Hofmann v. Auto Club Ins. Ass'n
| Citation | 211 Mich.App. 55,535 N.W.2d 529 |
| Decision Date | 19 May 1995 |
| Docket Number | Docket Nos. 150304,151033 |
| Parties | John HOFMANN, D.C. and Richard C. Herfert, D.C., Plaintiffs-Counter Defendants-Appellees-Cross Appellants, v. AUTO CLUB INSURANCE ASSOCIATION, Defendant-Counter Plaintiff-Appellant-Cross Appellee. John HOFMANN, D.C. and Richard C. Herfert, D.C., Plaintiffs-Counter Defendants-Appellants, v. AUTO CLUB INSURANCE ASSOCIATION, Defendant-Counter Plaintiff-Appellee. John HOFMANN, D.C. and Richard C. Herfert, D.C., Plaintiffs-Counter Defendants-Appellees, v. AUTO CLUB INSURANCE ASSOCIATION, Defendant-Counter Plaintiff-Appellant. , and 151268. |
| Court | Court of Appeal of Michigan (US) |
Sommers, Schwartz, Silver & Schwartz, P.C. by Patrick B. McCauley and Patrick Burkett, Southfield, for plaintiffs and counter-defendants.
Brandt, Hanlon, Becker, Lanctot, McCutcheon, Schoolmaster & Taylor by David J. Lanctot, Detroit, and Scarfone & Geen by John B. Geen, Grosse Pointe, and Gross & Nemeth by James G. Gross and Mary T. Nemeth, Detroit, of counsel), for defendant and counter-plaintiff.
Before MICHAEL J. KELLY, P.J., and McDONALD and RICHARD ALLEN GRIFFIN, JJ.
In these consolidated appeals and cross appeal from a bench trial judgment and order amending the judgment, we are asked to construe various provisions of Michigan's no-fault act, M.C.L. § 500.3101 et seq.; M.S.A. § 24.13101 et seq., and the Public Health Code relative to the practice of chiropractic, M.C.L. § 333.16401 et seq.; M.S.A. § 14.15(16401) et seq., in order to determine whether the expenses for various health-care products and services that were provided by plaintiffs to defendant's insureds during the course of chiropractic care are subject to payment as a no-fault benefit. We also are asked, inter alia, to evaluate the propriety of plaintiffs' charges for health-care services in cases involving no-fault insurance. We affirm in part, reverse in part, and remand for further proceedings.
Plaintiffs Hofmann and Herfert are licensed chiropractors who own separate chiropractic practices in Michigan. They both have patients who have no-fault automobile insurance coverage through defendant, Auto Club Insurance Association (ACIA). Sometime in 1984, ACIA made a "policy decision" that it would no longer pay for certain products and services that were being provided by chiropractors to its insureds, for the reason that the products and services were believed by ACIA to be outside the permissible scope of chiropractic practice in Michigan and, therefore, not subject to payment as a no-fault benefit.
On January 4, 1985, plaintiffs commenced this action in circuit court, seeking both a declaratory ruling that the subject products and services were within the scope of chiropractic, as well as an award of money damages based on ACIA's refusal to pay for those products and services that plaintiffs had provided to ACIA's insureds. On February 22, 1985, ACIA filed a countercomplaint seeking, inter alia, reimbursement for payments previously made to each plaintiff for: (1) certain products and services that allegedly were outside the scope of chiropractic; (2) authorized products and services to the extent the payments for those products and services exceeded the plaintiffs' customary charges for like products and services in cases not involving insurance; 1 and (3) claims for which plaintiffs had already received partial payment from Blue Cross and Blue Shield of Michigan (BCBSM). 2
The parties' various claims and counterclaims were litigated in a thirty-two-day bench trial that concluded in November 1989. On August 29, 1990, the trial court issued its written, eighty-six-page opinion, which contained rulings both favorable and unfavorable to each side. After entertaining post-trial motions, the trial court issued its final judgment on February 19, 1992, granting partial declaratory and monetary relief to each of the parties.
In particular, the trial court ruled that the following products and services are within the scope of chiropractic practice in Michigan: (a) Orthopedic and neurological examinations; (b) Nutritional analysis and nutritional supplements; (c) Cervical supports, cervical pillows, and lumbar supports, the use of which constitutes "rehabilitative exercise"; (d) Cervical, spinal, and intersegmental traction, the use of which constitutes "rehabilitative exercise"; (e) Hot and cold packs; (f) SOT blocking and wedges; (g) Re-evaluation X-rays; and (h) Pelvic X-rays.
Plaintiffs Hofmann and Herfert were awarded damages in the amount of $5,838.20 and $31,005.17, respectively, in compensation for their provision of the foregoing products and services to ACIA's insureds for which they did not receive payment from ACIA.
The trial court also ruled that the following services were outside the scope of chiropractic practice in Michigan:
(a) Extended care as a separate, unitary concept;
(b) The use of thermographic devices (including electronic infrared thermography, liquid crystal thermography, thermoscribe, dermathermograph, NCM and neurocalograph).
Additionally, the trial court found that both plaintiffs had violated M.C.L. § 500.3157; M.S.A. § 24.13157, by charging ACIA more for products and services in cases involving no-fault insurance than they customarily charged their patients in cases not involving insurance. The trial court further found that both plaintiffs had violated this Court's decision in Dean v. Auto Club Ins. Ass'n, 139 Mich.App. 266, 362 N.W.2d 247 (1984), by charging and receiving from ACIA amounts in excess of what plaintiffs had already received from BCBSM. The trial court determined that ACIA was entitled to total damages on its counterclaims, after setoff of the amounts owed by it to plaintiffs on the plaintiffs' principal claims, of $95,532.59 from plaintiff Hofmann and $7,563.49 from plaintiff Herfert.
Subsequently, on March 23, 1992, the trial court issued an order amending the February 19, 1992, judgment. The order provided that ACIA's right of recovery with regard to its various counterclaims for reimbursement would be limited to only those claims falling within the one-year period of limitation for the recovery of no-fault benefits embodied in M.C.L. § 500.3145(1); M.S.A. § 24.13145(1), instead of the six-year period of limitation that had been applied in the calculation of damages under the original judgment. Instead of setting forth a revised damages award, however, the order merely stated that "amount(s) owing on the Judgment shall be recalculated at the conclusion of the appellate process."
Three separate appeals and a cross appeal have been filed by the parties from the trial court's judgment and order amending the judgment. The appeals have been consolidated for this Court's review.
The chiropractic statute, M.C.L. § 333.16401 et seq.; M.S.A. § 14.15(16401) et seq., which is part of the Public Health Code, M.C.L. § 333.1101 et seq.; M.S.A. § 14.15(1101) et seq., defines chiropractic and requires a person who practices it to be licensed. Attorney General v. Beno, 422 Mich. 293, 303-304, 373 N.W.2d 544 (1985). One of the tasks required of us in this case is to examine each of the health-care products and services at issue 3 and determine whether it is within the statutory scope of chiropractic. However, because we are faced with these questions in the context of a dispute over entitlement to no-fault benefits, we will first analyze the effect, if any, of a given service or product's inclusion or exclusion from the scope of chiropractic on plaintiffs' entitlement to no-fault benefits for an expense relating to that service or product.
The approach followed by the trial court was to examine each health-care activity in question to determine whether the activity was authorized by the chiropractic statute. To the extent authority for a given activity could be found therein, the trial court determined that the expense for that activity was payable as a no-fault benefit. Conversely, to the extent authority for a given health-care activity could not be found therein, the trial court determined that the expense for that activity was not payable as a no-fault benefit. While we agree that the expense for an activity included within the scope of chiropractic may be subject to payment as a no-fault benefit, 4 we disagree with the trial court's conclusion that no-fault benefits necessarily are not payable for any expense relating to an excluded activity. Although the trial court did not state directly the basis for this latter conclusion, we are led to believe by the parties' briefs that the trial court, and the parties, were operating under an assumption that an expense for an excluded health-care activity is not subject to payment as a no-fault benefit because the exercise of such an activity is unlawful. 5
To be sure, only treatment lawfully rendered, including being in compliance with licensing requirements, is subject to payment as a no-fault benefit. Cherry v. State Farm Mutual Automobile Ins. Co., 195 Mich.App. 316, 320, 489 N.W.2d 788 (1992). It does not follow, however, that an activity is not lawfully rendered, and therefore not subject to payment as a no-fault benefit, merely because it is excluded from the statutory scope of chiropractic. In discussing the chiropractic statute, the Supreme Court in Beno explained:
[T]he purpose of the licensing statute is not to prohibit the doing of those acts that are excluded from the definition of chiropractic, but to make it unlawful to do without a license those things that are within the definition.
* * * * * *
The chiropractic statute does not prohibit the exercise of any non-chiropractic health-care activity. It only defines chiropractic and requires a person who practices it to be licensed. [422...
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