Attard v. Citizens Ins. Co., Docket No. 203300.

• Decision Date: 01 December 1999
• Docket Number: Docket No. 203300.
• Citation: 237 Mich. App. 311,602 N.W.2d 633
• Parties: Michael Joseph ATTARD, Plaintiff-Appellant/Cross-Appellee, v. CITIZENS INSURANCE COMPANY OF AMERICA, Defendant-Appellee/Cross-Appellant.
• Court: Court of Appeal of Michigan — District of US

602 N.W.2d 633

237 Mich. App. 311

Michael Joseph ATTARD, Plaintiff-Appellant/Cross-Appellee, v. CITIZENS INSURANCE COMPANY OF AMERICA, Defendant-Appellee/Cross-Appellant.

Docket No. 203300.

Court of Appeals of Michigan.

Submitted June 16, 1999, at Detroit.

Decided August 20, 1999, at 9:25 a.m.

Released for Publication December 1, 1999.

Liss and Associates, P.C. (by Arthur Y. Liss), Bloomfield Hills, for the plaintiff.

Secrest, Wardle, Lynch, Hampton, Truex and Morley (by Simeon R. Orlowski), Mt. Clemens, for the defendant.

Before: SMOLENSKI, P.J., and GRIBBS and O'CONNELL, JJ.

SMOLENSKI, P.J.

Plaintiff, Michael Joseph Attard, suffered injuries as the result of an automobile accident and subsequently filed suit against defendant Citizens Insurance Company of America for benefits under the no-fault act, M.C.L. § 500.3101 et seq.; MSA 24.13101 et seq. After a jury trial, the court entered judgment in favor of plaintiff for $140,806.39. Plaintiff appeals as of right from the trial court's denial of his request for attorney fees and interest pursuant to the no-fault act. Defendant cross appeals from the trial court's denial of its motion for a partial judgment notwithstanding the verdict (JNOV) in which it requested the court to eliminate portions of the jury award and the court's order awarding plaintiff mediation sanctions for certain work performed by plaintiff's attorneys. We affirm in part, reverse in part, and remand for further proceedings.

Plaintiff suffered a closed-head injury as the result of an automobile accident on July 19, 1991. Following the accident, plaintiff's wife, Alice Attard, cared for plaintiff. Defendant, in turn, paid Alice for attendant care benefits under the no-fault act. The parties stipulated in their joint final pretrial order that defendant paid plaintiff all attendant care benefits due through June 24, 1993, and that the rate for attendant care benefits paid after that date was $15 an hour. On or about December 6, 1993, Alice terminated her employment to take care of plaintiff on a full-time basis, having elected to continue her health insurance coverage with her former employer for eighteen months as allowed under the insurance coverage continuation provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).¹ Plaintiff presented evidence at trial that defendant agreed to pay the premiums necessary to extend Alice's health insurance coverage under the COBRA (the COBRA policy) as long as it was a cost-effective option in handling plaintiff's claim-related medical bills; however, Alice's COBRA policy lapsed on March 31, 1994, because of nonpayment of the policy premiums.

Plaintiff filed his present two-count complaint in 1994. In count I, plaintiff claimed unpaid benefits, attorney fees, and interest because of defendant's failure to comply with the provisions of the no-fault act. In count II, plaintiff claimed damages for defendant's failure to pay the premiums on Alice's COBRA policy. After a trial lasting several days, the jury awarded plaintiff compensation for 7,667.77 hours of attendant care that Alice had provided to plaintiff, $1,789.84 for a mattress, $9,600 for massage therapy, $2,100 for a family health-club membership, and $12,150 for defendant's breach of the agreement to maintain health insurance for plaintiff and his family. On January 14, 1997, the trial court entered judgment against defendant in the amount of $140,806.39.²

Plaintiff filed postjudgment motions seeking costs, mediation sanctions pursuant to MCR 2.403, a no-fault attorney fee pursuant to M.C.L. § 500.3148; MSA 24.13148, no-fault interest pursuant to M.C.L. § 500.3142; MSA 24.13142, and prejudgment interest pursuant to M.C.L. § 600.6013; MSA 27A.6013. Defendant moved for a new trial and a partial JNOV. The trial court granted plaintiff's motion for mediation sanctions and costs, but denied the motion with respect to no-fault attorney fees, finding that defendant had adequate and reasonable grounds to defend the suit. The trial court also denied plaintiff's motion to collect both prejudgment interest and no-fault interest and defendant's motions.

Plaintiff appeals as of right from the trial court's order denying his motion for attorney fees and no-fault interest. Defendant cross appeals from the court's order denying its motion for a partial JNOV with respect to the jury awards for massage therapy, the health-club membership, breach of the agreement to pay COBRA benefits and the court's refusal to offset against its liability the $6,566.25 that defendant paid for plaintiff's attendant care provided in November 1996. Defendant also cross appeals the trial court's award of mediation sanctions to plaintiff for $14,200 of attorney fees incurred by a second attorney at trial. First, plaintiff contends that the trial court erred in refusing to award him attorney fees pursuant to M.C.L. § 500.3148; MSA 24.13148 because defendant unreasonably refused to pay him no-fault benefits. We disagree. A trial court's finding of an unreasonable refusal to pay or delay in paying benefits will not be reversed on appeal unless the finding is clearly erroneous. McKelvie v. Auto Club Ins. Ass'n, 203 Mich.App. 331, 335, 512 N.W.2d 74 (1994); United Southern Assurance Co. v. Aetna Life & Casualty Ins. Co., 189 Mich.App. 485, 492-493, 474 N.W.2d 131 (1991).

Plaintiff's claim is based on the no-fault act's attorney fee provision, M.C.L. § 500.3148(1); MSA 24.13148(1), which provides that an attorney is entitled to a reasonable fee for representing a claimant in an action for personal protection insurance benefits that are overdue and that the 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." When 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. Shanafelt v. Allstate Ins. Co., 217 Mich.App. 625, 635, 552 N.W.2d 671 (1996). When an insurer refuses to make or delays in making payment, a rebuttable presumption arises that places the burden on the insurer to justify the refusal or delay. McKelvie, supra at 335, 512 N.W.2d 74.

In the present case, plaintiff contends that defendant unreasonably refused to pay him for twenty-four-hour-a-day attendant-care benefits provided by Alice. Plaintiff relies on defendant's admissions that plaintiff's physician expressed his opinion that plaintiff needed twenty-fourhour supervision; that as of June 24, 1993, there had been no material change in plaintiff's medical condition or need for attendant care; that defendant had not been advised by plaintiff's physician of a reduction in need for attendant care; that defendant had access to the medical opinion and records of plaintiff's physician concerning plaintiff's need for attendant care; and that defendant had not received a medical opinion since June 24, 1993, that plaintiff did not require twenty-four-hour-a-day attendant care. Furthermore, Alice submitted affidavits attesting to the fact that she provided plaintiff with twenty-four-hour-a-day attendant care. Defendant responds that it paid Alice for only eighteen hours a day because she could not provide plaintiff with attendant care for twenty-four hours each and every day.

We agree with defendant that a legitimate question of factual uncertainty existed concerning whether Alice provided twenty-four-hour-a-day attendant care for plaintiff. Alice testified that at times she provided care "by means of other people" if she could not be in the house and that she considered herself as providing care if she was available by telephone. Alice also testified that there were times when she tended to her children while plaintiff was home. In addition, she testified that she installed alarms on doors to awaken her if she fell asleep and plaintiff got up in the middle of the night. On the basis of the record before us, we conclude that Alice's own testimony created a legitimate question of factual uncertainty concerning the amount of time that she actually provided attendant care for her husband. As a result, the trial court did not commit clear error in finding that defendant did not unreasonably refuse or delay payment of benefits.

Next, plaintiff contends that the interest allowed under the no-fault act, M.C.L. § 500.3142; MSA 24.13142 (the no-fault interest statute) is a "cost" on which he can collect prejudgment interest pursuant to M.C.L. § 600.6013(6); MSA 27A.6013(6) (the prejudgment interest statute). We agree. A trial court's interpretation of the prejudgment interest statute is a question of law, which this Court reviews de novo. Haberkorn v. Chrysler Corp., 210 Mich.App. 354, 371, 533 N.W.2d 373 (1995). These two statutes at issue in this case serve different purposes. The prejudgment interest statute authorizes a party to collect interest on a money judgment recovered in a civil action, with the interest calculated from the date of filing the complaint "on the entire amount of the money judgment, including attorney fees and other costs." MCL 600.6013(6); MSA 27A.6013(6). In Phinney v. Perlmutter, 222 Mich.App. 513, 540-541, 564 N.W.2d 532 (1997), we stated that the purpose of prejudgment interest is to compensate the prevailing party for expenses incurred in bringing actions for money damages and for any delay in receiving such damages. In addition, the prejudgment interest statute is a remedial statute to be construed liberally in favor of the plaintiff. McKelvie, supra at 339, 512 N.W.2d 74. On the contrary, the no-fault interest statute requires an insurer to pay simple interest of twelve percent for personal protection insurance benefits that are not paid within thirty days "after an insurer...