AOPP v. Auto Club Ins. Ass'n

• Citation: 670 N.W.2d 569,257 Mich. App. 365
• Decision Date: 03 July 2003
• Docket Number: Docket No. 231804.
• Court: Court of Appeal of Michigan (US)
• Parties: ADVOCACY ORGANIZATION FOR PATIENTS & PROVIDERS, et al., Plaintiffs-Appellants, 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. and Linkage Enterprises, Inc., Defendant.

670 N.W.2d 569

257 Mich. App. 365

ADVOCACY ORGANIZATION FOR PATIENTS & PROVIDERS, et al., Plaintiffs-Appellants, 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. and

Linkage Enterprises, Inc., Defendant.

Docket No. 231804.

Court of Appeals of Michigan.

Submitted April 17, 2003, at Lansing.

Decided July 3, 2003, at 9:00 a.m.

Released for Publication August 20, 2003.

Lopatin, Miller, Freedman, Bluestone, Herskovic & Domol (by Barbara H. Goldman and Richard E. Shaw) and Linda Fausey, Southfield, Lansing, for the plaintiffs.

Dykema Gossett PLLC (by Lori M. Silsbury), Lansing, for Citizens Insurance Company and Auto-Owners Insurance Company.

Bodman, Longley & Dahling (by James A. Smith), Detroit, for State Farm Mutual Automobile Insurance Company.

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

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

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

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

Williams Mullen Clark & Dobbins (by Susan Tukel), Detroit, for Transamerica Insurance Group.

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

Feeney, Kellett, Wienner & Bush (by Cheryl A. Bush), Bloomfield Hills, for Review Works.

Still, Nemier, Tolari & Landry, P.C. (by David B. Landry), Farmington Hills, for Recovery Limited, Inc.

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

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

Jaffe, Rait, Heuer & Weiss, P.C. (by Joseph J. Shannon), Detroit, for Manageability, Inc.

Before FITZGERALD, P.J., and MARKEY and MURRAY, JJ.

PER CURIAM.

Plaintiffs Advocacy Organization for Patients & Providers and others appeal as of right the trial court's order granting defendants Auto Club Insurance Association and others' motion for summary disposition and denying plaintiffs' cross-motion for partial summary disposition in this no-fault insurance case. We affirm.

I. Basic Facts and Procedural History

This case involves a dispute over the interpretation of Michigan's no-fault act, M.C.L. § 500.3101 et. seq., and specifically M.C.L. § 500.3107 and 500.3157. Plaintiffs are forty-nine individual medical providers, two guardians of catastrophically injured victims of automobile accidents, and an organization made up of health-care providers and health-care patients, whose principal objective is to act as a spokesperson for and to protect the legal rights of both groups. Defendants are either no-fault insurance companies who have issued policies to Michigan motorists, or the review companies employed by one or more of defendant insurance companies to review medical bills arising out of automobile accidents.¹ Plaintiffs brought this action for declaratory judgment and injunctive relief, alleging that defendants violated the provisions of M.C.L. § 500.3107(1)(a), which requires that insurers pay "all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person's care, recovery or rehabilitation." Plaintiffs claimed that, under M.C.L. § 500.3107, defendant insurance companies have unlawfully been failing to pay the full and "reasonable" amount of their insureds' medical bills after employing defendant review companies to compare the insureds' providers' fees to those of other providers in order to determine what is "reasonable." Plaintiffs asserted that, in determining whether the fee is reasonable, § 3157 requires defendants to compare their insureds' health-care provider's fees for services with that provider's fees for comparable services provided to an uninsured patient. Plaintiffs therefore concluded that defendants' failure to pay the reasonable costs for necessary medical treatment rendered to victims of automobile accidents constituted a breach of their obligations under the act.

Plaintiffs further alleged that defendants had unlawfully informed their insureds in writing that they (the insureds) were not responsible or liable to the medical providers for the balance of the charges and promised to defend and indemnify their insureds against the providers' debt-collection attempts against the insureds/patients. As a result, plaintiffs asserted causes of action for tortious interference with contractual and business relationships and conspiracy to commit such acts.²

Plaintiffs filed a motion for findings and declarations, or partial summary disposition pursuant to MCR 2.116(C)(9) with regard to their request for declaratory judgment, arguing that defendants failed to state a valid defense to plaintiffs' claim that defendants may not lawfully refuse to fully reimburse health-care providers for covered medical expenses as provided in § 3157 of the act. Plaintiffs further argued that under the language of the act, defendants may not refuse to fully reimburse plaintiff providers for covered medical expenses as long as the provider's charge is not greater than the amount that provider would charge for similar services to persons without insurance. Thus, plaintiffs argued that defendants may not unilaterally determine whether a charge is reasonable when a standard for making that decision has been provided by the Legislature under § 3157. Accordingly, plaintiffs sought declarations and findings or partial summary disposition on their request for a declaratory judgment consistent with their interpretation of § 3157.

Meanwhile, defendants filed a motion for summary disposition pursuant to MCR 2.116(C)(8) and (C)(10), arguing that (1) a "customary" fee for a particular provider is not necessarily a "reasonable" one, and (2) defendants are permitted to evaluate a medical invoice for reasonableness as a matter of law. The motion also sought summary disposition regarding plaintiffs' claims for tortious interference, civil conspiracy, and fraud on the ground that each of those counts either failed to state a claim on which relief could be granted or failed to demonstrate a genuine issue of material fact for trial. Defendants concluded that summary disposition was appropriate as a matter of law and requested that plaintiffs' complaint be dismissed in its entirety.

After a hearing on the parties' respective motions for summary disposition, the trial court issued a well reasoned, written opinion and order denying plaintiffs' motion for partial summary disposition and granting defendants' cross-motion for summary disposition. The trial court rejected plaintiffs' argument and held that, under the act, defendants were entitled to review any medical charges and pay only those charges determined to be reasonable. The court further found that the "reasonableness" language in § 3157 did not refer to the amount that the medical providers established as the "customary" charge for their services, as such a conclusion would allow unilateral decisions by health-care providers regarding what constitutes reasonable medical expenses and would directly conflict with the Legislature's purpose in enacting the no-fault system and § 3107 in particular.

The trial court also found that plaintiffs had failed to establish a claim for tortious interference, civil conspiracy, or fraud because plaintiffs failed to establish any wrongful, unethical, or fraudulent conduct on the part of defendants in refusing to fully reimburse plaintiff providers' for medical claims. As a result, the trial court denied plaintiffs' motion, granted defendants' motion for summary disposition, and entered an order dismissing all of plaintiffs' claims with prejudice. This appeal followed.

II. Standard of Review

This court reviews de novo a trial court's decision regarding a motion for summary disposition. Spiek v. Dep't of Transportation, 456 Mich. 331, 337, 572 N.W.2d 201 (1998). Similarly, issues involving statutory interpretation are questions of law that this Court reviews de novo. Christiansen v. Gerrish Twp., 239 Mich.App. 380, 384, 608 N.W.2d 83 (2000).

III. Analysis

A. "Reasonable" Medical Expenses Under the No-Fault Act

The dispositive issue raised on appeal is whether, under the language of the act, defendant insurance companies are required to pay the full amount charged as long as the charge constitutes a "customary" one, or if defendants are entitled to independently review and audit the medical costs charged to their insureds to determine whether a particular charge is "reasonable." The answer to this question lies within the language of the statute itself.

The primary goal of statutory interpretation is to ascertain and give effect to the intent of the Legislature. Frankenmuth Mut. Ins. Co. v. Marlette Homes, Inc., 456 Mich. 511, 515, 573 N.W.2d 611 (1998) (citations omitted). The first step in determining the Legislature's intent is to examine the specific language of the statute itself. In re MCI Telecom Complaint, 460 Mich. 396, 411, 596 N.W.2d 164 (1999). If the statutory language is clear and unambiguous, the court must apply the statute as written, and judicial construction is neither necessary nor permitted. Sun Valley Foods Co. v. Ward, 460 Mich. 230, 236, 596 N.W.2d 119 ...