Lakeland Neurocare Centers v. STATE FARM MUT. AUTO. INS. CO.

• Decision Date: 31 May 2002
• Docket Number: Docket No. 224245.
• Citation: 250 Mich. App. 35,645 N.W.2d 59
• Parties: LAKELAND NEUROCARE CENTERS, Plaintiff-Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, as assignee of Michigan Department of State Assigned Claims Facility, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

645 N.W.2d 59

250 Mich. App. 35

LAKELAND NEUROCARE CENTERS, Plaintiff-Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, as assignee of Michigan Department of State Assigned Claims Facility, Defendant-Appellee.

Docket No. 224245.

Court of Appeals of Michigan.

Submitted January 15, 2002, at Detroit.

Decided February 15, 2002, at 9:15 a.m.

Released for Publication May 31, 2002.

Miller, Shpiece & Andrews, P.C. (by Wayne J. Miller and Ronni Tischler), Southfield, for the plaintiff.

Scarfone & Geen, P.C. (by John B. Geen), Grosse Pointe, for the defendant.

Before: CAVANAGH, P.J., and NEFF and B.B. MACKENZIE,¹ JJ.

CAVANAGH, P.J.

Plaintiff appeals as of right from an order denying its motion for no-fault penalty interest, M.C.L. § 500.3142, and attorney fees, M.C.L. § 500.3148(1). We reverse and remand.

Plaintiff filed this action against defendant, a no-fault insurer, as a consequence of defendant's denials of plaintiff's requests for payment for rehabilitation services rendered to Arthur Smith, defendant's insured,² who was a pedestrian injured in a motor vehicle accident. Defendant denied plaintiff's claims for payment, alleging that Smith was not struck by a motor vehicle. Subsequently, after plaintiff filed a motion for summary disposition that was supported by a plethora of evidence, defendant entered into a stipulated order granting plaintiff's motion with regard to the issue of defendant's liability. Further, defendant was ordered to pay plaintiff the full amount of "reasonable charges for the medical services rendered by Plaintiff" to Smith, an amount totaling $162,331.50. Thereafter, plaintiff filed a motion for no-fault penalty interest, M.C.L. § 500.3142, and attorney fees, M.C.L. § 500.3148(1). The trial court, citing Darnell v. Auto-Owners Ins. Co., 142 Mich.App. 1, 369 N.W.2d 243 (1985), denied the motion, holding that plaintiff was not entitled to no-fault penalties because plaintiff was not the injured party. This appeal followed.

Plaintiff argues that the trial court erred in denying its motion on the ground that only an injured party is entitled to enforce the penalty interest and attorney fee provisions of the no-fault act, M.C.L. § 500.3142, 500.3148(1). We agree.

Statutory interpretation is a question of law subject to review de novo on appeal. Crowe v. Detroit, 465 Mich. 1, 6, 631 N.W.2d 293 (2001). This Court first looks to the specific language of the statute to discern the Legislature's intent. Charboneau v. Beverly Enterprises, Inc., 244 Mich.App. 33, 40, 625 N.W.2d 75 (2000). We presume that every word, phrase, and clause in the statute has meaning and avoid any construction that would render any part of the statute surplusage or nugatory. Bieber v. Keeler Brass Co., 209 Mich.App. 597, 604, 531 N.W.2d 803 (1995). If the plain and ordinary meaning of the language of the statute is clear, judicial construction is inappropriate. Ypsilanti Housing Comm. v. O'Day, 240 Mich.App. 621, 624, 618 N.W.2d 18 (2000).

In this case, defendant did not dispute that plaintiff had the legal right to commence this action for payment of medical services rendered to defendant's insured. The issue, however, is whether plaintiff had the right to attempt enforcement of the penalty interest and attorney fee provisions of the no-fault act as a consequence of defendant's failure to pay plaintiff for medical services rendered to defendant's injured insured within the time limits imposed by the no-fault act. To resolve this issue, we review the relevant no-fault statutes.

MCL 500.3105(1) provides: "Under personal protection insurance an insurer is liable to pay benefits for accidental bodily injury arising out of the ownership, operation, maintenance or use of a motor vehicle as a motor vehicle, subject to the provisions of this chapter." MCL 500.3112 provides, in pertinent part:

Personal protection insurance benefits are payable to or for the benefit of an injured person or, in the case of his death, to or for the benefit of his dependents. Payment by an insurer in good faith of personal protection insurance benefits, to or for the benefit of a person who it believes is entitled to the benefits, discharges the insurer's liability to the extent of the payments unless the insurer has been notified in writing of the claim of some other person. [Emphasis added.]

MCL 500.3142 provides:

(1) Personal protection insurance benefits are payable as loss accrues.

(2) Personal protection insurance benefits are overdue if not paid within 30 days after an insurer receives reasonable proof of the fact and of the amount of loss sustained....

(3) An overdue payment bears simple interest at the rate of 12% per annum.

These statutes resolve in favor of plaintiff the issue whether plaintiff, a health care provider, is entitled to attempt enforcement of the penalty interest provision of the no-fault act. MCL 500.3105(1) imposes liability on an insurer to pay personal protection insurance benefits. These benefits are "payable to or for the benefit of an injured person...." M.C.L. 500.3112. These "benefits are payable as loss accrues" and "within 30 days after an insurer receives reasonable proof of the fact and of the amount of loss sustained." MCL 500.3142(1) and (2). Because plaintiff submitted a claim for personal protection insurance benefits for the benefit of Smith, the injured person and defendant's insured, plaintiff was entitled to payment within thirty days of defendant's receipt of reasonable proof of the medical services provided and the cost of such services. Consequently, plaintiff was entitled to attempt enforcement of the penalty interest provision of the no-fault act, M.C.L. § 500.3142.

Further, contrary to the trial court's conclusion, the fact that plaintiff was not the injured person is not dispositive. MCL 500.3112 specifically contemplates the payment of benefits to someone other than the injured person as reflected by its inclusion of the phrase "benefits are payable to or for the benefit of an injured person" and by its discharge of an insurer's liability upon payment made in good faith to a payee "who it believes is entitled to the benefits...." As a result, it is common practice for insurers to directly reimburse health care providers for services rendered to their insureds. See, e.g., Mercy Mt. Clemens Corp. v. Auto Club Ins. Ass'n, 219 Mich.App. 46, 48, 555 N.W.2d 871 (1996); McGill v. Automobile Ass'n of Michigan, 207 Mich.App. 402, 404, 526 N.W.2d 12 (1994); Hicks v. Citizens Ins. Co. of America, 204 Mich.App. 142, 145, 514 N.W.2d 511 (1994). Moreover, M.C.L. § 500.3142 does not limit the right to seek penalty interest solely to the injured person and if the Legislature intended to limit the penalty interest provision, it could have done so. MCL 500.3142(1) could have been written as "[p]ersonal protection insurance benefits are payable to the injured person as loss accrues." However, the judiciary may not engraft such a limitation under the guise of statutory construction. See Hagerman v. Gencorp Automotive, 457 Mich. 720, 729, 579 N.W.2d 347 (1998). Therefore, the trial court improperly denied plaintiff the right to attempt enforcement of the penalty interest provision, M.C.L. § 500.3142; accordingly, we reverse and remand for a determination whether payments for medical services rendered by plaintiff were overdue.

Next, we consider whether plaintiff was entitled to attempt enforcement of the attorney fee provision of the no-fault act. MCL 500.3148(1) provides:

An attorney is entitled to a reasonable fee for advising and representing a claimant in an action for personal or property protection insurance benefits which are overdue. The attorney's 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.

Defendant contends that the word "claimant" means that only the injured person may pursue attorney fees. However, undefined words contained in statutes are given meaning as understood in common language, considering the text and subject matter in which they are used. Maxwell v. Citizens Ins. Co. of America, 245 Mich.App. 477, 482, 628 N.W.2d 95 (2001); Marcelle v. Taubman, 224 Mich.App. 215, 219, 568 N.W.2d 393 (1997). We also may refer to a dictionary for the definition of a word that is not defined in the statute. Maxwell, supra; Marcelle, supra. The word "claimant" is defined as "a person who makes a claim." Random House Webster's College Dictionary (1997). The relevant dictionary definitions of the word "claim" include "a demand for something as due; an assertion of a right or an alleged right," and "a request or demand for payment in accordance with an insurance policy...." Id.

In this case, as discussed above, because plaintiff properly submitted a claim for personal protection insurance benefits for the benefit of defendant's insured, plaintiff was entitled to such payment within the time limits imposed by the no-fault act. Consequently, plaintiff was a claimant within the plain meaning of the statute and, thus, had the right to attempt recovery of its attorney fees...