory under MCR 2.403(O). See Cusumano, 264 Mich App at 235. Included within those sanctions were attorney fees and costs. See MCR 2.403(O)(6).
Plaintiff argues that defendant was not entitled to case evaluation sanctions because defense counsel engaged in misconduct related to a discovery violation. However, the case evaluation sanctions were not discretionary, instead, the sanctions were mandatory pursuant to MCR 2.403(O). See Cusumano, 264 Mich App at 235. To the extent that plaintiff argues that the trial court erred in denying her motion to vacate the jury verdict, the jury verdict is not part of the order that is at issue in this appeal.
Plaintiff argues that defendant was not entitled to attorney fees, and she cites MCR 2.403(O)(11). MCR 2.403(O)(11) provides that if the verdict is a result of a ruling on a motion, "the court may, in the interest of justice, refuse to award actual costs." The "verdict" in this case is not "a judgment entered as a result of a ruling on a motion after rejection of the case evaluation," MCR 2.403(O)(2)(c), and therefore, the verdict did not fall within the scope of MCR 2.403(O)(11). In this case, the trial court entered a judgment following the jury verdict. While the trial court granted a directed verdict on some of plaintiff's claims, the case went to trial and the jury returned a verdict. Thus, the verdict at issue was a jury verdict, not a judgment entered as a result of a ruling on a motion.
Moreover, even if the judgment was entered following a ruling on a motion—i.e., the motion for directed verdict—plaintiff cannot show that the trial court abused its discretion in declining to utilize MCR 2.403(O)(11) to refuse to award actual costs. The trial court considered defense counsel's discovery violation in awarding case evaluation sanctions. Indeed, the trial court reduced the sanctions award based on the improper conduct. Plaintiff has failed to show that this decision amounted to an abuse of discretion.
Plaintiff argues that defendant was not entitled to its bill of costs as part of the case evaluation sanctions. However, the trial court denied defendant's $11,825.41 bill of costs for failure to comply with MCR 2.625(2). Therefore, this aspect of plaintiff's argument is devoid of merit. In sum, the trial court did not err in awarding defendant case evaluation sanctions in the form of attorney fees.
II. DENIAL OF PLAINTIFF'S ATTORNEY FEES
Next, plaintiff argues that the trial court erred in denying her request for attorney fees and costs under MCL 500.3148(1). On appeal, plaintiff argues that she is entitled to $360,250 in attorney fees and $30,759.28 in costs. We disagree.
In reviewing a trial court's decision whether to award attorney fees under MCL 500.3148(1), "[t]he trial court's decision about whether the insurer acted reasonably involves a mixed question of law and fact." Hastings Mut Ins Co v Grange Ins Co of Mich, 319 Mich App 579, 587; 903 NW2d 400 (2017) (quotation marks and citation omitted). "What constitutes reasonableness is a question of law, but whether the defendant's denial of benefits is reasonable under the particular facts of the case is a question of fact." Id. This Court reviews questions of law de novo while factual findings are reviewed for clear error. Id. A finding is clearly erroneous "when the reviewing court is left with a definite and firm conviction that a mistake has been made." Id. (citation omitted).
MCL 500.3148(1) provides:
An attorney is entitled to a reasonable fee for advising and representing a claimant in an action for personal or property protection insurance benefits which are overdue. The attorney's fee shall be a charge against the insurer in addition to the benefits recovered, if the court finds that the insurer unreasonably refused to pay the claim or unreasonably delayed in making proper payment. [Emphasis added.]
In applying MCL 500.3148(1), the Michigan Supreme Court has explained as follows:
MCL 500.3148(1) establishes two prerequisites for the award of attorney fees. First, the benefits must be overdue, meaning "not paid within 30 days after [the] insurer receives reasonable proof of the fact and of the amount of loss sustained." MCL 500.3142(2). Second, in postjudgment proceedings, the trial court must find that the insurer "unreasonably refused to pay the claim or unreasonably delayed in making proper payment." MCL 500.3148(1). Therefore, assigning the words in MCL 500.3142 and MCL 500.3148 their common and ordinary meaning, "attorney fees are payable only on overdue benefits for which the insurer has unreasonably refused to pay or unreasonably delayed in paying." [Moore v Secura Ins, 482 Mich 507, 517; 759 NW2d 833 (2008) (citations omitted).]
Under the statute, a claimant has the "initial burden to supply reasonable proof of her entire claim, or reasonable proof for some portion thereof." Id. at 523. Upon receipt of this proof, "the insurer then must evaluate that evidence as well as evidence supplied by the insurer's doctor before making a reasonable decision regarding whether to provide the benefits sought." Id. In addition, "[w]hen determining whether attorney fees are warranted for an insurer's delay to make payments under the no-fault act, a delay is not unreasonable if it is based on a legitimate question of statutory construction, constitutional law, or factual uncertainty." Attard v Citizens Ins Co of America, 237 Mich App 311, 317; 602 NW2d 633 (1999).
The trial court denied plaintiff's request for attorney fees. The trial court found that plaintiff submitted evidence to support that defendant untimely paid claims that were not submitted to the jury. However, the trial court found that the evidence was "insufficient" in that plaintiff's documentation was handwritten and illegible. The trial court found that, to the extent plaintiff submitted proof of untimely payment of benefits, there was a reasonable dispute between the parties about the validity of the claims. The trial court explained, "[w]ith regard to the other expenses, the Court quite simply cannot make heads-or-tails of [p]laintiff's documents, and must therefore find that [p]laintiff has failed to carry her burden on establishing that these expenses were not in reasonable dispute." The trial court did not clearly err in making these findings.
In its order, the trial court noted that an independent medical examination "indicated that [p]laintiff's long term opiate use was increasing her pain and disability and that use of said medications should be discontinued." This supported the conclusion that payment for opiates was in reasonable dispute. Moreover, the trial court found that plaintiff's counsel failed to "carry her burden of supporting claimed hours with evidentiary support and submitting detailed billing records." Plaintiff submitted a calendar and a hand-written list of hours worked during 2015 through 2017; however, plaintiff "supports these hours with absolutely nothing to tie them to any amount of work." Therefore, the trial court concluded that, even if defendant unreasonably delayed reimbursement, plaintiff was not entitled to any attorney fees or costs.
Having reviewed the record, we conclude that the trial court did not clearly err in finding that claims paid by defendant before trial were in reasonable dispute. There was evidence attached to plaintiff's lower court brief to show that defendant paid some claims after the proceeding commenced. However, the trial court did not clearly err in finding that plaintiff failed to show that defendant unreasonably delayed payment of these claims. The exhibits attached to plaintiff's brief do not establish unreasonable delay. The trial court found that there was a dispute as to what services should be reimbursed given the independent medical examinations. On this record, we cannot conclude that the trial court clearly erred in making these factual findings.
Moreover, even assuming that plaintiff could show that defendant unreasonably delayed payment on the reimbursed claims, the trial court did not clearly err in finding that plaintiff's counsel failed to show a correlation between the reimbursed claims and any attorney fees. Plaintiff's counsel attached several documents to the amended lower court brief that appear related to attorney fees. There are copies of 28 months of calendars with handwriting purporting to show time that plaintiff's counsel spent on this case. The writing is virtually unreadable and cannot be relied upon to connect the time marked on any of the copies to the time that plaintiff's counsel spent working on the reimbursed claims discussed above. Plaintiff attached other documents to her lower court brief, but none of the attachments showed an amount that correlated with plaintiff's counsel's representation as to the reimbursed claims.
Stated simply, plaintiff's counsel failed to submit proof to support her request for attorney fees under MCL 500.3148(1). Plaintiff's counsel submitted an incoherent lower court brief in which she failed to clearly articulate what claims were paid, when they were paid, when they should have been paid, and how defendant acted unreasonably in delaying payment. Given the record, the trial court did not clearly err in finding that defendant acted reasonably in delaying payment on the various PIP claims that defendant paid prior to trial.
Affirmed.
/s/ Patrick M. Meter
/s/ David H. Sawyer
/s/ Thomas C. Cameron