ADVOCACY ORGANIZATION v. AUTO CLUB INS.

• Decision Date: 08 March 2005
• Docket Number: Docket No. 124639. Calendar No. 5.
• Citation: 472 Mich. 91,693 N.W.2d 358
• Parties: ADVOCACY ORGANIZATION FOR PATIENTS & PROVIDERS, Plaintiff-Appellant, v. AUTO CLUB INSURANCE ASSOCIATION, Allstate Insurance Company, Citizens Insurance Company, Farm Bureau Insurance Company, Farmer's Insurance Exchange, Frankenmuth Mutual Insurance Company, Imperial Midwest Insurance Company, Secura Insurance Mutual Company, State Farm Insurance Company, Transamerica Insurance Group, Wolverine Mutual Insurance Company, Lahousse-Bartlett Disability, Manageability, Inc., Medcheck Medical Audit Services, Recovery Unlimited, Inc., and Auto-Owners Insurance Company, Defendants-Appellees.
• Court: Michigan Supreme Court

693 N.W.2d 358

472 Mich. 91

ADVOCACY ORGANIZATION FOR PATIENTS & PROVIDERS, Plaintiff-Appellant, v. AUTO CLUB INSURANCE ASSOCIATION, Allstate Insurance Company, Citizens Insurance Company, Farm Bureau Insurance Company, Farmer's Insurance Exchange, Frankenmuth Mutual Insurance Company, Imperial Midwest Insurance Company, Secura Insurance Mutual Company, State Farm Insurance Company, Transamerica Insurance Group, Wolverine Mutual Insurance Company, Lahousse-Bartlett Disability, Manageability, Inc., Medcheck Medical Audit Services, Recovery Unlimited, Inc., and Auto-Owners Insurance Company, Defendants-Appellees.

Docket No. 124639. Calendar No. 5.

Supreme Court of Michigan.

Argued November 9, 2004.

Decided March 8, 2005.

Sheldon L. Miller, Barbara H. Goldman, Southfield, MI, and Linda Fausey Lansing, MI, for the plaintiffs.

Barris Sott Denn & Driker, P.C. (by Stephen E. Glazek), Detroit, MI, for Auto Club Insurance Association.

Garan, Lucow, Miller, P.C. (by David N. Campos), Grand Rapids, MI, for Allstate Insurance Company, Wolverine Mutual Insurance Company, and Secura Insurance Company.

Dykema Gossett, P.L.L.C. (by Lori McAllister), Lansing, MI, for Citizens Insurance Company and Auto-Owners Insurance Company.

Willingham & Cote (by Raymond J. Foresman), East Lansing, MI, for Farm Bureau Insurance Company.

Wheeler & Upham, P.C. (by Gary A Maximiuk and Jack L. Hoffman), Grand Rapids, MI, for Farmer's Insurance Exchange.

Foster Swift Collins & Smith (by Scott L. Mandel), Lansing, MI, for Frankenmuth Mutual Insurance Company.

Bodman, L.L.P. (by Diane L. Akers and James Albert Smith), Detroit, MI, for State Farm Mutual Automobile Insurance Company.

Howard & Howard Attorneys, P.C. (by Eric H. Lipsitt), Detroit, MI, for Transamerica Insurance Group.

Bodman, L.L.P. (by Joseph J. Shannon), Detroit, MI, for Manageability, Inc.

Lambert, Leser, Cook, Schmidt & Guinta, P.C. (by Susan M. Cook), Bay City, MI, for Medcheck Medical Audit Services.

Nemier, Tolari, Landry, Mazzeo & Johnson P.C. (by David B. Landry and Michelle E. Mathieu), Farmington Hills, MI, for Recovery Unlimited, Inc.

Zausmer, Kaufman, August & Caldwell, P.C. (by Mark J. Zausmer), Farmington Hills, MI, for Titan Insurance Company.

Bush, Seyferth & Kethledge, P.L.L.C. (by Cheryl A. Bush), Troy, MI, for Review Works.

Dykema Gossett, P.L.L.C. (by Jill M. Wheaton and Joseph Erhardt), Ann Arbor, MI, for the Michigan Catastrophic Claims Association, amicus curiae.

George M. Carr, P.C. (by George M. Carr), Lansing, MI, for the Property Casualty Insurers Association of America, amicus curiae.

Honigman Miller Schwartz and Cohn, L.L.P. (by Chris Rossman, Jason Schian Conti, and Cynthia F. Reaves), Detroit, MI, for the Michigan Health and Hospital Association, amicus curiae.

Kerr, Russell and Weber, P.L.C. (by Richard D. Weber and Joanne Geha Swanson), Detroit, MI, for the Michigan State Medical Society, amicus curiae.

Gross, Nemeth & Silverman, P.L.C. (by James G. Gross), Detroit, MI, for the Michigan Chamber of Commerce, amicus curiae.

Sinas, Dramis, Brake, Boughton & McIntyre, P.C. (by George T. Sinas and L. Page Graves), Lansing, MI, for the Coalition Protecting Auto No Fault, amicus curiae.

MEMORANDUM OPINION

This declaratory judgment action concerns obligations under the no-fault act, M.C.L. § 500.3101 et seq., to pay medical expenses. Plaintiffs are individual medical providers, two guardians of catastrophically injured victims of automobile accidents, and an organization of health-care providers and patients that principally seeks to protect the legal rights of both groups. Defendants are either no-fault insurance companies that have issued policies to Michigan motorists or the review companies employed by one or more of those insurers to review medical bills arising from automobile accidents.

M.C.L. § 500.3107(1)(a) requires that an insurer pay "all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person's care, recovery, or rehabilitation." M.C.L. § 500.3157 provides that a medical provider "may charge a reasonable amount for the products, services and accommodations rendered. The charge shall not exceed the amount the person or institution customarily charges for like products, services and accommodations in cases not involving insurance."

After a hearing on the parties' respective motions for summary disposition, the trial court ruled that defendants were entitled to review any medical charges and pay only those determined to be reasonable. The trial court further ruled that even though a medical provider's charge does not exceed the amount that provider customarily charges in cases not involving insurance, that fact alone does not establish that the charge is reasonable.

The Court of Appeals affirmed. 257 Mich.App. 365, 670 N.W.2d 569 (2003). It ruled that it is for the trier of fact to determine whether a medical charge, albeit "customary," is also reasonable. 257 Mich.App at 379, 670 N.W.2d 569.

Because we agree with the Court of Appeals resolution of this issue, and the others presented to it, we affirm. M.C.L. § 7.302(G)(1).

TAYLOR, CORRIGAN and MARKMAN, JJ., concur.

MICHAEL F. CAVANAGH, J. (concurring).

At oral argument it became very clear that defendants' methodologies in determining reasonableness were never at issue at the trial court level, which accounts for the dearth of evidence regarding those methodologies. Counsel for plaintiff admitted that the reason discovery was not more directed toward illuminating the methodologies was because no one asked plaintiffs before this Court's leave order to discuss how reasonableness should be assessed. Although I agree with the Court of Appeals conclusion that "reasonable" and "customary" are two separate inquires, I view its reference to the 80th percentile test, given this record, as dicta. Given that the question of reasonableness was not before the lower courts, and, consequently, discovery did not center on the question, I would be apprehensive about sanctioning any method without knowing its full details. I agree also with the Court of Appeals concurrence that urged our Legislature to address this issue and implement some guidelines in this area, as other no-fault states have done.

MARILYN J. KELLY, J., concurs with MICHAEL F. CAVANAGH, J.

WEAVER, J. (concurring).

I join fully in Justice Cavanagh's concurrence.

I write separately because this case is further evidence that this Court needs to address and open for public comment the specific procedures to be followed when a justice decides whether or not to participate in a case, and whether Const 1963, art 6, § 6 requires justices to give written reasons for their decisions whether or not to participate in a case.

When this Court entered its order granting leave to appeal on June 25, 2004, Justice Young was shown as not participating; he is also shown as not participating in this memorandum opinion. No public or written explanation for Justice Young's decision not to participate in the case has been given to the Court, the parties, or the public.

A justice's nonparticipation in a case may arise in one of two ways. A justice may decide, on his own initiative, not to participate in a case, and be shown as not participating. Alternatively, a party may request the recusal of a justice from a case. Recusal is defined as "[t]he process by which a judge is disqualified on objection of either party (or disqualifies himself or herself) from hearing a lawsuit because of self interest, bias or prejudice." Black's Law Dictionary (6th ed.).

It is now clear to me that there is a right and an expectation of the people of Michigan that a justice will participate in every case unless there is a valid publicly known reason why the justice should not participate in a particular case. Traditionally, in this Court a justice's decision on whether to participate or not participate in a case has been a secret matter, and justices have not made public the reasons for that decision.¹ But a justice's decision whether to participate or not participate in a case and the reasons for that decision should not be governed by tradition and secrecy; they should be governed by the law, the Constitution, and the Michigan Court Rules made in conformance with the Constitution; and they should be made publicly and in writing for the record. This Court should set the highest standards for clear, fair, orderly, and public procedures.

The question whether a justice should participate or not participate in a case arises with regularity. Since May 2003, when I proposed opening an administrative file on the recusal procedure in In re JK, 468 Mich. 1239, 663 N.W.2d 918 (2003), a justice has been shown as not participating, with no reason given, in at least 31 cases.²

The questions raised in this and any other case in which a justice's participation or nonparticipation arises are:

1) Are individual justices bound by the requirements of art. 6, § 6 of the 1963 Michigan Constitution that states, "Decisions of the supreme court ... shall be in writing and shall contain a concise statement of the facts and reasons for each decision ..."?

2) Do the procedures regarding the disqualification of judges set forth in Michigan Court Rule 2.003 apply to Supreme Court justices?

Const. 1963, art. 6, § 6, which states that "Decisions of the supreme court ... shall be in writing and shall contain a concise statement of the facts and reasons for each decision..." requires that justices give written reasons for each decision.³ There is no more fundamental purpose for the requirement that the decisions of the Court be in writing than for the decisions to be accessible to the citizens of the state. Because a justice's decision to not participate in a case can, itself, change the outcome of a case, the decision is a matter of public significance and public access and understanding regarding a justice's...