Bonkowski v. Allstate Ins. Co.

• Court: Court of Appeal of Michigan
• Writing for the Court: Zahra
• Citation: Bonkowski v. Allstate Ins. Co., 761 N.W.2d 784, 281 Mich. App. 154, 2008 WL 4603554 (Mich. App. 2008)
• Decision Date: 02 October 2008
• Docket Number: Docket No. 273945.
• Parties: BONKOWSKI v. ALLSTATE INSURANCE COMPANY.

761 N.W.2d 784

281 Mich. App. 154

BONKOWSKI v. ALLSTATE INSURANCE COMPANY.

Docket No. 273945.

Court of Appeals of Michigan.

Submitted March 11, 2008, at Detroit.

Decided October 2, 2008, at 9:00 a.m.

Liss and Associates, P.C. (by Nicholas S. Andrews and Arthur Y. Liss), and Larry A. Smith for the plaintiff.

Garan Lucow Miller, P.C. (by Daniel S. Saylor and Simeon S. Orlowski), for the defendant.

Before: TALBOT, P.J., and MARK J. CAVANAGH and ZAHRA, JJ.

ZAHRA, J.

In this attendant care benefit case brought under the Michigan no-fault act, MCL 500.3101 et seq., defendant, Allstate Insurance Company, appeals as of right a $2,541,146.87 jury verdict in favor of plaintiff, Shaun Bonkowski. The judgment entered on the verdict reflects the jury award of $1,730,723.67 in past due attendant care benefits, $10,546.85 in costs, $249,750 in attorney fees (549.5 hours at $500 an hour) pursuant to MCL 500.3148, and $525,126.35 in statutory interest pursuant to MCL 600.6013. The judgment denied plaintiff's requests for additional attorney fees as case evaluation sanctions pursuant to MCR 2.403. The judgment also denied a request for 12 percent penalty interest under MCL 500.3142(3), running from the entry of the judgment through the satisfaction of judgment. Defendant appeals the denial of its motion for judgment notwithstanding the verdict (JNOV), the award of attorney fees under MCL 500.3148, and the amount of attorney fees awarded. Plaintiff cross-appeals the trial court's denial of attorney fees under MCR 2.403 and the trial court's failure to impose through the satisfaction of judgment the 12 percent penalty interest under MCL 500.3142(3). Plaintiff also requests attorney fees on appeal pursuant to MCL 500.3148 and MCR 7.216(C), claiming that defendant's appeal is vexatious. We affirm the denial of the motion for JNOV and the denial of a 12 percent penalty interest through the satisfaction of judgment under MCL 500.3142(3). We reverse the attorney fees awarded under MCL 500.3148 and the trial court's denial of reasonable attorney fees under MCR 2.403. We vacate the award of attorney fees and remand for a determination of reasonable attorney fees, if any, awardable under MCR 2.403 and consistent with Smith v. Khouri, 481 Mich. 519, 751 N.W.2d 472 (2008).

I. FACTS AND PROCEDURAL HISTORY

On June 3, 2001, 18-year-old Shaun Bonkowski, plaintiff, was struck by an automobile and suffered extensive and tragic injuries, including a spinal cord injury that left him nearly paralyzed from the neck down. He also suffered a traumatic brain injury, which impairs his short-term memory and ability to concentrate, and causes him emotional problems. Despite his injuries, plaintiff is able to operate a powered wheelchair and, with devices attached to his wrist, plaintiff can feed himself and use a computer keyboard. The driver of the vehicle that struck plaintiff was never located. Plaintiff was nonetheless insured under a no-fault automobile insurance policy issued by defendant.

Plaintiff initially received treatment at St. Joseph's Mercy Hospital until August 15, 2001. On that day, defendant arranged for plaintiff, along with his father, Andrew, to travel by a medical air service to the Craig Hospital (the Craig) in Colorado, an institution that specializes in quadriplegia and closed head injuries. Plaintiff and Andrew resided at the Craig until December 1, 2001. While there, Andrew received extensive training on how to care for plaintiff. A nonexhaustive list of the care that Andrew provides to plaintiff includes: administering oral medication, detecting and assessing pain, diagnosing dysreflexia (a potentially lethal condition involving a rise in blood pressure in a paraplegic), clearing lungs, administering a bowel program, preventing and treating skin ailments, physical therapy (moving his arms and legs to maintain a range of motion), attending to emotional concerns, maintaining hygiene and tending to dietary needs. Dr. Owen Perlman, physiatrist and plaintiff's primary treating physician, characterized Andrew's care of plaintiff as interdisciplinary or multidisciplinary, in that different aspects of plaintiff's care would be performed by different health care professionals, including nurses, physical therapists, respiratory therapists, psychologists, etc.

Laura Kling, a registered nurse employed by a private rehabilitation company that coordinates plaintiff's health care services, became involved with plaintiff's care when he was admitted at St. Joseph's and managed plaintiff's care from 2003 to 2005. She participated in the discharge planning process at the Craig. She observed that Andrew, through the training provided at the Craig, obtained all the skills required to be an excellent caregiver to plaintiff. Despite Andrew's not having previous medical training and having obtained only the equivalent of a high school degree, the Craig discharged plaintiff to Andrew's care.

Defendant's employee, Jan Mainella was assigned to plaintiff's claim on June 9, 2001. Mainella received preliminary reports from Kling and plaintiff's attending physician at the Craig indicating that plaintiff would require 24-hour attendant care from a high-tech professional nurse or a registered nurse. Mainella also learned that plaintiff anticipated that Andrew would provide plaintiff 24-hour attendant care. Mainella recognized that while Andrew was not a high-tech professional nurse or a registered nurse, he was entitled to reasonable compensation for the care he provided to plaintiff. Mainella, using the Home Care Salary and Benefit Report, 2001-2002 (Report), determined what she deemed to be reasonable compensation payable to Andrew. Pursuant to that Report, the typical hourly salaries paid to Michigan nurses were $19.57 an hour for registered nurses, $22.80 an hour for licensed professional high-tech nurses, and $14.67 an hour for licensed practical nurses. Mainella decided that $456 a day was reasonable compensation for Andrew for providing Shaun 24-hour attendant care. She arrived at this amount by multiplying $19, the average of the above hourly rates, by 24 hours, because Andrew would be providing plaintiff with around—the-clock care. Thus, defendant agreed to pay Andrew approximately $166,000 a year to provide attendant care to plaintiff.

On August 29, 2001, well before the Craig discharged plaintiff to Andrew's care, plaintiff's counsel sent a letter to defendant demanding that Andrew be paid $34 an hour for the attendant care he was to provide. Defendant declined to increase the amount it intended to pay Andrew, and plaintiff filed this lawsuit on October 4, 2001. Defendant paid Andrew at a rate of $166,000 a year to attend to plaintiff. Defendant did not deny any requests relating to plaintiff's care, aside from plaintiff's request to increase the compensation paid to Andrew to provide 24-hour attendant care to plaintiff. On January 8, 2002, defendant offered to provide Andrew health care insurance.

At trial, plaintiff presented evidence that, upon discharge from the Craig, plaintiff's attending physician prescribed him 24-hour high-tech licensed practical nurse (LPN)¹ or registered nurse (RN) care. Plaintiff established that after returning home, Dr. Perlman similarly prescribed plaintiff "24 hour high-tech LPN" attendant care, from January 29, 2002, to the date of trial. In a deposition admitted at trial, Dr. Perlman described the care Andrew provides to plaintiff as the equivalent of the care provided by a "24-hour high-tech licensed professional nurse or even a registered nurse." Kling similarly testified that, "there is no question" that Andrew "has the knowledge, skill and expertise to provide the care for his son." Gerald Shiener, a board certified psychiatrist, testified that Andrew's care met or exceeded plaintiff's psychological needs in an appropriate manner.

Plaintiff also presented evidence that the training from the Craig was "unbelievable." Kling testified that not all registered nurses or high-tech licensed professional nurses could provide the care that Andrew provides to plaintiff because they would need additional training. She testified that even as a registered nurse, she could not provide care for a person with a spinal cord injury because she had not had the specific training. She also testified that the best place for someone with plaintiff's maladies would be at home with family caregivers.

Kling testified that licensed home health care professionals could be retained through the use of a health care agency. Such an agency would charge $37 to $40 an hour for a high-tech licensed practical nurse and $50 an hour for a registered nurse. Robert Ancell, a vocational rehabilitation counselor and case manager familiar with plaintiff's care, testified that "he had an understanding of what the costs are of different types of care that are needed for various medical conditions like [plaintiff's.]" He testified that high-tech licensed practical nurse would cost $40 an hour and that a registered nurse would cost $50 an hour, not including shift premiums and overtime. He also testified that physical therapy sessions cost $125 an hour, respiratory therapist sessions cost $75 a visit, and that behavioral therapist sessions cost $40 to $80 an hour. Ancell prepared an exhibit introduced at trial indicating that plaintiff's attendant care would have cost $3,205,125 if provided by a registered nurse, which defense counsel noted amounted to $80 an hour.

On cross-examination, defense counsel elicited testimony that Ancell's testimony was based on agency rates, and that the person actually providing the care would receive less than the agency rate. Defense counsel also elicited testimony that an agency rate, in addition to providing a profit for the agency, assumes costs such as workers' compensation insurance, professional liability insurance, malpractice insurance, health insurance, disability insurance, a secretarial...