Kondratek v. Auto Club Ins. Ass'n, Docket No. 90966

• Decision Date: 24 November 1987
• Docket Number: Docket No. 90966
• Citation: 163 Mich.App. 634,414 N.W.2d 903
• Court: Court of Appeal of Michigan — District of US
• Parties: Joan KONDRATEK, Plaintiff-Appellee, v. AUTO CLUB INSURANCE ASSOCIATION, a Michigan corporation, Defendant-Appellant, Linda Cardinale, Claim Representative, Defendant.

Page 903

414 N.W.2d 903

163 Mich.App. 634

Joan KONDRATEK, Plaintiff-Appellee, v. AUTO CLUB INSURANCE ASSOCIATION, a Michigan corporation Defendant-Appellant Linda Cardinale, Claim Representative, Defendant.

Docket No. 90966.

Court of Appeals of Michigan.

Submitted May 13, 1987.

Decided July 27, 1987.

Released for Publication Nov. 24, 1987.

Harold I. Gach, Southfield, and Wayne J. Miller, Birmingham, for plaintiff-appellee.

Brandt, Hanlon, Becker, Lanctot & McCutcheon by John B. Geen, Mt. Clemens, and MacArthur, Cheatham, Acker & Smith, P.C. by James G. Gross, Detroit, Attorneys of Counsel, for defendant-appellant.

Before MAHER, P.J., and McDONALD and DEMING, ^* JJ.

PER CURIAM.

Defendant appeals as of right from a February 18, 1986, judgment awarding plaintiff $11,669.29 for benefits, attorney fees, costs and statutory interest in this no-fault insurance action. M.C.L. § 500.3107(a); M.S.A. § 24.13107(a).

On July 6, 1983, plaintiff filed a complaint against defendant insurer and Linda Cardinale, a claims representative, seeking a declaratory judgment that vocational rehabilitation is a covered benefit under the no-fault act and that certain future rehabilitation expenses would be payable when incurred. Cardinale was later dismissed as a party defendant. Mediation was held on October 9, 1984, and the panel recommended an award to plaintiff of $19,500. Plaintiff accepted the mediation award; defendant rejected it.

A bench trial was held in August, 1985. The facts presented are not in substantial dispute. In May, 1976, plaintiff was seriously injured in an automobile accident. Plaintiff's back was injured and her lungs and vocal cords were crushed. For three years plaintiff was unable to talk. At trial plaintiff was able to speak in a hoarse whisper. The medical prognosis was that plaintiff's vocal cords were permanently deformed and that her voice would never return to normal. It is undisputed that plaintiff's no-fault insurer, defendant, received notice of the accident and, except for vocational rehabilitation expenses, paid what it determined to be covered benefits.

The trial court denied defendant's motion for the involuntary dismissal of plaintiff's complaint and for summary disposition under MCR 2.116(C)(9) and (10).

After closing arguments the trial court entered an oral opinion. Relying on a 1983 Attorney General opinion and a recent decision of this Court holding that "allowable expenses" as contained in § 3107(a) of the no-fault act include vocational rehabilitation expenses, the trial court held that plaintiff was entitled to reasonably necessary vocational rehabilitation expenses. Bailey v. DAIIE, 143 Mich.App. 223, 371 N.W.2d 917 (1985), lv. den. 424 Mich. 867 (1986). OAG, 1983-1984, No 6129, p. 50 (February 24, 1983). The trial court found that defendant's conduct, taking a rigid approach in rejecting plaintiff's claim for vocational rehabilitation counselling, was unreasonable, and thus awarded plaintiff attorney fees. In addition, the court entered a declaratory judgment granting plaintiff tuition expenses estimated at $6,490 to be incurred upon her enrollment in a sign language interpreter program at Madonna College.

Defendant raises several issues on appeal. Defendant first urges us to reject Bailey, supra, and find that vocational rehabilitation expenses are not "allowable expenses" within the meaning of the no-fault act. We decline to do so as we feel Bailey, was properly decided.

Defendant next requests this Court to adopt "definite operational guidelines" for determining the fact and extent of a claimant's entitlement to vocational rehabilitation. Section 3107(a) sets forth the standard for determining the fact and extent of a claimant's entitlement to benefits. Allowable expenses are "all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person's care, recovery, or rehabilitation." Thus two requirements are evident: (1) products, services and accommodations must be "reasonably necessary"; and (2) charges must be reasonable. We believe such a determination is a factual question best left to the trial courts, and therefore decline to set "definite operational guidelines." Moreover, a review of the record in the instant case indicates that the trial court's factual findings regarding the reasonableness of plaintiff's claim were not clearly erroneous.

Defendant next contends that the trial court erred in awarding plaintiff attorney fees. Section 3148 of the no-fault act permits a prevailing claimant to recover attorney fees if the court finds that the insurer unreasonably refused to pay the claim or unreasonably delayed in making proper payment. Defendant challenges the trial court's determination that it unreasonably refused to pay plaintiff's claim. The trial court's finding of unreasonableness was based on three factors: (1) defendant steadfastly took a position that vocational rehabilitation expenses were not covered under the no-fault act despite a February, 1983, Attorney General opinion to the contrary; (2) defendant was aware of the decision reached in Bailey v. DAIIE, supra, by the circuit court and by this Court in 1984 and 1985 respectively; and (3) despite defendant's observation of plaintiff's voice impairment during a November, 1983, deposition, defendant failed to take any action to investigate alternative proper rehabilitation programs for plaintiff.

A trial court's finding of unreasonable refusal or delay will not be reversed on appeal...